Authors: Feng Shenghao, Philip Adams, Zhang Keyu, Peng Xiujian, Yang Jun
This study uses a Computable General Equilibrium (CGE) model to quantify the economic implications of the proposed Global Electricity Interconnection (GEI) electricity system. Enhancements to the model for this study include: (a) a detailed and up-to-date electricity database; (b) a new fuel-factor nesting structure; (c) re-estimated values for the constant elasticity of substitution (CES) parameters between fossil fuel power generation and non-fossil fuel power generation; (d) a base-case (for years between 2011-2050) consistent with the New Policy Scenario outlined in the World Energy Outlook 2018; and (e) the stylized characteristics of the operation of the GEI network.
Modelling results suggest that, by 2050, compared to the base-case: (1) the GEI network will increase world GDP by 0.33 per cent; (2) all regions will benefit from GEI development; (3) world output of coal, oil and gas will fall by 1.4, 0.2 and 0.9 per cent, respectively; (4) the shares of renewable energy in total electricity and total primary energy will increase by 4.3 and 2.9 percentage points; and (5) global CO2 emissions will fall by 0.72 per cent.
JEL classification: C68, F17, Q43
Keywords: GEI (global energy interconnection); CGE (computable general equilibrium); nesting structure; CES (constant elasticity of substitution); Economic impacts
Working Paper Number G-307 can be downloaded in PDF format. To print this you will need the Adobe Acrobat Reader.
Go to working papers page