Domestic and Diplomatic Difficulties in Planning for Transboundary Trading of Electricity

2016

BMS

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The feasibility of the project called IceLink is now being examined, which entails laying 800-1,200 MW high-voltage direct current (HVDC) submarine cables over 1,000 km and transmitting over 5 TWh per annum. This project will meet the growing demand in Europe for electricity derived from renewable energy sources, though there exists a relatively high degree of potential risks (e.g., financial risk due to the lingering affect of the financial crisis). This study aims to examine the effectiveness of public financial support for the project by using a quantitative analysis as well as discussing public financial support as a possible measure to fill the viability gap. The simulation results imply that the project is unfeasible unless there is public financial support. In the light of the public nature of the project and its promotion of green power, public financial support may be acceptable. It can thus be said that public financial support will be effective for this project. Also, the sensitivity analysis results show break-even points for three major parameters:-WACC, wholesale power price, and CAPEX-to NPV. Furthermore, the corresponding public financial supports-concessional loans provided by public financial institutions, applying for the feed-in tariff (FiT) system in the UK, and receiving a government subsidy for initial investment-are discussed as potential measures to fill the viability gap. In order to have a feasible project, it is essential to introduce one or more effective measures of public financial support.

Section: Introductionmentioning

confidence: 99%

“…Planned trade of electricity from Iceland to the UK in the IceLink project.Source:Nakayama et al (2015) …”

mentioning

confidence: 99%

Effectiveness of Public Financial Support in an Electricity Transmission Project between Iceland and the UK

2016

BMS

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“…Within this context, the plan to transmit electricity from Iceland to other European countries such as the UK at a higher price has been investigated for some time (Hammons, Lee, Chew, & Chua, 1998 Under the circumstances, Landsvirkjun, the national power company in Iceland, is investigating the possibility of installing 800-1,200 MW high-voltage direct current (HVDC) submarine cables of over 1,000 km that will deliver more than 5 TWh of renewable electricity to the UK each year (Landsvirkjun, 2015a). The envisaged transmission route of IceLink is shown in Figure 1 (Nakayama, Sasaki, & Ito, 2015). …”

Section: Introductionmentioning

confidence: 99%

Risk Management in an Electricity Transmission Project between Iceland and the UK

International Journal of Social Science Studies

2015

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In recent years, energy is transmitted in the form of electricity in some parts of the world. Furthermore, all member states of the European Union (EU) have a legal obligation to ensure that 20% of their community energy consumption comes from renewable sources by 2020. Therefore, there is a great demand for electricity derived from renewable sources while at the same time there are non-negligible risks in electricity transmission between nations. Addressing these risks is thus of great importance. Under such circumstances, the national power company in Iceland is investigating the possibility of installing a series of 800-1,200 MW high-voltage direct current (HVDC) submarine power cables of over a span of 1,000 km in an effort to deliver more than 5 TWh of renewable electricity to the UK each year. In order to accelerate this project, the company must employ measures of risk prevention and/or mitigation. This study aims at revealing the potential risks of this project (called IceLink) using qualitative analysis. Thus far, there seems to be very few similar studies concerning the project, yet the results are significant from the viewpoint of risk management. Based on the results of interviews and a survey of the literature, we identify three major potential risks of the project: regulatory risk, political risk, and financial risk. In this regard, we classify risk in the same manner as a previous research. Subsequently, we suggest ways to manage these risks and as a result, we find that many of these measures can be introduced even under the present circumstances.

“…The CASA-1000 project was launched with the support of international financial institutions with a focus on the World Bank (SNC-Lavalin, 2011). As shown in Figure 1 (Nakayama et al, 2015), in this project, 1,200 km of transmission cable line was laid with a plan to trade the surplus electricity of 1,300 MW in the summer season from Tajikistan and, in future, from Kyrgyzstan to Pakistan via Afghanistan. Thanks to the realization of this project, the international community expects to eliminate power shortages in Afghanistan and Pakistan, provide economic development through foreign currency revenue, and contribute to Afghanistan's reconstruction and social stability.…”

Section: Introductionmentioning

confidence: 99%

A study on the risk management of the CASA-1000 project

Hydrological Research Letters

2015

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