Bridging East Asia: assessing system costs of an energy island
A reduced-order model comparing interconnection scenarios across KR–JP–CN.
Key Findings
The analysis demonstrates that the system-level effectiveness of renewable energy depends more on power system structure and institutional configuration than on installed capacity alone. Rather than pursuing detailed unit-level or spatially resolved modeling, this study adopts a transparent, comparative system-level framework to isolate how different cross-border configurations shape costs, emissions, and surplus dynamics under a common structural baseline.
Domestic Renewable Expansion
Across both Korea and Japan, a uniform tripling of domestic renewables primarily displaces LNG generation and leads to pronounced surplus conditions, particularly under solar-heavy expansion. By contrast, a wind-dominant expansion achieves more effective coal displacement due to wind's more temporally distributed generation profile. In Korea, however, the impact of domestic renewable expansion remains limited by structural rigidities associated with a nuclear-dominated and inflexible system.
Interconnection Effects
Interconnection between Korea and Japan improves overall system efficiency by pooling demand and smoothing renewable variability, reducing surplus generation and marginal costs at the margin. However, interconnection alone does not induce a qualitative restructuring of the generation mix or cost structure, and its contribution remains incremental rather than transformational.
The Energy Island Configuration
The energy island configuration produces a qualitatively different outcome by enabling the introduction of system-scale offshore wind as a new regional supply source. Under this configuration, large-scale coal displacement and deep emissions reductions become structurally feasible, alongside a shift toward persistent surplus conditions reflected in abundance-driven marginal cost signals.
Limitations and Future Research
Key limitations — including restricted access to unit-level operational data, coarse spatial abstraction, and the absence of explicit market representations — are treated explicitly and used to motivate future research priorities. The findings underscore the need for improved generator-level data, higher-resolution regional demand information, and a shared, open power system data platform to support credible, scalable, and policy-relevant Asia-Pacific power system analysis.