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System Plan 2018 – Electricity and Gas in Denmark 2 System Plan 2018

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System Plan 2018 – Electricity and Gas in Denmark 2 System Plan 2018 SYSTEM PLAN 2018 – ELECTRICITY AND GAS IN DENMARK 2 SYSTEM PLAN 2018 CONTENTS 1. A holistic approach to electricity and gas planning ......................................3 1.1 Energinet’s objectives and the political framework .............................................. 3 1.2 New organisation ............................................................................................................. 4 1.3 Analysis and planning .................................................................................................... 5 1.4 Research and development .......................................................................................... 8 1.5 Environmental reporting ..............................................................................................10 1.6 Energy efficiency ............................................................................................................11 2. Electricity .........................................................................................................16 2.1 Security of electricity supply ......................................................................................17 2.2 Resources to safeguard balance and technical quality ......................................22 2.3 Cooperation with other countries ..............................................................................24 2.4 Cooperation with other grid operators ....................................................................29 2.5 Planning for conversion and expansion of electrical installations .................33 2.6 Conversion, expansion and maintenance of the power grid .............................38 2.7 The wholesale market ..................................................................................................41 2.8 The ancillary services market ....................................................................................45 2.9 The retail market ............................................................................................................46 3. Gas ....................................................................................................................48 3.1 Security of gas supply ..................................................................................................50 3.2 Maintaining gas balance, including storage...........................................................52 3.3 Gas transit and transport capacity ...........................................................................53 3.4 Planning ............................................................................................................................53 3.5 Connection of new gas facilities ................................................................................54 3.6 Conversion, expansion and maintenance of the gas grid ..................................55 3.7 Cooperation with other grid operators and countries ........................................58 3.8 The wholesale market ..................................................................................................60 3.9 The retail market ............................................................................................................60 Editorial work concluded on 1 November 2018 Doc. no. 18/04372-17 SYSTEM PLAN 2018 3 A HOLISTIC APPROACH TO ELECTRICITY AND GAS PLANNING Energinet is the Danish 1.1 Energinet’s objectives and the energy policy agreements, the most state energy infrastructure political framework recent of which is from June 2018. Energinet’s objectives are to safeguard Such agreements can contain specific company. It is an independ- the efficient operation and expansion details of specific projects, for example ent public enterprise that of the grids, and to guarantee open, expansion with renewable energy, and owns, operates anddevel- equal access for all users. New grids indeed this is encouraged. The political ops the Danish transmission may be created and major changes initiatives establish the framework in may be made to existing grids if there which Energinet works, in terms of systems for electricity and is sufficient need for expansion, for construction activities, market develop- gas and parts of the gas example relating to security of supply, ment, security of supply and operating distribution grid emergency planning, market compe- strategies. tition or the integration of renewable energy. Within this framework, Energinet has a duty to take the initiative to examine The following chapters set out how the socio-economic benefits of new factors such as security of supply, initiatives, including expansion of operation, and the market interact to in- interconnections with neighbouring fluence the expansion and modification countries, in order to integrate renewa- of the electricity and gas transmission ble energy, develop market competition, grids. The long-term expansion of maintain security of supply and the grids is based on technical and optimise operation over the long term. financial considerations, but must also be seen in the context of the long-term The general EU context Danish and European political objec- Danish energy and climate policy is tives concerning energy and climate. driven in large part by compliance with Denmark’s international obligations on The general Danish context climate change, including in particular The long-term political goal is for Den- the EU’s goals and initiatives. The EU mark’s energy supply to become fossil has two energy initiatives with particu- fuel free by 2050. Another objective lar relevance to long-term develop- is to make the Danish utility sector ment – ambitious climate targets and as cost-effective as possible in the building an Energy Union. interests of consumers and to improve Danish competitiveness. Alongside By 2030 the EU plans to reduce total security of supply, these goals con- CO2 emissions by at least 40 per cent stitute the general Danish context in compared to 1990. This should be which Energinet will expand the grids seen in light of the long-term EU and develop market models, security climate target to reduce CO2 emissions concepts and operating strategies in by 80-95 per cent by 2050, which is the short, medium and long term. now being reconsidered following conclusion of the Paris Agreement. The Initiatives to achieve the Danish targets indirectly affect Energinet’s political objectives are specified in analysis, planning and development 4 SYSTEM PLAN 2018 activities – for example converting the Danish transport Energinet’s growth in recent years as sector and the electricity and heating sector to renewable it takes on more and more duties and energy will also affect the overall development of electricity projects relating to the development and gas transmission grids. and operation of the Danish electricity and gas grids and the electricity and The other significant EU initiative is the Energy Union. The gas markets. Energy Union focuses on security of supply, implementation of the internal market, energy efficiency, reduced climate These developments have increased impact and the promotion of research and innovation. These the complexity of Energinet’s overall initiatives will have a direct impact on Energinet’s analysis portfolio of activities and the roles it work, planning and development activities – for example has to perform, and they will continue security of supply is now also about regional cooperation to do so. This background of greater between EU countries and better competition in Europe to complexity partly explains why the push consumer prices down. group was more clearly subdivided into independent companies and legal 1.2 New organisation units with their own supervisory board On 1 May 2018, Energinet became a group with central and executive board, each with its own corporate departments and independent legal service and particular business logic, mandates business units, each with its own supervisory board and and problems to solve as they strive to executive board. The purpose of the reorganisation was to achieve Energinet’s vision of balance in improve transparency around decision-making and allow the a sustainable energy system. Energinet group to perform its many and varied functions in a more focused and efficient way. It was a response to FIGURE 1: ENERGINET'S SUBSIDIARY STRUCTURE AS OF 1 MAY 2018. GAS STORAGE DANSK GAS TSO-EL TSO-GAS DENMARK DISTRIBUTION OTHERS Energinet Energinet Lille Torup Dansk Energinet SOV Eltransmission A/S Gas TSO A/S Gaslager A/S Gasdistribution A/S Energinet Teknik og Energinet Gas Storage Dansk Anlæg A/S Elsystemansvar A/S Denmark A/S Gasdistribution Fyn A/S Energinet Energinet Forretningsservice DataHub A/S Dansk A/S Gasdistributions- service Region Energinet Associated Syd A/S Activities A/S SYSTEM PLAN 2018 5 1.3 Analysis and planning Energinet regularly analyses scenarios predicting how the transition to renewable energy in the Danish energy supply FIGURE 2: EXPECTED RE GROWTH might develop. These long-term, holistic analyses across BASED ON ENTSO-E SCENARIOS. energy systems are key to ensuring reliable and efficient *2020 is derived from Energinet's Analysis As- design and operation of the electricity and gas transmission sumptions 2017. Sustainable Transition (ST) 2030 is the ENTSO-E/ENTSOG scenario for 2030 with the grids in Denmark. Investments in energy systems, production least renewable energy, and Global Climate Action plants and infrastructure are often long-term, large-scale (GCA) 2040 is the scenario for 2040 with
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