From interconnections of local electric power systems to Global Energy Interconnection

1 Introduction

The tendency to connect electric power systems (EPS)by AC and DC links and create large international and intercontinental interconnections is obvious for the specialists [1-5]. It is characterized by using so called system effects, that appear when maneuvering energy resources, generating capacities and power flows. In doing so the main objective of extending and connecting EPS is to supply electric power and power services of high quality and with high reliability to consumers on the whole territory of the interconnection.

Such a large international electric power infrastructure,as any bulk system, should have hierarchical structure in the form of several interacting electric power zones (zonal interconnections). The conditions associated with possible problems in technological control, with localization of zonal electric power markets due to constraints or large distance of power transmissions, etc. are the prerequisities for such a zonal structure. Interconnected EPS of countries of former USSR can be an example of hierarchical structure because jointly operated Unified Energy System of Russia and some other national EPS have their own structures of local EPS [6]. European interconnection ENTSO-E and the interconnection of the USA and Canada are the other types of hierarchically arranged interconnections.

This paper presents historical analysis of investigations during several last decades concerning ideology of creation and development of international and intercontinental electric power interconnections as the basis of World Energy System or, by the other words, Global Energy Interconnection. Chapter 2 deals with classification of system effects of EPS interconnections and quantitative estimations of such effects. Chapter 3 includes some historical analysis of transformation of ideas in this area and discussions of them. Chapter 4 describes the concept of Global Energy Interconnection. Conclusions discuss the main results of this paper.

2 System effects of interconnections

2.1 Technical system effects

The system effects in EPS are of a multi-factor character. Traditionally the following components of the system effects have been set off at integration of EPS [6, 7].

a) A “capacity” effect：

· A decrease in demand for installed capacity of power plants by bringing into coincidence the load maximums,reducing the short-term reserve, decreasing the reserves for routine maintenance;

· An increase in firm power of hydro power plants owing to a rise in the total firm power due to asynchronous run off in different river basins and use of long-term regulation of water reservoirs to the benefits of neighboring EPS;

· A more complete use of commissioned capacity by decreasing the unused capacity in a large system.

b) A “structural” effect：

· Rationalization of power generation structure in EPS by using energy resources that are cheap but economically inefficient in terms of transportation, transmitting power to neighboring systems, increasing the use of peak and free power of hydro power plants;

· A better use of hydro power in the high water years;

· An opportunity to construct power plants successively with the use of temporary surplus power in the other EPSs;

· Saving in the construction of electric networks for power supply to the areas of individual EPSs joint.

c) A “frequency” effect implies a lesser impact of an individual energy unit or a consumer in a large EPS on the system frequency as compared to a smaller system. The frequency effect allows the unit capacity of energy facilities to be chosen based on the optimum in terms of technicaleconomic factors, without constraints on the system requirements.

d) An “operation” effect implies a decrease in operating costs by optimizing the operating conditions of power plants in the integrated system, increasing the total density of load curves of EPSs at integration, by widely using cheap fuels.

e) An “environmental effect” supposes improvement of environmental situation by redistributing power generation at power plants with its decrease in the areas with unfavorable environmental situation.

All these components are of objective material(technological) nature. Generally, the estimation of [8]shows reduction of 10-12 GW in necessary installed capacity of power plants and 12-14 million tce/year of fuel in the Unified Energy System of former USSR in the opposite to isolated operation of regional EPSs. European Economic Commission estimates the similar reduction of necessary installed capacity of power plants in 34 GW for operation of UCPTE interconnection in 1989 [9].

However, along with the above positive system effects there are negative system effects. They are related to possible heavy cascade system emergencies and vulnerability to the external factors (catastrophic natural phenomena for example, icing, typhoons, etc., electro-magnetic exposures of natural or technogenic-anthropogenic origin, etc.) [10].

2.2 Market system effects

At present many stakeholders are involved in operation and development of EPSs. These are power companies,governmental authorities, power consumers. Interests of these stakeholders and correspondingly criteria of assessing interests are different. Profit is the principal criterion for power companies as participants of the wholesale electricity market.The profitability level of electricity (budget receipts), the influence of electric power industry on industrial output,employment and the living standard of population, the level of the environmental impact, energy security, etc. are the criteria for governmental authorities. Consumers are interested in electricity price level, reliability and quality of power supply.

The criteria of stakeholders can be contradictory. In particular, decisions that are effective from the state or economic standpoint may prove unacceptable for the other stakeholders. Many decisions cannot be taken without matching the interests of all concerned parties and reaching a compromise.

Let us consider the key factors which specify system effects for different stakeholders in a market environment(we will call them market system effects) for the structure of electric power industry that is represented by competing generation and sales companies, network companies as natural monopolies, power consumers [11]. Such a structure of electric power industry is under operation now in Russia.

Offers of the generation companies for power supply to the wholesale market form a supply function which is correlated with a power demand function from the sales companies and consumers. Then the equilibrium price of electricity in the wholesale market is determined on this base. Taking into account the mentioned major criterion for generation companies (profits) competition will make them decrease expenses for power production by loading first of all the most effective generation capacities. As a result, the equilibrium price of electricity in the wholesale market will decrease under market mechanisms. This is possible at joint operation of generation companies in the system without network constraints and also with regard to requirements and limitations on participation of generating units in covering the load curves, assurance of reliability of power supply to consumers and power quality.

Correlation of the considered market system effect with the components of technical system effects presented in Section 2.1 shows that virtually all technical system effects are realized in formation of the equilibrium electricity price in the wholesale market. However, the extent of their realization depends on the performance of competitive market mechanisms. In view of the fact that an ideal competition in electric power industry is practically unattainable because of the limited number of market participants, the considered market system effect for generation companies is expected to be lower than the potential technical system effect from the components of Section 2.1.

Similar market mechanisms should act, when the sales companies compete in the consumer’s electricity markets,resulting in realization of additional components of the market system effect at this level.

Network companies play an auxiliary part in the considered market processes, rendering the required services on power transmission from suppliers to consumers,assurance of power supply reliability and power quality,thus enhancing the market system effect owing to electricity market functioning.

Note that for a short-term perspective the market mechanisms operating in the electricity markets can cause the electricity prices to decrease even below the level determined by the complete realization of technical system effects owing to formation of bids of generation companies below the electricity production cost. However, if such a situation takes place over a long period of time, it can bring about adverse consequences： inadmissible decrease in resources for upkeeping capacity reserves, maintenance of equipment in working conditions, its updating and replacement. In response, conditions for competition in the electricity markets will disappear, the trends to sharp rise of electricity prices and the necessity for their control will arise.

The consumer interests expressed by their mentioned major criteria are associated with the incentives to effective operation of electricity markets, i.e. the maximum realization of the market system effect and correspondingly the electricity price cut.

The interests of governmental authorities are contradictory to a certain extent. The electric power industry, for example,will be highly profitable only at high profits of power companies that are attainable at high electricity prices. Simultaneously the efficiency of industrial production, the living standard of population and other interests demand that these prices be declined. However, on the whole the governmental authorities are certainly interested in the effective operation of electricity markets, i.e. the maximum realization of the market system effect.

Note that the real effect from realization of measures to intensify interconnection of EPSs for the stakeholders depends on the efficiency of organizational and economic management system for electric power industry. It determines to a great extent redistribution of the real effect among the stakeholders and can both contribute to and prevent from realization of the technical system effects. Actually the world experience shows that the effective competition in the wholesale electricity market is a failure because of frequently existing oligopoly and as a result, absence or insufficient use of the market system effects.

3 Historical aspects of the problem

R.B. Fuller [12] was apparently the first to mention the idea of Global Power Interconnection in his works in the early 1980s. This idea was brought to a detailed concept by Y.N. Rudenko and V.V. Ershevich in [13]. In 1986 the Global Energy Network Institute was established in San-Diego to work out the problem of global power interconnection design [14].

On the initiative of Y.N. Rudenko, an international conference “The World Energy System” was established in November 1991. The conference was held in different countries： in Russia, Hungary, Romania, Italy, Canada,Japan and some others.

The Asia Pacific Energy Research Center (APERC)was established in 1996 in Tokyo by the initiative of Asia Pacific Economic Cooperation Economic leaders at the Osaka Summit in 1995. The research area of APERC covers all the industries of the energy sector of the region.An important direction of the research is related to the potential and problems of interstate power interconnections[16,17].

In 1998, the International Conference “Asian Energy Cooperation” was established at the Melentiev Energy Systems Institute SB RAS to be held every two years. The topic of the Conference embraces the issues of energy cooperation on the Asian continent with a focus not only on electric power systems and their interconnections but also systems for gas and oil supply, especially in the Northeast Asia, and the interdisciplinary issues within energy sectors of various countries.

In the 1990s-2000s, Energy Systems Institute alone and together with the other institutions performed a great number of studies to develop conceptual principles and assess the prospects for the interstate power interconnections, first of all in Northeast Asia and also in Eurasian continent [18-21].Fig. 1 demonstrates some aspect of the developed concepts.

Fig. 1 Structure of interstate power interconnection in Northeast Asia in the future

Fig. 2 A structural scheme of Global Energy Interconnection

In 2015, significant achievements in the UHV power transmission technologies [11] gave a new impetus to the idea of Global Energy Interconnection which was developed in the eponymous book [23] by the Chairman of State Grid Corporation of China Liu Zhenya. The book was published in the Chinese, English and Russian languages,and was presented at the international conference “Global Energy Interconnection”. Before the Conference the international association “Global Energy Interconnection Development and Cooperation Organization” (GEIDCO)had been founded. During the conference and after it,the arrangements were reached and some agreements for cooperation were signed, including those concluded by the organizations and experts from Russia. In 2017, GEIDCO established the international journal “Global Energy Interconnection”.

4 Concept of Global Energy Interconnection

4.1 Main points of the strategy

The Global Energy Interconnection (GEI) concept is based on a strategy of replacing fossil fuels with environmentally clean energy sources, and increasing the share of electric power in the final energy consumption.Large-scale development of renewable energy sources,namely, wind, solar and hydro is expected. Moreover, some countries will develop nuclear energy, and soon it will be based on a closed fuel cycle with fast neutron reactors [24].It is planned to expand the network of UHV transmission lines for long-distance power transmission and connection of remote GEI parts with one another. Fig. 2 demonstrates a structural scheme of the future GEI [23].

In 2000-2013 the total share of renewable energy sources (except hydro) in the world electricity production increased from 1.8 to 4.8 per cent. With such dynamics, the environmentally clean energy sources will be able to meet 80 per cent of the world demand for electricity by 2050,thus providing a switch to a new model of electric power system operation. The increase in the share of electric power in the final energy consumption is planned by cutting direct use of coal, petroleum products and natural gas in the industry and households. Currently, for example,the share of electric heating in European countries reaches 90 per cent. Electric power favorably differs from the other primary energy resources by the convenience of use,environmental security and cost-effectiveness both when transmitted and when consumed. About one third of the world energy consumption falls on the transport industry.However, the energy conversion efficiency of petroleum products makes up 15-20 per cent, and the possibilities of its further increase are insignificant. At the same time the efficiency of electric power conversion to kinetic energy,considering the efficiency of battery charging system,reaches 80 per cent. The share of electricity in the world energy consumption in 1990-2012 increased from 34 to 38.1 per cent, and its rise to 80 per cent is expected by 2050 [25].

4.2 Stages of creation

Global Energy Interconnection in the time horizon to 2050 will connect all continents and largest areas where the renewable and other energy sources are concentrated. The formation of GEI, however, will be a staged process [23].

In the first stage until 2030, it is necessary to provide a coordinated development of national and international electric power systems and force the adoption of environmentally clean energy sources worldwide. The generated electricity can be supplied to consumers through existing and evolving international electric power interconnections.In this case, the system benefits from the optimal use of various energy sources that were enumerated in Section 2 can be implemented to the maximum, thus enhancing the efficiency of electric power system operation and expansion.

The key objectives of the second stage (2030-2040) will be the development of the largest areas with concentrated renewable energy sources in arctic and equatorial regions as well as design of continental power interconnections. In this stage, the construction of main transmission lines between continents will be started. Another crucial objective will be to devise the principles for coordinating joint efforts and incentivizing the cooperation among countries to build the Global Energy Interconnection and control its operation.

The third stage (2040-2050) suggests the completion of the GEI concept implementation through the establishment of a system for technological and commercial control,which can be based on different principles and structures[21,26]. This will allow a substantial rise in the international and intercontinental power exchanges, a reduction in power cost, and higher reliability of power supply.

4.3 Key technologies

The environmentally clean technologies for power production and UHV transmission will underpin the GEI [23].

The main directions in the enhancement of wind generation imply the development of wind energy resources with low values of average wind speed, an increase in the ability of equipment to withstand extreme climatic conditions, development of offshore wind parks, and improvement in wind speed forecast accuracy. In solar generation, the crucial directions will be the production of highly effective photovoltaic materials and thin-film solar panels, simplification of their production and installation,as well as the development of methods for solar activity monitoring.

Today the technologies of wind generation are developing rather actively： annual power output involving wind power exceeds 650 TWh, which is about 3 per cent of the world electricity consumption. An impressive potential of wind power is emphasized in [27]. According to this research,by the year 2040 the share of wind generation in the power generation mix can reach 30 per cent under favorable conditions. An intensive development of technologies in the first decade of the 21 century made it possible to create an 8 MW wind turbine which decreased the cost of electricity by 90 per cent. In the coming decade, an additional 50 per cent reduction in the cost of electricity generated by wind turbines is expected due to an increase in the single capacity of wind turbines.

Owing to the government subsidies to the comparatively expensive solar power in many countries, the installed capacity of solar power plants in the world exceeded 200 GW, as of 2015. The main problem is related to an increase in the solar power conversion efficiency, which is now about 20 per cent. Nevertheless, the theoretical efficiency of the monocrystalline and polycrystalline silicon cells is 38 per cent. The cost of electricity generated by photovoltaics is expected to decrease by 55 per cent by the year 2025 and by the year 2050 this index is expected to be even lower than for the conventional thermal power plants.

The technologies of solar thermal power generation have been actively developing since the 1970s. Currently,the efficiency of solar thermal power plants makes up 25-30 per cent. According to the forecast, by the year 2050 the cost of electricity from solar thermal power plants will be lower than for the conventional ones.

The forecast of the future GEI should consider the increasingly more real prospects for the accelerated development of safe and reliable nuclear power industry,particularly owing to the considerable achievements in the nuclear waste treatment. Russia is ranked fi rst in the world in this essential technology, which is conf i rmed by the BN-800 fast breeder reactor put into service at the Beloyarskaya nuclear power plant[24].

Development of power storage technologies particularly intensive in the last decades is of vital importance for large-scale development of renewable energy sources and for reliable and cost-effective operation of electric power systems. Power storage has broad prospects for the future GEI.

To transmit large amounts of electricity at long distances,it is proposed to construct a network of UHV DC and AC transmission lines. The first 1000 kV AC transmission line in the world was put into service in China in 2009.Currently, China has several successfully operating transmission lines of such kind, and 6 ±800 kV DC transmission lines. Brazil and India are constructing four more DC transmission lines of this voltage class.The studies and testing of ±1100 kV DC equipment are conducted to transmit power at a distance of 5000 km with a transfer capability of 12 GW.

Of great importance are cable UHV transmission lines that can negotiate water barriers to interconnect power systems and supply power from offshore power plants. Since the 1990s there has been a trend toward the predominance of cable DC transmission lines among the electric facilities put into operation in the world. In the case of successful development of cable ±800 kV DC transmission lines, it will be possible to provide power transmission through water barriers at distances above 1000 km.

4.4 Possible challenges

As well as many ambitious projects, the concept of Global Energy Interconnection has great opportunities to promote promising technologies and advanced solutions,however it faces some justified criticism. The ideologists of the concept [23] also recognize potential challenges.

For example, the probability of geopolitical conflicts similar to the oil crises of the 20th century and local tensions does not disappear. The construction and operation of GEI will be impossible without coordinated actions and trustbased partnership of all countries, whose prospects are doubted by some experts. The distribution of economic effect among the GEI member countries, in particular, can become one of the reasons for disagreements. Moreover, in the light of the interconnection scale, the issues of technological control and market interaction will be essential.

Thus, the established international association of organizations and experts “GEIDCO” has become of paramount importance. This international collegial body will provide the development of ideology, search for solutions to the set problems, and choice of a single vector of the world power industry development as an interstate infrastructure ensuring economic, reliable and sustainable power supply to consumers.

5 Conclusions

Despite potential technical and political difficulties and unsolved problems, the idea of Global Energy Interconnection represents a unique concept intended to comprehensively solve the problems which require the resources that may be insufficient even in the highly developed countries and their existing economic and political associations. It is the expansion of cooperation and partnership on fair terms, that underlies the prospects for the long-term effective, reliable and sustainable development of the world power industry as a platform for the uniform power supply to the economy and social sphere in all countries. Moreover, the foreseeable time and rather real tools for the concept implementation provide an additional impetus to the experts worldwide to alter the structure and character of the future power industry based on the idea of Global Energy Interconnection.