The techno-economic benefits of a globally interconnected world would be lower than those provided by interconnections at the national and subnational level.
This is the main conclusion of On the Techno-economic Benefits of a Global Energy Interconnection, a new paper published by a group of researchers that includes Christian Breyer, professor of solar economy at Finland’s Lappeenranta University of Technology (LUT).
According to the study, a globally interconnected grid could offer a levelized cost of electricity of €52.50/MWh, which is 4% lower than what could be expected with an isolated global energy system. Moreover, a similar energy system would require 4% less installed capacity than a conventional one.
Solar and wind, of course, would play a central role in a globally interconnected world. “The achieved cost level of about €20-25/MWh and €25-30/MWh for solar PV and wind energy, respectively, at very good sites, brings both technologies to the forefront as a major source of energy in the 21st century,” the researchers said.
However, they believe that techno-economic analysis alone may not be sufficient to assess the advantages and disadvantages of both options. They argued that a more holistic approach will be necessary.
In the future, long-distance energy trading might be done in the form of high-density energy carriers such as liquefied synthetic natural gas, synthetic liquid fuels, methanol and ammonia. “A high global granularity of geo-spatial structuring may reveal the relative range of economic benefits generated by power transmission, which may be complemented by progress in understanding future trade patterns for renewable electricity-based power-to-X fuels and chemicals and their respective transportation costs,” the group explained.
This means that the best arrangement for geospatial power sector integration from an economic perspective should be achieved on a regional level.
“A global energy interconnection may be still beneficial, but the respective electricity trade can be expected to be more within the major regions,” the researchers said.