Cross-border trade in electricity

• 成果类型: Article
• 署名作者: Antweiler, Werner
• 署名单位: University of British Columbia
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.03.007
• 发表日期: 2016
• 页码: 42-51
• 关键词: electricity; international trade; Two-way trade

摘要

This paper develops a novel economic theory of two-way trade in a homogenous good, electricity. In this model of 'reciprocal load smoothing,' international trade provides insurance. As electricity demand is stochastic and correlated across jurisdictions, electric utilities can reduce their cost during peak periods by importing cheaper off-peak electricity from neighbouring jurisdictions. Two-way trade emerges in the presence of strongly convex marginal costs. Observed trade between Canadian provinces and US states strongly supports the theoretical model. Reciprocal load smoothing provides an economic rationale for integrating North America's fragmented interconnections into a continental 'supergrid' if technological progress in long-distance bulk transmission continues to reduce costs. (C) 2016 The Author. Published by Elsevier B.V.