Welfare analysis of increased interconnection between France and Ireland
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Welfare analysis of increased interconnection between France and Ireland Valeria Di Cosmo1 · Seán Collins2 · Paul Deane2 Received: 17 January 2018 / Accepted: 25 March 2019 © Springer-Verlag GmbH Germany, part of Springer Nature 2019
Abstract The all-island electricity market in Ireland has been in operation since 2007. Existing electricity interconnection between the Republic of Ireland, Northern Ireland and the United Kingdom is small but plays an important role in current electricity market operation in the region. A 700 MW Electricity interconnector between Ireland and France was proposed in 2009. In June 2016, the UK voted to leave the European Union and this has refocused political attention on Ireland’s limited interconnection capacity and the need for geographic diversification of interconnector options. We provide the first publically available detailed welfare impact of a new interconnector from Ireland to France and use an EU wide power system model (PLEXOS-EU) to simulate one vision of the 2030 EU electricity market based on European Commission analysis under varying fuel price assumptions. We demonstrate, that varying fuel prices has limited impact on welfare for the scenarios examined and the project has the potential for a positive impact on welfare in Ireland if low project interest rates are achieved. Our results show that the investment in interconnection reduces wholesale electricity prices in France and Ireland as well as the net revenues of thermal generators. The owners of the new interconnector between France and Ireland see positive net revenues. France is only marginally affected by the new interconnector. Renewable generators see a modest increase in net revenues. Great Britain may see welfare losses associated with the additional interconnection primarily driven by lower net revenues from existing Irish-British transmission line and higher costs of electricity generation. Keywords Interconnection · Brexit · Renewable generation · Storage
* Valeria Di Cosmo [email protected] 1
University of Torino, FEEM Corso Magenta 63, Milan, Italy
2
MaREI Centre, Environmental Research Institute, University College Cork, Cork, Ireland
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List of symbols Indices j Generation unit J Total number of generators l Interconnector line L Total number of interconnector lines t Time period T Optimisation time horizon stor Index related specifically to pumped storage unit RESup Upper storage reservoir RESlow Lower storage reservoir Variables Vjt Integer on/off decision variable for unit j at period t Xjt Integer on/off decision variable for pumped storage pumping unit j at period t Ujt Variable that = 1 at period t if unit j has started in previous period else Pjt Power output of unit j at period t (MW) Hjt Pump load for unit j at period t (MW) Flt Power flow on interconnector line l at interval t between market nodes (MW) Wint Flow into reservoir at time t (MWh) Woutt Flow out of reservoir at time t (MWh) Wt Volume of storage at a time
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