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2013-02 - Cross-Border Trade in Electricity and the Development of Renewables-Based Electric Power: Lessons from Europe
Heymi Bahar and Jehan Sauvage
Renewable energy has been identified by many governments as a means of mitigating CO2 emissions from the electricity sector, and for making the transition to a low-carbon economy. However, the electric power output of some renewable-energy technologies, such as those based on intermittent wind and solar energy, can vary considerably over short periods of time and thereby introduce instability into the electricity system.
Cross-border trade in electricity is one way of dealing with this intermittency problem, as it enables countries to gain access to a more diversified portfolio of plants, producing over a wider geographic area. To benefit fully from cross-border trade in electricity, interconnected countries need to establish a non-discriminatory trading regime based on co-operation and co-ordination, according to this study of trade in renewables-based electric power in Europe.