Economic Assessment of Power Link between Europe and China

As China and majority European nations are all promoting high level renewable energy, it can effectively reduce greenhouse gases (GHG) emission, fuel cost to serve loads, and the reliance to combustion-based electricity generation. However, the growing penetration of renewable energy also causes operation challenges, such as renewable curtailment, system reliability, and higher ramping rate requirements, etc. Because renewable energy resources, such as wind and solar PV, are intermittent variable resources, it requires a significant amount of flexible resources to accommodate them. In addition to traditional resources, such as, hydro, pumped storage, steam coal, and gas units, to meet net load (load – wind – solar), battery energy storage system (BESS) becomes vast available clean resource option to mitigate these issues, but they are expensive to build. Building a transmission line to integrate widely dispersed, time diversified renewable energy sources is another option. Even though the distance between Munich Germany and YiLi China is as far as 6400 km, it could be economically justified to build such a power link, considering China and Europe’s complementarity of renewable generation, time shift for load, and ultra-high voltage direct current (UHVDC) technology improvements. Moreover, Europe is a winter peaking system while China is a summer peaking system, therefore, capacity sharing via transmission line could reduce installed generation capacity requirements for both Europe and China, respectively. The power link would not only enable economic energy transfer and integrate renewable resources, but also allow generation capacity sharing between Europe and China, which will bring significant benefits to European countries and China. This study compared the economic benefits and cost for UHVDC ±800kV and ±1100kV, respectively, and concluded that the ±1100kV project’s benefit cost ratio is higher than that of ±800kV based on the given assumptions. Therefore, the ±1100 UHVDC project is the winning bid to link Europe and China.