Presentation on theme: "Iceland and the European offshore electricity grid"— Presentation transcript:
1 Iceland and the European offshore electricity grid Justin WilkesPolicy DirectorThe European Wind Energy Association
2 More than 700 members from almost 60 countries Manufacturers with a leading share of the global wind power marketComponent suppliersResearch institutesNational wind and renewable associationsDevelopersElectricity providersFinance and insurance companiesConsultantsContractorsThis combined strength makes EWEA the world’s largest and powerful wind energy network
4 Tackling the flexibility challenge Variability is an inherentcharacteristic of everypower systemFlexible generation is largelyprovided by gas, hydro andto a lesser extent biomassLarge scaleDSM and newenergy storageremainunavailable inthe short termWith an increasing supply of variable RES, improved infrastructure and access to flexibility resources become necessary.Sources of flexibility to balance variability include dispatchable (or flexible) power plants, demand-side management and demand response, energy storage facilities and increased interconnection with adjacent marketsAn economically viablepower system with largeamounts of RES will requirechanges in all 3 areasSource: IEA 2011, Harnessing Variable Renewables
5 Momentum for grid development in Europe is evident Already in September 2009 EWEA published its “Offshore Network Development Master Plan”North Seas Countries Offshore Grid Initiative signed by 10 countries in 2010 – ongoing workOffshore Grid is a key part of the European Infrastructure PackageSecond ENTSO-E 10-year network development plan in the makingBoth the Cobra cable and Krieger’s Flak have been awarded financing from the EU’s Economic Recovery Plan.In the aftermath of the financial crisis, the EU elaborated an Economic Recovery Plan complementary to its Member States. A substantial part of the money was earmarked for energy infrastructure projects, innovative, but that could start spending in a short time frame.Krieger’s Flak qualified as it will be, ultimately, a 3-way interconnector whilst Cobra cable qualified for the financing as it will have a “plug” along it in which the numerous German offshore wind farms should be able to connect to.
6 Prominent grid infrastructure projects: UK/Norway under considerationNorGer - Germany/Norway ministerial agreementKrieger’s Flak (Germany – Sweden and Denmark on hold) with EERP financingCobra cable (Netherlands/Denmark) with EERP financingEast-West interconnector, EIB loan (Ireland/Wales)BritNed, EIB loan (UK/Netherlands)Skagerrak 4 (Denmark/Norway)
7 Global cumulative wind power capacity 1990-2007 (MW) EWEA’s 20 year offshore network development planGlobal cumulative wind power capacity (MW)All necessary grid updates to transport all electricity produced by planned, proposed, under construction and operating offshore wind farms to European electricity consumers in an economically sound wayRecommends building a transnational offshore grid infrastructure to connect: GW by GW by 2030
8 Global cumulative wind power capacity 1990-2007 (MW) EWEA’s 20 year offshore network development planGlobal cumulative wind power capacity (MW)Based on:Existing TSO plansTradeWind scenariosAdded value of plan:- Provides step by step timetable for grid developmentSuggested capacitiesIntegrated with development/concession zones
9 Offshore grid designLines/branches: submerged HVDC cables characterised by transmission capacity,Offshore nodes: offshore platforms containing HVDC conversion equipment, switchgear etc. to serve as:common connection points for a number of offshore wind farms;common connection points for a number of other marine generators; andintersection (junctions) of network branches.Onshore nodes: connection points to interconnect the offshore transmission grid to the onshore transmission grid.There are three basic elements which will form the backbone of the future offshore transmission network:Lines/branches: consisting of submersed cables characterised by transmission capacity,Offshore nodes consisting of offshore platforms containing HV DC conversion equipment, switchgear and so on to serve as:common connection points for a number of offshore wind farms;common connection points for a number of other marine generators; andintersection (junctions) of network branches.Onshore nodes: connection points which will interconnect the offshore transmission grid to the onshore transmission grid.
10 Global cumulative wind power capacity 1990-2007 (MW) EWEA’s 20 year offshore network development planGlobal cumulative wind power capacity (MW)All layers animatedSource: EWEA 200910
12 Global cumulative wind power capacity 1990-2007 (MW) Building the European offshore gridGlobal cumulative wind power capacity (MW)BenefitsPredictable energy outputConnections to more than one countryPower trading between countriesViable alternative to onshore grid constructionConnection to other marine renewable energy sourcesMore economical utilisation of grid through shared useMore energy securityMore interconnection capacity means more firm powerBuild a single European electricity market to benefit all consumersBUT: Iceland not yet part of these considerationspredictable energy output and less need for additional balancing capacitywind power can be sold to more than one countrypossibilities of power trading between countriesminimised strengthening of onshore interconnectors‘ high voltage networkspossible reduction of GHG of oil and gas platforms through connection to the gridconnection opportunities to other marine renewable energy sourcesmore economical utilisation of grid capacity through shared usemore energy securitymore interconnection capacity means more additional firm power=> The future European grid will contribute to building a well-functioning single European electricity market that will benefit all consumers
13 Current EU approach to facilitate grid developments Current TEN-E programme is insufficient -COM investment estimates :Electricity: 140 bn € (onshore, offshore and smart grids at transmission and distribution level)Gas: 70 bn €TEN-E budget was increased from 155 mln € to currently 5.1bn € in the „Connecting Europe Facility“ and revised guidelines on TEN-E
14 Agreement on Trans-European Networks Main elements:Priority infrastructure corridors agreed – all renewables focussedNorthern Seas offshore gridNorth-South electricity interconnections in Western EuropeNorth-South electricity interconnections in Central Eastern and South Eastern EuropeBaltic Energy Market Interconnection Plan in electricityPriority thematic areas agreedelectricity highwayssmart gridsnational/regional TSO coordination (along the lines of CORESO, CECRE)PICs and PTAs have:Permitting and planning deadlines of 3 ½ years (binding...)Access to CEF/TEN-E funding
15 A European Offshore/Supergrid What is needed from the European stakeholders (+TSOs and Regulators):A European approach towards an optimised European electricity system should be promoted.Acknowledge that a European Offshore/Supergrid will be beneficial rather than costly for consumers.Design and implement schemes that favour investment decisions, and ensure a cost recovery for the investors, especially on cross-border projects, which require a more coordinated approach.Coordination is critical for tackling the challenges of potential distortions created by different interconnection regimes.take into account the long-term economic benefits of improved transmission, as demonstrated in European transmission studies (TradeWind and EWIS)
16 Recommendations for Iceland Explore bilateral cooperation possibilities in energy policy in generalParticularly with the UK (in progress)Make best use of regional cooperation foraNorth Seas Countries Offshore Grid InitiativeENTSO-E regional group for North Sea grid developmentUse EU legislationRenewable Energy Directive 2009/28 cooperation mechanisms
17 Recommendations for Iceland Explore business case for electricity exports to UKExplore feasibility of HVDC interconnectorsAddress technology challengeAddress financial risk
18 Ongoing challange: How to create a facilitating environment for private and public investments in energy infrastructure in the EUIssue for TSOs/private investors: Most interconnectors might have good business case, but access to equity is difficultPrivate investors often lack awareness on why investments in energy infrastructure are viable (low ROR, but also low risk, especially interesting for institutional investors)Environment slowly changing: e.g. Mitsubishi engagement in Tennet to jointly invest in four offshore grid connections in GermanyNeed to create a better investment framework for infrastructureInvestments: recognised in the European Infrastructure PackageTEN-E budget should be used to leverage private finance,be that EC Project bonds or equity, rather than grants
19 EWEA’s next 20 Year Offshore Network Development Plan?
20 Thank you www.ewea.org EWEA 80 RUE D’ARLON B-1040 BRUSSELS F:E: