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Cross-Country Electricity Trade, Renewable Energy and European Transmission Infrastructure Policy

Author

Listed:
  • Jan Abrell

    (ETH Zurich, Switzerland)

  • Sebastian Rausch

    (ETH Zurich, Switzerland)

Abstract
This paper develops a multi-country multi-sector general equilibrium model, integrating high-frequency electricity dispatch and trade decisions, to study the e ects of electricity transmission infrastructure (TI) expansion and re- newable energy (RE) penetration in Europe for gains from trade and carbon dioxide emissions in the power sector. TI can bene t or degrade environ- mental outcomes, depending on RE penetration: it complements emissions abatement by mitigating dispatch problems associated with volatile and spa- tially dispersed RE but also promotes higher average generation from low- cost coal if RE production is too low. Against the backdrop of European decarbonization and planned TI expansion, we nd that emissions increase for current and targeted year-2020 levels of RE production and decrease for year-2030 targets. Enhanced TI yields sizeable gains from trade that de- pend positively on RE penetration, without creating large adverse impacts on regional equity.

Suggested Citation

  • Jan Abrell & Sebastian Rausch, 2016. "Cross-Country Electricity Trade, Renewable Energy and European Transmission Infrastructure Policy," CER-ETH Economics working paper series 16/229, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:16-229
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    File URL: http://www.cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-16-229.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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