Power Connections
Possible New PPP Models – For Merchant Investments Involving Local Stakeholders A possible scheme for new interconnection implementation,
particularly suitable for developing countries, could be the Public-Private-Partnership (PPP) schemes involving local stakeholders from the transmission sector and International Financing Institutions (IFIs). This could be considered as an umbrella for developing new transmission infrastructure through gradual injection of private capital. Power grid interconnections can affect the societies in the
interconnected countries in a number of ways. These impacts can be positive or negative, particularly where the costs and benefits of interconnection are not fairly distributed have different implications. Some power grid interconnections can contribute to sustainable development, others can damage prospects for sustainable development. For electricity exporting countries, the construction and
operation of power plants to feed an interconnection, and the fuel supply infrastructure for power plants, may have significant social impacts. Displacement or resettlement of population by new facilities (particularly hydropower) can be considerable, and can lead to social problems such as migration from rural areas to the already overcrowded cities, unemployment and personal problems. The interest of the electricity market participants in the
development and operation of cross-border interconnections is twofold: economic objectives for electricity agents (i.e., generators) and supply and route concerns for electricity customers. Electricity market participants affected by the expansion
of new interconnection capacity are in favour of the new infrastructure only if this is profitable to them (in terms of generation or consumption), which does not necessarily mean that these projects are viable from a common electricity market point of view. On the other hand, customers might be against the expansion of interconnection capacity even if it supports the creation of a common electricity market.
Some Conclusions of WEC’s Interconnectivity Study ■ Present AC and DC transmission technologies for OHTL’s, underground and sea cables, stations and auxiliary systems do not set practical limits to interconnections. The main limits are political, regulatory, financial and especially in developed countries, increasingly coming from environmental and local opposition.
■ Power transmission to remote areas or islands through interconnected systems reduces not only the final cost of kWh but also environmental impacts of local small-size fossil fuels plants.
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■ Overhead transmission technologies currently in operation (up to 1,000 kV AC and +/- 800 kV DC ) allow shipping of cheap and remote electricity up to several thousand MW per circuit which results in substantial cost savings, and when electricity is generated by renewables (such as large hydropower plants or inland wind farms) a significant contribution is made to the reduction of emissions.
■ The development of both underground and undersea (up to 2,000m deep) cables and DC technologies helps overcome the opposition to building OHTL’s and allows development of additional sea-crossing interconnections – as for example in the Baltic and the Mediterranean sea. They also offer interesting potential for integration of large amounts of renewables, mainly wind and solar, when their production costs drop to competitive levels.
■ Regional markets can operate efficiently without a uniform regulatory framework. The Central America market is a very good example, where minimum changes were introduced in the internal regulations.
■ Bilateral contracts are the easiest way to initiate cross- border trading. A market limited to bilateral contracts can capture an appropriate part of the total benefits, with less coordination and with simple regulation.
■ In all the cases, appropriate rules for congestion management are crucial.
■ Optimisation of the use of the scarce capacity of cross border interconnections is necessary.
■ The Environmental Impact Assessment (EIA) can help reduce overall project costs, assist in completing projects on schedule, and help design projects which are acceptable to stakeholders.
■ The use of new renewable energy sources for electricity generation is growing rapidly around the world. The requirements on the existing transmission and distribution systems for integration of renewable generation are huge and costly.
The many challenges posed by the necessary expansion of
transmission infrastructure in different parts of the world are usually outweighed by the benefits the interconnected systems bring to the consumers, both near and afar. ■
Footnote 1. A study report will be released in June 2010.
Dr. Alessandro Clerici is Senior Advisor to the President of ABB and Elena Virkkala Nekhaev is Director of Programmes at the World Energy Council.
www.worldenergy.org
worldPower 2010
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