A new tool models a fairer electricity trade

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image: The optimal scenario for electricity trade between the nations of Northeast Asia, from the perspective of the conventional model. Larger arrowhead size indicates higher power flow.
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Credit: Pavel Odinev / Skoltech

Skoltech researchers and their colleagues have proposed a new model for the interaction of electricity trading nations and the planning of their grid lines. Described in IEEE Transactions on Power Systems, the model suggests an explanation of why there is no cooperation in some parts of the world where it seems economically worthwhile, as well as possible solutions to achieve it. At the heart of the action is the realization that previous approaches have failed to place an appropriate value on the stability of economic ties.

There are many reasons why countries trade electricity. The most obvious is that some geographies are just better suited for generating electricity, so much so that it can be ludicrous to produce electricity at a cost many times more than what you can buy from a neighbor. Additionally, electricity demand fluctuates widely throughout the 24 hour cycle, so an electricity supplier tends to have excess production at least at some point of the day when they are ready to export.

To find optimal ways to expand electricity trade, researchers use mathematical models that balance the economic interests of participating nations and suggest where transmission lines should be best positioned and what is the optimal power flow at through each of them. The output of such a model might look like this (fig. 1).

The downside to the conventional model is that planning relies solely on an economic cost-benefit analysis, but with projects set to last for decades, it’s also essential to consider each party’s propensity to quit. This is something that the new approach proposed by the Skoltech researchers and their colleagues attempts to resolve, resulting in a different plan of interconnections for the same region (Fig. 2).

Compared in purely economic terms, the previous model wins by a small margin. For the scenario shown in Figures 1 and 2, for example, it is expected to generate around $ 7 billion in savings per year over a two-decade period, or around 6% more than the new stability-conscious model. But since the latter favors longer-lasting projects, the team expects this to more than make up for the savings gap.

The innovative approach of the proposed methodological framework for the planning of electricity exchanges between countries lies in the connection of the concepts of operations research, economics and cooperative game theory. In particular, the stability of the interconnection project and the propensity of a country to abandon such a project are, for the first time, captured in a cross-border transmission planning model through two-tier programming.

“One of the stability problems with the Standardized Approach is that it does not give enough weight to the interests of transit countries. So, for example, the interests of the two main players – the importer and the exporter – might be balanced, but the transit country would have an inferior position, making it more likely to veto the project. Our model takes into account the interests of the transit country in a more equitable manner, ”said study co-author David Pozo of Skoltech.

“The tool we are developing can also predict the damage caused by the resignation of a certain party. It is a useful by-product of the model which allows participants to stipulate appropriate penalties in the contract, ”adds the researcher.

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The study reported in this article featured researchers from Skoltech, the Trapeznikov Institute for Control Sciences of the SAR, the University of Newcastle, the University of Manchester, and the Pontifical Catholic University of Chile. .

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Skoltech is a private international university located in Russia. Established in 2011 in collaboration with the Massachusetts Institute of Technology (MIT), Skoltech cultivates a new generation of leaders in science, technology and business, conducts research in groundbreaking areas and promotes technological innovation in the goal of resolving critical issues. problems facing Russia and the world. Skoltech focuses on six priority areas: artificial intelligence and communications, life sciences and health, advanced engineering and advanced materials, energy efficiency and ESG, photonics and quantum technologies, advanced studies. Website: https://www.skoltech.ru/.


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