Economics of planning electricity transmission considering environmental and health externalities

Abstract

Long-distance electricity transmission can achieve environmental benefits through the transfer of air pollutants. However, current electricity transmission investment decisions do not take enough environmental factors into account. This study combines Greenhouse Gas-Air Pollution Interactions and Synergies model with power system planning to reveal how regional differences in environmental and health losses affect the allocation of electricity at the spatial level. Based on the analysis of inter-provincial electricity interconnection in China, we find that the regional differences in environmental and health external costs of power generation are significant. Considering external costs in investment decisions will largely improve the economy of long-distance inter-regional electricity transfer dominated by ultra-high voltage lines, thus replacing a portion of intra-regional electricity transfer dominated by high voltage lines. Meanwhile, the increases in local health losses in major electricity exporting provinces are not significant, which can alleviate the regional equity issues caused by pollutant transfer.

Keywords: Economics; Electrical system; Energy policy; Energy sustainability; Health sciences.

Graphical abstract

Figure 1

Provincial unit external costs of power generation The subfigures show the unit external costs of coal-fired power (A) gas-fired power (B) and biomass power (C) respectively. Subfigure (D) shows the provincial average external costs per kWh in 2018.

Figure 2

Total external costs generated or suffered by each province in 2018 The red bars represent the variable$G_i^O$in the Method section; the yellow bars represent the variable$S_i^O$; the blue bars represent the variables$G_i^L$and$S_i^L$, which are actually the same concept. The power structure composition of the external costs is shown in Figure S2.

Figure 3

Provincial total capacity mix and new transmission lines under each scenario The subfigures show the results of BAU scenario (A) and EHE scenario (B) respectively. The area of the pie chart represents the amount of total installed capacity in 2035. The red lines show the newly built inter-provincial power transmission lines during 2018–2035, and the width of the lines represents the transmission capacity.

Figure 4

Province-specific external benefits from electricity transfers under each scenario The subfigures show the results of BAU scenario (A) and EHE scenario (B) respectively. The squares represent the transfer of electricity between each province in 2035, and the colors of the squares represent the range of external benefits of the transfer.

Figure 5

External cost changes caused by electricity transfers under each scenario The subfigures show the results of BAU scenario (A) and EHE scenario (B) respectively. The area of the pie chart represents the absolute amount of electricity transfers. North includes Beijing, Tianjin, Hebei, Shandong, Shanxi, Inner Mongolia; Northeast includes Heilongjiang, Jilin, Liaoning; East includes Jiangsu, Zhejiang, Shanghai, Anhui, Fujian; Center includes Henan, Hunan, Hubei, Jiangxi, Sichuan, Chongqing; South includes Guangdong, Guangxi, Hainan, Guizhou, Yunnan; Northwest includes Xinjiang, Tibet, Gansu, Qinghai, Ningxia, Shaanxi.