Value of the interconnectors in the Nordic countries · Benefits of interconnectors capacity...

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Value of the interconnectors in the Nordic countries

Tattini, Jacopo; Gargiulo, Maurizio

Publication date:2015

Document VersionPeer reviewed version

Link back to DTU Orbit

Citation (APA):Tattini, J. (Author), & Gargiulo, M. (Author). (2015). Value of the interconnectors in the Nordic countries.Sound/Visual production (digital)

https://orbit.dtu.dk/en/publications/9d610bf3-d0cf-468d-a670-5f8b15643e24

Value of the interconnectors in the Nordic countries

Jacopo Tattini, Maurizio Gargiulo

PhD Student at Energy System Analysis Group

System Analysis Division

DTU Management Engineering

DTU Management Engineering, Technical University of Denmark

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Agenda

• Background

• TIMES-NordPool

• Analysis of power trade in the Nordic countries

• Analysis of grid expansion possibilities

• Sensitivity analysis on effect of no grid expansion

• Conclusions

2 26 October 2015



Agenda

• Background

• TIMES-NordPool




• Conclusions

3 26 October 2015



Background: Nord Pool market

4 26 October 2015

Nord Pool: power trading market of Nordic and Baltic countries. The auctioning countries are divided into bidding areas linked with interconnectors controlled by the TSOs. If the power flows between the bidding areas exceed the interconnectors transmission limit, grid congestion occurs. Bottlenecks in the interconnectors lead to different prices in the various areas composing the Nordic electric system.



Benefits of interconnectors capacity expansion

Interconnectors are one of the main power price drivers in the Nordic countries

Interconnectors are essential for the integration of variable power sources

Interesting to assess their role and their influence on the power trade

5 26 October 2015

Source: L’ Abbate et al. (2011)



Agenda

• Background

• TIMES-NordPool




• Conclusions

6 26 October 2015



TIMES-NordPool

TIMES-NordPool: represents the Norwegian, Swedish and Finnish power and thermal systems.

Purposes:

• To be run together with TIMES-DK to better simulate power trade processes

• Exploring the future power exchange between the Nordic countries under different assumptions

• Assessing transmission capacity expansion under different scenarios

7 26 October 2015



TIMES-NordPool: Spatial resolution

• Multiregional model: Each country = One region

• Interconnectors between Norway, Finland and Sweden implemented as endogenous trade processes

• Interconnectors between Nordic countries and neighboring countries implemented as exogenous trade processes

8 26 October 2015

Power prices and volumes endogenously optimized

Power volumes calculated according to price related criteria



TIMES-NordPool: Hard-linking with TIMES-DK

9 26 October 2015

TRADE

TIMES-NordPool TIMES-DK

All interconnections between Nordic countries as endogenous processes



TIMES-NordPool: Time structure

• Same 32 time slices as TIMES-DK The models are consistent

• Base Year: 2010

• Time horizon: 2010-2050

10 26 October 2015



Agenda

• Background

• TIMES-NordPool



• Sensitivity analysis oneffect of no grid expansion

• Conclusions

11 26 October 2015



Assumptions for the analysis

All analyses on the power trade between the Nordic countries have been performed using TIMES-NordPool hard-linked to TIMES-DK.

Baseline scenario considers:

• DKW and DKE: power and thermal system fossil free by 2035, entire energy system fossil free by 2050

• NOR, FIN, SWE: no environmental constraints (NETP Carbon Neutral scenario is implemented but not activated)

12 26 October

2015



Transmission grid in the base year

13 26 October 2015

Base year

Source: ENTSO-E (2012)

High integration of power systems



Transmission grid expansion

14 26 October 2015

Exogenous grid expansion


Starting grid

+



Power generation in 2050

15 26 October 2015

Solar 35%

Wind Onshore

65%

DKE

Solar 18%

Wind Onshore

82%

DKW

Coal 9%

Hydro 57% Natural

Gas 4%

Wind Offshore

17%

Wind Onshore

13%

NOR Biomass 4%

Coal 19%

Hydro 56%

Wind Offshore

11%

Wind Onshore

6%

Nuclear 4% SWE

Biomass 8%

Coal 42%

Hydro 13%

Wind Offshore

12%

Wind Onshore

3%

Nuclear 22%

FIN



Electricity prices in 2050

16 26 October 2015



Power trade between Norway and Denmark in 2050

17 26 October 2015

Trade is ongoing:

• Until marginal costs equal

• Until congestion occurs

Power price

Power flow



Price convergence

Between 2010 and 2020 about 7.5 GW of new transmission lines are installed

18 26 October 2015

..less congestions



Agenda

• Background

• TIMES-NordPool




• Conclusions

19 26 October 2015



Analysis of grid expansion

• Uncertainty on grid expansion after 2020

• Endogenous optimization of grid expansion

• Possible new interconnectors from ENTSO-E in Ten-Year Network Development Plan 2014 (TYNDP)

• Constraint on starting year, no on transmission capacity

20 26 October 2015

https://www.entsoe.eu/major-projects/ten-year-network-development-plan/tyndp-2014/Pages/default.aspx






Uncertainty on costs of future interconnectors

Sensitivity analysis with interconnectors costs: under which cost condition the interconnectors are built?

21 26 October 2015

Low Medium High

k€/MW INVCOST O&M INVCOST O&M INVCOST O&M

NOR-SWE 190 0.4 310 0.7 440 1.0

NOR-FIN 600 1.4 1000 2.3 1400 3.2

SWE-FIN 56 0.1 91 0.2 130 0.3

DKW-DKE 430 1.0 725 1.6 1020 2.3

DKW-SWE 560 1.3 930 2.1 1300 2.9

SWE-GER 260 0.6 429 1.0 600 1.4

SWE-LAT 300 0.7 500 1.1 700 1.6

NOR-HOL 1033 2.3 1721 4.0 2410 5.4




Endogenous grid expansion: sensitivity analysis

22 26 October 2015

Low interconnectors costs Medium interconnectors costs High interconnectors costs

Exogenous power prices not consistent



Agenda

• Background

• TIMES-NordPool




• Conclusions

23 26 October 2015



Sensitivity analysis: only existing interconnectors

How does the Nordic power system react to a changeless transmission grid?

Only interconnectors existing or under construction by 2015 are considered

24 26 October 2015

Region Average relative price

increase

Average absolute price increase

(€/MWh)

Price relative stnrd dev increase

DKE 7% 3.4 59%

DKW 1% 0.5 64%

FIN 1% 0.5 53%

NOR 9% 3.9 88%

SWE 12% 4.8 87%

Most penalized country



Agenda

• Background

• TIMES-NordPool




• Conclusions

25 26 October 2015



Conclusions

TIMES-NPM hard-linked to TIMES-DK allows:

• Calculating endogenously the power prices and volumes between Denmark and the

rest of the Nordic countries Limiting the risk of the assumptions on the

exogenous trade processess for the Danish interconnectors

• Optimizing endogenously the transmission grid expansion

• Assessing for the Nordic interconnectors the cost thresholds within which they are

feasible

• Assessing for each Nordic country the average increase of power prices if the

planned interconnectors are not built

26 26 October 2015



27 26 October 2015

Jacopo Tattini [email protected]

http://www.sys.man.dtu.dk/Research/Energy-Systems-Analysis/PhD-projects

mailto:[email protected]

Value of the interconnectors in the Nordic countries · Benefits of interconnectors capacity...

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