Optimal Electricity Trading with Carbon Emissions Pinch Analysis

Abstract

Many countries face the challenge of cutting greenhouse gas (GHG) emissions from electricity generation while coping with increasing demand. This problem is especially pronounced in developing countries with growing energy consumption. Commitments to cut GHG emissions can be met by increasing the share of low-carbon sources such as renewable and nuclear energy, but rapidly scaling up the capacity of such sources can be difficult. In a region of contiguous countries with heterogeneous levels of GHG intensity, electricity trading can be used to reduce the need for new power generation capacity. A country with a low-carbon power mix can export to its neighbours and thus reduce the need for new generation capacity in those countries. In this work, a variant of Carbon Emissions Pinch Analysis (CEPA) is developed for optimizing regional electricity trading to meet GHG emissions cuts. The method is demonstrated with the case of the Association of Southeast Asian Nations (ASEAN).