Costs and benefits of large-scale deployment of wind turbines and solar PV in Mongolia for international power exports

Highlights

This paper discusses the impacts of massive renewable power exports from Mongolia.

The author uses a multi-region power system model of Northeast Asia (NEA).

Massive “Mongolian renewables” significantly decarbonizes the NEA power system.

Large investment costs of the renewables are likely to pose economic challenges.

Strong emission reduction policies would be important for implementation.

Abstract

Power grid interconnection has gained attention in Northeast Asia (NEA) as a means to effectively utilize the abundant renewable resources in Mongolia. This paper quantifies the potential economic and environmental benefits of deploying massive wind turbines and solar PV in Mongolia for power exports. The author uses an NEA-wide multi-region power system model formulated as a linear programming problem. The analysis considers power systems characteristics, such as the seasonal and daily electric load curves of the NEA regions.

The simulation results show that the large-scale Mongolian renewables contribute to significant CO2 reductions in NEA. China, in particular, benefits from a significant reduction in coal-fired generation. However, huge investments would be required for the massive renewables and cross-boundary transmission facilities, pushing up electricity supply cost. The relevant planning organizations need to carefully consider these environmental opportunities and economic barriers before implementation. This paper also investigates the economic impacts of transmission route circuity due to avoiding transmission through the Democratic People’s Republic of Korea (DPRK). Our results imply modest effects of the circuity on the total system cost; availability of routes through the DPRK would not significantly increase the benefits to the NEA system of integrating massive renewables in Mongolia.

Keywords

  • Grid interconnections;
  • Electricity trade;
  • Renewable energy;
  • Northeast Asia Super Grid;
  • Linear programming;
  • Energy systems modeling

1. Introduction

International power grid interconnection becomes potentially attractive to decarbonize the electricity sector in Northeast Asia1 (NEA), especially after several recent regional events, including the Fukushima nuclear disaster in Japan, the power shortage in Korea, and increased concern about air pollution in China. These three major electricity consuming countries, together accounting for 31% of world electricity demand in 2013 [1], have recently reaffirmed the importance of lower-carbon and more resilient energy systems. Their governments and/or industries are currently discussing alternative energy supply options, including imports from foreign countries [2]; [3] ;  [4]. At the same time, other neighboring NEA countries with abundant renewable resources, in particular, Mongolia, have shown strong interest in developing renewables and exporting electricity to attract new investment [5]. According to Elliiott et al. [6] and Energy Charter et al. [7], estimated wind and solar photovoltaics (PV) potential in Mongolia reach 1100 GW2 and 1500 GW, respectively. Thus, several multilateral interconnection schemes have been proposed in NEA, with a focus on renewable energy developments in Mongolia for international power exports [7]. Also, relevant organizations, including GEIDCO initiated by State Grid Corporation of China, have started discussion and planning from various perspectives, such as economic, environmental, legal and institutional [3]; [4] ;  [8].

This research aims to examine the economic viability of developing the abundant wind and solar resources in Mongolia for international power exports. There have previously been various studies examining renewable energy integration and transmission expansion in each individual country in NEA3; however, few papers so far have quantified the costs and benefits of the Mongolian renewables for power trade. There are several studies which have performed modeling and analyses of international power trade in NEA [7]; [9]; [10]; [11]; [12] ;  [13]. Yet, these studies, except for Energy Charter et al. [7] and Otsuki et al. [13], did not consider wind and solar resources in Mongolia. As for Energy Charter et al. [7] and Otsuki et al. [13], the scenarios discussed in their analyses limited the Mongolian renewables to 100 GW (50 GW wind and 50 GW solar PV), despite the huge estimated potential.

This study utilizes an NEA-wide multi regional power system model, formulated as a linear programming problem. This model considers power system characteristics, including seasonal and daily electric load curves of each region and output profiles of renewables in Mongolia. Compared with the author’s previous study [13], the novelty of this paper includes the two points as follows:

Quantification of the costs and benefits of large-scale (such as 2000 GW-scale) deployments of Mongolian renewables for international exports, and

Expansion of the modeled grids in China, from two in our previous study (CH-N and CH-NE) to the all markets in this paper (Fig. 2). This enhancement allows us to consider China’s large market and to discuss the optimal grid integration of massive Mongolian renewables in a more comprehensive and convincing manner.

Although uncertainties exist regarding the degree of future energy cooperation that can be achieved in NEA, the author believes that this paper can contribute to stakeholders’ and policy makers’ discussions by quantitatively providing findings and implications from an economic perspective.

This paper proceeds as follows: Section 2 gives an overview of the multi-region power system model; Section 3 presents the simulation results; and Section 4 summarizes major conclusions and implications, and then proposes a future research agenda.

2. Methods

2.1. Overview of the multi-region power system model

This paper uses a multi-region power system model developed by Otsuki et al. [13].4 This is a linear programming model, which aims to minimize a single-year total system cost, consisting of the annualized initial cost, operation and maintenance (O&M) cost, fuel cost and carbon cost for the whole of NEA under various technical and political constraints. Hence the NEA economies are assumed to cooperate fully to achieve the regional optimization. Although the degree of future energy cooperation in NEA is uncertain, this paper assumes the most ideal situation in order to quantify the maximum benefits potentially obtainable from developing renewables in Mongolia for power exports. Fig. 1 is a schematic diagram of this model. An additional enhancement to the model used in this study compared to our previous work is the inclusion of battery storage technology. Detailed mathematical descriptions and model validation are provided in Otsuki et al. [13]. The assumed discount rate to annualize initial investments is 5%; carbon cost considers only direct emissions from fuel combustion.

Fig. 1

Fig. 1

Fig. 1. 

Schematic diagram of the multi-region power system model.

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