Modeling the Cost of Achieving a Renewable Energy Target: Does it Pay to Cooperate Across Borders?

摘要

Electricity markets are increasingly integrated across borders, but transmission and renewable energypolicies often remain local and uncoordinated. In this paper, we analyze how cooperative behavior indeveloping renewable energy technologies across borders and/or cross-border transmission capacityinvestment can reduce the cost of achieving a renewable energy target. We use a three stepequilibrium model with: i) transmission investment, ii) generation investment and iii) electricitymarket that we apply to an interconnected two zone system. We find that it pays to cooperate if thezones have different renewable energy sources, but the success of a renewable energy cooperation alsodepends on cooperation in transmission development, which is therefore an important interaction totake into account in renewable energy policy discussions.