Investigating the long-term benefits of EU electricity highways: The case of the Green Aegean Interconnector

Abstract

This paper investigates the potential long-term benefits that could be arisen by the construction and operation of the envisioned “Green Aegean Interconnector”. This will be a pioneering 9-GW direct interconnection line connecting Greece with Germany to facilitate the transfer of massive amounts of RES generation from South-East to Central-North Europe. The ultimate goal of this analysis is to estimate the total electricity supply cost to be undertaken by the end-consumers in Greece with and without the said interconnector along with the cost/benefit of the Greek national economy associated with the foreseen cross-border electricity exchange. Detailed simulations of the Greek electricity market using a specialized electricity market simulation software on the basis of the main provisions of the revised Greek National Energy and Climate Plan are performed under realistic market evolution scenarios for a future 30-year study horizon (2026–2055). Simulation results and the associated cost-benefit analysis indicate that such a project would enable the operation of additional RES projects in Greece. This would, in turn, decrease the overall Greek end-consumers’ electricity cost and create a significant surplus for the Greek economy through the increased exporting activity, whereas at EU-level it would assist towards further achieving the European energy market integration.