Group for Research in Decision Analysis

G-2020-39

Deep decarbonization in Northeastern North America: The value of electricity market integration and hydropower

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In several countries, electricity systems are under strong decarbonization pressure. In particular, the Canadian provinces of Quebec and Ontario as well as the states of the northeastern United States have committed to cut their greenhouse emissions by more than 70\% (with respect to emission levels of 1990). Increased collaboration and integration between jurisdictions could decrease such decarbonization costs, especially when important hydropower resources are available.

Using a capacity expansion and dispatch model of the Northeastern North American electricity sector, we analyze the impact of emission reduction targets, load levels and availability of power technologies in a range of scenarios, in order to assess the benefits of regional cooperation. Our results show that for deep decarbonization, the electricity system costs can be significantly reduced through integration, especially by adding more interconnection capacity. These costs savings and benefits are however not evenly allocated between jurisdictions, creating potentially difficult collaboration incentives.

, 31 pages