Power System Implications of Subsidy Removal, Regional Electricity Trade, and Carbon Constraints in MENA Economies
This study analyzes impacts on the power sector in the Middle East and North Africa region of three policies: removal of fuel subsidies, cross-border electricity trade, and reduction of carbon dioxide emissions in line with commitments under the Pa...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/783251592940144153/Power-System-Implications-of-Subsidy-Removal-Regional-Electricity-Trade-and-Carbon-Constraints-in-MENA-Economies http://hdl.handle.net/10986/33992 |
| Summary: | This study analyzes impacts on the power
sector in the Middle East and North Africa region of three
policies: removal of fuel subsidies, cross-border
electricity trade, and reduction of carbon dioxide emissions
in line with commitments under the Paris Agreement. The
analysis uses a power system planning model that minimizes
the total electricity supply cost over 2018–35 by satisfying
specified technical, economic, environmental, and policy
constraints. The study shows that the region would save
between US$26.3 billion and US$27.5 billion, measured in
2018 prices, by removing subsidies of natural gas used for
power generation. It would save US$83.6 billion to US$90.9
billion through cross-border electricity trade. The two
policies together would yield a reduction of 10 percent in
cumulative power sector carbon dioxide emissions in the
region, with a net cost savings of US$111 billion. If a
carbon constraining policy is considered to achieve the same
level of reduction of emissions, the cost of the power
system would increase by US$97 billion. The study also
reveals that the benefits of subsidy removal would be higher
in the presence of cross-border trade, and the benefits of
cross-border trade would be higher in the absence of fuel subsidies. |
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