Making energy transition possible: the role of green grids and cross border trade in renewables

Accelerating an energy transition by encouraging the move from fossil fuels towards cleaner, and increasingly cheaper renewables and storage is one of five key themes for COP26 in Glasgow next month. One initiative of the UK’s COP Presidency has been the establishment of an Energy Transition Council, consisting of ministers and senior officials from over twenty countries, together with representatives of international organisations, to make “clean power technologies the preferred option for countries investing in new power generation, with the aim of doubling the rate of investment in clean power by 2030".

However, increasing the share of renewable energy in our power generation mix comes with its own challenges, not least building and operating electricity grids that can cope with large inputs of ‘variable’ renewable energy sources, for example, those which can only generate during daylight hours or when the wind is blowing. Advancements in storage technology – for instance, large scale batteries, pumped hydro or the use of renewable energy to power the process of creating a clean fuel such as hydrogen – will be part of the answer to the problem of matching variable supply to patterns of demand. But scaling-up renewables to the extent needed to power industry, cities and transport networks will also often require linking centres of high demand to regions of high renewable energy generation potential that maybe quite distant from one another. Although the sheer distances involved may make this challenging, the concept of green grids facilitating cross-border or regional trade in renewable energy has distinct benefits as well.

Green grids linking supply with demand

The first and most obvious potential benefit of long distance connections through green grids is that it may help regions with low renewable potential still be able to gain access to cheap renewable power. Bangladesh is a good example of a ‘renewables constrained’ country, with no substantial hydro power resources and, because of high population densities and the resultant pressure on agricultural land, very limited space to install utility-scale arrays of solar PV panels or on-shore wind farms. But because Bangladesh is connected to a regional grid that trades power between itself, Bhutan, India, and Nepal, it still has potential access to low cost solar and wind power from India and hydropower from the Himalayas.

Long distance connections also provide the ability to access different types of renewable power. So continuing with the South Asian example above, while solar and wind are variable across short time periods (hours to days), hydro power is generally more constant in nature, varying in availability mainly across seasons rather than days or hours. This means hydro power from Bhutan and Nepal has the potential to be used to balance demand on the Indian grid when the sun isn’t shining or the wind not blowing. In addition, because of a coincidence of seasonal rainfall and temperature variation, Himalayan hydro potential is at a peak in the monsoon, when temperatures, and the demand for electricity to power air conditioning, is at its highest in India.

Cross border trade underpinning energy security

Another benefit of cross-border electricity interconnections is the enhanced ability it confers for regional networks to ‘flex’ and provide mitigation for shocks that would otherwise cause greater problems for stand-alone national grids. As recent research carried out by the Indian think tank International Research and Action for Development (IRADe) shows, Bangladesh, Bhutan, India and Nepal were better able to cope with the rapid and large temporary drop in demand for electricity during the early months of the Covid pandemic. This was a result of having interconnected grids, which allowed the four countries more flexibility when trying to balance generation with demand while continuing to utilise high priority renewable sources.

The sun is always shining somewhere

Perhaps the most interesting benefit opening up from long distance interconnectors however is the opportunity to exploit different time zones.

Advances in technology now mean that using ultra high voltage direct current (UHVDC) interconnectors, power can be transmitted hundreds, if not thousands of miles with very little loss. China, for example, recently completed a 970 mile long 800-kilovolt UHVDC line to bring solar and wind power from Tibet, at a cost of US$3.45 billion, and is constructing a 1.1 million-volt cable that can supply Shanghai with up to 12,000 megawatts of power from the deserts and mountains of Xinjiang province, around 2,000 miles away.

UHVDC technology opens up the possibility of exploiting east-west time differences to take advantage of the fact that, for example, that the sun is still shining in the Gulf States as darkness falls in India. Our FCDO-funded Energy and Economic Growth Applied Research Programme (EEG) commissioned techno-economic and financial analysis earlier this year of a potential electricity interconnector between Gulf Cooperation Council (GCC) countries and India. Seventy-five different scenarios covering a range of cost variables and solar PV farm locations in GCC were considered and the analysis suggested that in sixty-four of the seventy-five scenarios studied the interconnector was the least-cost optimal power system for the two regions. Interestingly, the studies predicted that the trend in electricity flows across the connector would start from India to the GCC in 2030 and only switch towards higher trade volumes from the GCC to India in 2050.

Challenges to expansion

The obvious challenge to the expansion of cross-border and even inter-continental green grids is a political one – mistrust of neighbouring countries and a desire to maintain control over energy security by keeping generating capacity in-country. The historic difficulties of relationships between India and Pakistan, for example, mean that the latter is not yet part of the South Asia power exchange mechanism enjoyed by Bangladesh, Bhutan, India, and Nepal.

There are also other genuine issues to consider. Installing wind and solar in areas with the fastest wind speeds or the highest solar radiation is not always the most cost-effective strategy from an overall system perspective, nor is it necessarily the most environmentally or socially beneficial. Priorities differ between stakeholders, and it is thus important to look at multiple criteria, both monetised and non-monetised, when assessing suitable sites for renewable energy generation and to allow stakeholders to weigh and combine these criteria in a transparent manner in order to prioritise areas for development. For example, optimal energy development pathways should ideally be shaped by goals to protect biodiversity and areas important to local communities. Large-scale deployment of wind and solar power plants or new hydropower dams may directly conflict with biodiversity and ecosystem services and negatively impact local communities.

If not addressed, conflicts are likely to result in project delays and cost overruns, and require mitigation and compensation costs that would affect the feasibility of new energy infrastructure that is critical for achieving energy security, economic growth, and climate goals. To this end, EEG has commissioned the University of California Santa Barbara to develop geospatial analyses and tools that estimate multiple criteria allow different stakeholders across the Southern Africa Power Pool to participate in the decision-making process and address siting issues that result when renewable energy development is solely a project developer-driven process.

Next steps - COP26 and green grids

India’s Prime Minister Modi has championed an initiative known as One Sun One World One Grid (OSOWOG) that envisages building a global solar grid. Building on this, the UK and India plan to launch a Green Grids Initiative at COP26. The aim is to engage leaders of key countries at COP itself to raise the profile of the role of grids in decarbonisation, and the need to accelerate action and cooperation. In addition, the initiative intends to convene a working group of multilateral development banks and international technical agencies, to help accelerate existing initiatives on grids and ensure these are focusing sufficiently on the clean energy transition, while also accelerating research, development and knowledge sharing around green grids and their implementation.

Post-COP26: an update 

EEG is continuing to work with the Climate Parliament to raise awareness of the Green Grids Initiative amongst legislators and parliamentarians across South Asia and Sub Saharan Africa, through a series of  on-line roundtables. Each round table has utilised research sponsored by EEG to illustrate the benefits and potential of long distance cross border trade in renewable energy.

About the author:

Simon Trace is the Principal Consultant, Natural Resources and Energy at Oxford Policy Management and Director of the FCDO funded applied research programme on Energy & Economic Growth (EEG). Simon has over 35 years’ experience working in international development including 10 years as CEO of the international NGO Practical Action.