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1、Supporting the renewable electricity transition through tradeUNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTIONUNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION1CONTENTSAcknowledgements.2Foreword.3Executive summary.5Introduction.8A.The role of trade in renewable electricity.91.1

2、 Overview.101.2 Renewable electricity generation potential is unevenly distributed.101.3 Renewable electricity supply is intermittent,demand is uneven.101.4 Trading renewable electricity across borders can help balance supply and demand.121.5 Trading renewable electricity enables economies to exploi

3、t their comparative advantages.141.6 Trading renewable electricity across borders can help importing countries reach decarbonization targets.161.7 Interconnectors create interdependence underscoring the case for a global grid.18B.Addressing issues facing cross-border transmission of renewable electr

4、icity.212.1 Overview.222.2 Cross-border electricity trade.222.3 Supply disruptions and export restrictions.262.4 Supply chain bottlenecks create opportunities to promote re-globalization.282.5 Access to finance.302.6 Transparency on regulatory approval processes and timelines.352.7 Drawing inspirati

5、on from the submarine cable network enabling the internet.39C.Conclusions.43Glossary of acronyms.46SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE2ACKNOWLEDGEMENTSThis co-publication of the World Meteorological Organization and the World Trade Organization was prepared under the overal

6、l guidance of Michael Roberts,Head,Aid-for-Trade Unit,Development Division,WTO,and Dr Roberta Boscolo,Influencer,Climate&Energy Leader at WMO.Hoe Lim,Director of the Trade and Environment Division at the WTO,supervised the work.The lead author was Michael Roberts.At the WTO,Rousi Zhang,Edvinas Drevi

7、nskas,Daniel Ramos,Qing Yi and Abhishek Bhattacharya provided contributions.Valuable comments were also received from Marc Auboin,Mateo Ferrero,Lauro Locks,Reto Malacrida,Devin McDaniels,Jose-Antonio Monteiro,Roy Santana,Astghik Solomonyan,Erik Wijkstrom and Ankai Xu.Barbara Marcetich and Elizabeth

8、Upton provided editorial guidance.Vishvanathan Subramaniam(Geneva Graduate Institute),Matthew Wittenstein(Chief,Energy Connectivity Section UNESCAP)and Peter Wooders(Geneva Platform for Resilient Value Chains)also provided helpful guidance.At WMO,Daniel Kull,Director Resources Mobilization and Devel

9、opment Partnership,Amir H.Delju,Senior Scientific Officer of the Climate Services Branch,Services Department,and Rundong Cao,Young Professional,also provided inputs.The publication was edited and reviewed by Anthony Martin at the Information and External Relations Division of the WTO.DISCLAIMERPrepa

10、red by the staffs of the World Meteorological Organization(WMO)and the World Trade Organization(WTO).For the WMO,the designations employed in WMO publications and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of WMO concerning the

11、legal status of any country,territory,city or area,or of its authorities,or concerning the delimitation of its frontiers or boundaries.The mention of specific companies or products does not imply that they are endorsed or recommended by WMO in preference to others of a similar nature which are not m

12、entioned or advertised.The findings,interpretations and conclusions expressed in WMO publications with named authors are those of the authors alone and do not necessarily reflect those of WMO or its Members.For the WTO,this work is published under the responsibility of the WTO Secretariat.The views

13、expressed,and the terms and illustrations used in this publication are without prejudice to WTO members rights and obligations,nor intended to provide any authoritative or legal interpretation of the provisions of the WTO Agreements.The names of countries and territories used in this joint publicati

14、on follow the practice of the WTO.This document,as well as any data,illustrations and maps included herein,are without prejudice to the status of or sovereignty over any territory,to the delimitation of international frontiers and boundaries and to the name of any territory,city or area.Copyright 20

15、24,World Meteorological Organization and World Trade Organization.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION3FOREWORD“By trading energy from sun,wind and water across borders,we can deliver more than enough clean energy to meet the needs of everyone on earth.”1One Sun Declaration,C

16、OP26The sun shines,the wind blows,and water flows,but not in the same places or at same times across the globe.Cross-border trade in renewable electricity can help even out these spatial and temporal mismatches in supply and demand.The energy transition involves a move from fossil fuel-reliant energ

17、y generation to abundant,yet intermittent,weather-dependent power production.Cross-border trade has a key role to play in making national power grids operate efficiently while ensuring security of supply.Advanced weather,water,and climate information and services are essential for a smooth transitio

18、n to renewable energy.Such information underpins intermittent renewable energy systems,contributing to better operations and maintenance,risk management and investment planning.Electricity trade represents a trade and development opportunity for many places with comparative advantages in solar,wind

19、and hydropower electricity generation.It offers a path out of the current ironic reality that some of the places with the greatest clean energy potential are also locations with relatively high rates of energy poverty,low levels of economic development and limited integration into the global trading

20、 system.Trade in renewable energy would also help lower the costs of getting to net zero.By unlocking the comparative advantage of renewable power generation hotspots,cross-border renewable electricity trade can reduce the overall cost of the net zero energy transitionby up to USD 3 trillion accordi

21、ng to one estimate.2Several least developed countries(LDCs)are already well-established exporters of renewable electricity,generated mainly from hydropower resources.Increased export prospects for renewable electricity promise to help galvanize more investment in generation capacity,grid upgrades,an

22、d interconnection,with positive spillovers for domestic electricity access.The latter may in turn incentivize investment in adding value to other goods and services for instance,abundant renewable energy could be used to make green hydrogen that could in turn be used to process raw commodities.Cross

23、-border electricity cable interconnections can help reduce greenhouse gas(GHG)emissions and support economies to meet their nationally determined fossil fuel phase-out timelines.By drawing on a greater range of renewable electricity generation sources across a broad geographic area,interconnection a

24、nd trade can help make power supply more secure through diversification between different sources and locations.Just as shipping lanes,air corridors,highways and internet cable networks facilitate the movement of goods and services in the global economy,cross-border electricity transmission lines of

25、fer a mechanism to get renewable electricity from where it is abundant to where it is needed.The global cross-border network of cables that has been laid to build the World Wide Web underscores what is possible.Unlocking opportunities in cross-border renewable electricity trade requires action to ad

26、dress the backlog of interconnection projects,as well as delays in the delivery of critical components and long timeframes for project delivery.Action is also needed to upgrade climate services and to relieve supply chain bottlenecks in the goods and services needed to supply grid infrastructure,inc

27、luding transmission lines.The development of electricity grid connections needs cohesive international policy frameworks and the support of public and private sector capital.These frameworks should derisk capital-intensive interconnection projects and provide transparency and predictability in regul

28、atory approval timeframes.While there is no World Trade Organization(WTO)agreement that deals specifically with energy trade,various existing WTO rules and bodies can help to address frictions and inefficiencies that delay or stall interconnector projects.And new disciplines or cooperative approache

29、s that WTO Members may wish to pursue could be helpful to attract finance for capital-intensive renewable energy investments and liberalize trade in related environmental goods and services.SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE4The World Meteorological Organization also has a

30、 powerful role to play in upgrading the climate services offered by its Members National Meteorological and Hydrological Services and expand the use of meteorology and hydrology to plan in advance according to where weather-related deficits or surpluses are expected,thus benefitting decision-making

31、in the energy sector.This report concludes with a simple message for policymakers:the energy transition creates new opportunities to expand trade in renewable electricity and to promote re-globalization.By leveraging renewable energy resource endowments,we can help promote a just transition.Lets wor

32、k together to seize these opportunities.Signatures of representatives of the two organizations WMO WTO UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION5EXECUTIVE SUMMARYThis co-publication of the World Meteorological Organization(WMO)and the World Trade Organization(WTO)focuses on a core

33、 aspect of international trade:ensuring security of supply.This role is increasingly important in the context of the transition to renewable energy,which is central to mitigating the effects of climate change.As energy systems transition away from reliance on fossil fuels,the share of electricity in

34、 global energy production will grow along with weather-dependent renewable energy.Natural energy sources,notably solar,wind and water the main focus of this report are abundant but they are not evenly distributed worldwide.Additionally,many different meteorological factors have an impact on power ge

35、neration and energy demand.The transmission of power across borders from renewable electricity sources can help address the mismatches between electricity supply and demand.It can supplement storage solutions,such as batteries,and contribute to security of energy supply.It can also unlock a range of

36、 other benefits:better grid utilization of renewable electricity,reduced need for electricity storage and new trade opportunities.Some least developed countries(LDCs)are already realizing these opportunities while others need support to do so.Moreover,trading renewable energy across borders helps ec

37、onomies meet their decarbonization commitments.Situating renewable energy generation in locations with the most favourable resource endowments and using grid interconnection to benefit from these comparative advantages reduces the overall cost of the global energy transition.Trading renewable electr

38、icity across borders can reduce the overall cost of the net zero energy transition by up to USD 3 trillion according to one estimate.3 The shared value created by the connection cables is akin to that created by the cable infrastructure underpinning the World Wide Web.Global electricity trade has gr

39、own in nominal terms by USD 99.8 billion since 2003,with 64%of that expansion occurring since 2013.Yet cross-border electricity trade remains low in value(USD 132 billion in 2023,according to UN Comtrade statistics)and far below its potential when compared to the growth of renewable energy needed to

40、 meet Paris Agreement climate targets.International electricity trade,measured by gross imports in each country,was 2.8 per cent of the 809 TWh supplied in electricity globally in 2021.4Realizing trades full potential means addressing the various factors stalling progress in this area.One is to addr

41、ess the bottlenecks in the supply chains of goods and services needed for grid and interconnection expansion.In turn,this would unlock opportunities for developing economies and LDCs to participate more fully in manufacturing value chains.Enabling both the flow of electricity and grid infrastructure

42、 goods and services in the most cost-effective manner across borders would help unlock growth opportunities and reduce transition costs.Several other steps could boost progress.Interconnector projects are capital-intensive and require large up-front investment before revenues start to flow.Internati

43、onal investment in renewable energy has nearly tripled since the adoption of the Paris Agreement in 2015.However,much of this growth has been concentrated in developed countries,with most developing economies left behind.5 Developing economies presently receive less than one-fifth of global clean en

44、ergy investments.Ensuring that both grid operators and suppliers can reliably access sustainable trade finance and climate finance would help to tackle this critical bottleneck.Rolling out a new wind or solar project can take between one to five years,but new transmission and distribution networks o

45、ften take 10 to 15 years to plan,obtain permissions and complete.Improving the predictability of regulatory processes is another important step given the multi-jurisdictional nature of projects involving approvals,export restrictions,tariffs and transit issues.This report discusses how WTO rules and

46、 bodies dealing with these issues in areas such as telecoms,information technologies and government procurement can be relevant for renewable energy.SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE6ENDNOTES1 Green Grids Initiative One Sun One World One Grid(2021),“One Sun Declaration”Gl

47、asgow,UN Climate Change Conference(COP26)at the SEC Glasgow 2021(nationalarchives.gov.uk).2 Transition Zero(2023),“Cables to change the world November 2023 The benefits of transmission to decarbonise global electricity supply”,London.3 Aman Majid,Abhishek Shivakumar,Maarten Brinkerink,Thomas Kouroug

48、hli,Matt Gray,Isabella Suarez,Trevor Barnes and Handriyanti Diah Puspitarini(2023),“Cables to Change the World”,Transitionzero.org.4 IEA(2020),Global Overview Trade;Electricity Market Report 2020,IEA,Paris.5 UNCTAD,World Investment Report 2023.https:/unctad.org/system/files/official-document/wir2023

49、_overview_en.pdf.SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE8INTRODUCTIONThis joint WMO-WTO report has been issued in conjunction with the COP29 Presidency Initiatives to Focus Global Attention and Accelerate Climate Action,notably those concerning Pledges on Green Energy Zones and

50、 Corridors and Global Energy Storage and Grids.The report has three main sections:Section A,drafted by the WMO,outlines how endowments of solar,water and wind resources differ worldwide.The section examines how this range of endowments underlines the potential for trade to help buttress security of

51、energy supply by matching renewable energy supply with demand.In turn,this can help unlock new export opportunities for developing economies,and in particular LDCs,that have comparative advantage in renewable energy.Section B,drafted by the WTO,examines why interconnector projects are difficult to i

52、nitiate and frequently stall.After surveying electricity trade patterns,the report identifies the factors delaying project implementation and where the multilateral trading system may be able to ease bottlenecks to ensure greater cross-border transmission of renewable electricity.Section C,drafted j

53、ointly by WMO and the WTO,concludes with a call to work together to ease the transition to weather-dependent electricity generation systems in an efficient and timely manner in line with the Paris Agreement timelines.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION9The role of trade in r

54、enewable electricityASUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE101.1 OverviewThe transition to renewable energy is central to achieving both the UN 2030 Agenda for Sustainable Development and the Paris Agreement on climate change.Energy accounts for more than three-quarters of tot

55、al greenhouse gas(GHG)emissions globally.1The global energy system is moving increasingly towards renewable energy sources,but the speed and geographic scope of the transition needs to accelerate and expand.Developing economies presently receive less than one-fifth of global clean energy investments

56、.Concerted action is needed therefore if the world is to stay within Paris Agreement climate targets and reach net zero by 2050,whereby the amount of GHG produced is balanced by the amount removed from the atmosphere.The COP28 climate change conference in the United Arab Emirates in December 2023 ca

57、lled for a tripling of renewable energy capacity and a doubling of energy efficiency by 2030 to limit global warming to 1.5C.Energy efficiency and renewable energy are the main pillars of the energy transition.Together,they can provide over 90 per cent of the energy-related CO2 emission reductions t

58、hat are required,using technologies that are safe,reliable,affordable and widely available,to meet Paris Agreement targets.2A decarbonized power sector,with renewable sources at its core,is central to the transition to a sustainable energy future.To achieve net zero,the share of renewable energy in

59、the power sector has the potential to reach 85 per cent by 2050,mostly through growth in solar and wind power generation.3However,wind,water and solar resources,the focus of this report,are not equally distributed worldwide.National endowments differ considerably in terms of renewable energy sources

60、 and vary by season and by the day.Energy demand is similarly prone to fluctuations.Trading renewable electricity across borders can support the transition to weather-dependent power generation systems,addressing intermittency of renewable energy supply and mismatches between electricity supply and

61、demand.Currently,global cross-border electricity trade is valued at USD 132 billion in 2023 by UN Comtrade statistics,but has the potential to grow much higher.Expanding interconnections would improve grid renewable energy usage,complement storage options and offer new trade opportunities,including

62、for LDCs.Trading renewable energy across borders also helps importing economies meet their decarbonization commitments and lessens the overall cost of the global energy transition.Furthermore,since electricity can flow in both directions,the shared value created could eventually lead to the establis

63、hment of a global green grid akin to the World Wide Web.1.2 Renewable electricity generation potential is unevenly distributed“More energy from the sun falls on the earth in one hour than is used by everyone in the world in one year.”4The potential of renewable electricity is vast,but the uneven dis

64、tribution of renewable energy resources across the world is an inherent challenge.Renewable energy resources are abundant in some regions but scarcer in others.For example,solar energy is plentiful in desert areas but limited in northern latitudes see FigureA.1.5Hydropower resources are abundant at

65、the tropics,but wind speeds are lower than at other latitudes see FigureA.2 and Figure A.3.671.3 Renewable electricity supply is intermittent,demand is unevenEnergy generation from water,wind and solar sources is,by its nature,intermittent.This intermittency stems from fluctuations in the natural re

66、sources driving power generation,causing variability on a daily and seasonal basis.Factors related to climate change also lead to variability(see Box A.1).Daily fluctuations are most apparent in solar power,where generation peaks obviously during sunlight hours and drops to zero overnight.Wind power

67、,while less predictable,also experiences daily variations due to changes in wind speeds,influencing output.Seasonal fluctuations are also evident.Solar generation is typically higher in summer months due to longer days and more direct sunlight.Conversely,wind patterns can shift with the seasons,lead

68、ing to periods of higher or lower wind resource availability at different times of the year.Hydropower generation is also influenced by seasonal precipitation and snowmelt patterns.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION11Figure A.1:Map of global photovoltaic power potentialSour

69、ce:World Bank Group,Energy Sector Management Assistance Program(ESMAP)and Solargis.Figure A.2:Map of global mean wind speeds6Source:World Bank Group,ESMAP,DTU wind energy and Vortex.Climate change related factors are also a cause of variability in power generation.Prolonged droughts can affect hydro

70、power generation,while shifts in wind patterns due to climate change can have a major impact on wind energy output.SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE12Figure A.3:Map of global hydropower potential7Source:Hoes OAC,Meijer LJJ,van der Ent RJ,van de Giesen NC(2017).Box A.1:Imp

71、act of climate factors on the energy sectorThe first attempt to identify global climatic factors affecting renewable energy potential was published jointly by the WMO and the International Renewable Energy Agency(IRENA)in 2023.It compares data from 2022 to a 30-year average(1991-2020)to assess how c

72、limate variability and change have has impacted specific energy technologies and demand.The report specifically examines wind and solar power efficiency,hydropower and energy demand,focusing on the observed changes between the long-term averages and conditions in 2022.The results underscore the impa

73、ct of climate variability and change on various energy technologies.They show significant fluctuations in wind and hydropower usage,while solar photovoltaic(PV)remains relatively stable.The report stresses the need for better understanding and integration of climate factors into energy planning and

74、management,particularly for optimizing renewable energy deployment in developing regions such as Africa.Source:WMO.8Electricity consumption is also influenced by daily,seasonal and climate-related factors.Daily variations:in renewable energy demand are linked to typical consumption patterns.Higher d

75、emand coincides with peak residential and commercial use.Seasonal variations:Demand for energy is influenced by cold,heat,precipitation and other factors,such as public holidays or religious festivals.Climate-related events:Heatwaves can lead to a surge in electricity consumption by cooling systems.

76、During periods of extreme cold,demand for heating can strain energy supplies,particularly in regions dependent on electric-heated systems.Renewable energy production often does not align with peak demand times.Solar power,for instance,peaks at midday but demand may be highest in the evening.Wind ene

77、rgy,on the other hand,may be more available at night when demand is lower.1.4 Trading renewable electricity across borders can help balance supply and demandWhen one economy has excess wind or solar power,this surplus can be exported to an economy UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCO

78、NNECTION13experiencing higher demand or lower generation.Ensuring security of energy supply between surplus and deficit economies is one of the most fundamental roles of trade.Hence,trading renewable electricity across borders can help address intermittency of supply and demand variability.Integrati

79、on of renewable energy into existing power systems is a major challenge for electricity grid operators.Networks were typically designed for consistent volumes of electricity based on predictable power generation.These systems were not built to handle new supply connections or variability in energy g

80、eneration,which requires active management.Increasing the share of intermittent electricity from solar and wind into electricity grids requires increases in grid capacity,grid control,flexibility and storage.One technique used to manage the intermittency of power supply from renewable sources is“cur

81、tailment”.This refers to the reduction of power production when there is too much electricity in the grid.As the use of renewable energy increases,so the share of curtailed wind and solar generation is also on the rise in many markets.9Curtailing(i.e.reducing or stopping)power provided from renewabl

82、es is inefficient.Renewable energy generation forgone through curtailment is permanently lost(e.g.a wind turbines blades are stopped rotating)and may instead be replaced by energy generated from other sources,notably GHG-emitting fossil fuels.Furthermore,curtailment may give rise to compensation pay

83、ments to the renewable energy generator due to the inability of the network operator to accept this power.Battery technologies are becoming a key solution to enable the storage of electricity from renewables and release power when it is needed.Some 10 gigawatts of battery storage have been deployed

84、in the US state of California10 and in Northwest China.11 Lithium-ion batteries are the dominant storage technology for large-scale plants,allowing electricity grids to ensure a reliable supply of renewable energy.12Lithium-ion batteries are also used in many other applications(e.g.mobile phones and

85、electric cars)so pressure on worldwide lithium resources is increasing.The International Energy Agency(IEA)forecasts that the world may face potential shortages of lithium unless sufficient investments are made to expand global production.13Trade in renewable energy also offers a solution to the pro

86、blem of market balancing.In Europe,for instance,interconnection has been shown to halve the curtailment of low cost,renewable power and reduce price volatility by giving consumers access to lower-cost electricity from other economies.14The development of interconnectors,including high-voltage direct

87、 current(HVDC)transmission lines,enables rapid electricity exchange across borders.An interconnector is any grid infrastructure that connects two or more power systems operating under different legislative regulators and/or operation regimes.15 Interconnectors are physical cable infrastructure that

88、links the power grids of different economies,running under the sea,underground or via overhead cabling.Interconnectors help to stabilize prices and enhance the reliability of the global power system.The global length of HVDC lines has almost tripled since 2010,surpassing 100,000 km by the end of 202

89、1,with a total transmission capacity exceeding 350 gigawatts(GW).16 Figure A.4 gives an overview of existing electricity interconnectors.17Interconnectors facilitate the integration of renewables into power networks and improve network system efficiency.This decreases reliance on fossil fuels withou

90、t compromising reliability of supply.Increased interconnection can also unlock significant renewable potential in locations with abundant supplies,lowering the costs of energy and storage capacities required for decarbonization targets.Global renewable capacity is expected to grow by 2.7 times by 20

91、30 to reach 9,763.1 GW.18 In this context,resource forecasting techniques are increasingly vital.These forecasts,which predict wind speeds,solar irradiance(i.e.a measure of the suns intensity)and other relevant weather conditions,are used as inputs to models to estimate the potential energy output f

92、rom renewable sources see Box A.2.Accurate forecasts reduce the uncertainty associated with renewable energy generation,allowing grid operators to plan for periods of high or low renewable energy output.Forecasting models are critical to efficiently schedule power generation and to manage the reserv

93、e requirements needed to accommodate the fluctuations in energy supply.Accurate forecasting allows grid operators to anticipate changes in renewable energy output,enabling them to balance supply and demand more effectively and minimize curtailment and reliance on back-up fossil fuel generation.It al

94、so reduces the costs associated with maintaining reserves.SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE14Box A.2:WMOs Global Framework for Climate ServicesThe WMO plays a crucial role in supporting renewable energy integration into power networks by providing high-quality meteorologi

95、cal and climate data services.These services are essential for improving the accuracy of renewable energy forecasts and enhancing grid management practices.The WMOs Global Framework for Climate Services provides climate information and services to various sectors,including energy providers.It helps

96、in the development of tailored climate services that can assist in renewable energy forecasting.This includes the provision of long-term climate data and seasonal forecasts,which are invaluable for planning the integration of renewables into the grid.The real-time weather data and forecasts produced

97、 by national hydro-meteorological organizations are essential for short-term renewable energy forecasting.This data allows grid operators to anticipate changes in wind and solar output,making it easier to balance supply and demand in real time and to optimize power supply.The use of these services i

98、s essential for managing the variability and uncertainty of renewable energy sources.It ensures that renewable energy is reliably integrated into power grids,supporting the global clean energy transition.Source:WMO.19Figure A.4:Existing electricity interconnectors(as of 1 February 2024)5-10 GW0-1 GW

99、1-5 GWSource:IRENA,Brinkerlink et al.17Interconnectors can reduce the amount of back-up storage capacity required,including in the form of battery storage technologies,to ensure reliability and energy security.They also lead to a more efficient use of renewable energy,minimizing curtailment losses a

100、nd reducing overall electricity costs by allowing access to cheaper renewable electricity from other economies.Real-time weather data and forecasts also play an important role in energy demand forecasting.In addition to helping grid operators balance supply and demand,forecasting is important to ens

101、ure the resilience of energy infrastructure e.g.in the face of extreme weather events.Trading renewable electricity across borders can reduce the overall cost of the net zero energy transition by up to USD 3 trillion according to one estimate.201.5 Trading renewable electricity enables economies to

102、exploit their comparative advantagesCross-border energy trading allows economies to benefit from their renewable energy endowments,taking advantage of geographic assets and time differences to participate in power generation.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION15This applies

103、to countries along the Tropic of Cancer.For example,when India hits peak energy demand in the evening,the sun is still strong in the Gulf countries.In turn,when the sun is strong over India at midday,the surplus power it generates would serve the morning peak demand in the Gulf countries.21To tap in

104、to the renewable electricity possibilities offered by these natural variations,work is underway on a Gulf-India undersea transmission project.It aims to create a HVDC electricity link between India and the Gulf Cooperation Council countries,particularly Saudi Arabia and the United Arab Emirates.The

105、project is part of Indias“One Sun,One World,One Grid”(OSOWOG)framework and the India-Middle East-Europe Economic Corridor announced during Indias G20 Presidency in September 2023.22Locations with favourable solar,wind and hydropower electricity generation potential are also frequently associated wit

106、h high rates of energy poverty,low levels of economic development and limited integration into the global trading system.23In Africa,renewable energy resources are plentiful,especially solar,but also wind,biomass(e.g.plants and wood),geothermal and hydropower see Figure A.6.The African region has hu

107、ge potential to deploy solar energy systems.The IEA estimates that Africa is home to 60 per cent of the best solar resources globally,yet only 1%of installed photovoltaic(PV)capacity.24 IRENA estimates the continents solar technical potential at 7,900 GW.25 Africas installed renewable energy product

108、ion was 62GW in 2023.26Morocco is an example of an African country seeking to take advantage of its endowments in solar energy through the export of solar-generated electricity.As of end 2021,renewable capacity accounted for 3,950 megawatts(MW),or 37 per cent of the countrys installed electricity ge

109、neration capacity with 1,770MW of hydro,1,430 MW of wind and 750 MW of solar.The country aims to increase the share of renewable capacity to 52 per cent by 2030,70 per cent by 2040 and 80 per cent by 2050.At COP28,Morocco and Portugal signed a joint declaration on an electrical interconnection to bo

110、ost the development of renewable energy.This declaration followed on from the Xlinks Morocco-UK Power Project,which seeks to construct a 4,000km HVDC subsea cable connecting the UK grid to the renewable energy-rich region of Guelmim Oued Nou in Morocco.The European Union signed in October 2022 a Gre

111、en Partnership on energy,climate and the environment with Morocco,the first of its kind with a partner country,which will contribute to scaling up cooperation on the transition to renewable energy and decarbonization.Similarly,Tunisia plans to construct an interconnector with Italy linking the Tatao

112、uine solar plant with the European energy market.This project will tap into Tunisias natural endowments in solar energy generation and help relieve grid congestion in northern Italy.Figure A.5:Map of Mean Wind Power Density of MadagascarSource:Global Wind Atlas,World Bank Group.SUPPORTING THE RENEWA

113、BLE ELECTRICITY TRANSITION THROUGH TRADE16IRENA estimates the potential of wind power generation in Africa at 461 GW27(see Figure A.5).Current installed capacity is 8,65 GW.28 One example of untapped renewable wind energy potential is Madagascar,an LDC with the potential to generate up to 154 GW usi

114、ng offshore capacity.29 Situated in the path of the Indian Ocean trade winds,Madagascar benefits from winds that blow consistently throughout the year.Wind energy projects are at an early stage of development in Madagascar.They face several challenges,including the need for significant investments i

115、n grid infrastructure and the establishment of a supportive regulatory framework.30 Low population densities and high poverty levels make it difficult to attract the necessary investment to expand renewable energy generation to service the domestic market.31 In 2020,only an estimated 33.7 per cent o

116、f the population had access to electricity,compared to an average of 48.4 per cent for Sub-Saharan Africa.Trading renewable electricity with the African mainland and neighbouring island states could offer Madagascar an opportunity to expand its trade footprint and to promote growth in its wind energ

117、y sector through external demand.Hydropower is the largest source of renewable-based electricity in Africa,with sizeable unexploited potential recently estimated at 1,753GW(see Figure A.6).32 In several African countries with major rivers crossing their territory,hydropower accounts for half or more

118、 of electricity generation.Africas largest hydropower producers are Ethiopia,Angola,South Africa,Egypt,the Democratic Republic of Congo,Zambia,Mozambique,Nigeria,Sudan,Morocco and Ghana.331.6 Trading renewable electricity across borders can help importing countries reach decarbonization targetsImpor

119、ting electricity from economies with renewable energy surplus can help governments meet their nationally determined contributions under the Paris Agreement to move away from fossil fuels.Furthermore,technological innovation in high-voltage cable connection technology is enabling electricity to be ca

120、rried across long distances with low power transmission losses and to be bundled with adjacent services,e.g.internet cables.In South-East Europe,several EU countries have committed to phasing out coal generation,working towards net zero emissions by 2050 in line with the rest of the European Union.T

121、he planned coal phase-out dates for Hungary,Romania and Bulgaria are 2025,2030 and 2038,respectively.These plans to phase out coal power generation will be greatly helped by expansion of renewable energy generation in the Caspian Sea and South Caucasus and transmission of resulting electricity throu

122、gh the planned Black Sea Submarine Cable.34In September 2024,a project to create the Caspian Sea-European Union Green Energy Corridor was initiated,with the aim of enhancing the transmission of green energy from the Caspian region to Europe.35 This corridor involves a strategic partnership between A

123、zerbaijan,Georgia,Hungary and Romania.It focuses on the production and transmission of renewable energy,particularly through the use of undersea cables,across the Caspian Sea and the Black Sea.Figure A.6:Renewable energy potential and capacity installed in Africa,for wind,solar and hydropowerSource:

124、WMO 2022.36 UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION17The project includes the construction of a Black Sea submarine cable with a capacity of 1,000 MW and a length of 1,195 kilometres.The World Bank has approved a USD35 million loan for the first phase of the project,with the aim

125、 of beginning construction in early 2025 and completing the project by 2030.The project should improve energy security and decarbonize energy supply by transporting renewable energy from the Caucasus region to Europe.It also includes the laying of a parallel fibre-optic cable to enhance digital conn

126、ectivity.Both Azerbaijan and Kazakhstan are well-established energy exporters with significant surpluses and expertise in operating in complex energy markets.The Caspian Sea region enjoys significant renewable energy potential,notably in wind energy.A March 2020 assessment by the World Banks Energy

127、Sector Management Assistance Program(ESMAP)estimated the technical potential of offshore wind energy in the Caspian Sea at 845 GW see Figure A.7.37Singapore is also collaborating with trading partners to import green energy to buttress its own energy transition plans and to meet rising demand for en

128、ergy.Singapore imported renewable electricity for the Figure A.7:Potential of offshore wind in the Caspian SeaSource:World Bank Group.37first time in 2022.The Lao PDR-Thailand-Malaysia-Singapore Power Integration Project enables up to 100 MW of hydropower to be exported from Lao PDR to Singapore via

129、 Thailand and Malaysia using existing infrastructure.Lao PDR,a least developed country scheduled to graduate from LDC status on 24November 2026,38 has seen its electricity exports reach nearly 28.5%of the countrys total exports in 2023,representing USD 2.4 billion.This underscores the strategic impo

130、rtance of electricity trade for the nations economy.Hydropower currently accounts for about 70%of total electricity generation output in Lao PDR.The country has about 10 onshore wind power projects with a total design capacity of 3.6 GW in the planning stage.It currently sells electricity to six cou

131、ntries,namely Cambodia,China,Myanmar,Singapore,Thailand and Viet Nam,and plans to increase electricity exports.39Singapore also plans to import 100 MW equivalent of electricity from a solar farm in Pulau Bulan,Indonesia,through a new interconnector in 2024 or soon after.40 Additionally,there are pro

132、posals to import 1 GW of clean electricity from Cambodia,an initiative that will further support Singapores long-term objective of importing up to 4 GW of low-carbon electricity by 2035.41Another project to support Singapores transition is the Australia-Asia PowerLink,a private sector proposal that

133、builds on Northern Australias comparative advantage in producing solar electricity.Through the construction of a large-scale solar farm,the project would transmit as much as 1.75 GW of electricity to Singapore via a 4,200km subsea cable,covering up to 15%of Singapores energy needs.42Relevant also in

134、 this regional context is the United Nations Economic and Social Commission for Asia and the Pacific(ESCAP)Regional Road Map on Power System Connectivity.The Road Map details nine strategies to support increased cross-border power system integration,suggesting key milestones,timeframes and responsib

135、le entities for realizing each element.ESCAPs Green Power Corridor Framework addresses Strategy 9 of the Road Map,providing a set of principles and metrics to ensure the coherence of energy connectivity initiatives and the Sustainable Development Goals.43The United Kingdom is also importing renewabl

136、e electricity to help it transition from fossil fuels.The UKs National Grid estimates that between 2020 and 2030 interconnectors will help the UK prevent 100 million tons ofcarbon emissions.44SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE181.7 Interconnectors create interdependence un

137、derscoring the case for a global grid“We need new transmission lines crossing frontiers and connecting different time zones,creating a global ecosystem of interconnected renewables that are shared for mutual benefit and global sustainability.This must be combined with expanded and modernized nationa

138、l and regional grids and complemented with the rapid scale-up of mini-grids and off-grid solar solutions.”45One Sun Declaration,COP27Building inter-regional or cross-border transmission grids,often referred to as“supergrids”,can lower the cost of making the transition from fossil fuels and reduce fl

139、uctuations in supply.Studies show that wind power is a reliable source since the wind is always blowing sufficiently in some parts of the world to generate energy.Moreover,the seasonal patterns of wind and solar power are complementary,ensuring their combined supply remains relatively constant throu

140、ghout the year.46Since electricity can flow in both directions along HVDC cables,this interconnection and shared value could eventually lead to the establishment of a global green grid akin to the World Wide Web for the internet.In October 2018,Prime Minister Narendra Modi of India proposed the idea

141、 of“One Sun,One World,One Grid”(OSOWOG)for the first time at the First Assembly of the International Solar Alliance(ISA)in India.During COP26 in Glasgow,Scotland,in November 2021,the Green Grids Initiative(GGI)was launched see Box A.3.Initiatives such as the Global Energy Interconnection Development

142、 and Cooperation Organization(GEIDCO),a non-profit international organization based in Beijing,are also actively promoting inter-regional or cross-border transmission grids.Box A.3:One Sun,One World,One GridThe GGI and the OSOWOG initiatives were unveiled jointly by India and the UK as part of their

143、 bilateral collaboration in conjunction with the ISA and the World Bank Group.These initiatives,focusing on the global transition to renewable energy,work in partnership as GGI-OSOWOG,emphasizing the collective commitment to a common goal.This first-ever international network of interconnected solar

144、 grids seeks to connect 140 countries to continuous solar power and has been endorsed by 80 ISA member countries.The vision behind the OSOWOG initiative is the mantra that“the sun never sets”.The idea is to harness solar energy from different parts of the world,where the sun is shining at any given

145、moment,and efficiently transmit that power to areas where it is needed.By creating a connected global grid,regions that experience daylight can contribute excess solar power to other regions that may be in darkness,balancing energy production and consumption on a global scale.The OSOWOG initiative i

146、s to be carried out in three phases:In the first phase,the Indian grid would be connected to the grids of the Middle East,South Asia and South-East Asia to develop a common grid.This grid would then be used to share solar energy as needed,in addition to other renewable energy sources.The second phas

147、e would be to connect to the pool of renewable resources in Africa.The third phase would look at achieving global interconnection,with the aim of 2,600GW of interconnection by 2050.The goal is to integrate as many economies as possible to create a single power grid of renewable energy.This can then

148、be accessed by all economies.ISA also aims to mobilise USD1 trillion of funding by 2030 to assist developing economies in expanding their solar power to meet their energy needs.Source:Invest India.47UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION19Connecting national grids across border

149、s can unlock significant benefits by enabling the sharing of renewable resources,balancing intermittency and enhancing energy security.As demonstrated in various regional initiatives,such interconnections can facilitate the transport of surplus energy from areas of high generation capacity to region

150、s with unmet demand.This collaborative approach not only enhances the reliability and resilience of power systems but also accelerates the deployment of renewable energy by optimizing resource utilization and creating larger,more integrated electricity markets.The goal of a single,fully interconnect

151、ed“global grid”highlights the growing importance of cross-border electricity trade and regional grid interconnections to facilitate a global transition towards renewable energy.Creating a global grid,however,currently faces significant challenges(see Section B below).ENDNOTES1 IEA(2024),Greenhouse G

152、as Emissions from Energy Data Explorer,IEA Website2 IRENA(2018),“Global Energy Transformation:A roadmap to 2050”,International Renewable Energy Agency,Abu Dhabi.3 IRENA(2018),“Global Energy Transformation:A roadmap to 2050”,International Renewable Energy Agency,Abu Dhabi.4 NREL(2024),”Solar Energy B

153、asics”National Renewable Energy Laboratory website accessed on 2 September 2024.The National Renewable Energy Laboratory is a national laboratory of the US Department of Energy,Office of Energy Efficiency and Renewable Energy,operated by theAlliance for Sustainable Energy LLC.5 The open access Globa

154、l Solar Atlas 2.0 map shows long-term average daily/yearly sum of electricity production from a 1 kW peak grid-connected solar PV power plant.6 The open access Global Wind Atlas map gives an estimate of mean power density at 100 m above surface level globally.7 Hoes OAC,Meijer LJJ,van der Ent RJ,van

155、 de Giesen NC(2017),“Systematic high-resolution assessment of global hydropower potential”.PLoS ONE 12(2):e0171844.https:/doi.org/10.1371/journal.pone.0171844 The map estimates the potential hydropower plant locations for micro-hydropower to large-sized plants based on the Global Multi-resolution Te

156、rrain Elevation Data 2010.The data was compiled from the 4TU Centre for Research by the authors.8 WMO,IRENA(2023),“2022 Year in Review:Climate-driven Global Renewable Energy Potential Resources and Energy Demand”,WMO,Geneva9 International Energy Agency(2023),“Will more wind and solar PV capacity lea

157、d to more generation curtailment?”Renewable Energy Market Update,Paris,IEA Publications.10 China Daily(22 May 2024),“China emerging as energy storage powerhouse”11 California Energy Commission(15 April 2024),California Energy Storage System Survey12 National Grid(2024),“What is battery storage”,Nati

158、onal Grid(UK)website 2024 version,https:/ on 29 August 2024.13 International Energy Agency(2021),“The Role of Critical Minerals in Clean Energy Transitions”Paris:IEA Publications.14 Elisabeth Cremona,Energy&Climate Data Analyst(2023),“Breaking borders:The future of Europes electricity is in intercon

159、nectors”,Policy Brief,Ember European Environment Bureau,https:/ember-climate.org/.15 Matthew David Wittenstein(2023),“Principles for Interconnection”Blog Post for Global Green Grids Initiative,https:/ IEA(2023),Electricity Grids and Secure Energy Transitions,IEA.17 IRENA(2024),“Geopolitics of the en

160、ergy transition:Energy security”,International Renewable Energy Agency,Abu Dhabi and Brinkerink,M.,et al.(2024),“Global Transmission Database”,https:/doi.org/10.5281/ZENODO.10063445.18 IEA(2024),“Renewables 2024”IEA,Paris19 For further information,see the Global Framework for Climate Services on the

161、 World Meteorological Organization website:https:/wmo.int/site/global-framework-climate-services-gfcs 20 Aman Majid,Abhishek Shivakumar,Maarten Brinkerink,Thomas Kouroughli,Matt Gray,Isabella Suarez,Trevor Barnes and Handriyanti Diah Puspitarini(2023),“Cables to Change the World”,Transitionzero.org.

162、21 Sterlite Power(2021),“Closer to a Green Power Corridor”,Sterlite Power website accessed on 28 August 2024.22 Ministry of External Affairs,(2023),“Memorandum of Understanding on the Principles of an India-Middle East-Europe Economic Corridor”,Government of India,New Delhi,official website.23 For a

163、 discussion of energy poverty,see the Executive Note prepared for the G20 Energy Transition Working Group and the G20 Climate Sustainability Working Group for the G20 Italian Presidency.Sustainable Energy for All Initiative(2021),“Energy Poverty:addressing the intersection of Sustainable Development

164、 Goal 7(SDG7),development and resilience”24 International Energy Agency(2022),“Africa Energy Outlook”Paris,IEA Publications.25 IRENA and AfDB(2022),Renewable Energy Market Analysis:Africa and Its Regions A Summary for Policy Makers,International Renewable Energy Agency and African Development Bank,A

165、bu Dhabi and Abidjan.26 IRENA(2024)“Renewable Energy Statistics 2024”,IRENA,Abu Dhabi27 IRENA and AfDB(2022),Renewable Energy Market Analysis:Africa and Its Regions A Summary for Policy Makers,International Renewable Energy Agency and African Development Bank,Abu Dhabi and Abidjan.28 IEA(2024),“Rene

166、wables 2024”IEA,ParisSUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE2029 World Bank Group(2020),“Technical Potential for Offshore Wind in Madagascar”.This map shows the estimated technical potential for fixed and floating offshore wind in terms of installed power capacity in megawatts(

167、MW)within 200 kilometres of the shoreline.It is provided under a World Bank Group(WBG)initiative on offshore wind that is funded and led by the Energy Sector Management Assistance Program(ESMAP).Washington DC,World Bank.30 Reve(2023),“The Potential of Wind Energy in Madagascar”,Reve News(evwind.es).

168、31 World Bank Group(2023),“Madagascar Set to Expand Access to Renewable Energy and Digital Services thanks to USD400 Million Credit”,Press Release,Washington DC,World Bank.32 IRENA and AfDB(2022),Renewable Energy Market Analysis:Africa and Its Regions A Summary for Policy Makers,International Renewa

169、ble Energy Agency and African Development Bank,Abu Dhabi and Abidjan.33 IRENA and AfDB(2022),Renewable Energy Market Analysis:Africa and Its Regions A Summary for Policy Makers,International Renewable Energy Agency and African Development Bank,Abu Dhabi and Abidjan.34 The World Bank,(2023),“Enhancin

170、g Energy Security through Power Interconnection and Renewable Energy”Program Concept Stage Report No:IDC35815,Washington.35 Euronews(4 September 2024),“Azerbaijan,Georgia,Hungary and Romania launch Black Sea power line to bring green energy to EU”Euronews Green36 WMO(2022),“WMO 2022 State of Climate

171、 Services:Energy(wmo.int)”WMO,Geneva.37 World Bank Group(2020),“Offshore Wind Technical Potential in the Caspian Sea”.This map shows the estimated technical potential for fixed and floating offshore wind in the Caspian Sea in terms of installed power capacity in megawatts(MW)within 200 kilometres of

172、 the shoreline.It is provided under a World Bank Group(WBG)initiative on offshore wind that is funded and led by the Energy Sector Management Assistance Program(ESMAP).Washington DC,World Bank.38 Decisions on LDC graduation are taken by the United Nations Committee for Development Policy,an advisory

173、 body to the UN Economic and Social Committee.The decisions are based on certain socio-economic thresholds.For more information,see the web page of the United Nations Office of the High Representative for the Least Developed Countries,Landlocked Developing Countries and Small Island Developing State

174、s:https:/www.un.org/ohrlls and WTO website:https:/www.wto.org/english/tratop_e/devel_e/graduation_ldc_status_e.htm39 Lao News Agency(2023),“Laos aims to become electricity source of Southeast Asia”,Lao News Agency website.40 IEA(2024),Electricity Market Report 2023,IEA,Paris.41 Powerline(2024),“Kepp

175、el Energy to import 1 GW of clean electricity from Cambodia to Singapore”,Powerline India Magazine,.in.42 Infrastructure Australia(2024),“Australia-Asia Powerlink”,Infrastructure Australia website accessed on 30 August 2024.43 United Nations Economic and Social Commission for Asia and the Pacific(20

176、21)“Electricity Connectivity Roadmap for Asia and the Pacific Strategies towards interconnecting the regions grids”United Nations,Bangkok.44 National Grid(2021),“Why interconnectors play an essential role in our net zero future”National Grid UK website,accessed on 17 July 2024.45 Green Grids Initiat

177、ive One Sun One World One Grid:(2021),“One Sun Declaration”Glasgow,UN Climate Change Conference(COP26)at the SEC Glasgow 2021(nationalarchives.gov.uk).46 IRENA(2024),Geopolitics of the energy transition:Energy security,International Renewable Energy Agency,Abu Dhabi.47 Dewangi Sharma(2024),“One Sun,

178、One World,One Grid:Empowering Sustainability”,Invest India blogs.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION21Addressing issues facing cross-border transmission of renewable electricityBSUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE222.1 OverviewGlobal cross-border el

179、ectricity trade is far below its potential.International electricity trade,measured by gross imports in each country,was 2.8 per cent of total electricity supplied,totalling 809 TWh in 2021.1 Net imports(i.e.total global energy demand,including imports,in excess of aggregate total domestic generatio

180、n)represented 1.12 per cent of total electricity production in 2022.2In many parts of the world,progress on interconnector projects is slow or entirely stalled.3 Grids are not keeping pace with the transition to renewables due to the time it takes to build and update them.There are also challenges r

181、elated to the operation of grids with high levels of renewables.4 Currently,over 3,000GW of renewable generation capacity is in“grid queues”,waiting to be exploited,with many projects in advanced stages of development.5As grid operators seek to upgrade their networks,supply chain bottlenecks are eme

182、rging.The Utilities for Net Zero Alliance,which unites leading global utilities and power companies,is seeking to promote supply chain expansion for grid and interconnection development.6 Diversifying associated global supply chains could offer new opportunities for developing country and LDC suppli

183、ers to join manufacturing supply chains.Interconnector projects are capital-intensive and require large up-front investment before revenues flow.Many grid operators are cash constrained,making access to finance challenging.7 Since interconnectors do not distinguish between the production method used

184、 to generate electricity transmitted along HVDC lines,interconnector projects may not automatically meet climate finance criteria.This also affects access to trade finance provided by multilateral development banks(MDBs)as they have strict criteria for projects seeking to access sustainable trade fi

185、nance.In most jurisdictions,grids are required to go through extensive planning and processes to obtain permits that can take many years.8 Interconnectors have the additional complication of involving regulators in multiple jurisdictions.Delays in one jurisdiction,including those of transit economie

186、s,can have a domino effect,extending already lengthy project delivery timeframes and leading to cost overruns.Transparency about regulatory approval and greater predictability on timelines would help to boost investor confidence.A comparison of current and planned electricity interconnections with t

187、he far more extensive global cable network that supports the World Wide Web highlights the scope for growth.There may also be lessons that can be learned from the WTOs experience with trade rules concerning telecoms and information technologies.Government procurement disciplines are another area whe

188、re grid operators may draw inspiration.2.2 Cross-border electricity tradeClassificationElectricity is classified as a merchandise good by the World Customs Organization(WCO).The International Convention on the Harmonized Commodity Description and Coding System(HS Nomenclature),used to classify trade

189、d goods,designated the code 2716 to electrical energy.However,it is an optional heading,meaning that not all trading partners use it.9 Its optional status reflects the view held by some that electricity should instead be considered a service.Inclusion of electricity in the HS Nomenclature enables ec

190、onomies to uniformly categorize and report electricity trade,ensuring clarity and consistency in customs and trade statistics.Classifying electricity as a good acknowledges its role as a tradable commodity with significant economic value.It also assists statistical reporting and economic analysis.Th

191、e WCOs HSNomenclature makes no distinction on the method of power generation or whether it requires the input of other energy sources(i.e.primary or secondary electricity).10Electricity shares several characteristics with traditional goods that are produced and consumed.The generation of electricity

192、 involves substantial infrastructure and investment similar to manufacturing processes in other industries.Moreover,electricity can be quantified and measured in terms of production,consumption and trade(e.g.in kilowatt-hours),making it straightforward for standardization and statistical tracking.Gl

193、obal electricity tradeIn 2023,the reported value of electricity trade to UN Comtrade was approximately USD 132.8 billion globally.11 This compares with a market value of electricity generation worldwide,valued by Statista,at approximately USD 1.6 trillion in 2023.12 Some 68 economies reported electr

194、icity exports worth USD 67.2 billion.A further 69 economies reported USD 65.6 billion in electricity imports.A total of 55 economies reported both exports and imports of electricity in 2023.Global electricity trade has grown UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION23Figure B.1:Bi

195、lateral imports(mirror exports)of electricity in 2023(kWh)GermanyFranceAustriaNetherlandsDenmarkCzechiaSwitzerlandNorwaySwedenBelgiumPolandItalyUnited KingdomSpainFinlandLithuaniaHungarySloveniaSerbiaUkraineMontenegroGreecePortugalCroatiaIrelandRomaniaMoroccoLatviaBulgariaMaltaNorth MacedoniaTrkiyeB

196、osnia HerzegovinaSlovakiaAlbaniaLuxembourgGeorgiaEstoniaRussian FederationKazakhstanChinaChina,Hong Kong SARChina,Macao SARUSACanadaMexicoGuatemalaArgentinaParaguayBrazilUruguaySouth AfricaMozambiqueZimbabweUzbekistanTurkmenistanBurkina FasoTogoGhanaBeninNigeriaSource:UN Comtrade,selected trade line

197、s where quantity unit was in kWh and trade value higher than USD 50 million.in nominal terms by USD 99.8 billion since 2003,with 64%of that expansion occurring since 2013.Most trade in electricity takes place in the EU single electricity market(see Figure 2.8).Seven of the ten largest exporters and

198、importers of electrical energy are EU member states.Two other top ten exporters are EU-adjacent nations(Norway and Switzerland).A similar picture emerges on the import side,with Switzerland and the UK also in the top ten of global importers.Figure B.1 below shows a chord diagram of imports in TWh wh

199、ere reported values were greater than USD 50 million.In 2023,the largest importers of electricity were Germany,which imported 72 TWh from tenneighbouring countries,followed by Italy with 57 TWh and the United States with 51 TWh.The largest exporters were France(89 TWh),followed by Canada(51 TWh),Ger

200、many(40 TWh),the United States(39 TWh)and Sweden(38 TWh).All European Union member states,including net exporters,benefit from electricity imports at times.During 2023,none of the 27 member countries was solely an exporter.The EU has set an interconnection target of at least 15%by 2030 to encourage

201、EU countries to interconnect their installed electricity production capacity.13SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE24The EUs interconnection target means that each member state should have in place electricity cables that allow at least 15%of the electricity produced on its

202、territory to be transported across its borders to neighbouring countries.This policy is based on the understanding that connecting Europes electricity systems will allow the EU to boost its security of electricity supply and to integrate more renewables into energy markets,thus achieving its climate

203、 and energy goal.The IEA highlights that different regional electricity trading“blocs”can be observed around the world:In North America,trade primarily involves Canada,the United States and Mexico,with Mexico also exporting to Guatemala.In Latin America,significant trade occurs between Argentina,Bra

204、zil,Paraguay and Uruguay.In Africa,major bilateral trade involves Mozambique and South Africa,with each importing around 8 TWh from the other and simultaneously exporting to Zimbabwe.Another African trading bloc includes Benin,Burkina Faso,Ghana,Nigeria and Togo.India plays a major role in cross-bor

205、der trade and regional connectivity in South Asia.Presently,India benefits from hydropower imports from Bhutan and Nepal.Nepal has 5,000 MW in hydropower electricity above the needs of its domestic energy market.Indias hydropower electricity imports from Bhutan and Nepal were valued at USD500 millio

206、n in 2023.Investments for further development of new hydro projects(about 1,200MW)were agreed in mid-2022.14In many cases,electricity trading is conducted within regional power pool arrangements.These are integrated power transmission grid and electricity markets across countries,often within region

207、al trading arrangements,with the purpose of creating and leveraging economies of scale in the generation and transmission of electricity.Regional power pools and coordinated electricity markets aim to optimize the distribution of electricity,ensuring that supply meets demand more effectively across

208、large areas,thereby reducing the possibility of redundant generation capacity within individual countries.Box B.1 delves into the Southern African Power Pool(SAPP)arrangement and outlines some of SAPPs plans for new interconnectors.The African Union is seeking to develop a Single Electricity Market

209、in Africa,building on the five existing power pool arrangements.Investments in cross-border transmission infrastructure to deepen electricity trade lie at the heart of these plans.Box B.1:The Southern African Power Pool(SAPP)Created in 1995 through a Southern African Development Community treaty,the

210、 Southern African Power Pool(SAPP)includes 12 member countries,represented by their respective national power utilities.It facilitates cross-border electricity trade in Southern Africa.The SAPP balances regional supply and demand through coordination mechanisms,a strong regulatory framework and ongo

211、ing investments in transmission infrastructure.It is actively working on new transmission projects,with a particular focus on integrating renewable energy sources into these projects and alleviating congestion in the current grid.Projects include:The Kalumbila-Kolwezi Interconnection Project,which i

212、nvolves the construction of a high-voltage line linking the Republic of Zambia and the Democratic Republic of the Congo.The AngolaNamibia interconnection,which aims to link the electricity networks in north-west Namibia with the southern part of Angola,potentially also integrating the proposed Bayne

213、s Hydro Power Station into the Namibian and Angolan national electricity networks.Angola was recognized in the SAPP pool plan as one of the countries with surplus hydropower.The Inga-Soyo interconnector project,through which Angola plans to tap into renewable electricity produced at the hydroelectri

214、c dam at Inga in the Democratic Republic of the Congo.Plans are underway to upgrade power generation at the Inga Falls.The Zimbabwe,Zambia,Botswana,Namibia(ZIZABONA)project,which consists of the development of new transmission facilities in Zimbabwe,Zambia,Botswana and Namibia,with the aim of creati

215、ng a western transmission corridor to the SAPP.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION25Similar power pool arrangements are found in other regions.For example,the Central American Electrical Interconnection System(SIEPAC)connects the electricity grids of Costa Rica,El Salvador,G

216、uatemala,Honduras,Nicaragua and Panama so promoting regional energy integration and cooperation.Since 2015,efforts have been underway to integrate larger amounts of renewable energy into the SIEPAC grid through the Clean Energy Corridor of Central America initiative supported by IRENA,bilateral dono

217、rs and multilateral development banks(MDBs).Costa Ricas electricity system is already almost fully renewable due to high hydropower availability.Costa Ricas transmission system is connected to Panama and Nicaragua as part of SIEPAC.Electricity trade with neighbouring countries in recent years has us

218、ually remained under 1 TWh(less than 10%of national demand).15In 2021,a World Bank Policy Research Paper examined the potential savings in electricity supply costs from unrestricted electricity trade between Latin American countries.The volume of cross-border regional electricity trade currently acc

219、ounts for less than 5%of the total regional generation.One of the key impediments identified was a lack of regulatory/institutional reforms in the power sector to facilitate trade.Introducing these reforms would lead to savings of between USD1.5 billion and almost USD 2 billion,and without expanding

220、 their current electricity generation capacity.16TariffsIn so far as it is considered a good and classified in the WCO HS nomenclature,cross-border trade may attract tariffs as well as other duties and charges imposed by an importing country.WTO members tariff commitments on electricity imports vary

221、.Many members opted not to make any commitments and left electricity trade unbound in their schedules of tariffs applied on goods,meaning that no upper limits were set.Others indicated tariff rates in these schedules.Furthermore,there are others who have no HS code for electrical energy in their sch

222、edules of commitments(e.g.Australia and New Zealand).Among members of the SAPP,nine of the 12 participating members have not made tariff commitments on electrical energy in their goods schedules.Three others set their maximum tariff rates at 60%(Lesotho),80%(Angola)and 100%(Democratic Republic of th

223、e Congo)respectively.BoxB.2 provides a short explainer on tariffs and the WTO.Among the WTO members that have made tariff commitments on electrical energy is the European Union(the largest electricity market worldwide),which has bound its tariff rates at 0%.This is a commitment not to apply tariffs

224、on imports of electrical energy into the European Union from non-EU member states.In addition,no tariffs are applied on trade within the EUs Single Market.17Box B.2:Tariffs and the WTO:an explainerCustoms duties on merchandise imports are called tariffs.Each WTO member has set out how it intends to

225、treat the imports of other members merchandise in a schedule of commitments,often referred to as“goods schedules”.These schedules are legal instruments that form an integral part of the General Agreement on Tariffs and Trade(GATT)and the WTO Agreement.The schedules include so-called“bound”or maximum

226、 duties.Bound tariffs are commitments not to increase a rate of duty beyond an agreed level.Where a tariff is indicated as“unbound”,no commitment has been made.The member concerned can set the rate of duty at the level of its choice;the member is therefore at liberty to determine its own tariff rate

227、.Applied rates are the duties that are actually charged on imports and are often below the bound rates.Goods schedules are one of the main WTO tools to ensure transparency,security and predictability for world trade.Members schedules also include commitments on“Other duties and charges”(ODCs).Like t

228、he customs tariff,ODCs have a maximum level for each product and are expressed either in ad valorem(i.e.charged as a percentage of the price of the product)or non-ad valorem format.A“null”value in the ODC column of the schedule means the ODC is duty free.The WTO Goods Schedules e-Library is an onlin

229、e platform that facilitates access to the legal instruments that embody the WTO Schedules of Concessions(https:/goods-schedules.wto.org/)Source:WTO Secretariat.SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE26The United States has also bound its import tariff on electrical energy impor

230、ts at 0%.Among other North American states,Mexico has bound an ad valorem duty rate at 35%and Canada has left this tariff line unbound.Among countries that have joined the WTO since its creation in 1995(recently acceded members),both Lao PDR(20%ad valorem)and Nepal(15%ad valorem)have made tariff bin

231、dings on electrical energy imports in their tariff schedules.18WTO members do not distinguish between renewable and other energy sources in their tariffs(e.g.by listing a separate tariff line or binding their tariffs at different rates).Based on the latest WTO tariff data covering the period 2020-20

232、24,out of 107 economies(with the EU counted as one)that reported information on electricity trade,66 applied a zero-tariff for electricity imports.A further five economies applied tariffs less than 5%.A total of 23 members applied a 5%tariff,while three more applied tariffs higher than 5%but less th

233、an 10%.A further six economies applied a 10%tariff.19 One member applied a specific duty with an ad valorem equivalent of 29%.Classifying electricity as a good raises some challenges for customs valuation.The WTO Customs Valuation Agreement(CVA),also known as the Agreement on Implementation of Artic

234、le VII of the General Agreement on Tariffs and Trade 1994,“aims for a fair,uniform and neutral system for the valuation of goods for customs purposes a system that conforms to commercial realities,and which outlaws the use of arbitrary or fictitious customs values.”For practical reasons,electrical e

235、nergy is not cleared by customs in the normal way.Clearance is done after the entry of the good(i.e.electrical energy)into the territory and according to measurements at power plants.Valuation issues can potentially arise in situations when minimum payments are required which are not linked to consu

236、mption and payments are required relating to construction and maintenance of the transmission system in the exporting country.20TransitAnother concern that can arise is the stacking of multiple transmission charges when electricity crosses different countries a practice referred to as“pancaking”.Thi

237、s phenomenon can occur when electricity is transmitted over long distances and crosses multiple transmission zones(i.e.legal jurisdictions),each managed by a different transmission system operator or governed by different regulatory frameworks.Each transit country may impose its own transmission cha

238、rge for the use of its infrastructure.As electricity flows from the point of generation to the point of consumption,these charges accumulate or“stack”up,similar to a stack of pancakes,hence the term“pancaking”.The stacking of transmission fees(i.e.transit fees)can significantly increase the overall

239、cost of delivering electricity across regions.This in turn discourages long-distance electricity trade and reduces market efficiency.Box B.3 outlines WTO disciplines covering transit.2.3 Supply disruptions and export restrictionsSince electricity is difficult to store in significant volumes and for

240、long time periods,non-delivered amounts of electricity may necessitate the curtailment of supply to electricity users.For example,in South Africa,the energy company Eskoms load shedding protocols(i.e.supply restrictions)first impact large industrial users and then are extended to domestic users.21Wh

241、en the source of electricity supply is external(i.e.an electricity exporter in another economy),measures taken to stabilize the domestic grid in that jurisdiction may lead to disruption of exports.For example,supply could be affected by issues such as a plant failure,which could cause a change in fr

242、equency to ripple throughout the entire network and extend beyond national borders.22 Extreme weather events,labour disputes and other events may also lead to interruptions of supply.Other risks of disruption in electricity supply may be regulatory or geopolitical in nature.Restrictions might be int

243、roduced to prioritize national energy needs,to control prices for domestic users,or for national security reasons.These factors also have a bearing on energy transit.Article XI of the GATT 1994 deals with the General Elimination of Quantitative Restrictions.Broadly,it prohibits export bans and restr

244、ictions,but allows members to apply them temporarily to prevent or relieve critical shortages of foodstuffs or other essential products.The“general exceptions”in GATT Article XX may also be relevant for example,these provide flexibilities for trade restrictions that are essential to the acquisition

245、or distribution of products in general or local short supply.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION27Box B.3:WTO,the GATT and transitTo the extent that electricity is considered a good,the provisions of Article V of the General Agreement on Tariffs and Trade are relevant.(The G

246、ATT is the predecessor to the World Trade Organization).Article V covers“Freedom of Transit”.The seven clauses of Article V variously define traffic in transit and impose obligations on members.These provisions cover inter alia transit routes,unnecessary delays and restrictions,transit duties and ch

247、arges and contain non-discrimination provisions.Non-discrimination is a fundamental principle of the GATT 1994 and the WTO.In essence,trade without discriminationimplies that a member should not discriminate between its trading partners giving all of them“Most-Favoured-Nation”(or MFN)status.It also

248、should not discriminate between its own and foreign products,services or nationals(giving all of them“national treatment”).In the context of transit,non-discrimination may imply not applying divergent treatment according to the mode of transport,country of origin,or destination or applying customs d

249、uties,transit duties,or other charges except as necessary for transportation,administrative expenses,and cost of services rendered.Article V:4 states:“All charges and regulations imposed by contracting parties on traffic in transit to or from the territories of other contracting parties shall be rea

250、sonable,having regard to the conditions of the traffic.”Also relevant are the accession commitments of members who have joined the WTO since 1995.Some recently acceded members have undertakings on Article V,including on charges for transportation of transit goods.Disciplines of the WTO Trade Facilit

251、ation Agreement and the findings in WTO disputes that have dealt with transit may also be relevant.23,24In addition,the General Agreement on Trade in Services(GATS)can apply to activities such as the laying of cables,their maintenance,the transmission of electricity,and the disposal of cables that m

252、ay be undertaken in transit states.Much like the patchwork of commitments on tariffs,there is similar divergence between members with respect to the inclusion of core energy services,such as transport,transmission and distribution,in their schedules of services concessions.Also relevant to transit a

253、re obligations contained in other conventions and treaties outside WTO rules and agreements.For example,the UN Convention on the Law of the Sea contains provisions providing the right to lay submarine cables and pipelines(Article 112)on the continental shelf,but stipulates that due regard is paid to

254、 cables or pipelines already in position(Article 79).25 The Energy Charter Treaty,an international agreement on cross-border cooperation in the energy industry,also includes provisions on transit(Article 7).26Source:WTO Secretariat.Export restrictions are a prominent topic in trade policy.Measures t

255、aken during the 2007-2008 food price crisis and during the COVID-19 pandemic are prominent examples.These measures also came to the fore again as various WTO members sought to assure their agricultural supplies after the outbreak of the war in Ukraine.27A WTO information note on export prohibitions

256、and restrictions published in April 2020 explains how restrictions initiated by one economy may create a domino effect.If trade does not provide secure,predictable access to essential goods,economies may feel they have to pursue domestic production instead,even at much higher prices.Such a scenario

257、results in lower supply and higher prices for a much-needed commodity.28The WTOs 2021 World Trade Report further noted that export restrictions adopted to secure national supplies in response to a crisis can often lead to trade retaliation from other countries,as well as dwindling imports and escala

258、ting conflicts,leaving all those concerned less well-equipped to cope with and recover from the shock that motivated the trade restrictions in the first place.29WTO rules promote transparency in trade policies,including through the notification of changes to members regulations and procedures.These

259、transparency rules also include export restrictions.Such measures should be notified to the WTO as soon as possible in line with the 2012“Decision on Notification Procedures for Quantitative Restrictions”.By following WTO transparency rules,members provide assurance to their trading partners and inv

260、estors,fostering a more predictable environment for trade,including cross-border electrical energy and transit.30 This transparency is particularly helpful in the SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE28energy sector,where issues related to grid access,transit fees and regulat

261、ory practices can significantly impact trade flows.A prominent initiative seeking to manage the risks associated with interconnection is the Quad Partnership for Cable Connectivity and Resilience announced by Australia,India,Japan and the United States at the 2023 Quad Summit in Hiroshima,Japan.In J

262、uly 2024,the government of Australia announced the launch of a new USD 18 million Cable Connectivity and Resilience Centre to help ensure undersea cable networks in the Indo-Pacific are resilient and all countries can benefit from reliable connectivity.2.4 Supply chain bottlenecks create opportuniti

263、es to promote re-globalizationThe acceleration of renewable energy deployment calls for modernizing distribution grids and establishing new transmission corridors to connect renewable resources such as solar PV projects located far from demand centres in cities and industrial areas.31Reaching nation

264、al energy and climate goals means adding or refurbishing a total of over 80 million kilometres of grids by 2040,the equivalent of the entire existing global grid.32Supply chain bottlenecksIn 2023,the IEA reported that the supply chain for grid infrastructure is showing tightness.33 Manufacturers of

265、transmission lines have struggled to cope with limited inventory,labour and material shortages,inflation,long lead times for the production of components and knock-on delays for customers.Constructing a transmission line is a complex task,requiring a variety of components and technologies(e.g.cables

266、,power lines,transformers,substations and control systems).Various materials are needed to manufacture these technologies and components.Aluminium and copper are the principal materials for the manufacture of cables and transmission lines.Aluminium is preferred for overhead power lines and increasin

267、gly used for underground and subsea transmission cables.34An overhead HVDC transmission line requires around 5 kilogrammes of aluminium per megawatt and per kilometre(kg/MW/km)for an overhead HVDC line and 29 kg/MW/km of copper for an underground cable.Metal requirements are far higher for AC transm

268、ission lines.An overhead AC transmission line requires around 11 kilogrammes of aluminium per megawatt.35 Wood,steel and concrete are used for the pylons in the distribution grid,while steel is also used for transmission towers to support the overhead conductors.Power transformers are a further comp

269、onent of power systems.Almost half of the material(by weight)required for their manufacture is steel,of which more than 60%is grain-oriented electrical steel(GOES)while the remainder is construction steel.GOES is almost 2.5 times more expensive than construction steel and must meet minimum efficienc

270、y standards for transformers,such as the Energy Efficiency Program for Certain Commercial and Industrial Equipment in the UnitedStates and the Ecodesign Directive in the European Union.36GOES is another segment of the supply chain where the IEA reports pressure.Growing demand for non-GOES electrical

271、 steel for making electric vehicles(EVs)is leading some steel producers to switch part of their production away from GOES.Production of GOES is also under pressure as it is used in EV charging stations as well.Semiconductors are a further product for which the IEA is reporting supply shortages.High-

272、power semiconductors are a central component of HVDC converter valves,used in HVDC converter stations.In turn,many materials are required in the supply chains of the components of the HVDC stations,including silicon,steel,aluminium,copper,nickel,polymer and zinc.37The IEA suggests that the expected

273、increase in demand for HVDC equipment over the next ten years might put supply chains under additional pressure,potentially amplified by a lack of experienced personnel in manufacturing and in areas such as engineering,construction and project management.Constructing new transmission lines can also

274、be affected by shortages in related service markets.Subsea cables,for example,require cable-laying vessels operated by specialist providers.Depending on the future deployment of offshore wind and subsea interconnectors,additional vessels could be needed.If their construction is not planned well in a

275、dvance,there could be a shortage and a delay to projects.38To help address supply chain issues,the Utilities for Net Zero Alliance(UNEZA)was established at COP28 in 2023.This Alliance unites leading global utilities and power companies with the aim of spearheading the development of grids that are r

276、eady for renewable energy,promoting clean energy solutions and advancing electrification efforts.In UNEZAs Roadmap UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION29to 2030 and beyond,two of the four priority actions speak to IRENAs projection that grid investment must be boosted from th

277、e benchmark figure of USD 368 billion per year to USD 720 billion per year by 2030 and to de-risk supply chains by addressing bottlenecks that are leading to a significant mismatch between supply and demand.39UNEZAs roadmap runs parallel to discussions at the WTO about environmental goods and servic

278、es,in particular under the Trade and Environmental Sustainability Structured Discussions(TESSD)initiative among a group of WTO members.At the WTOs 13th Ministerial Conference(MC13),TESSD convenors issued an analytical summary of their work to date on the topic and outlined the path to achieving conc

279、rete outcomes by MC14(WT/MIN(24)/11/Add.3).The“living”document will be further updated based on discussions and contributions under the working group(see Box B.4).Re-globalization opportunitiesA major factor in the location of cable manufacturing is the cost and time associated with transporting fin

280、ished cables.With expansion of grid networks and interconnectors needed in areas of comparative advantage in renewable energy production,there may be re-globalization opportunities to expand manufacturing in new locations and increase manufacturing capacity.The market for electrical cables has been

281、growing significantly,with the demand for insulated wires increasing by 35%over the past decade.40 Africas demand for transmission cables is expected to grow by 6.8%annually between 2022 and 2027,driven by substantial investments in grid expansion and renewable energy projects.41 For example,Africas

282、 cross-border grid interconnection projects,such as the West African Power Pool(WAPP)and the SAPP,are expected to require an estimated 10,000 kilometres of new transmission cables over the next decade.42Box B.4:WTO TESSD discussions on environmental goods and servicesIn November 2020,Trade and Envir

283、onmental Sustainability Structured Discussions(TESSD)were launched as an initiative by a group of WTO members to intensify work on the topic,complementing the work of other WTO committees and bodies,including the Committee on Trade and Environment.The initiative is open to all members.It currently h

284、as 76 co-sponsors representing more than 85%of global trade and including members from all regions and at all levels of development.A unique feature is the participation of stakeholders from the business community,civil society,academic institutions and other international organizations,who enrich t

285、he deliberations in TESSD with their technical expertise.After intense technical work,in February 2024,during the WTOs 13th Ministerial Conference in Abu Dhabi,Canada and Costa Rica,the co-convenors of the initiative,released a“package”of outcomes.In particular,the outcome documents identified:pract

286、ices to guide the design and implementation of trade-related climate measures;renewable energy goods and services that are key for the energy transition;trade-related action areas to support a circular economy;considerations that can guide subsidy design to benefit the environment while avoiding tra

287、de distortions.In particular,the analytical summary of discussions on environmental goods and services and renewable energy(WT/MIN(24)/11/Add.3)included:(i)indicative lists of renewable energy goods and services,including goods such as photovoltaic cells for solar energy,gearboxes for wind turbines,

288、generators for hydropower,and electrolysers for green hydrogen production,and services such as engineering,testing and analysis,environmental consulting,operation,maintenance and repair,and recycling;(ii)trade barriers and supply chain bottlenecks;(iii)developing country perspectives;and(iv)opportun

289、ities and approaches for promoting and facilitating trade in these goods and services.The group continues its regular work towards potential future outcomes on the topic.Source:WTO SecretariatSUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE30The African market for insulated electrical c

290、ables is currently valued at approximately USD 4.3 billion,with South Africa and Egypt being the largest importers of these products,accounting for 22%and 15%of Africas total imports,respectively.43 Countries in East and North Africa are key regions where grid expansion is taking place.For example,K

291、enya is expected to invest over USD 1.5 billion in transmission infrastructure over the next five years,with cables accounting for a significant portion of the investment.44The International Trade Centres Export Potential Map suggests that there are some USD 5.6 billion in untapped export opportunit

292、ies regarding electrical cable(HS Code 8544).45 Several LDCs may have potential to expand exports of these cables.The Export Potential Map indicates Ethiopia,Bangladesh and Myanmar have an estimated untapped export potential of USD 150 million in electrical cables.A 2019 report by the Beijing-based

293、GEIDCO asserts that energy interconnection can open opportunities for the co-development of electricity,mining,metallurgy,manufacturing and trade on the African continent.46 The report argues that by coordinating the planning and construction of clean energy(notably hydropower),an integrated industr

294、ial development plan is feasible that covers value addition activities such as mining,smelting and mineral-processing.Solving the problems of power shortages in industrial development and limited power markets would unlock enormous economic and social benefits according to the authors.Compliance wit

295、h new technical regulations and standardsOne requirement that new entrants,existing manufacturers of electrical cables and other related electricity grid products as well as electricity generators must respect is compliance with technical regulations and standards.Renewable energy projects must comp

296、ly with the technical specifications and standards set by grid operators,and meet power quality standards defined by grid operators.They must also meet requirements for safety and security,including cybersecurity,and adhere to grid codes that define the necessary measures for maintaining grid stabil

297、ity.47Additionally,manufacturers and generators must respect other procedures,standards and technical requirements,including those related to environmental impact.One discernible trend is towards more standards and technical regulations requiring greater sustainability in the manufacture of componen

298、ts used in power grid components.For example,some new measures require the phasing out of certain materials,such as lead in grid equipment and sulphur hexafluoride(SF6),a highly potent greenhouse gas,used to keep networks running safely.WTO rules and committee work covering transparency have a role

299、to play by ensuring a flow of information from WTO members about the scope of new measures and their entry into force.WTO committees also provide an avenue for members to make comments on other members draft rules(see Box B.5).2.5 Access to financeOverviewAchieving the transition to net zero and uni

300、versal electricity access will require significant up-front capital investment to modernize grids and roll out new cross-border interconnection infrastructure.48 In 2021,there were almost 80 million km of overhead power lines and underground cables worldwide of varying voltage levels.This equates to

301、 roughly a hundred trips to the moon and back.49IEA projections suggest that meeting national climate pledges requires a three-fold increase in grid investments over the next five years from current levels.Meeting a Net Zero Emissions Scenario requires a five-fold increase.Of the USD770 billion funn

302、elled each year into clean energy for what IEA terms as“emerging markets and developing economies”(EMDEs),only one-fifth is currently directed into building,scaling and future-proofing electricity grids.50 Figure B.2 highlights the IEAs projection of the required levels of grid and battery storage i

303、nvestment needed to meet their Net Zero Emissions Scenario.In many developing economies,securing the necessary investment to upgrade grids and roll out interconnectors is proving difficult to find.Many projects are stalling due to lack of funds.A World Bank database tracking the financial and operat

304、ional performance of more than 180 utilities in over 90 countries shows that fewer than 40%of utilities collect enough revenue to meet their annual operating and debt service costs the minimum for financial sustainability.51The World Bank argues that this situation is especially delicate for utiliti

305、es in low-income economies and lower-middle-income economies where high costs of supply,low charges,operational inefficiency and poor sector planning and procurement often create persistent cycles of underperformance.UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION31Box B.5:TBT notificat

306、ions affecting electrical transmission equipmentThe WTO Agreement on Technical Barriers to Trade(TBT Agreement)seeks to ensure that technical regulations,standards and conformity assessment procedures do not create unnecessary obstacles to trade nor unjustifiable or arbitrary discrimination.The TBT

307、Agreement also strongly encourages the use of international standards by requiring them to be used as a basis of standards and regulations,when appropriate.Transparency through specific notifications obligations for WTO members is one of the principles under the TBT Agreement to minimize trade barri

308、ers.A number of notifications have been made by members regarding electrical transmission products over the period 2023-2024.Measures have focused on ensuring improved safety,energy efficiency and adherence to updated international standards.Examples of regulations introduced include the following:C

309、hina issued new regulations for energy-efficient electrical transmission systems,aligning with its broader energy-saving and emission reduction targets under national green energy policies.52 The United States revised its safety and environmental standards for high-voltage electrical transmission eq

310、uipment,focusing on minimizing environmental impacts and enhancing public safety protocols.53 Japan introduced new conformity assessment procedures for electrical transmission components,aimed at harmonizing standards with international energy efficiency guidelines.54 The Republic of Korea updated i

311、ts regulations for the import and manufacturing of electrical transmission systems,enhancing compliance with digital safety standards and cybersecurity protocols in smart grids.55The WTOs ePing system for notifications(https:/eping.wto.org/en/Search)can play an important role in ensuring transparenc

312、y and facilitating members ability to review and comment on draft regulations.Source:WTO Secretariat.Figure B.2:Grid and batteries average investment in the IEAs Net Zero Emissions Scenario(USDbillions)04012010080602020222026-20302031-203520222026-20302031-203520222026-20302031-203520222026-20302031

313、-203520222026-20302031-203520222026-20302031-203520222026-20302031-2035IndiaSouthernAsiaOtherAsiaAfricaLatinAmericaEurope andEurasiaMiddleEastSource:IEA(2024).56 SUPPORTING THE RENEWABLE ELECTRICITY TRANSITION THROUGH TRADE32Electricity is a key enabler of social and economic development,and governm

314、ents may subsidize their systems(e.g.by not fully recovering costs)for public policy reasons.However,this can result in underinvestment in critical maintenance,upgrades and system expansion,with increased dependence on government subsidies.57 Many projects are stalling due to lack of funds.58 Box B.

315、6 focuses on challenges in scaling up grid investment.Not all grid projects may qualify for climate financeExpenditure on grid upgrades and interconnection do not automatically meet the criteria to be considered as climate finance.Cables are technology neutral(i.e.they do not distinguish between whe

316、ther electricity is generated by renewable or other forms of energy).Because grid projects are an enabler of decarbonization,not direct contributors to emission reductions,additional criteria are applied.If these criteria are met,the grid or interconnection project is designated as eligible for clim

317、ate finance and the applicant can access climate-related concessional finance.A 2021 paper by the Global Grids Initiative estimated thatonly 40%of the required investment qualifies as climate finance.59 Two main approaches set criteria on whether a project investment can be designated as eligible fo

318、r climate finance:the EU Taxonomy and the Common Principles adopted by the MDBs and the International Development Finance Club,a partnership of development banks.60 If grid projects meet the EU Taxonomy and Common Principles criteria,almost any investment within it is eligible,resulting in low verif

319、ication costs and wide inclusivity of beneficiaries across potential projects.Box B.7 sets out the MDBs Common Principles criteria relating to the transmission of electricity.Box B.6:Challenges in scale-up of grid investmentA 2022 working paper for the Green Grids Initiative outlines challenges that

320、 investors face in deploying capital to finance grid investments,including the following:Lack of solid creditworthiness from utilities:Historically,utilities located in Emerging Markets and Developing Economies(EMDEs)have often been viewed as high-risk borrowers and have low credit ratings.Consequen

321、tly,it has meant that it is more costly for debt and equity investments in EMDE economies compared to advanced economies,with capital investments being up to seven times more expensive in EMDEs.This can act as a deterrent in encouraging further investment from the private sector.The need for“patient

322、”capital:The approval process to obtain finance can be a time-intensive process for utility companies.The Rocky Mountain Institutes Climate Finance Access Network suggests that the approval process from major funds could take up to four years,with utility companies facing difficulties in preparing a

323、nd packaging grid projects into financially viable assets.This may result in utility companies often being discouraged to seek climate finance to obtain urgent forms of capital.Global supply chains disruptions:Severe supply shortages in recent years have delayed the supply of critical raw materials

324、needed for grid infrastructure,such as semiconductors.These delays can cause inflationary pressures and lead to overall increases in component costs,thereby impacting the economic feasibility of projects.Pipeline projects have extensive lead times:Construction of electric grids is extremely capital-

325、intensive and requires extensive lead times from the initial investment decision to commissioning.Coupled with the growing shortage of technical personnel,this is likely to result in further delays in project lead times.Availability of sufficient data:Investors have stressed lack of information and

326、data for instance,data on anticipated project performance.This can act as an additional barrier in mobilizing further private investment.Political decisions around end-user tariffs and private ownership/operation of assets:Grid investments,like many infrastructure investments,are often subject to ri

327、sks due to political sensitivities related to foreign direct investments and vulnerabilities to local currency due to tariffs and user fees.Investments in less mature markets have a higher associated regulatory and country risk due to the possibility of country-specific factors eroding the profitabi

328、lity of conducting business.Source:Green Grids Working Paper.61 UNLOCKING RE-GLOBALIZATION OPPORTUNITIES VIA INTERCONNECTION33Box B.7:MDBs Common Principles for Climate Mitigation Finance relating to transmission of electricityCriteria Non-nuclear,very-low-carbon electricity shall be either renewabl

329、e electricity meeting the criteria for lifecycle GHG emissions in activity 2.1(Generation of renewable energy with low lifecycle GHG emissions to supply electricity,heating,mechanical energy or cooling),or fossil-fuel-based generation with carbon capture and storage or utilization as described in ac

330、tivity12.5(Carbon capture,transport,storage,or utilization).Apportionment of financing eligible for climate mitigation finance shall differ by type of investment:1.If the transmission or distribution system is dedicated to,or is required for,the evacuation of non-nuclear,very-low-carbon electricity

331、or reducing its curtailment,the financing of such investment shall be fully eligible.Where such investment is a part of a larger investment programme,eligible financing shall be apportioned according to the capacity required for the evacuation of the non-nuclear,very-low-carbon electricity.Any addit

332、ional capacity beyond the above shall be apportioned as described below depending on the nature of the investment.2.Financing of general transmission or distribution investments within an existing grid shall be apportioned according to the share of additional electricity delivered that can be charac

333、terized as non-nuclear,very-low-carbon electricity during a 10-year period comprising five years before and five years after the start of the operation of the new infrastructure.3.Financing of a new grid system not connected to an existing system shall be apportioned according to the share of non-nuclear,very-low-carbon electricity delivered at the start of the operation of the grid and in the fiv