The direct interconnection of the UK and Nordic power market – Impact on social welfare and renewable energy integration

Behnam Zakeri; James Price; Marianne Zeyringer; Ilkka Keppo; Brian Vad Mathiesen; Sanna Syri

doi:10.1016/j.energy.2018.08.019

The direct interconnection of the UK and Nordic power market – Impact on social welfare and renewable energy integration

Behnam Zakeri^*, James Price, Marianne Zeyringer, Ilkka Keppo, Brian Vad Mathiesen, Sanna Syri

^*Corresponding author for this work

Department of Energy and Mechanical Engineering

Research output: Contribution to journal › Article › Scientific › peer-review

30 Citations (Scopus)

Abstract

United Kingdom and the Nordic power market have plans to interlink directly through a sub-sea power transmission line in The North Sea. Such power market couplings have complicated implications for the interconnected energy systems and for different agents in the common power market. We analyse this case by modelling the hourly operation of the Nordic-UK power market coupling, considering the local district heating (DH) system in each country as well. According to the results, after the operation of the new interconnection between Norway and the UK (North Sea Link), the overall socio-economic benefits (social welfare) in the region will likely improve by 220–230 million euro per year, without considering the cost of the interconnector itself. The UK-Nordic market coupling enhances the flexibility of the UK power system in wind integration, irrespective of the share of wind in the Nordic countries. However, increasing wind capacity in the UK will diminish the expected economic benefits of the link. The merit order effect of wind integration in the UK will reduce the price gap between UK and Norway, and so the congestion income of the link in many hours a year when the link is congested from Norway towards the UK.

Original language	English
Pages (from-to)	1193-1204
Number of pages	12
Journal	Energy
Volume	162
DOIs	https://doi.org/10.1016/j.energy.2018.08.019
Publication status	Published - 1 Nov 2018
MoE publication type	A1 Journal article-refereed

Funding

We gratefully acknowledge the support and the funding from Doctoral Program at Aalto University (The School of Engineering), Finland, through the Sustainable Transition of European Energy Markets (STEEM) project. BZ thanks the UCL Energy Institute and the Whole System Energy Modelling (WholeSEM - Ref: EP/K039326/1 ) platform, UK, for the research visit fellowship. The contribution by BZ have been partly supported by the RE-INVEST project “Renewable Energy Investment Strategies – A two-dimensional interconnectivity approach” funded by Innovation Fund, Denmark . The contributions from JP, MZ and IK have also been supported by WholeSEM. We appreciate Paul-Frederik Bach for the time series data of the UK power system, and Mikko Wahlroos for the power plant database developed at Aalto University, Finland. Appendix A

Keywords

Energy policy
Energy systems model
European energy market
Power market coupling
Renewable energy integration

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.energy.2018.08.019

https://vbn.aau.dk/da/publications/the-direct-interconnection-of-the-uk-and-nordic-power-market-impaLicence: CC BY-NC-ND

Cite this

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title = "The direct interconnection of the UK and Nordic power market – Impact on social welfare and renewable energy integration",

abstract = "United Kingdom and the Nordic power market have plans to interlink directly through a sub-sea power transmission line in The North Sea. Such power market couplings have complicated implications for the interconnected energy systems and for different agents in the common power market. We analyse this case by modelling the hourly operation of the Nordic-UK power market coupling, considering the local district heating (DH) system in each country as well. According to the results, after the operation of the new interconnection between Norway and the UK (North Sea Link), the overall socio-economic benefits (social welfare) in the region will likely improve by 220–230 million euro per year, without considering the cost of the interconnector itself. The UK-Nordic market coupling enhances the flexibility of the UK power system in wind integration, irrespective of the share of wind in the Nordic countries. However, increasing wind capacity in the UK will diminish the expected economic benefits of the link. The merit order effect of wind integration in the UK will reduce the price gap between UK and Norway, and so the congestion income of the link in many hours a year when the link is congested from Norway towards the UK.",

keywords = "Energy policy, Energy systems model, European energy market, Power market coupling, Renewable energy integration",

author = "Behnam Zakeri and James Price and Marianne Zeyringer and Ilkka Keppo and Mathiesen, \{Brian Vad\} and Sanna Syri",

year = "2018",

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doi = "10.1016/j.energy.2018.08.019",

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AU - Zakeri, Behnam

AU - Price, James

AU - Zeyringer, Marianne

AU - Keppo, Ilkka

AU - Mathiesen, Brian Vad

AU - Syri, Sanna

PY - 2018/11/1

Y1 - 2018/11/1

N2 - United Kingdom and the Nordic power market have plans to interlink directly through a sub-sea power transmission line in The North Sea. Such power market couplings have complicated implications for the interconnected energy systems and for different agents in the common power market. We analyse this case by modelling the hourly operation of the Nordic-UK power market coupling, considering the local district heating (DH) system in each country as well. According to the results, after the operation of the new interconnection between Norway and the UK (North Sea Link), the overall socio-economic benefits (social welfare) in the region will likely improve by 220–230 million euro per year, without considering the cost of the interconnector itself. The UK-Nordic market coupling enhances the flexibility of the UK power system in wind integration, irrespective of the share of wind in the Nordic countries. However, increasing wind capacity in the UK will diminish the expected economic benefits of the link. The merit order effect of wind integration in the UK will reduce the price gap between UK and Norway, and so the congestion income of the link in many hours a year when the link is congested from Norway towards the UK.

AB - United Kingdom and the Nordic power market have plans to interlink directly through a sub-sea power transmission line in The North Sea. Such power market couplings have complicated implications for the interconnected energy systems and for different agents in the common power market. We analyse this case by modelling the hourly operation of the Nordic-UK power market coupling, considering the local district heating (DH) system in each country as well. According to the results, after the operation of the new interconnection between Norway and the UK (North Sea Link), the overall socio-economic benefits (social welfare) in the region will likely improve by 220–230 million euro per year, without considering the cost of the interconnector itself. The UK-Nordic market coupling enhances the flexibility of the UK power system in wind integration, irrespective of the share of wind in the Nordic countries. However, increasing wind capacity in the UK will diminish the expected economic benefits of the link. The merit order effect of wind integration in the UK will reduce the price gap between UK and Norway, and so the congestion income of the link in many hours a year when the link is congested from Norway towards the UK.

KW - Energy policy

KW - Energy systems model

KW - European energy market

KW - Power market coupling

KW - Renewable energy integration

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ER -

The direct interconnection of the UK and Nordic power market – Impact on social welfare and renewable energy integration

Abstract

Funding

Keywords

UN SDGs

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