Reliability in multi-regional power systems: Capacity adequacy and the role of interconnectors

Based upon probabilistic reliability metrics, we develop an optimization model to determine the efficient amount and location of firm generation capacity to achieve reliability targets in multiregional electricity systems. A particular focus lies on the representation and contribution of transmission capacities as well as variable renewable resources. Calibrating our model with a comprehensive dataset for Europe, we find that there are substantial benefits from regional cooperation. The amount of firm generation capacity to meet a perfectly reliable system could be reduced by 32.4GW (i.e., 6.1 %) compared to an isolated regional approach, which translates to savings of 12.9 Bn Euro when being valued with typical investment costs of an open-cycle gas turbine. Interconnectors contribute in both directions, with capacity values up to their technical maximum of close to 200 %, while wind power contributions are in the range of 3.8 - 29.5 %. Furthermore, we find that specific reliability targets heavily impact the efficient amount and distribution of reliable capacity as well as the contribution of individual technologies, and should therefore be chosen with care.