Statnett - Nord.link - Status of a Transnational Project - Ingard Moen
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Transcript of Statnett - Nord.link - Status of a Transnational Project - Ingard Moen
NORD.LINKStatus of a transnational project
German Norwegian Energy ForumBerlin 24. October 2013
Foto: TennetT
Content• Partners• The rationale• The project
– Key figures– Status progress
• Economics – the investor perspective
Connectingrenewables
DC Nordseekabel GmbH & Co.KG
The NORD.LINK Partners
• Norwegian TSO• Owner and operator of the Norwegian
grid, including interconnectors• 50% project ownership
• Dutch and German TSO• Owner and operator of the grid at the
connection points in Germany• 25% project ownership
• German government owned financial institution
• Active in financing Energiewende projects• 25% project ownership
Strategic fit
• Increase security of supply • Market integration in Europe• Create value for stakeholders and society• Facilitate integration of renewable
Connecting hydro to wind
• Reduce CO2 emissions
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Key figures• Tonstad – Wilster
• 514 km submarine cable
• 53 km overhead line, Norway
• 55 km underground cable, Germany
• In operation 2018
• 1400 MW
• VSC converter technology
• Investment 1.5 – 2.0 billion EUR
Status progress – NORD.LINK
Technical license
License according to the Offshore Energy Act
Interconnectorlicense
Exclusive Economic Zone(EEZ)
Offshore license
Regional Planning Procedure
Norwegian Water Resources and
Energy Directorate
Ministry ofPetroleum and Energy
Ministry ofPetroleum and
Energy
Danish Energy Agency
Federal Maritime and
Hydrographic Agency (BSH)
State Mining Authority (LBEG)
Amt fürPlannfeststellung
Energie (AfPE)
Required licenses
Stadt und Kreis- Wegennutzung- Wasserung- Private
Socio-economic business case
NPV (2013 MEUR) |
Congestion rent interconnector 1 325Revenue from trade with reserves 100Compensation from capacity mechanisms 240Investment cost cable and converter 700Operation‐ and maintenance costs ‐40"Interconnector" profitability 925Producer‐ and consumer surplus 1 350Reduced congestion rent other interconnectors ‐340Transit costs ‐20System operations costs ‐250Losses in the Norwegian grid ‐200Norwegian grid reinforcements (net) ‐220Residual value 20Socio‐economic profitability, Norway 1 260IRR 11 % 10 %Repaid in year 2029 2031
Approximate numbers from the Norwegian Interconnector License applicationFlat exchange rate 1 EUR = 8 NOK used for conversion
Widerbenefits
Overall economic benefit> (Investment + increased variable cost) => Profitable
Investments in the electricity sector, - complex decisions, high uncertainty
• Fuel prices
• CO2-price
• Interconnector capacity
• Energy efficiency
• New renewable generation
• New nuclear /dismantling of old nuclear
• Development of demandand demand response
… regulatory intervention in the markets increase uncertainty for investors
ELECTRICITY PRICE DRIVERS
Capacity Mechanisms –a challenge for the European EM integration
Capacity Markets – important for the business case for our planned interconnectors
• UKAuthorities have published a draft solution for a national capacity market(27. June and 11. October)
• GermanyHas not concluded yet – have strategic reserves for the coming winter
• NorwayIn the interconnector license applications,we have estimated that each interconnectorcould earn 30 MEUR/year from CM participation
• Our viewAs a general principle market developments should facilitate trade and follow the principles behind the Internal Energy Market
We support market coupling and the development ofan integrated European electricity market. It will:
Facilitate competition and provide effective resource utilization Provide cost efficient security of supply
Our planned interconnectors will contribute to the same by:
Allowing Norwegian flexible hydropower capacityto play along with other production capacityto the common benefit of the systems on both sides, thus
providing a contribution to the transformation of the European electricity system
If the introduction of capacity markets is deemed necessary, they must be designed so that all market players, also interconnectors, are allowed to participate
Closing remarks
BACKUP
Market Coupling – a success story
Benefits of the integration due to market coupling, implemented across EU, is estimated to be between €2.5bn to €4bn per year (booz&co, 2013)
Market coupling of Germany and The Netherlands
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No flow from high price to low price
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Before market coupling After market coupling
Interconnectors contribute to security of supply
Capacity availability of nuclear power and interconnectors
Sources: IAEA (2013) and CIGRE (2012)
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Capacity availability [%]for 29 countries with commercial nuclear reactors (2010)
Capacity availability [%]for 35 HVDC interconnectors around the world (2010)
HVDC interconnectors 1 - 35Countries 1 - 29
AVERAGE
AVERAGE