The importance and Competition Intensity of Cross-Border Electricity Trade of Iran in West Asia Community, using Trade Network Theory

This study aims to model electricity cross border trade policy based on the network theory and to investigate the position and importance of West Asia community in the global electricity trade network. The cohesion in the electricity trade between countries will ensure the security of electricity supply and reduce costs. West Asia community is a group of countries in the network that includes Iran. 

For this purpose, the global network is constructed to examine the role of each node in the network for the time period of 2010-2018. Different communities are identified to proceed with the network analysis. We detect the communities based on the Louvain method as it has the large z-scores for all years and it’s an efficient algorithm. An innovative analysis is introduced; that is competitiveness to capture the competition intensity among electricity exporters. To capture the competition intensity between two electricity exporters, we use Glick and Rose (1999) suggested indicator. 

of this study clearly show the influence and necessity of Iran for stabilizing of the network within its community. Iran mostly has electricity trade with seven of its neighboring countries, which are Turkey, Pakistan, Iraq, Afghanistan, Turkmenistan, Azerbaijan and Armenia. Among them, Iran exports electricity to three countries, Afghanistan, Pakistan and Iraq, and conducts bilateral trade with four other partners.The results of the competition intensity suggest more interconnectedness among community members, and show Iran compete with Turkey, Azerbaijan and Russia on the regional market share. The competition intensity trend, extracted from the competition networks, escalated during the time period. Also Iran is a key node of its community in the competition networks. Finally, it is showed that electricity trade can be increased between Iran and other regional partners. Also based on all different kind of the centrality measures, Iran is the most important node in these networks. All in all, the competition intensity networks for the region, depict intense competition among the nodes, and especially Iran is considered to be the most central node, showing the highest competition relation with its partners. Turkey in the first years and Azerbaijan in the last years of the period are in second place in terms of the competition intensity (These extracted competition networks can be scrutinized in details that give researchers crucial information about the condition of export competition). 

Community of Iran usually consists of Iraq, Afghanistan, Pakistan, Tajikistan, and Uzbekistan, Turkey and Armenia. The position of Iran within its community has been scrutinized. For the first part, among all, community of Iran is in the middle ranking (for example, 8 and 10 among 16 and 15 communities in 2011 and 2018, respectively) based on the total weight. The share of weight of this community to the total trade, varies between 0.2% in 2015 to 14.7% in 2014. By conducting a measure for finding trade hubs in different communities, it’s been found Iran had the greatest score and considered to be the trade hub in west Asia region. Its score in some years puts it among top five trade hubs in whole network (for 4 years).There are eight main electricity importers from Iran. From this aspect, this importing markets have been examined to identify the rivals. In terms of Afghanistan, Iran has the second place after Uzbekistan. In case of Turkey, in the first half of the period, Iran is the biggest exporter, but it started to compete and give away its position to Bulgaria, Azerbaijan and Georgia. Armenia imports from just Iran and Georgia till 2015. The trend in trade of Azerbaijan is similar to Turkey. Iran is the biggest exporter in the first years, but Russia and Armenia gradually took the position. so as a summary, Iran in terms of export to Iraq, Pakistan and Turkmenistan has the dominant share in all years; but in other markets like Afghanistan, Armenia and Azerbaijan, it’s competing; and in Turkey it’s losing the competition. The results from competition measure support the real data.