TYNDP: Ten-Year Network Development Plan 2016 Kristo Helin 8.12.2016

What is the TYNDP? TYNDP TYNDP 2016 Is published by ENTSO-E Presents how to develop the power grid in the next 15 years in order to achieve different energy related goals Is created in a two-year process and published on even years TYNDP 2016 Builds on the 2014 edition ”[O]ffers a view on what grid is needed where to achieve Europe’s climate objectives by 2030”

Overview Europe has set common targets for their energy policies The targets do not define the structure of the energy system Is the use of heat pumps and electric cars going to explode? Is the system development going to be harmonised or individual? Coal over gas OR gas over coal? Will the goals be achieved with a slow or quick start? The TYNDP 2016 approaches the problem with four separate scenarios, ”visions” for 2030, and an ”expected progress” scenario for 2020

Overview - Scenarios Expected progress 2020 – It is assumed that all scenarios only start to diverge after this point Vision 1 – Slow start for 2030 goals, coal over gas, individual policies Vision 2 – Slow start for 2030 goals, coal over gas, harmonised policies Vision 3 – Regular pace to 2030 goals, gas over coal, individual policies Vision 4 – Regular pace to 2030 goals, gas over coal, harmonised policies Note: The Visions are not forecasts

Overview - Scenarios TYNDP 2016

Main research question Investment needs and boundaries/barriers: 10 main ones (yellow) and several regional ones (grey) What is the needed additional capacity on the main barriers? TYNDP 2016

Method of modelling (1) “ENTSO-E distinguishes between market studies and network studies. Market studies are used to calculate the dispatch of generation units and load all along the year on an hourly basis […]. They represent bidding areas through a network of interconnected nodes […]. Network studies, on the other hand, contain the full detail of the physical grid and are used to calculate the actual load flows that take place in the network under given generation/load conditions. Network studies are in particular necessary to compute the GTCs used in market studies.” --ENTSO-E Guideline for Cost Benefit Analysis of Grid Development Projects, 2015 16.11.2018

Method of modelling (2) Market studies Network studies Hourly simulation Dispatch of production units Take into account constraints such as flexibility, availability of thermal units, hydro conditions, wind and solar and load profiles, … Network studies Flow simulation Represent the precise network flows created by the dispatch and load patterns obtained through market studies Both study types are used iteratively 16.11.2018

Indicators used in assessment (1) Needed capacities of transmission lines are determined by considering the power generation in the whole EU In practice, each additional line is analysed separately. If the line adds value above its costs, the line is useful TYNDP 2016

Indicators used in assessment (2) “In every Vision, the TYNDP 2016 tests whether the European extra high-voltage grid is capable of transferring power from generation facilities to load centres in numerous situations. It identifies the possible bottlenecks and the associated investment needs, assesses the costs and benefits of (jointly) proposed reinforcements, […] and thus puts every investment project into a common perspective.” Used indicators: SEW and CBA

Socio-economic welfare (SEW) “For all four refined 2030 Visions, the TYNDP 2016 fine-tunes the interconnection target capacities for every main boundary by 2030 […]. The interconnection level is optimal in this analysis when the societal economic benefits brought by an additional project fail to overcome its costs. This principle however, is complex to implement in practice, and the approach here considered is a simplified one as only Socio-Economic Welfare (SEW) is considered.” “Socio-economic welfare (SEW) is characterised by the ability of a power system to reduce congestion and thus provide an adequate GTC so that electricity markets can trade power in an economically efficient manner” --ENTSO-E Guideline for Cost Benefit Analysis of Grid Development Projects, 2015

Cost benefit analysis (CBA) “[…] ENTSO-E has defined this multi-criteria CBA […]. A robust assessment of transmission projects, especially in a meshed system, is a very complex matter. Additional lines […] leads to an increase of Social-Economic Welfare over Europe. Further benefits such as Security of Supply or improvements of the flexibility also have to be taken into due account. These technical aspects are hardly monetisable.” --ENTSO-E Guideline for Cost Benefit Analysis of Grid Development Projects, 2015

Ex.: Nordics—Continental Europe West ”Interconnecting the hydro-based Nordic system (NO/SE) with the thermal/nuclear/wind-based Continental system” Will improve SoS on both sides (Norway, Sweden, Cont. EU) Reasonably good socio-economic cost-benefit ratio However very dependent on basic price assumptions (CO2, coal, gas) Generally expected to decrease CO2 emissions, however with low CO2 prices they may increase due to the connection

Ex.: Nordics—Continental Europe West TYNDP 2016

Ex.: Nordics—Continental Europe West “Having a look at SEW/GTC values in the different visions indicates that the energy-balance of the different visions both for the Nordics and Continental countries is the main driver for price differences in the visions hence they drive the SEW-value of connecting the Nordic and Continental systems. The Nordic surplus is very high in Vision 2, which results in a high price difference and subsequent high SEW/GTC-value.” TYNDP 2016

Ex.: Nordics—Continental Europe West Optimal level of interconnection 4.5—7 GW Present and planned investments lead to reaching the target capacity by 2030 TYNDP 2016

Limitations Work does not clearly and exactly define simulation methods Applicable technologies and practices for grid operation are assumed, although they do not yet exist CBA and SEW analyses not very exact methods Only average hydrological year considered in some analyses Relevant to us in the Nordic countries The suggestions are no doubt valid, but their future is not very certain Everyone wants benefits, no one wants costs Projects may have cumulative impacts on other project’s economy Lost benefit is not necessarily viewed as a cost

Some total benefits TYNDP 2016 suggests 150 b€ investments, 80 b€ of which is for projects already endorsed in national plans Effort is significant financially Still, only 1.5—2 €/MWh in the total power consumption in 15 years Less than 1 % of the total electricity bill Suggested additions help avoid 30—90 TWh of RES spillage globally Spillage reduced to 1 % of the total supply Of the 50—80 % carbon emission reduction in the electricity sector by 2030 (from 1990), up to 8 % is enabled by the TYNDP suggestions

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