A techno-economic and financial analysis of a Gulf-India undersea electricity interconnector

As part of efforts to decarbonise, power systems around the world will need to cope with increasing shares of intermittent renewable generation from technologies such as wind and solar photovoltaics (PV) in the coming decades. One promising solution to this challenge is cross-border electricity interconnectors. This study is an independent combined techno-economic and financial analysis of an electricity interconnector between Gulf Cooperation Council (GCC) countries and India. A techno-economic model of a combined India-GCC power system was developed using OSeMOSYS, an open-source energy system modelling tool and combined with a financial model. The models were applied across 75 scenarios covering a range of cost variables and solar PV locations in the GCC. We find that a techno-economic case for a GCC-India interconnector is clear: an interconnector is part of the least-cost ‘optimal’ power system in 64 of the 75 scenarios studied. The trend of electricity flows gradually shifts from the India->GCC direction in 2030 to the other way around by 2050. The overall trade volumes are influenced by the location of the solar PV farm; locations further to the west contribute towards higher trade volumes in the GCC->India direction. Of the cost variables considered in the study the overall (social) discount rate is most strongly correlated with the interconnector trade volumes. The financial case for the CCG-India interconnector is less clear. Of the projections developed for the scenarios from the technoeconomic model, only a small number are immediately investible. It is also expected that a smaller interconnector will be a more attractive investment opportunity, for a trade-off in total system cost reductions.