Power Trade between Iran and Turkey: A Non-linear Optimization Analysis

Abstract

Power systems interconnections have many advantages not only inside a country but also for expanding international electricity trades. It is shown that grid interconnection may provide low cost, low-risk hedging opportunities against domestic uncertainty about growth in supply of and/or demand for power. This paper presents an optimization framework for (a) profit maximization in the Short-Run trading and (b) cost minimization in the Long-Run trading in power exchanges of Iran with Turkey. It is an application of a regional electricity market model to obtain an optimal power trade level between Iran and Turkey for the present as well as a 30-years sight. For both optimization models, the required objective function, parameters, variables and constraints are described. Results derived from running Short-Run model show that the export capacity of Iran is about 1000 MW, yielding a total profit of 161 M$ for one year. In addition, results derived from running Long-Run model show that, there will be greater potential for power export of Iran to Turkey which can grow 12% a year.