Electricity trading between countries is a crucial issue, though little known to the general public. The view that acquiring electricity from other countries is a national failure has become outdated, especially in a world where energy cooperation is increasingly important.
There are several reasons why countries are forced to buy electricity from others. One of the most common is an unexpected surge in energy demand , which can exceed local production capacity. Natural disasters or events like the nuclear disaster in Japan can also cripple energy infrastructure, forcing temporary dependence on other countries. Other factors include a lack of investment in new infrastructure, weaknesses in energy sources such as nuclear or hydroelectric power, and insufficient funds to modernize energy systems.
How is electricity traded?
Energy trading can involve both renewable and conventional sources, expanding the possibilities for both selling and buying countries. An example of this is the exchange of hydroelectric power between Paraguay and Brazil, where both countries share the large Itaipu Dam, a key project for their energy supply.
As clean energy gains traction on the global stage, the exchange of these energy sources through strategic electrical interconnections is expected to increase considerably. Having a diversified energy mix with both renewable and conventional sources allows countries to adjust their trade strategies based on their surpluses or deficits at any given time.
Electrical interconnections allow neighboring countries like France and Spain to exchange electricity. For several years, Spain has been a key exporter of electricity to France, especially during periods when French nuclear power generation has been insufficient to meet domestic demand. In particular, the decline in French nuclear power production in 2022 and 2023 increased the need to import large quantities of electricity from Spain.
Countries selling and buying electricity
Analyzing the energy market, we can observe how certain countries stand out as net exporters of electricity . Some of the countries that stand out as sellers in the electricity trade are:
- France: Great dominator of the European market, thanks to its nuclear infrastructure.
- Paraguay: Leader in the export of hydroelectric energy thanks to the Itaipú Dam.
- Colombia and Mexico: They export significant quantities, especially to regional neighbors.
In contrast, other countries are major electricity buyers for various reasons, such as insufficient production or a lack of efficient interconnections. Some of these buying countries include:
- Japan and South Korea: They must import electricity due to their geographic and demographic limitations.
- Ecuador and Brazil: Both countries alternate roles as buyers or sellers depending on seasonal needs.
- United States: Despite being a major producer, at certain times it tends to import from Canada.
Due to changes in demand, the electricity trade balance between countries can vary significantly throughout the year. For example, countries such as Germany and Spain, although they export substantial amounts of electricity, may have periods where they must purchase energy due to fluctuations in the generation of their renewable sources.
The future of electricity trading
The global energy market will become even more dynamic in the coming years, primarily due to the significant changes underway. The gradual phasing out of nuclear and fossil fuels in many countries has created new opportunities for those with the capacity to sell electricity. Furthermore, advances in electrical storage technologies, such as hydroelectric batteries, could radically alter how energy is traded, enabling greater levels of self-sufficiency.
Another key factor will be the increase in energy corridors between countries, which facilitate the transport of electricity. Projects such as the submarine cable between Spain and Morocco , or the numerous interconnections being studied in Europe, are designed to optimize large-scale electricity trading.
In this century, electricity trading will become increasingly important, and countries with the capacity to invest in infrastructure to export their energy surpluses will gain significant competitive advantages. This trade will not only generate economic benefits but will also contribute to a more sustainable energy balance. Therefore, it is crucial that countries not only meet their domestic demands but also aim to become key players in the global electricity trade.
In short, those countries that manage to develop a robust and diverse electricity supply will be able to consolidate themselves as net energy exporters, taking advantage of growing international demand and changes in the global energy mix.