HVDC
BritNed: Sharing Energy
with Energy Shares
Netherlands
Power markets are another way the world is getting a
bit smaller. Beginning with a high-voltage direct-current
(HVDC) link to France 25 years ago, the UK continues
to expand the power grid with its European neighbors,
recently commissioning a new interconnector to the
Netherlands (BritNed).
Text: Daniel Whitaker, Illustration: Ciaran Hughes
APX-ENDEX trades
MWh/day, average
Source: BritNed
The new BritNed interconnector
between Maasvlakte, in the Netherlands, and the Isle of Grain in the
UK is a major step towards a transEuropean power market.
49
HVDC
“ BritNed’s
benefits include greater
efficiency,
help to integrate wind
power, and
improved
security of
supply.”
René Kerkmeester,
Commercial Director of BritNed
HVDC
The British and Dutch transmission
system operators National Grid and
TenneT have taken a major step forward in the process of establishing a
single physical power market by
building an interconnector between
the Netherlands and the UK. BritNed,
as it is known, was agreed upon in
2007, with cable manufacture starting
the following year, and an intensive
two years of construction before its
commissioning ceremony took place
in April 2011.
The interconnector runs 260 kilometers from Maasvlakte, a port district
near Rotterdam reclaimed from the
North Sea in the 1960s. “The link
doesn’t follow the shortest path to the
UK,” says Nigel Wood, BritNed’s Head
of Technical Operations, “since the
Essex/Suffolk landfall this would deliver is fast eroding and prone to seabed subsidence.” Instead, BritNed
begins stretching north, but then turns
in towards the northwest. The cable
meets the UK at the Isle of Grain, the
end of a peninsula by the mouth of
the River Thames in the English coastal county of Kent. Grain (originally
meaning “gravel”) is a marshy area,
now dominated by two large oil- and
gas-fired power stations. “We worked
ankle-deep in mud,” recalls Wood
of construction there.
While the twin copper cable normally
operates bipolar at 1,000 MW, if need
be, BritNed’s powerful HVDC link – the
brain and the heart of the system – can
switch them to monopolar operation at
reduced power of 500 MW within two
seconds to provide the right amount
of energy needed at the right time.
For Global Marine Systems, the cable
layer, burying the cable was a challenge. For a start, seven other utility
cables (principally telephone and gas)
had to be crossed. Also, while the cables are mainly buried in solid clay on
the UK side, at Maasvlakte it is mostly
sand, which could easily shift and
leave the cable uncovered and vulnerable. “To deal with this,” says Wood,
“a mass float excavator was needed.
That’s basically a 5-tonne vacuum
cleaner hanging off the back of a
boat.” The excavator blew any covering sand off the cable, so that it
could be safely covered with stones.
The British and Dutch grids transmit
using alternating current (AC), but
the BritNed interconnection allows
power transmission of 1,000 MW
using a direct-current (DC) transmission voltage of 450 kV. This means
converter stations are needed at each
end. Siemens has provided both.
Within the valve hall of each of the
282-tonne units, 12-pulse direct-light
triggered thyristor valves are attached
to each end of the cables to transform
the power. Beyond them, AC switchyards act as interfaces with the two
countries’ transmission systems.
A short underground AC cable system
links the UK converter station to National Grid’s 400-kV Grain substation.
At Maasvlakte, there is a short overhead line to connect with TenneT’s local
380-kV substation. Each converter
station uses six 210-MVA transformers to feed the AC power into the
thyristor-based AC-to-DC conversion.
Describing the converter stations,
Wood praises Siemens’ “efficiency and
ability to act as a team player.”
There are two ways to buy or sell electricity through
BritNed and elsewhere in Europe. In either case, power suppliers will do so in conjunction with contracts
with end users. Cheaper electricity in one country can
meet demand and reduce prices in another country.
Prices will become equal across adjacent countries as
long as there is sufficient transmission capacity.
The first way, “explicit” trading, involves the suppliers
buying capacity on the BritNed interconnector (in either direction) for a certain period and then separately
purchasing the power itself to run over that capacity
from traders. BritNed holds auctions for capacity across
different time scales, i.e., annually, seasonally, quarterly, monthly, multiday and intraday. In order to help
guarantee future access, BritNed won’t sell capacity
any further out than a year ahead.
One example of the monthly auctions was the first
explicit auction, held on March 24, 2011. In it, 300 MW
were offered for April 2011. In the direction Netherlands to Great Britain, the price was €2.56 per MWh,
Security Aspects a High
Priority
BritNed’s goal is to have the highest
security standard possible to achieve
zero incidents. In order to comply
with all regulations in the UK and the
Netherlands, they strictly follow the
guidelines of the SHESQ policy: safety,
health, environment, security, and
quality. The focus is on critical areas of
business where safe behavior by managers, employees, contractors, and
agency staff is essential to safeguard
employees and the public. Strong security guidelines have been developed,
and the design of the HVDC arrangement was considered with these aspects in mind. Local Siemens experts
are well versed in the security aspects
and worked with National Grid and
TenneT from the very beginning to realize their concepts and ideas.
But while suppliers come from all
over Europe, BritNed is very much
Living Energy · Issue 6/February 2012
51
How European Electricity is Traded over BritNed
Photo: Detlef Schneider
50
a British-Dutch partnership, following
in the path of corporate success stories such as Shell and Unilever. There
is no single leader above Operations
Director Philip O’Gorman in the UK
(Nigel Wood’s boss) on the engineering side and René Kerkmeester in the
Netherlands, its Commercial Director,
who steer the limited company in
tandem. “Coalitions are in fashion,”
points out Nigel Wood, referring to
the fact that both the British and Dutch
governments currently operate on
this basis. Kerkmeester and Wood
agree that the two nationalities have
strengths and weaknesses, but the
team knows this well enough to play
to the former. Wood describes the
Dutch as “quickly responsive” and the
British as “good at meeting deadlines.”
Kerkmeester lived long enough in
London working before in telecoms to
have skill at blending “Dutch directness and British diplomacy.”
Living Energy · Issue 6/February 2012
and in the direction Great Britain to Netherlands,
the price was €0.39 per MWh. A total of twelve customers took part and ten were successful in purchasing
capacity. BritNed’s explicit trading is facilitated by an
innovative trading software platform, known as Kingdom, provided by partner organization Unicorn Systems, based in Prague. Nineteen traders – large utilities
and financial institutions – currently participate.
The alternative is “implicit” trading, which takes place
at APX. In implicit auctions, the transmission capacity
is auctioned together with the electricity. Capacities
and flow direction are determined during the combined
electricity trading and transmission capacity auctions
so that the electricity, usually to the greatest extent
possible, flows to the market region with the highest
price – and the higher demand for power. This approach
is also known as “market coupling,” as it involves linking two national markets together. Trilateral market
coupling has taken place between France, Belgium, and
the Netherlands since 2006.
In keeping with its shareholders’ role,
BritNed is a “shipper” rather than a
supplier of power. This means its key
objectives must be physical reliability
and a focus on giving interested suppliers – wherever they are – whatever
they could possibly need. Equipment
from Siemens and other suppliers
to BritNed helps to ensure reliability.
Delivering whatever is needed is
achieved through a customer-focused
attitude rare among interconnectors.
“Were more customer driven than
other cables [interconnectors],” says
Kerkmeester. “It’s unusual that we
have a customer relations team.”
For those wishing to trade power over
BritNed, there is a choice of two trading formats (see sidebar on Electricity
Trading), either through an explicit
trading system developed by BritNed
and its partner Unicorn Systems
hosted in Prague or via APX-ENDEX
in Amsterdam (see APX sidebar). An-
drew Claxton, Director of Business
services at APX, thinks they are succeeding: “BritNed is at the forefront of
innovation; they’re creative at finding
the best ways to sell capacity.”
A Matter of Social
Importance
In an article in the Guardian (UK)
in April 2011, Wilfried Breuer, Head
of Power Transmission Solutions at
Siemens, commented on the idea of a
European supergrid, which gained
momentum in December 2010 with
the signing of an agreement by all ten
countries bordering the North Sea to
coordinate deployment of new HVDC
cables that would maximize the use
and sharing of renewable energy between them, including wind power
from the UK, solar power in Germany,
and hydropower from Scandinavia.
Said Breuer: “The supergrid will
be built, but gradually. It’s not one u
52
HVDC
HVDC
53
APX-ENDEX: a Hub of Activity
APX-ENDEX is another Anglo-Dutch
venture with Belgian participation.
It has evolved from the Amsterdam
Power Exchange, launched in 1999 as
the first place on the European mainland where power could be bought
and sold. Since then, APX has grown
to encompass six spot markets and
four futures markets, trading gas and
electricity. As with BritNed, APX is
owned only by transmission companies, keeping it independent of those
who trade and supply power.
The exchange group has grown at
a double-digit rate over the last three
years, and looks set to keep thriving.
Paul Groes, an APX Account Manager,
who comes from a utility background,
relishes the “diversity” of APX. “Here,
I deal with a wide range of companies, from many countries,” he says.
Communications Officer SannaMaaria Mattila from Finland agrees,
adding, “APX has a young dynamic,
with 15 nationalities represented
between 150 of us.”
The staff works in an efficient, modern building, opposite the great Arena
Stadium of Amsterdam’s Ajax football club. As we pass the bank of 30
computer screens that makes up the
spot price trading floor, there is an
Facts
BritNed is a
€600 million
joint venture
between two electricity transmission companies,
Dutch TenneT and British National Grid.
The joint venture has developed, built, and
commercially operates
the
260-km-long
high-voltage direct-current (HVDC)
electricity interconnector,
1,000 MW
,
with a capacity of
between Great Britain and the Netherlands
(operational since April 2011).
The interconnector has
± 450 kV DC
;
voltage levels of
400 kV, 50 Hz AC (UK); 380 kV, 50 Hz AC (Netherlands)
and 6 x 210 MW transformers.
BritNed offers a blend of implicit and explicit auctions.
APX-ENDEX is the central counterparty to all implicit trades.
Trades automatically match across borders
to the extent capacity is available.
investment like a highway. It will develop over 10 to 15 years, leg by leg.”
For René Kerkmeester, though only
two months into his job, this is one
part of what makes working at BritNed
so satisfying. The electricity sector
involves complex, long-run investment
decisions: BritNed cost €600 million
to build. And Kerkmeester notes that
this combines with a day-to-day environment in which anything can happen – a case in point being the German
“Energiewende,” a rapid policy shift
towards renewables.
Another source of reassurance to
Kerkmeester is that with so many
connections from energy to the economy and to people’s lives, he believes
BritNed’s activities also have social
importance. BritNed’s social value is
particularly clear in the case of renewable generation – a point emphasized
by UK Energy Minister Chris Huhne
at BritNed’s opening ceremony. Britain
has a growing portfolio of wind generation in the North Sea (14 GW are
planned, much of it connected to the
UK grid by Siemens), but a much-com-
Living Energy · Issue 6/February 2012
Photos: APX-ENDEX, Detlef Schneider
No ordinary office:
Simple surroundings
belie the critical
power trading going
on at APX-ENDEX.
mented weakness of such power is its
“feast/famine” intermittent nature.
With BritNed, gale-driven excess UK
power can be passed to the mainland.
When the same weather system then
moves over to northern Germany (as
often happens), the new German excess
can be passed back to Britain. Thus,
the interconnector makes renewables
a far less volatile form of generation.
BritNed’s benefits, says Kerkmeester,
“include greater efficiency, help to
Living Energy · Issue 6/February 2012
atmosphere of relative calm. But this
changes abruptly at noon each day
as bids and offers stream in to set
the prices for the next day’s megawatt-hours of electricity and thermal
units of gas. Activity is more steady
on the neighboring floor, where a
dozen screens reflect futures prices,
though on average, more volume
is transacted here.
Andrew Claxton, APX’s Director of
Business Services, highlights APX’s
role in helping move the EU towards a
single set of prices for power. “During 2011, for 55–75 percent of hours,
there was a single price across France,
Belgium, the Netherlands, and Germany. Once you allow for transmission
costs, natural losses, and import
charges, the same was true for Britain
and the Netherlands over 75–85 percent of hours.” This means optimal
usage of transmission capacity for grid
operators and more efficient energy
prices for users. “BritNed is an important part of this convergence,” Claxton
continues. “It has added 10,000 to
15,000 MWh/day via auction to the
40,000–45,000 MWh/day APX trades
in other UK power markets. Over in
Britain (where other exchanges operate), they no longer feel they are an
integrate wind power, and improved
security of supply.”
One still evolving area of interconnection is its regulation. BritNed offers
guaranteed third-party access in return for exemptions from some tariff
regulation. Regulators are currently
proposing a “cap and collar” regime
that allows prices to vary between
fixed minimum and maximum levels.
René Kerkmeester sees this as “a fair
compromise, sharing risks between
Communications Officer Sanna-Maaria
Mattila typifies the young, international
dynamic of APX-ENDEX.
APX Account Manager Paul Groes
enjoys the diversity of both his work
and his client base.
island system. BritNed has created
a reference price for their daily power
auctions, which previously lacked
liquidity – with Europe acting as
a giant market maker.”
consumers, investors, users, and traders. We just want a level playing field.”
If the regulation is right, then there
will certainly be additional interconnectors across the North Sea. In the meantime, those on the BritNed team appear to relish their pioneering role. p
Daniel Whitaker is a freelance technology and
business writer who divides his time between
the UK and Spain. His work has appeared in the
Financial Times, the Times and the Economist,
among others.