Iceland and the European offshore electricity grid
Justin Wilkes
Policy Director
The European Wind Energy Association
More than 700 members
from almost 60 countries
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Manufacturers with a leading share of the global wind
power market
Component suppliers
Research institutes
National wind and renewable associations
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Developers
Electricity providers
Finance and insurance companies
Consultants
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Contractors
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www.ewea.org/membership
This combined strength makes EWEA the world’s
largest and powerful wind energy network
EWEA Lead Sponsors
Tackling the flexibility challenge
Variability is an inherent
characteristic of every
power system
Flexible generation is largely
provided by gas, hydro and
to a lesser extent biomass
Large scale
DSM and new
energy storage
remain
unavailable in
the short term
An economically viable
power system with large
amounts of RES will require
changes in all 3 areas
Source: IEA 2011, Harnessing
Variable Renewables
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 work
• Offshore Grid is a key part of the European Infrastructure Package
• Second ENTSO-E 10-year network development plan in the making
Prominent grid infrastructure projects:
• UK/Norway under consideration
• NorGer - Germany/Norway ministerial agreement
• Krieger’s Flak (Germany – Sweden and Denmark on hold) with
EERP financing
• Cobra cable (Netherlands/Denmark) with EERP financing
• East-West interconnector, EIB loan (Ireland/Wales)
• BritNed, EIB loan (UK/Netherlands)
• Skagerrak 4 (Denmark/Norway)
EWEA’s
20 year offshore
network
development plan
Global cumulative
wind power
capacity
1990-2007 (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 way
• Recommends building a transnational offshore grid
infrastructure to connect:
40 GW by 2020
150 GW by 2030
EWEA’s
20 year offshore
network
development plan
Global cumulative
wind power
capacity
1990-2007 (MW)
• Based on:
- Existing TSO plans
- TradeWind scenarios
• Added value of plan:
- Provides step by step timetable for grid
development
- Suggested capacities
- Integrated with development/concession zones
Offshore grid design
•Lines/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; and
–intersection (junctions) of network branches.
•Onshore nodes: connection points to interconnect the offshore
transmission grid to the onshore transmission grid.
EWEA’s
20 year offshore
network
development plan
Global cumulative
wind power
capacity
1990-2007 (MW)
Source: EWEA 2009
EWEA concept one of many
Building the European offshore grid
Global cumulative wind power capacity
1990-2007
Benefits (MW)
• Predictable energy output
• Connections to more than one country
• Power trading between countries
• Viable alternative to onshore grid construction
• Connection to other marine renewable energy sources
• More economical utilisation of grid through shared use
• More energy security
• More interconnection capacity means more firm power
• Build a single European electricity market to benefit all
consumers
BUT: Iceland not yet part of these considerations
Current EU approach to facilitate grid developments
Current TEN-E programme is insufficient COM investment estimates 2010-2020:
• Electricity: 140 bn € (onshore, offshore and smart grids
at transmission and distribution level)
• Gas: 70 bn €
TEN-E budget 2007-2013 was increased from 155 mln € to
currently 5.1bn € 2014-2020 in the „Connecting Europe
Facility“ and revised guidelines on TEN-E
Agreement on Trans-European Networks
Main elements:
• Priority infrastructure corridors agreed – all renewables focussed
– Northern Seas offshore grid
– North-South electricity interconnections in Western Europe
– North-South electricity interconnections in Central Eastern and
South Eastern Europe
– Baltic Energy Market Interconnection Plan in electricity
• Priority thematic areas agreed
– electricity highways
– smart grids
– national/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
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.
Recommendations for Iceland
• Explore bilateral cooperation possibilities in energy policy
in general
– Particularly with the UK (in progress)
• Make best use of regional cooperation fora
– North Seas Countries Offshore Grid Initiative
– ENTSO-E regional group for North Sea grid development
• Use EU legislation
– Renewable Energy Directive 2009/28 cooperation
mechanisms
Recommendations for Iceland
• Explore business case for electricity exports to UK
• Explore feasibility of HVDC interconnectors
– Address technology challenge
– Address financial risk
Ongoing challange: How to create a facilitating environment for
private and public investments in energy infrastructure in the EU
• Issue for TSOs/private investors: Most interconnectors might
have good business case, but access to equity is difficult
• Private 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
Germany
Need to create a better investment framework for infrastructure
Investments: recognised in the European Infrastructure Package
TEN-E budget should be used to leverage private finance,
be that EC Project bonds or equity, rather than grants
EWEA’s next 20 Year Offshore
Network Development Plan?
Thank you
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