The role of cross-border electricity trade in transition to a low-carbon economy in the Northeastern U.S

Abstract

Canadian hydropower resources offer a potentially attractive option for meeting decarbonization targets in the US Northeast region, where there are ambitious climate goals and nearby hydro resources in Quebec. Existing transmission capacity is, however, a limiting factor in expanding hydropower imports to the region. To examine the value of expanding transmission capacity from Quebec to the Northeast, we employ an integrated top-down bottom-up modeling framework (USREP-EleMod). This research was part of an Energy Modeling Forum effort, EMF34, with a goal of better characterizing linkages in energy markets across North America. The scenarios we examine exogenously expand transmission capacity by 10, 30, and 50% above existing capacity into the US Northeast (New York/New England), finding the value to the economy of these expansions ranging from $.38-$.49 per kWh imported into New York, and $.30-$.33 per kWh imported into New England by 2050. The scenarios include economy-wide emissions goals these states have set for themselves. The carbon limits we imposed raise fuel prices more than electricity prices and as a result we found greater electrification in the US Northeast region from 2030 onward, a result that one would not see using just an electricity sector model, demonstrating a main hypothesis of EMF34, that models that looked at more integration across energy markets would give deeper insight than more narrowly focused models.