Abstract:
Based upon probabilistic reliability metrics, we develop an optimization model to determine the efficient amount and location of firm generation capacity to achieve reliability targets in multiregional electricity systems. A particular focus lies on the representation and contribution of transmission capacities as well as variable renewable resources. Calibrating our model with a comprehensive dataset for Europe, we find that there are substantial benefits from regional cooperation. The amount of firm generation capacity to meet a perfectly reliable system could be reduced by 32.4GW (i.e., 6.1 %) compared to an isolated regional approach, which translates to savings of 12.9 Bn Euro when being valued with typical investment costs of an open-cycle gas turbine. Interconnectors contribute in both directions, with capacity values up to their technical maximum of close to 200 %, while wind power contributions are in the range of 3.8 - 29.5 %. Furthermore, we find that specific reliability targets heavily impact the efficient amount and distribution of reliable capacity as well as the contribution of individual technologies, and should therefore be chosen with care.