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 the most renewable energy. For more, please see the System investments. It is therefore important to carry out long-term Perspective 2035 report. analyses that can help to identify needs and solutions across energy sectors in order to minimise the risk of making bad investments in long-term energy infrastructure. % 80 Long-term analyses 70 In the spring of 2018, Energinet published System Perspec- 60 tive 2035, a long-term scenario analysis which focuses on 50 the opportunities and challenges related to the transition of Danish energy supply. System Perspective 2035 is based on 40 extensive scenarios and modelling of the entire European 30 energy system, because the energy supply system in Den- 20 mark is highly cross-border and international in nature. In 10 2019, too, this scenario and modelling complex is expected to 0 form the basis for a number of detailed analyses that further 2020* ST 2030 GCA 2040 explore issues from System Perspective 2035, and for new long-term analyses that examine the options for further Solar (PV) O shore Onshore market coupling of different energy sectors and its derived wind wind effects on the future energy infrastructure.

System Perspective 2035 is centred on three pan-European scenarios which present likely outcomes of the overall development in the European energy supply system – two green scenarios and one that is less green. Common to all Electricity storage in batteries will be three scenarios is that there will be much more wind power able to smooth out electricity produc- and solar energy in Europe, not least in North-Western tion over several hours, making better Europe with large wind resources in the North Sea region. use of the infrastructure. But even with In Denmark, the proportion of electricity generated from the price of batteries falling sharply, wind and solar in 2020 is likely to reach 55 per cent of it is not likely to be financially viable electricity consumption. As the entire region around Denmark to store generated electricity for days approaches these levels, a wide range of measures will be rather than hours. necessary to integrate and utilise the large and fluctuating volumes of renewable electricity generated. Electricity generated from wind and solar to be utilised in other energy sectors too Integration in the electricity system is not enough on its own A central part of the solution is to Strong, international electricity transmission lines are still utilise the green, cheap and abundant an important part of the solution, but with the share of wind electricity in other energy sectors. power across the North Sea region set to increase signifi- Power-to-heat and power-to-trans- cantly in future, this will not be enough on its own. And it is port are important elements in this no simple matter to get permission to build new, high-power electrification process, and combined electricity transmission lines down through Europe. with electric vehicles and heat pumps, they are expected to deliver significant energy efficiency improvements and 6 SYSTEM PLAN 2018

replace significant quantities of fossil fuels in the years to supply of renewable electricity gener- come. ated from wind and solar in particular. The transition to an efficient energy Power-to-high-value products are not quite as mature, but system based on renewable energy is there is major potential. With power-to-gas (PtG), electrical therefore expected to be achieved by power is converted to hydrogen by means of electrolysis, means of comprehensive electrification and the hydrogen can then be used directly, transported in and sector coupling. To efficiently a hydrogen grid, injected or methanised for the (methane) integrate such large volumes of gas system, converted into high-value energy products such fluctuating wind and solar power, the as liquid fuels, fertilisers, plastics, etc. Sources of carbon for electricity system needs much greater high-value hydrocarbon products include CO2 from biogas demand-side flexibility than today. upgrading and, looking slightly further ahead, carbon from thermal gasification, CO2 capture from industry (e.g. cement System Perspective 2035 suggests that plants) or possibly direct air capture. much of this flexibility can come from so-called energy plants, which can con- The analyses in System Perspective 2035 suggest that sume electricity, e.g. for electrolysis or electrolysis/PtG/PtX can not only give the electricity system heat pumps, when renewable electricity great flexibility in terms of consumption but can also trans- generation is cheap and plentiful, but form large volumes of renewable electricity generated from can also generate electricity in periods wind and solar into essential high-value products tradition- of high demand. This means that ally based on fossil gas and oil. The analysis also indicates energy plants are flexible large-scale that Denmark occupies a position of competitive strength in prosumers. Households and business- the transformation of green power into high-value energy es are increasingly expected to have products that can be sold in the international market: plenty their own solar cells and perhaps local of wind in the North Sea region, competitive electricity prices, battery storage. They will therefore a district heating system that can use surplus heat, lots of become small prosumers generating experience handling biomass in the energy sector, etc. much of their own electricity, especially during the summer months. Small Large and small prosumers will support each other prosumers are not expected to go A steadily increasing proportion of our energy is expected completely off-grid, however, as this to come via the electricity system as a cheap and plentiful would be very expensive. The analysis

FIGURE 3: THE POTENTIAL ROLE OF ENERGY FACILITIES IN THE 2035 ENERGY SYSTEM.

OFFSHORE TRANSMISSION GRIDS WITH INTERNATIONAL INTERCONNECTORS WIND RENEWABLE RE GAS ENERGY WOOD CHIPS LARGE CENTRAL FUELS INDUSTRIAL HOUSEHOLD WOOD WASTE ETC. ENERGY PLANT PROSUMER PROSUMER HEAT ONSHORE WIND DISTRIBUTION GRID 50/60 KV 10 kV 0,4 kV PV POWER PLANT RENEWABLE LIQUID MANURE ETC. ENERGY ORGANIC WASTE LOCAL FUELS SMALL LOCAL HEAT ENERGY PLANT POWER PLANT STRAW HEAT DISTRIBUTION GRID TRANSMISSION GRIDS WITH INTERNATIONAL INTERCONNECTORS SYSTEM PLAN 2018 7

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suggests that large scale solutions and ”If Denmark is to achieve The Danish Energy Agency expects to distributed supply solutions will sup- release the 2018 analysis assumptions port each other. In the summer, surplus the political goal of a fossil to Energinet in late 2018, and the electricity from distributed solar cells fuel free energy system by particular expectations arising from the can be used in energy plants, and in the 2050, it will be necessary energy agreement of 29 June 2018 will winter, wind power from large onshore be included as changes compared to and offshore wind turbines can be used to discover new knowledge previous analysis assumptions. to supply small prosumers. and create new solutions’” Strategic investment plan Analysis assumptions for Energinet is facing the introduction of electricity and gas a new regime of financial regulation. Energinet’s task of developing the Part of the new regime is rooted in the infrastructure of the Danish electricity Danish government’s supply strategy and gas system according to long-term for use by Energinet, but are published from 2016, in which Energinet was and holistic planning is based on to give stakeholders an insight into En- asked to create a ‘multi-year economic analysis assumptions about the future erginet’s assumptions about the future investment plan on the basis of long- development of the energy system. energy system. Energinet used to be term development plans. The plan responsible for preparing the analysis constitutes the financial framework The analysis assumptions describe assumptions, but in the 2017 Danish for Energinet.dk’s investments.’ The developments in detail until 2040 in Finance Act (finansloven), the govern- investment plan was later renamed the terms of prices, consumption, and ment decided to transfer responsibility strategic investment plan (SIP). production and transmission capacity to the Danish Energy Agency. The aim in the electricity and gas system chiefly was to involve the authorities in the Against this background, Energinet is for Denmark, but also to some extent decision-making process at an earlier working closely with the Danish Energy for Denmark’s neighbouring countries. stage and to improve the legitimacy of Agency and the Danish Ministry of The analysis assumptions are intended Energinet’s investment decisions. Energy, Utilities and Climate to develop 8 SYSTEM PLAN 2018

a concept for the SIP. A key goal of the SIP will be to increase "Energinet must work the transparency of Energinet’s decisions to invest in new electricity and gas infrastructure. The investments must be alongside the other energy designed to safeguard security of supply, incorporate more stakeholders to cover the renewable energy and develop the energy markets. Moreover, entire development spec- the SIP is expected to become a central element in the future financial regulation of Energinet. trum, including research, development, demonstra- The strategic investment plan will be based on the analysis tion and innovation’" assumptions announced by the Danish Energy Agency, and the first SIP is expected to be created in 2019.

1.4 Research and development If Denmark is to achieve the political goal of a fossil fuel free energy system by 2050, it will be necessary to discover new opportunities which are all important knowledge and create new solutions. for electricity and gas systems in the long term. The activities are coordinat- Energinet owns and operates Denmark’s main electricity ed across subsidiaries, too, which is and natural gas grids, and safeguards security of supply in essential for consistency, knowledge Denmark. In the period up to 2050, Denmark has the political sharing and efficiency. goal of a fossil fuel free energy supply. More renewable energy can only be integrated with continuous improvement More small-scale collaborative projects of the existing system and with completely new solutions. Energinet’s R&I activities are focused Knowledge-sharing is crucial in driving development and on the short term as well as the long finding new solutions. This is true of day-to-day challenges term. The rapid pace of technological as well as the longer-term challenges which come from development means we have increased being part of the Danish and European energy sector. the number of small-scale and demon- stration projects in Energinet. This Integrating the remaining share of renewable energy will be approach can produce results more complicated. In the years to come, there is no doubt that the quickly and minimise risks, and allows energy sector will need to create and share new knowledge closer collaboration on specific solu- and find new solutions to an even greater extent than today. tions. This links the short term and long The existing solutions are no longer up to the task. Not term together. The approach also helps just Denmark, but Europe is facing the same challenge. In to prove or disprove new ideas quickly. the years to come, in Energinet and throughout the energy sector in Europe, we will need to work on our development The R&I activities are generally activities in a more focused way. We need to find entirely new aimed at increasing value creation in solutions, compelling us to use experimental and theoretical Energinet’s core activities by finding approaches to gain new knowledge and understanding. We new ways to perform the activities need to learn from our practical experience in a systematic in a smarter and more efficient way. way, and collaborate with others to achieve continuous im- The main focus is on development of provements. And we need to keep trying, failing and pushing the electricity and gas infrastructure, the boundaries to find the required solutions. Energinet must development of data and digitisation, work alongside the other energy stakeholders to cover the development of operation, flexibility entire development spectrum, including research, develop- and storage, the green gas transition, ment, demonstration and innovation (R&I). standardisation and optimisation, and integration across energy systems Energinet is now a group with genuine subsidiaries which (sector coupling). The long-term points carry out their own F&I activities to guarantee relevance to of reference for the R&I activities are the particular challenges facing each subsidiary. As part of summarised in figures 4 and 5. R&I, Energinet addresses trends, analyses, challenges and SYSTEM PLAN 2018 9

FIGURE 4: R&I PERSPECTIVES FOR ELECTRICITY.

2035 Electricity markets underpin e‘cient operation of the Full scale of new oƒshore grid electricity system. connection concepts - possibly in interaction with gas. Generation adequacy marketed. 2030

Ready for system operation without spinning plants in the region. Demonstration of new Extensive use of operations 2025 oƒshore grid connection support tools for optimum Supply of ancillary services concepts - possibly in utilisation of electricity required to maintain power interaction with gas. infrastructure. system stability and system stability from converter-based generation/demand. 2020 Power-to-gas strategy. Demonstration of operations Optimisation of Energy-only support tools for optimum utilisa- as market model for Market-based solutions for tion of electricity infrastructure. generation adequacy. procurement of ancillary STRATEGY Development of cost-eƒec- services required to maintain PERIOD Artificial Intelligence data tive AC/DC principles for Demonstration of market power system stability. strategy. grid connection of rene- models for distributed energy wable energy. resources (DER) i collaboration 2018 Digital substation strategy. with grid enterprises (DSOs) Infrastructure concept development Operations development Market development Security of supply *DER - Distributed Energy Resources

FIGURE 5: R&I PERSPECTIVES FOR GAS.

2035 Full-scale implementation of Gas system operation and combined electricity/gas market fully integrated for grid connection concept for biogas and other RE gases. both o–shore and onshore RE electricity generation. 2030

Demonstration of interaction E–ective operation of European model for trade in Market solution safeguards between electricity and gas system with high share of biogas and other RE gases. security of supply in situations 2025 in the grid connection of biogas and other RE gases Decentralised RE gas with a large share of distribut- both o–shore and onshore (incl. CCU*). production handled via market. ed production of RE gases RE electricity generation. (biogas etc).

2020 Analysis and strategy for Analysis tools based on Full implementation of market the gas system's adaptation operational data for optimisa- and certificates for RE gases, to the RE transition. tion of maintenance. incl. PtG.

STRATEGY PERIOD PtG and CCU* strategies. Analysis of incorporation of RE gases (incl. H­). Analysis and demonstration Strategy for security of of new market and business supply following Tyra R&I of new RE gas grid Balancing of upgrade or models. closure. connection solutions. system adaptation. 2018 Infrastructure concept development Operations development Market development Security of supply *In this context, PtG and CCU are Power-to-Gas and Carbon Capture & Utilisation (CO­), respectively. 10 SYSTEM PLAN 2018

FIGURE 6: CHANGE IN ELECTRIC CAPACITY FROM 2016 TO dinitrogen oxide. 2017 • Acidifying gases: sulphur dioxide and oxides of nitrogen. • Other emissions: particulates, Electricity output 2016 2017 Change unburned hydrocarbons other than according to main fuel methane and carbon monoxide. Wind 5,250 5,497 247 Every year, Energinet collects environ- mental data from the largest Danish Solar 845 908 63 electricity producers for inclusion in Hydroelectric 7 7 0 the environmental report. As a result, Energinet receives environmental data Biogas 118 118 0 for facilities that collectively represent about 91 per cent of total Danish ther- Biomass 1,507 1,582 75 mal electricity generation. Energinet estimates the data for the remaining Waste 351 351 0 plants based on generation conditions from previous years. Natural gas 2,151 2,150 -1 Energinet’s environmental report has Oil 722 723 1 helped to document the expansion of re- newable energy in the electricity supply Coal 1,604 1,567 -37 industry, and, importantly, the reduction Other 26 26 0 of acidifying gases produced by the elec- tricity supply industry. Development in Total 12,581 12,929 348 recent years has also seen a downward trend in thermal electricity generation based on fossil fuels in Denmark, and consequently also in CO2 emissions The plans should not be regarded as hard and fast, but as from the electricity supply industry. This moving points of reference. They should be interpreted in is expected to continue in the forecast light of a society and a sector in constant flux, where network period of the environmental report. codes, operational collaborations, common balancing rules, market coupling and regional adequacy calculations are In 2017, thermal electricity genera- crucial in determining how we will achieve a fossil fuel free tion based on fossil fuels was at its energy system by 2050. The dynamic between the here and lowest-ever level in the historical now and the bigger picture in research and innovation allows period for which data is available (1990 the direction of Energinet’s current activities to be adjusted in onwards). The shift from fossil fuels a transparent way to reflect the long-term transition activi- to renewable energy generation is ties and general developments in the energy system. reflected in the changes in electricity generation capacity in figure 6. 1.5 Environmental reporting Every year on 1 May, Energinet publishes an environmental In 2017, biofuels (biomass and biogas) report setting out developments in Danish electricity and were the most commonly used fuels in CHP generation and the principal environmental impacts in Danish power stations, overtaking coal the form of fuel consumption, production of residues and for the first time. The biomass conver- atmospheric emissions. The environmental report consists of sion of several primary power stations a situation report covering the previous year and a forecast is a major factor in the reduction of CO2 for the next 10 years. The following atmospheric emissions emissions from Danish electricity and are included in Energinet’s environmental reporting: CHP generation by around 22 per cent • Greenhouse gases: carbon dioxide, methane and from 2016 to 2017. SYSTEM PLAN 2018 11

”The decrease in SO2 emissions since 1990 can FIGURE 7: CHANGE IN CO2, SO2 AND NOx EMISSIONS FROM DANISH ELECTRICITY AND CHP GENERATION. be attributed to the use of fuels with a lower sulphur

1,000 tonnes SO2 og NOx Million tonnes CO2 content and the installa- 200 50 tion of desulphurisation

160 40 units at the large power stations and waste incine- 120 30 ration plants” 80 20

40 10 stations and waste incineration plants. 0 0 1990 1995 2000 2005 2010 2015 SO2 emissions are so low that fluctu- ations in generation from individual

SO2 NOx CO2 power stations are clearly discernible. Despite the general improvements in the sector as a whole, increases in emissions are therefore possible in some years. NOx emissions have primarily been reduced through the installation of deNOx units and Energinet also uses the data basis underpinning the en- low-NOx burners at the large power vironmental report to calculate the annual environmental stations. Through to 2027, SO2 and NOx impact statement for electricity and the annual electricity emissions are expected to remain at a labels. The environmental impact statement sets out the consistently low level. CO2 emissions average environmental impact of consuming one kWh of reflect changes in the use of fossil electricity, and is commonly used by companies in their fuels at the Danish power stations, and environmental reports. Electricity labels are prepared on the substantial variations are therefore basis of the Danish Executive Order on Electricity Labelling seen in the historical values, depending (elmærkningsbekendtgørelsen), which obliges electricity on Denmark’s electricity trading with suppliers to provide information about the environmental neighbouring countries. benefits of the electricity they sell to their customers. 1.6 Energy efficiency According to the most recent national statement for all The EU’s Energy Efficiency Directive sectors from the Danish Centre for Environment and Energy 2012/27/EU mandates the Member (DCE) from 2016, out of total Danish emissions of CO2, SO2 States, among other things, (a) to and NOx, the Danish electricity supply industry contributes undertake an assessment of the 31 per cent, 24 per cent and 9 per cent respectively. The energy efficiency potentials of their development in emissions of these three substances from gas and electricity infrastructure, Danish electricity and CHP generation in the period 1990- and (b) to identify concrete measures 2017 is shown in figure 7. Since 1990, emissions of CO2, SO2 and investments for the introduction and NOx have fallen by 61 per cent, 98 per cent and 89 per of cost-effective energy efficiency cent respectively. improvements, see Article 15(2).

The decrease in SO2 emissions since 1990 can be attributed Electricity transmission to the use of fuels with a lower sulphur content and the Energy efficiency in the power grid is installation of desulphurisation units at the large power about issues including reducing the 12 SYSTEM PLAN 2018

energy lost during transfer from the production facility to the consumption FIGURE 8: TRANSMISSION LOSS IN THE ELECTRICITY site. The loss is caused by the develop- TRANSMISSION GRID INCLUDING INTERCONNECTORS ment of heat in the components, and (HVDC). this loss of energy in the electricity grid is known as transmission loss.

GWh Transmission loss in the electricity 1,000 transmission grid is heavily influenced 800 by transit through the Danish electricity system, caused by trade between the 600 Nordic and Central European electricity markets. In terms of the physics, trans- 400 mission loss increases in proportion to 200 the square of the load. The greater the transit load, the higher the transmis- 0 sion loss. Previous studies have shown 2013 2014 2015 2016 2017 that in practice, the transmission loss increases by up to a factor of four from HVDC connections AC grid in Eastern AC grid in Western no-transit situations to full-transit Denmark (DK2) Denmark (DK1) situations.

Transmission loss in the electricity transmission grid is the result of power transmission through the grid FIGURE 9: CHANGE IN GROSS ELECTRICITY CONSUMP- components plus the no-load loss. TION AND TRANSIT IN DENMARK. The average transmission loss in the electricity transmission grid over the past five years has been estimated TWh at 2.5 per cent of gross electricity 25 consumption in Denmark.

20 Assessment of energy saving potential 15 in electricity transmission Energinet pays for the transmission loss 10 in the 132 kV, 150 kV and 400 kV grids, half the transmission loss in the HVDC 5 connections to Norway and Sweden, and a third of the transmission loss in 0 2013 2014 2015 2016 2017 the HVDC connection to Germany. In the period 2013 to 2017, the transmission Consumption in Consumption in loss was between 700 and 1,000 GWh as Western Denmark Eastern Denmark shown in figure 8. Transmission loss has been increasing due to the commission- Transit in Western Denmark Transit in Eastern Denmark ing of the 400 MW offshore wind farm at Anholt in 2013 and the commissioning of the 700 MW Skagerrak 4 connection at the end of 2014.

The increase in the transmission loss in Western Denmark is also explained SYSTEM PLAN 2018 13

by the increase in transit, which grew from about 5.4 TWh during inspection and maintenance. in 2013 to about 7.1 TWh in 2017. This corresponds to 27 The components are kept activated per cent and 34 per cent of gross electricity consumption in throughout the year to allow grid these years respectively. In addition, the current trend is that failures to be managed by diverting electricity is not consumed where it is produced, but instead the flow of electricity to consumers if has to be moved through the electricity transmission grid, necessary. Load losses are proportional inevitably increasing transmission loss. to the square of the power transported.

Energinet is the Danish transmission company, and as such All else being equal, as Denmark’s it is under an obligation to incorporate energy-efficient electricity system is increasingly inte- solutions in its transmission planning. In this connection, the grated with neighbouring countries, the planning process uses a method which assesses the eco- transmission loss is expected to rise. nomic value of individual projects. Losses in the transmission Transmission loss likewise increases grid are included as a factor in the economic assessment of when new production capacity is transmission projects alongside capital costs and operating located further away from the consum- expenses. The eventual solution is assessed in its entirety. ers, meaning that the transmission This guarantees consumers the lowest possible transmission grid must be used more if the output tariffs by implementing cost-effective and energy-efficient is not consumed locally. This is already improvements in the grid infrastructure. The cost-effective evident today with offshore wind farms, and energy-efficient improvements are therefore implement- for example. ed continuously in all transmission projects in Denmark. Efficiency potentials in the operation Analysis of energy consumption and transmission loss of existing grids in the electricity transmission grid The energy efficiency initiatives in the Transmission loss is very difficult to measure in practice, so transmission grid described below are it is calculated as the difference between the energy added usually initiated as positive side-effects (production, infeed from the distribution grid and imports of other initiatives. In the existing from other countries) and energy removed (consumption, grid, the cost of investment is usually offtakes for the distribution grid and exports to other greater than the savings in terms of countries) in the electricity transmission grid. transmission loss. On the other hand, there are some measures which could Losses result from power transmission through the grid reduce transmission loss, but which components (load loss primarily in the transmission lines Energinet chooses not to carry out as and transformers), and from no-load loss (primarily in trans- they would have a negative impact on formers and reactors) in the grid. No-load losses are virtually the security of electricity supply. For ex- independent of the electricity consumption in the system, and ample, synchronous condensers could even though they are smaller than the load losses in terms be turned off, but this has been shown of power, they occur in full whenever the components are to affect the operational reliability of energised, which they usually are throughout the year except certain HVDC connections. 14 SYSTEM PLAN 2018

The need for voltage-regulating components in the electricity "The Energinet group has grid is constantly monitored. If there is no need for certain voltage-regulating components during a particular period, set itself an official target it may be useful to turn them off and thereby reduce the to reduce methane emissi- transmission loss. ons by 10 per cent in 2020

Reactive power controllers compared to the 2015-2017 Among the initiatives that Energinet is working on are the average" so-called reactive power controllers (RPCs). RPCs facilitate proper functioning of the electrical system by connecting and disconnecting reactive components. This helps to maintain an optimal reactive balance and prevents overvoltages in the electrical grid. Higher utilisation of voltage regulation from new wind farms also helps to maintain a constant voltage level. Danish transmission grid. The projects are assessed on the basis of their For now, implementation of automation is only done locally economic value, and losses in the to address local challenges. But Energinet’s long-term transmission grid are included as a ambition is to implement automatic optimisation of flows factor in the economic assessment of a and voltage using centralised calculations for the overall project. Apart from losses, capital costs transmission grid. This would not substitute decentralised and operating expenses are considered control, but merely supplement it. For the time being, though, for all Energinet projects (for example the reduction in transmission loss solely as a result of the landing facilities for offshore wind investments in automation can not outweigh the investments. farms). is not outweighed by the savings. Losses are primarily determined in Implicit transmission loss two stages in the analysis of new As things stand, the optimization algorithms used in elec- projects. As a project matures, several tricity markets do not take into account that there is a cost alternative ways to achieve the project (transmission loss) associated with transporting energy goal are considered, and losses of the between price areas. This means that in hours during which relevant equipment (transmission lines, exchanges take place between price areas, and there is little transformers and reactors) are includ- or no price differences, there is an economic loss. ed in the assessment of the costs of the different solutions analysed. The losses If transmission loss is included in the optimization algorithms are also assessed on the basis of the used by the exchanges (implicit loss handling), the economic anticipated load curve according to the losses associated with transporting energy will be taken into location of the component in the grid. account when capacity is allocated. In practice, this will be However, the solutions are assessed as done by including a loss factor expressing the percentage of a whole, so a solution with lower losses the energy lost during the exchange. This means that before is rejected if the total value of a solution any exchange can take place, the marginal welfare gain (the with higher losses is found to be better. price difference between the areas) must be greater than or equal to the marginal welfare loss from transporting the When components for construction energy. projects (transmission lines, trans- formers and reactors) are put out to Energinet has applied to the Danish Utility Regulator to tender and procured, the process also introduce implicit transmission loss, which is expected to considers whether it is worth optimis- happen for the first time in the Skagerrak connection at the ing the losses for the components. If end of 2019. the value of the loss reduction exceeds the investment costs, the procurement Efficiency potentials in grid expansion process seeks to find the most attrac- Energinet uses a general method to assess projects in the tive overall economic solution. SYSTEM PLAN 2018 15

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Gas transmission and the setpoint temperature, thereby and the electricity consumption of The 2015 assessment of the energy reducing fuel gas consumption. In compressors. The Danish Natural Gas efficiency potentials of the electricity addition, the replacement of the 1980s Supply Act (lov om naturgasforsyning) and gas infrastructure in Denmark, boilers in the remaining meter and requires Energinet to safeguard which was produced to meet the regulator stations is expected to be efficient gas transport and financial requirement in point (a), states that the completed in 2019. resources through holistic planning. energy loss in the Danish gas grid is This means that new construction very low (about 0.05 per cent of total MRNewtech is another initiative, in projects must take due account of gas consumption). The report shows which densitometers are removed economic and environmental factors, that no significant potential efficiency and replaced with calculated values (a and that gas grid operation must be improvements can be identified that densitometer is a measuring instru- optimised on an ongoing basis, with have not already been implemented ment that measures the gas density). components routinely replaced with in ongoing operations, although it Densitometers release a small amount more energy-efficient models during does indicate that energy savings are of gas, so the substations that have operational maintenance. possible by reducing gas preheating at undergone MRNewtech have managed the meter and regulator stations. to reduce their gas leaks. The Energinet group has set itself an official target to reduce methane This happens on a regular basis by Continued focus on energy efficiency emissions by 10 per cent in 2020 adjusting the boiler control to minimise All in all, major projects such as compared to the 2015-2017 average. A the margin between the minimum biogas return, the shutdown of Tyra, detailed action plan is currently being outlet temperature of the gas supplied and potentially Baltic Pipe will have prepared and is expected to be finished from the meter and regulator stations an impact on natural gas emissions by the end of 2018. 16 SYSTEM PLAN 2018

ELECTRICITY

New electricity supply As of June 2018, the Danish Minister of In the cooperation with other grid Energy, Utilities and Climate assumes operators, the relationship between the legislation means that from overall responsibility for security of distribution grid and the transmission June 2018, a different legal electricity supply and specifies the grid will be extremely important in the framework applies to the level. According to the new legislation, years to come. Technological develop- work Energinet does around Energinet is responsible for main- ment, alongside a greater emphasis taining the specified level of security on distributed electricity generation, security of supply of electricity supply and to monitor will make cooperation between the changes. two grid levels even more important in order to maintain security of supply Cooperation within the EU and within for maximum economic benefit and to the Nordic region is becoming increas- effectively integrate renewable energy. ingly important for the Danish energy system. European grid development Also in the years ahead, it will become planning must be closely coordinated necessary to expand the transmission with Danish planning. Very significant grid. In most of Jutland and in South investments will be needed in future Zealand and Lolland-Falster, this will in the European and the Danish power mainly involve integration of electricity grids, and close cooperation between generation from renewable energy countries is a high priority so that all facilities. On the islands, Copenhagen stakeholders can share in the rewards. is in particular need of reinvestments and expansions due to higher electric- The same is true of market issues at ity consumption combined with the the present time. In both the Danish declining importance of thermal power and European context, the market has stations. At present, reinvestment been identified as the central factor projects account for approximately a that will drive development of the ener- quarter of the total planned invest- gy system towards independence from ments in the transmission grid, and fossil fuels. Market formation, data in future, reinvestment projects are and digitisation will propel the future expected to make up a steadily increas- development of the energy system. ing proportion of overall investments.

The pan-European network codes, In terms of installations and mainte- which establish the scope and nance, the focus is on Viking Link, the framework for markets, operation and West Coast Connection, the connection grid connection, are currently being between Endrup and Idomlund, and implemented. This is a crucial step in the replacement of end-of-life grid the process of developing the energy components that were installed in the system – not only must the initial 1960s and 1970s. Installations and implementation succeed, but continu- reinforcements will also be necessary ous development will also be necessary as new data centres are added, which as technologies change. by Danish standards are very large electricity consumers. SYSTEM PLAN 2018 17

splits the security of electricity supply into two main elements. These two FIGURE 10: ILLUSTRATION OF SECURITY OF ELECTRICITY elements address the adequacy of the SUPPLY, WHICH CONSISTS OF SYSTEM ADEQUACY AND electricity system and the security of SYSTEM SECURITY. the electricity system, referred to as system adequacy and system security respectively.

In assessing system adequacy, Energinet examines whether the electricity system has enough electrici- ty-generating units to meet demand for SECURITY OF ELECTRICITY SUPPLY electricity in Denmark, and whether the power grid is capable of carrying the electricity. These elements are referred to respectively as power adequacy and grid adequacy. SYSTEM ADEQUACY SYSTEM SECURITY System security, on the other hand, addresses whether the electricity grid can be operated reliably. This element examines changes in system resilience GENERATION GRID ADEQUACY ROBUSTNESS IT SECURITY to component failures and breakdowns ADEQUACY Ability to supply Ability to – components in the grid as well as Ability to handle critical IT systems – and the capacity Ability to electricity to sudden maintain meet overall cunsumers disturbances secure system to maintain reliable operation of the operation demand or outages system.

Security of electricity supply is therefore an interaction that changes with differing demands on the electricity system. For example, the green transition alters the relationship 2.1 Security of electricity supply between types of electricity-generating According to the Danish Electricity Supply Act (lov om units, with more fluctuating electricity elforsyning), Energinet is responsible for maintaining the generation (e.g. wind turbines) and specified level of security of electricity supply and to monitor less dispatchable electricity generation changes. Security of electricity supply is defined as the (e.g. large power stations). Energinet is probability that electricity will be available to consumers therefore constantly working to develop when they need it. and specify methods to monitor and assess changes in the security of In its efforts to maintain the level of security of electricity electricity supply. supply and to monitor changes, Energinet uses a model that 18 SYSTEM PLAN 2018

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Control center, Erritsø, Southern Denmark

Security of Electricity Supply Report annual Security of Electricity Supply recommendations on the future level Energinet presents historical and Report. The report is not, however, of security of electricity supply. The forecast assessments every year expected to differ significantly from Minister for Energy, Utilities and in the Security of Electricity Supply previous editions of the Security of Climate sets the level on the basis of Report, which has been published since Electricity Supply Report. This is the recommendations. This is expected 2015. The report has its roots in the because previous editions were based to improve transparency and increase recommendations of the Committee for on the recommendations in ‘Security of the acceptance of the chosen level of the Regulation of Electricity (Elreg- electricity supply in Denmark’, most of security of electricity supply. The report uleringsudvalg) and the 2015 report which have now been incorporated into also goes out to four weeks of public entitled ‘Security of electricity supply the Danish Electricity Supply Act. Even consultation. in Denmark’ (Elforsyningssikkerhed so, the report is expected to be more i Danmark), which covers methods, comprehensive in selected important Energinet must also prepare relevant concepts and calculations around areas. For example, Energinet’s method alternatives to the generation adequacy security of electricity supply in Den- of assessing generation adequacy is forecast so it includes factors such as mark. This report was prepared by the expected to be developed as described the anticipated changes to the security Danish Energy Agency with input from in the 2018 Security of Electricity of electricity supply and an assessment key players in the electricity sector. Supply Report. In addition, the light of the economic costs and benefits of It contains recommendations about shed on generation adequacy will specific initiatives. Value of Lost Load1 the reporting of security of electricity probably reveal several sensitivities indicators must be incorporated to supply, including the way generation and alternatives to improve the way describe the costs associated with the adequacy forecasts will be calculated recommendations are given. forecast. in future. Method development in connection with In the summer of 2018, the Danish security of electricity supply 1 Value of Lost Load, abbreviated VoLL, is a financial Electricity Supply Act was amended to Among the new initiatives, En- indicator that expresses the cost of interrupted state that Energinet must prepare an erginet must from now on provide supply, and is normally stated as DKK/kWh. SYSTEM PLAN 2018 19

Generation adequacy assessments in future. BID is therefore expected to Until now, Energinet has used the FSI (Forsyningssikkerhed- estimate a lower probability of power sindeks) model but expects to move to the Better Investment shortage than FSI. Decisions (BID) model going forward. Precision in the assessment of gener- The BID model is an electricity market model which, among ation adequacy in the future therefore other things, can be used to assess generation adequacy. The depends on the assumptions and on model carries out simulations of the electricity market across developments in the electricity system Europe, thus reflecting Denmark’s links to its neighbours. nationally and internationally. For example, in the assessment of genera- Outages of power stations and interconnectors are stochastic tion adequacy, Energinet has included elements. The model calculates generation adequacy in an increased risk of deficient system all modelled price areas, thus incorporating the impact of security due to power shortages, and foreign generation adequacy on Danish generation adequacy. as the model covers a larger geograph- The model can also handle flexible electricity consumption ical area, the assessment of generation directly, which is one of the recommendations in ‘Security of adequacy in Denmark will increasingly electricity supply in Denmark’. vary according to the available power in Europe. BID is used by the other Nordic TSOs, as well as in ENTSO-E’s Midterm Adequacy Forecast2, which gives Grid adequacy Energinet greater opportunity to use the results both With regard to grid adequacy, Energinet nationally and internationally. is starting to look at new methods to assess the possibility of constraints in One of the main differences between FSI and BID is that BID the electricity transmission grid within incorporates both modelling of the power situation through- Denmark, including several probabilis- out Europe and compulsory heat production for power tic assessments. This should be seen stations. FSI only models selected neighbouring areas, with as complementing Energinet’s grid the other areas modelled with a probability of availability. In dimensioning criteria, which seek to addition, the increased regional cooperation in Europe, for ensure that situations of deficient grid example in Nordic RSC3, makes BID’s assumptions about adequacy and system security cannot perfect coordination between neighbouring countries more occur. To a large extent they define the reasonable than before, when things like inspection and scope and framework for the expan- maintenance plans were prepared according to different sions and reinvestments necessary processes and time frames in each country. Although coor- to maintain security of supply and the dination in Europe is expected to improve, it is not likely to quality of the supplied electricity. The be perfect. BID’s assumptions about perfect coordination will criteria specify, for example, that supply therefore be a focus point in the interpretation of BID results. must be maintained in the presence of any grid defect without affecting More detailed modelling of other countries and thus a larger neighbouring TSOs and without geographical area could mean more or less available power disconnecting consumers. In addition, compared to FSI, but is expected to result in more available the transmission grid must be resilient power through more coordinated use of capacity in Europe to a possible subsequent fault without causing further outages.

In the interface between the electricity transmission grid and the electricity 2 Within the ENTSO-E framework, a comprehensive European level risk assessment of generation adequacy is carried out. Results are reported annually in the Mid- distribution grids, new methods must term Adequacy Forecast (MAF) report. also be developed as a result of the 3 Nordic RSC stands for ‘Nordic Regional Security Coordinator’ and is a joint office Demand Connection Code (DCC). located in Copenhagen, where employees across the TSOs in Finland, Norway, One example is the exchange of Sweden and Denmark collaborate to resolve a number of operational issues. reactive power between the electricity 20 SYSTEM PLAN 2018

transmission and distribution grids, for which methods must IT security be developed for the planned expansion of reactive compo- IT systems are increasingly being used nents in the grids and requirements must be specified for the to monitor and control components physical flow of reactive power during operation. in the electricity supply industry. This greater dependence on IT makes the Coordination of the expansion of reactive components in electricity system more vulnerable if IT both grids is intended to ensure that there are no areas with systems are unavailable or faulty. This overexpansion and no areas with a shortage of reactive applies not only to Energinet systems components. In grid operation, too little or too much reactive but also to systems in the distribution power can have a major impact on the voltage in the electric- and generation companies and balance ity grid and therefore on security of supply. responsible parties, which handle many generation facilities. Resilience As part of the new concept for the Security of Electricity In 2016, the Danish Energy Agency Supply Report, Energinet must specify a total estimated level revealed a number of issues that might of annual outage minutes4 for the entire Danish electricity make it more complicated and difficult system. This includes the output minutes from the BID to address cyber security in the sector. calculations and the expected number of outage minutes Some of the issues arise because the from other outages. exchange of data between players cre- ates a dependency that can be difficult Energinet has not specified expected outage minutes before, to evaluate in terms of risk. In addition, so it needs to develop new methods to predict or assess local circumstances and internal the development of future outage minutes. The forecast for processes within companies indirectly future outage minutes must include an assessment of the create challenges for overall communi- number and duration of future disconnections of electricity cation in the sector. The threat situation consumers and the annual electricity consumption. for IT systems has changed in recent years, and with increased digitisation Disconnections due to deficient system security are difficult of the energy systems, Denmark will be to predict because the risk of failure is very low, but the increasingly vulnerable to breakdowns consequences can be very serious. Some years are therefore and attacks. expected to have only a few outage minutes, and others are expected to have many. Energinet must therefore regularly reassess the methods it uses to guar- antee a high level of IT security. With cyber attacks becoming more organ- ized and aimed at different IT systems, it is necessary to keep assessing which tools are the right ones to prevent 4 Outage minutes correspond to the average duration of electricity supply outages in minutes per electricity consumer per year in Denmark. and combat destructive cyber attacks. SYSTEM PLAN 2018 21

of the progress of Kriegers Flak. This is due to deficient generation adequacy, FIGURE 11: ENERGINET HAS OPTED FOR A STRATEGIC which is measured in output minutes5. RESERVE FOR THE PERIOD 2025-2029, AND WILL REVISIT Energinet’s previous target was no A WIDE RANGE OF POSSIBLE SOLUTIONS FOR 2030 AND more than five output minutes. Without BEYOND, IF NECESSARY. new initiatives, the expected outage level will be 11 output minutes in 2025, 2030 increasing to 42 output minutes in 2030. Strategic reserve In the next few years, Energinet will im- 2018 2025-2029 plement new market reforms that will incentivise the market players to take Strategic Other market reserve initiatives their own steps to balance production and consumption of electricity. The reforms are therefore also expected Other market Construction to help maintain generation adequacy. initiatives activity However, there is uncertainty about Development the precise timing and impact of these of strategic reserve market initiatives. This is because a Construction number of regulatory and technological activity changes are expected in and around the electricity market in the next few MARKET DEVELOPMENT years, significantly influencing the effect of the market measures. Exam- ples include new digital management solutions for households and industrial facilities, changes to electricity taxes, Because the attacks can be both targeted and non-targeted, a increased use of battery solutions, etc. strong IT defence is essential. In terms of the specific power chal- In addition, other players in the electricity system may be lenge facing Eastern Denmark by exposed to attacks affecting their operations. Depending on 2030, the uncertainty means that there the player’s area of responsibility, there may be an impact on will continue be an increasing risk of the operation of the electricity system. To reduce the risk of insufficient power in Eastern Denmark destructive cyber attacks, Energinet cooperates widely with unless one or more initiatives are players in Denmark and abroad. The aim is to work together implemented. That is why Energinet to find the vulnerabilities in IT systems before they are has studied a number of infrastructure exploited. In this way, the prevention methods are updated on expansions and market initiatives de- an ongoing basis with the players in the electricity system. signed to improve generation adequacy in Eastern Denmark. The economic Energinet is examining the need for a assessment indicates that a strategic temporary strategic reserve in Eastern Denmark reserve is the lowest-cost initiative Energinet’s analyses and projections show that the risk capable of safeguarding generation that electricity will not be available when needed in Eastern adequacy in Eastern Denmark. Denmark is set to increase from 2025 onwards, irrespective A strategic reserve is a time-limited and flexible initiative that can maintain generation adequacy – provisionally until 2030 and possibly beyond. This 5 Output minutes are consumer-weighted outage minutes, calculated by dividing unserved electricity by the average hourly consumption in the year. allows Energinet to assess whether 22 SYSTEM PLAN 2018

Danish Electricity Supply Act this has changed – Energinet is now responsible FIGURE 12: RESERVE TYPES. for maintaining the specified level of security of electricity supply and to monitor changes. WESTERN EASTERN DENMARK DENMARK Balancing the electricity system is Frequency-con- achieved by the market players trading trolled reserves in balance up to the delivery hour. In Frequency - normal operation the hour before the delivery hour, and Frequency Containment (FCR-N) during the delivery hour, Energinet reserves Reserves (FCR) Frequency-control- is responsible for balancing the led reserves - dis- electricity system. To do so, Energinet turbance (FCR-D) uses a number of plans and forecasts to assess the imbalance in the next delivery hour. Automatic fre- quency restoration reserves (aFRR) Manual frequency To maintain balance in the electricity Ancillary restoration reser- system, Energinet purchases ancillary services Manual frequency ves (mFRR) services, which can be activated auto- restoration matically or manually. The vast majority reserves (mFRR) of ancillary services consist of reserve capacity. There is a lesser need for properties required to maintain power system stability and other ancillary the market reforms are having the necessary effect or other services such as black start capability. initiatives should be implemented. A strategic reserve is established on the basis of a call for tenders aiming to give To guarantee availability of the neces- Energinet guaranteed access to generation capacity or load sary balancing resources, Energinet shedding that can be activated with minimal market impact if purchases a range of services on an power shortages occur during the period. ongoing basis, primarily from Danish electricity generators and through In addition to a strategic reserve, infrastructure expansions international markets and agreements. from Eastern Denmark to Western Denmark, Sweden, There are two types of reserves: Germany and Poland have been studied as a way of safe- frequency reserves and balancing re- guarding generation adequacy. serves. Purchases of ancillary services differ in DK1 and DK2, since the regions In February 2018, the European Commission approved tem- each belong to a different synchronous porary strategic reserves in Germany and Belgium, and on area. DK1 and DK2 use different this basis, Energinet will start talks with the Danish energy balancing approaches that reflect the authorities about the possibility of applying to the European size and composition of the electricity Commission for a temporary strategic reserve to maintain system. In the Nordic synchronous area generation adequacy in Eastern Denmark. Energinet will use containing DK2, balancing is based on these talks to ask for an approval for the period 2025-2029 the frequency, whereas in the Central with an option to extend this period by five years. European synchronous area containing DK1, balancing is based on imbalances 2.2 Resources to safeguard balance and technical quality of energy. Energinet is responsible for security of supply and in order to fulfil this duty must maintain technical quality and balance Frequency reserves are characterised in the interconnected electricity supply system, cf. section by being automatic reserves, which 27a(1)(1) of the Danish Electricity Supply Act. In the new constantly respond to frequency SYSTEM PLAN 2018 23

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Studstrup CHP plant

fluctuations and stabilise the frequency system stability from the primary possible to continue using market- at around 50 Hz. power stations. The parties seek to based methods and to use regulated use competitive tendering to purchase prices for payment instead. Frequency Restoration Reserves properties required to maintain power (mFRR) with manual activation are system stability. If a need for properties If there is a sudden need for properties known as regulating power in the required to maintain power system required to maintain power system Nordic region and are activated from a stability can be predicted, Energinet stability, Energinet executes a remedial common Nordic platform in which bids announces a call for tenders and the action on the basis of section 27c of the for upward and downward regulation players can submit bids. Danish Electricity Supply Act. In this are submitted by the market players on case, an order is issued. an hourly basis. Frequency Restoration If there is only one potential supplier, Reserves (aFRR) with automatic Energinet is unable to complete the Properties required to maintain power activation used to be called secondary tendering process. In this situation, the system stability are also provided from reserves or LFC. call for tenders is cancelled and the Energinet’s synchronous condensers. contract is then awarded directly to If the primary power stations are able Automatic and manual balancing the player. This means that the need to supply sufficient properties required reserves are used to maintain the is instead met on the basis of an order to maintain power system stability energy balance between production and settled using the cost plus method to allow Energinet to switch off its and consumption during the delivery (see below) approved by the Danish synchronous condensers, Energinet hour. They respond within 15 minutes Utility Regulator6 in April 2017. The new proposes that the power stations in order to restore balance. Danish Electricity Supply Act makes it should be compensated for this. The compensation method has been Properties required to maintain notified to the Danish Utility Regulator power system stability and is currently awaiting approval.

Energinet purchases properties 6 The Danish Utility Regulator was called the Energy required to maintain power Supervisory Board until 30 June 2018. 24 SYSTEM PLAN 2018

Market purchases geographical area. Close cooperation Planned market purchases are always the preferred method with the other European countries is for Energinet to fulfil the responsibilities described in section a prerequisite for a well-functioning 27a(2) of Consolidated Act (lovbekendtgørelse) 1009 of 27 June European internal energy market and is 2018. Market purchases are directly related to section 27a. a cornerstone of Energinet’s efforts to maintain high security of supply. Under the old Danish Electricity Supply Act, an order was issued when there was only one potential supplier that could The EU’s third liberalisation package meet a particular need. This need could be defined geo- created ENTSO-E in 2009 to promote graphically for example. The order was made on the basis of cross-border electricity transmission section 27b of the Danish Electricity Supply Act. The relevant and ultimately to create a genuine section has been amended in the new Danish Electricity internal market in electricity. With the Supply Act, which entered into force on 1 July 2018. establishment of ENTSO-E, the Euro- pean TSOs have been given important The new Danish Electricity Supply Act gives Energinet duties as well as a significant influence Elsystemansvar the option to continue with the mar- on the development of the European ket-based call for tenders even if there is only one supplier electricity market and electricity offering the service in question. In these situations, regulated transmission system. prices are used for payment. The option to continue with the market-based call for tenders is sanctioned by section 27a(2) Energinet and the other Nordic TSOs of the new Danish Electricity Supply Act. This means that have prioritised their cooperation in greater use can be made of market-based methods when ENTSO-E, and considerable resources purchasing the services necessary to safeguard security of are still being devoted to the Nordic electricity supply. TSOs’ contribution to the development of pan-European cooperation. Under If Energinet Elsystemansvar is unable to issue a mar- the auspices of bodies including the ket-based call for tenders, section 27c(2) of the new Danish Nordic RSC7, Energinet and the other Electricity Supply Act is applicable. This is in pursuance TSOs are on track to deliver a genuine of the Commission Regulation establishing a guideline on internal electricity market. The Nordic electricity transmission system operation. The Regulation RSC and the Nordic Balancing Concept provides a legal basis for plans to be changed and remedial are concrete examples of a regional actions to be activated. If remedial actions are activated, pay- implementation of efforts to develop ment will be based on a forthcoming cost plus method that the common European energy market is yet to be notified to the Danish Utility Regulator. Until this (read more about the Nordic Balancing method is notified and approved, payments under sections Concept in section 2.8 and about the 27a(2) and 27c(2) will be based on the currently approved RSC in section 2.3). settlement method for purchases of properties required to maintain power system stability. At this pan-European level, ENTSO-E is responsible for grid planning, while 2.3 Cooperation with other countries ACER (Agency for the Cooperation of The Danish electricity grid is designed to be closely intercon- Energy Regulators) is responsible for nected with the grids of neighbouring countries. This helps to supervision. As a TSO, Energinet is guarantee a high level of security of supply in Denmark even responsible for national grid planning when there is no wind and the sun is not shining, and makes at transmission level. The Danish better use of renewable energy production across a larger Energy Agency oversees national grid planning, and the Danish Utility Regulator ensures that national grid planning is compatible with European grid planning. 7 Nordic RSC stands for ‘Nordic Regional Security Coordinator’ and is a joint office located in Copenhagen, where employees across the TSOs in Finland, Norway, Sweden and Denmark collaborate to resolve a number of operational issues. SYSTEM PLAN 2018 25

Electricity Supply Act. The European FIGURE 13: TYNDP 2018 PROJECTS IN EUROPE: 166 ten-year plan is produced on the basis TRANSMISSION PROJECTS AND 15 STORAGE PROJECTS of investment plans for six European (12 HYDROELECTRIC POWER AND 3 COMPRESSED AIR). regions and presents a summary of the principal electricity infrastructure projects with pan-European signifi- cance. The projects typically concern Under construction interconnections between countries or At approval stage between different price areas as well Planned but not yet at approval stage as national connections with common Under consideration regional or common European signifi- cance. Denmark contributes to regional investment plans in the North Sea and Baltic Sea regions and thus also to the pan-European ten-year plan. Energinet is working to ensure close coordination between national and European grid planning.

The TYNDP 2018 report contains a package of deliverables: • Scenario report, describing the future scenarios on which the TYNDP is based. The scenario storylines were developed in collaboration with various stakeholders, including the Member States and regulators. And now, for the first time, the same scenarios are used in electricity and gas planning. In other words the electricity TYNDP and gas TYNDP are based on the same future scenarios and data for 2025, 2030 and 2040. • Regional investment plans, which address system and grid require- ments at the regional level. ENTSO-E Clean Energy for all Europeans is a package of legislative is divided into six regions, and initiatives that builds on the third liberalisation package, Energinet is in two regional groups: for example by strengthening regional cooperation. Greater North Sea and the Baltic. regional cooperation is therefore seen as a step towards a • The TYNDP 2018 main report, which fully integrated internal market in energy throughout Europe. analyses the effect of grid expansion The Nordic countries are front and centre in this develop- at the pan-European level up to 2030 ment, and are boosting cooperation in the electricity market with a detailed economic cost-benefit by setting up an Electricity Market Forum involving energy analysis of all 181 projects in the ministers and relevant players. plan. • Various reports, which illustrate European planning cooperation various regional and pan-European In terms of planning, Energinet is working with other topics with relevance for the future European transmission system operators on the European development of the electricity Ten Year Network Development Plan (TYNDP), as set out system. This includes four regional in EU Regulation 714/2009 and section 28 of the Danish reports tailored to the European 26 SYSTEM PLAN 2018

corridors as defined in EU Regulation 347/2013 on the "Although the four Nordic trans-European networks. And a number of technical reports. TSOs already work to- gether within ENTSO-E, TYNDP 2018 describes a total of 166 transmission projects there is still a need for and 15 storage projects expected to be commissioned by 2035. They include nine Danish transmission projects, of close Nordic cooperation" which four electricity projects and one gas project have been designated Projects of Common Interest (PCI). For each TYNDP project, cost-benefit analyses were prepared in four European scenarios with two time frames. The overall investment requirement in the TYNDP is valued at about EUR Midterm Adequacy Forecast 114 billion up to 2030. The investments will allow 48-50 per One important activity of ENTSO-E cent of electricity consumption to be covered by renewable is the pan-European assessment energy, and emissions of CO2 to be reduced by 65-75 of generation adequacy, called the per cent compared to 1990 levels. Furthermore, it will be Midterm Adequacy Forecast or MAF for possible to save EUR 2-5 billion in production costs per year short. The MAF is also a requirement (2030 figures). The projects in the TYNDP will also help to from EU Regulation 714/2013, and has improve security of supply because they will relieve existing been updated to reflect the closure grid congestion points. The European system is facing the of many primary power stations in same challenges as in Denmark: the production portfolio is step with the massive expansion of evolving. Some countries are discontinuing nuclear power, wind and solar. This trend puts future others are replacing or phasing out old power stations, and generation adequacy under pressure most countries are increasing the share of renewable energy in many countries including Denmark, in electricity consumption. This development will trigger see the Security of Electricity Supply major changes in electricity flow patterns across Europe Reports from 2016, 2017 and 2018. and therefore changes in requirements concerning system The MAF developed a new probabilistic flexibility and system stability in order to maintain security methodology for the interconnected of supply. The electricity grid will have to be modified in European system. The methodology response, for example better control systems for existing uses hourly resolution and a climate lines, upgrades of existing connections, or completely new database with 35 years of statistics on connections in order to facilitate European energy policy. factors such as wind, solar radiation and temperatures. Also included Projects of Common Interest are the unplanned outages of power Every two years the European Commission updates a list of stations and international connections. projects of particular European importance. The list is based The methodology also forms the basis on the latest TYNDP, and Denmark has five projects in the for calculation of generation adequacy current list. The next list (list IV, which is based on TYNDP18) in the Nordic system. is due for publication at the end of 2019. Nordic planning cooperation Denmark has two current PCIs under construction: the East Although the four Nordic TSOs already Coast Connection and Kriegers Flak Combined Grid Solution. work together within ENTSO-E, there Two of the other projects – Viking Link and the West Coast is still a need for close Nordic cooper- Connection – have been approved by the minister, and the ation. Cooperation was intensified in Baltic Pipe gas project is planned but not yet approved by 2015 with a joint Nordic TSO strategy the minister. PCIs are subject to special requirements with and in 2016 with an analysis of the regard to transparency and public involvement, but can also challenges facing the Nordic system in receive faster processing of approvals or financial support the years to come. The findings were from the EU. As a result, Energinet has obtained financial published in the summer of 2016 in the support for feasibility studies for these three Danish projects: so-called Challenges Report. The report the Viking Link project, the East Coast project and Baltic Pipe. highlights challenges around system SYSTEM PLAN 2018 27

reason why the corridors to Denmark are of interest is that several connec- FIGURE 14: NORDIC RSC. tions are approaching their technical end-of-life. It is also necessary to consider whether further integration is needed between the Nordic and continental synchronisation system to provide the system flexibility required to cope with the evolving production portfolio. In addition, the corridors connect two areas with plentiful hydroelectric power and solar and wind energy.

Operational cooperation in the Nordic region The Regional Security Coordinator (RSC) is an operational unit intended to provide strong and close regional SVENSKA FINGRID coordination of transmission system KRAFTNÄT operation. For the time being, the objective is to provide five services to the TSOs: STATNETT • Capacity calculations • Maintenance planning • System security analyses • Generation adequacy analyses • Grid model calculations • Five RSCs have been created in Europe: • Baltic RSC ENERGINET • Coreso • Nordic RSC • SCC • TSCNET

Due to its special situation operating in two synchronous areas, Energinet is in two RSCs: flexibility, generation adequacy, frequency quality and inertia. • One is called TSO Security Cooper- In March 2018, The Way Forward – Solutions for a Changing ation (TSCNET), and this operational Nordic Power System was published, setting out some cooperation involves 13 continental solutions to these challenges. Inputs included the Nordic Grid European TSOs. This cooperation is Development Plan 2017 (NGDP 2017) and Generation Ade- well established, and Energinet has quacy. They describe the current plans and grid development been involved since 2013. At the end projects in the Nordic countries, and the market initiatives of 2014 Energinet became co-owner potentially required to safeguard generation adequacy, of the operating company set up by including a new generation adequacy calculation method. the participating TSOs. TSCNET has its offices in Munich. NGDP 2017 identified five corridors of major interest in the • The other is called Nordic RSC, and is Nordic region (NO-DK, NO-SE, NO-FI, FI-SE and DK-SE). The an operational cooperation involving 28 SYSTEM PLAN 2018

FOTO

Statnett, Svenska Kraftnät, Fingrid ever-closer cooperation in terms of countries and with the approval of the and Energinet. The office, located in markets, planning and operation under for Minister for Energy, Utilities and Copenhagen, was set up in 2017, and the auspices of the Nordic RSC and Climate approval, become the co-owner is staffed from all four Nordic TSOs. other organisations, Energinet and the of limited liability companies which other TSOs are on track to deliver a carry out cross-border TSO functions The statutory basis for the creation genuine internal electricity market. as mentioned in section 28(2)(3) and of Regional Security Coordinators functions relating to interconnection (RSCs) is contained in EU Regulation According to section 28(2)(3) of the of electricity markets.’ On the basis of 2017/1485 establishing a guideline Danish Electricity Supply Act, Energinet these provisions, Energinet has estab- on electricity transmission system must ‘cooperate with system operators lished and participates in a number of operation (System Operation Guideline in other countries to establish mutual, different collaboration forums in the Regulation). At the European level, how- equivalent principles for electricity Nordic region and in Europe. ever, TSOs have been creating RSCs supply and grid tariffs, grid access and on a voluntary basis since 2008, when transit, market issues, etc., co-ordi- With the creation of ENTSO-E, the Coreso and TSC were established. In nation of transmission connections European TSOs have been given 2015, the European TSOs and ENTSO-E (including the handling of balance and important duties, including quasi-reg- entered into a multilateral agreement capacity problems) and enter into any ulatory duties, as well as a significant on the establishment of RSCs, and it is joint system operation agreements influence on the development of the this agreement which formed the basis necessary in order to ensure that the European electricity market and for the establishment of other RSCs benefits yielded by interconnected sys- electricity transmission system. This including Nordic RSC. tems are exploited.’ In continuation of is a major commitment, Energinet is this provision, section 28c of the Danish actively involved in all the main areas: Market cooperation Electricity Supply Act states that ‘En- market, system operation, planning and The interconnected European electricity erginet or its wholly owned subsidiaries research and development. Energinet transmission grid links the European may, as part of the cooperation with the advocates market-based solutions countries together, and through transmission system operators of other delivering economic benefits, and SYSTEM PLAN 2018 29

even greater transparency and stakeholder involvement in Forthcoming topics include: ENTSO-E. • Changes in maintenance planning. • Descriptions for communication with The Nordic cooperation is rooted in direct collaboration installations – generation, consump- between the four Nordic TSO CEOs who meet quarterly. In tion and substations. addition, the four Nordic TSOs join forces in many different • Description of Energinet’s system areas including market development, system operation and defence plan and system recovery planning, and there is a continuous and informal exchange plan. of view on European activities. Energinet and several other • Implementation of the new capacity European TSOs are co-owners of the Joint Allocation Office calculation methodologies. (JAO), which acts as a service company for the participating • Implementation of procedures TSOs, offering auction services. The JAO is the designated and changes in market design to Single Allocation Platform (SAP) for capacity allocation in the enable competition between power forward market covering the whole of Europe. Specifically, exchanges, see section 2.7. the JAO handles the auction of that portion of the capacity of • Scope and framework for two Eu- the Great Belt Power Link and the Danish-German connec- ropean platforms activating manual tions which is sold in long-term contracts. reserves (the MARI platform) and automatic reserves (the PICASSO See section 2.7 about the wholesale market for more details platform)8. of European regulation of the markets. Activities to implement the current and Network codes future network codes will constitute The network codes are part of the wider EU regulation of the an important task for Energinet in the electricity sector and define the scope and framework for future. This will probably be a more or markets, operation and grid connection. The network codes less permanent task, as the network are therefore crucial for large parts of Energinet’s business. codes are expected to require updating What characterises network codes is that they are primarily and further development to keep pace implemented – at national, regional and European level – in with future technical progress, for cooperation between TSOs and must be based on stakehold- example. er consultations, after which the TSOs’ proposals must be approved by the respective national supervisory authorities. 2.4 Cooperation with For Energinet it is essential for the network codes to be im- other grid operators plemented in a way which generates the maximum economic As the electricity system develops from value, meaning that implementation of the network codes is being based on dispatchable energy of considerable strategic importance for Energinet. production from primary and local power stations to having to deal with Most recently, Energinet has focused on: greater integration of renewable ener- • Rules for connection of generation and consumption. gy, there are more and more collabora- • A common framework and operating agreements for tive interfaces between the distribution frequency regulation products. and transmission level. In all the • Implementation of the pan-European intraday market distribution and transmission grids, XBID, see section 2.7. the objectives is the same: to maintain • New capacity calculation methods in the CCR Nordic and security of supply and optimise it from CCR Hansa regions, see section 2.7. an economic point of view, and to effectively integrate renewable energy. The resources necessary for operating and balancing the electricity system – at distribution and transmission level – can only be provided on the basis of 8 MARI stands for Manually Activated Reserves Initiative and PICASSO stands for Platform for the International Coordination of Automated Frequency Restoration close cooperation and coordination. and Stable System Operation. 30 SYSTEM PLAN 2018

At EU level, the focus is on creating a regulatory structure that helps to define roles and responsibilities for grid companies and transmission companies, most recently FIGURE 15: THE VISION FOR DSO-TSO the Clean Energy for All Europeans package that makes a COOPERATION. number of proposals to support the green transition. The proposed legislation addresses technical and market issues in the collaborative interfaces between the distribution and transmission level, and is expected to be adopted by the Market Member States in 2019 and enter into force from 2021. cooperation committee Increased cooperation across the distribution and transmission grids Denmark has a long-standing tradition of cooperation TSO-DSO coordination Grid involving grid companies, the Danish Energy Association and committee cooperation Energinet, both formally in various forums and informally in committee day-to-day operation. In 2018, the grid companies, the Danish Energy Association and Energinet decided to set up more formal collaboration forums to intensify their joint efforts to In their roles as neutral market identify and overcome the challenges facing the electricity facilitators, Energinet and the system in the coming years. By intensifying cooperation electricity distribution companies in distribution and transmission, we have made an active will ensure, that the electrical strategic choice, aiming to find the best solutions by cutting system is operated and developed across boundaries. in society's best interest, now and in the future. The participants The cooperation is organised in three committees: a TSO-DSO will work together to ensure that Coordination Committee, a Market Collaboration Committee consumers have a cost-effective and a Grid Collaboration Committee, of which the first two are security of supply and green newly established collaboration forums from 2018. transition, where balancing of the electricity system is safeguarded TSO-DSO Coordination Committee by market-based solutions to the The TSO DSO Coordination Committee discusses strategic extent possible, and where the issues that cut across transmission and distribution and framework supports innovation encompass the Market Collaboration Committee and the and technological development Grid Collaboration Committee. The Coordination Committee of benefit to the electricity sets the strategic direction of cooperation in the various consumers. forums, reflecting the collaborative interfaces between grid companies and Energinet concerning operation, planning, investments, market context, data exchange and data protection. The Committee also focuses on creating a common understanding of the national and European trends and developments as a basis for forward-looking, proactive coordination between the distribution and trans- mission level in the Danish electricity

9 The Dialogue Forum brings together Energinet and Danish electricity market system. players to discuss market regulations and market processes. The Technology And Implementation Group is a forum in which the market players, their IT suppliers and Energinet discuss and coordinate issues around DataHub. In the Electricity Market Collaboration Committee The Market Players’ Forum, Energinet meets with wholesale market players to update Market Collaboration Committee focuses them on national and international market developments. The Electricity Market Players’ Forum aims to give players the opportunity to stay up-to-date with on the market-related collaborative national and international wholesale market developments. The Players’ Working interface between the transmission grid Group For Ancillary Services brings together the players in the energy sector and Energinet in a forum for sparring and dialogue around market-related issues and the distribution grid. The Commit- relating to the development of the market in ancillary services. tee’s activities will be directed to the SYSTEM PLAN 2018 31

areas within the natural monopolies in electricity supply, such Grid Collaboration Committee as the communication and exchange of metered data and tariff The Danish Energy Association, the structures. The Committee is also involved in new collabora- grid companies and Energinet have set tive interfaces that have sprung up in response to develop- up the Grid Collaboration Committee ments in the electricity system, for example how to develop a to coordinate and prioritise activities market framework for efficient activation of flexible resources of importance in the development, connected to the distribution level or implementation of aggre- planning and operation of the entire gators in the codes. electricity system at transmission and distribution level. The Market Collaboration Committee complements the broad market cooperation discussed in forums such as the The Committee’s goals are: Dialogue Forum, the Technology and Implementation Group, • Formulating basic guidelines con- the Electricity Market Players’ Forum and the Market Players’ cerning technical issues of relevance Working Group for Ancillary Services, and also includes to the entire system. other market players. The Market Collaboration Committee is • Safeguarding the mutual exchange committed to transparency and involves market players9 in of information between the Danish projects. Energy Association, grid companies and Energinet. The Market Collaboration Committee is currently working on • Initiating technical development the following projects: activities.

Utilisation of flexibility from installations Last year, the Grid Collaboration connected to the distribution grid Committee worked on coordinating As the electricity system develops, flexible resources will activities to implement EU regulations increasingly be available at the distribution level that can concerning network codes. It also be activated. The Market Collaboration Committee has established a working group that has therefore set up a working group to investigate and present developed a model for the exchange proposals on how to establish the best possible conditions of reactive power between the trans- for the utilisation of flexibility from installations connected to mission system and the distribution the distribution grid. The aim is to establish conditions that systems. ensure that the flexible resources from the distribution grid are utilised where they create most value for the system as The Grid Collaboration Committee a whole, therefore also including end customers and those focuses on the technical and opera- providing the flexibility. For example, a substantial part of tional collaborative interface between our automatic balancing reserves already comes from the the transmission grid and the distri- distribution grid. The working group has members from grid bution grid. The collaboration makes companies, the Danish Energy Association, balance responsi- it possible to coordinate and prioritise ble parties, producers and Energinet. activities that are relevant to the devel- opment, planning and operation of the Tariff cooperation entire electricity system. The ambition As a natural consequence of developments in the electricity is to jointly identify, in a proactive and system, it has become necessary to adapt the tariff structure efficient way, a number of solutions so it is better able to support active customers in making to support the future operation and informed decisions about their use of the grids. The aim is to expansion of the electricity grid. define common general design criteria for future DSO-TSO In 2018, the Grid Collaboration tariffs which establish a clear and cost-based tariff struc- Committee also regularly discussed ture, simplify tariffs and prevent conflicting incentives. The implementation of the EU regulations working group has members from the grid companies, the concerning connection to and operation Danish Energy Association and Energinet. Market players will of the electricity system. Implementa- be heavily involved in the work. tion of these network codes affects all 32 SYSTEM PLAN 2018

400/150-132 or 400/220 kV transformer substation FIGURE 16: THE EXISTING ELECTRICITY TRANSMISSION GRID 220/150 kV transformer substation AT YEAR-END 2018. 150/60 or 132/50 kV transformer substation AC/DC conversion Power station Norway 150 kV or 132 kV cable Skagerrak 1,2,3&4 1.700 MW 150 kV or 132 kV overhead line 220 kV cable

Konti-Skan 220 kV overhead line Starbakke Bredkær KS 1&2 400 kV cable 680/740 MW 400 kV overhead line

Dybvad HVDC cable Nibstrup HVDC overhead line OŸshore wind farm Nordjyllandsværket Fredensdal Hvorupgård Klim Fjordholme Vendsysselværket Frøstrup Skansen Nors Håndværkervej Bagsværdgård Ådalen Vester Hassing Hareskovgård Ålborg Øst Glentegård Måløvgård Grønnegård Ferslev Hovegård Vilsted Dyregård Svanemøllen Bedsted Ballerupgård Bellahøj Mosbæk Amager- Sindbjerg Ejbygård værket Roslev Tinghøj Lindevang Hersted- gård Kærbybro 400 MW Vigerslev Vejleå Amager Anholt Brøndbygård Bilstrup Ishøj Kastrup H. C. Ørsted Værket Ramme Struer Foulum Tjele Hornbæk Loldrup Moselund Flaskegård Åstrup Tange Avedøreværket Mesballe Idomlund Mosedegård København Trige Studstrupværket Mollerup Bjørnholt Hasle Sweden Høskov 1.300/1.700 MW Videbæk Herning Hørning Lem Kær Malling Teglstrupgård Valseværket Gørløse Sdr. Felding Askær Borup Stovstrup Thyregod Stasevang Nr. Asmindrup Ølstykkegård Allerødgård Hatting Kyndbyværket Sperrestrupgård Novo Syd Lyngerup Kalundborg Torslunde Skibbygård Knabberup Vindingegård Hedegård C Asnæsværket Kamstrup Karlsgårde Kirkeskovgård B Landerupgård Statoil Syd 209 MW Søstremose Nyrup Bramdrup Ryttergård Karlstrup Endrup Revsing Tårup N Herslev Ostedgård Jersie A Estrupvej 160 MW Spanager Holsted Skærbæk- Fynsværket Esbjergværket Andst Graderup Odense SØ Storebælt Bjæverskov værket 600 MW Ringsted Lykkegård Hejninge Horns Rev Kingstrup Fraugde Herlufmagle Haslev Ribe Rislev Næstved Fensmark Magstrup Abildskov Stigsnæs Østerholm Blangslev

Bredebro Kassø Svendborg Ensted Masnedø Orehoved

Sønderborg Eskilstrup Vestlolland Radsted Flensborg Idestrup Rødby Sverige

B 60 kV 207 MW A KONTEK 166 MW 585 MW Østkraft Rødsand

Germany Tyskland 1.500/1.780 MW SYSTEM PLAN 2018 33

parts of the electricity system and requires close dialogue in Forward planning – system security 400/150-132 or 400/220 kV transformer substation the industry. If the electricity system is unable to 220/150 kV transformer substation handle sudden system disturbances, 150/60 or 132/50 kV transformer substation The Grid Collaboration Committee is currently working on the in other words if system security is AC/DC conversion following projects: inadequate, the consequences may Power station be far-reaching because in the worst Norway 150 kV or 132 kV cable Theme day focusing on the grid case, sudden and widespread blackouts Skagerrak 1,2,3&4 1.700 MW 150 kV or 132 kV overhead line The Grid Collaboration Committee arranges an annual theme could occur in Western or Eastern 220 kV cable day focusing on topical technical and operational issues Denmark, or both. Konti-Skan 220 kV overhead line Starbakke affecting the grid. In 2018, the event covered issues including Bredkær KS 1&2 400 kV cable 680/740 MW control of the electricity system and the use of batteries, and Changes in the electricity system, com- 400 kV overhead line was again enthusiastically supported by the grid companies. prising changes in available production Dybvad HVDC cable Nibstrup capacity and changes in grid structure HVDC overhead line OŸshore wind farm Nordjyllandsværket Exchange of reactive power and capacity, may affect system security Fredensdal Hvorupgård Klim Fjordholme Vendsysselværket The exchange of reactive power between the transmission and therefore create an additional need Frøstrup Skansen Nors Håndværkervej Bagsværdgård system and the distribution systems has evolved over the for installations with properties required Ådalen Vester Hassing Hareskovgård Ålborg Øst Glentegård Måløvgård Grønnegård years, partly as a result of increased undergrounding in the to maintain power system stability. New Ferslev Hovegård Vilsted Dyregård distribution systems. These changes, combined with the wind turbines, grid components, pow- Svanemøllen Bedsted Ballerupgård need for a clear model describing how this exchange is to er-electronic components, synchronous Bellahøj Mosbæk Amager- Sindbjerg Ejbygård værket be regulated, prompted the Grid Collaboration Committee condensers and power stations all have Roslev Tinghøj Lindevang to set up a working group to address the issue. In 2018, it properties required to maintain power Hersted- gård Kærbybro 400 MW Vigerslev successfully completed its mission, and the model can now system stability. Vejleå Amager Anholt Brøndbygård Bilstrup Ishøj Kastrup be incorporated into a technical regulation, ensuring that the H. C. Ørsted Værket Ramme Struer Foulum exchange of reactive power is handled in an effective way in To continue to maintain secure and sta- Tjele Hornbæk Loldrup Moselund Flaskegård Åstrup terms of the system. ble operation, there is not expected to Tange Avedøreværket Mesballe be any need for new installations with Idomlund Mosedegård København Trige Studstrupværket 2.5 Planning for conversion and expansion properties required to maintain power Mollerup Bjørnholt of electrical installations system stability in Western Denmark. Hasle Sweden Høskov 1.300/1.700 MW Most of the 132 kV and 150 kV grid was established from the This is partly because closer electrical Videbæk Herning Hørning 1960s and up until the 1990s, and large parts of this asset links are being created across borders Lem Kær Malling Teglstrupgård Valseværket Gørløse pool are therefore facing reinvestment over the next 10-15 with new international connections, Sdr. Felding Askær Borup Stovstrup Thyregod Stasevang years. The green transition and extra consumption also mean which will have a stabilising effect on Nr. Asmindrup Ølstykkegård Allerødgård Hatting Kyndbyværket Sperrestrupgård that more expansions in the transmission grid are to be the Western Danish electricity system. Novo Syd Lyngerup expected in the next several years. Kalundborg Torslunde Skibbygård Knabberup Vindingegård Hedegård In Eastern Denmark, the electricity C Asnæsværket Kamstrup Karlsgårde Kirkeskovgård Forward planning – grid adequacy system is not as resilient to major B Landerupgård Statoil Syd 209 MW Søstremose Nyrup Bramdrup Ryttergård Karlstrup Currently, reinvestment projects account for around 25 per system disturbances as in Western Endrup Revsing Tårup N Herslev Ostedgård Jersie A Estrupvej 160 MW Spanager cent of the total planned investments in the transmission Denmark, and new initiatives concern- Holsted Skærbæk- Fynsværket Esbjergværket Andst Graderup Odense SØ Storebælt Bjæverskov værket 600 MW Ringsted grid. Going forward, reinvestment projects are expected ing properties required to maintain Lykkegård Hejninge Horns Rev Kingstrup Fraugde Herlufmagle Haslev to make up an increasing share of the total investments. power system are expected to become Ribe Rislev Næstved Fensmark To ensure an appropriate level of grid adequacy, there is a necessary in future in the southern part Magstrup Abildskov Stigsnæs Østerholm need in the years ahead to expand the transmission grid. In of the area. The specific needs are yet Blangslev most of Jutland and in South Zealand and Lolland-Falster, to be clarified in detail. this will mainly involve integration of electricity generation Bredebro Kassø Svendborg Ensted Masnedø from renewable energy facilities. In addition, there may be a Cooperation with regional Orehoved greater need for reinforcements if large data centres contin- grid operators Sønderborg Eskilstrup ue to be built. Finally, Copenhagen needs reinvestments and Various committees, groups and Vestlolland Radsted Flensborg Idestrup expansions due to an increase in electricity consumption in forums have been set up with the Rødby Sverige Copenhagen combined with the closure or part-time opera- grid operators and the Danish Energy tion of thermal power stations in the area. Association to handle coordination and B 60 kV 207 MW A KONTEK cooperation in day-to-day operation and 166 MW 585 MW Østkraft Rødsand

Germany Tyskland 1.500/1.780 MW 34 SYSTEM PLAN 2018

The main responsibility of these groups is to maintain a project portfolio FIGURE 17: GRID COMPANIES IN DENMARK WITH INSTAL- consisting of projects in the transmis- LATIONS DIRECTLY CONNECTED TO THE TRANSMISSION sion grid and the distribution grids that GRID. may influence one another, and which therefore need to be coordinated in terms of planning.

The projects in the portfolio are Nord Elinord Energi initiated either by the grid company or Evonet Læsø Elnet by Energinet and include: • Connection of electricity generating Thy-Mors facilities and major electricity consumers, where it is uncertain N1 whether the optimal connection point is the distribution grid or the transmission grid. NOE Net NET8800 KONSTANT • Grid expansions at one voltage level RAH which may affect another. & MES • Substations connecting the trans- Dinel RADIUS mission and distribution system. RAH & MES KONSTANT The group makes sure the necessary analyses are performed to determine TRE-FOR Ravdex Cerius whether the specific need is best met by expanding the transmission Evonet Vores Elnet grid and the distribution grids, and to Flow describe the overall consequences for the grid of expansion at a particular voltage level. If the regional coordina- VEKSEL El-net Øst tion groups identify a need to modify the transmission grid, Energinet ini- tiates a maturation project to deter- mine the best technical and financial solution, but if, on the other hand, they identify a need in the distribution grid, the project is passed to the grid planning of the electricity grid. The cooperation takes place company for maturation. Regional at several levels, making it strategic as well as operational. coordination consists of continuous, It is important for Energinet to foster effective cooperation at formally organised cooperation, and all times, through formal agreements but also informally, in the resources required are entirely order to optimise the operation and planning of the system as dependent on the current volume of a whole. upcoming projects.

Regional coordination and planning Energinet is required by law to create For each grid company in Denmark with equipment that has a plan covering the future need for an electrical connection to the transmission grid, there is a transmission capacity in the inter- regional coordination group which guarantees coordinated connected electricity supply system planning and grid development of the transmission grid and and transmission lines to other grids. the distribution grids. The purpose is to establish a basis on which the necessary reinvestments, SYSTEM PLAN 2018 35

400/150-132 or 400/220 kV transformer substation FIGURE 18: LONG-TERM REFERENCE GRID FROM THE 2017 RUS PLAN. 150/60 or 132/50 kV transformer substation AC/DC conversion Power station 150 kV or 132 kV cable Norway 150 kV or 132 kV overhead line Skagerrak 1,2,3&4 1.700 MW 220 kV cable 400 kV cable

Konti-Skan 400 kV overhead line Bredkær Starbakke KS 1&2 HVDC cable A 680/740 MW 600 MW HVDC overhead line Jammerbugt Dybvad Nibstrup O¡shore wind farm Area for near-shore Nordjyllandsværket wind turbines Fredensdal Hvorupgård Vendsysselværket Frøstrup Skansen Håndværkervej Bagsværdgård Nors Vester Hassing Ådalen Hareskovgård Klim Fjordholme Ålborg Øst Glentegård Aggersund Måløvgård Ferslev Hovegård Grønnegård Vilsted Dyregård Svanemøllen Ballerupgård Bellahøj Bedsted Mosbæk Amager- Ejbygård værket Lindevang Adelgade Sindbjerg Roslev Tinghøj Hersted- Kærbybro 400 MW Vejleå gård Vigerslev Amager Engbjerg Anholt H. C. Ørsted Brøndbygård Værket Bilstrup Kastrup Ishøj Ramme Struer Foulum Hornbæk Tjele Loldrup Moselund Flaskegård Åstrup Avedøreværket Tange Idomlund Mesballe Mosedegård København Trige Studstrupværket Mollerup A Bjørnholt 600 MW Søndervig Ikast Hasle Sweden Herning Høskov 1.300/1.700 MW Ringkøbing Fjord Videbæk Hørning Lem Kær Malling Teglstrupgård

Valseværket Gørløse Sdr. Felding Askær Borup Stovstrup Thyregod Nr. Asmindrup Stasevang Viking Link Ølstykkegård Allerødgård 1.400 MW Hatting Kyndbyværket Sperrestrupgård E Novo Syd Lyngerup United 600 MW Hedensted Kingdom Kalundborg Torslunde Skibbygård D Knabberup Vindingegård C 600 MW Hedegård Asnæsværket Kamstrup 400 MW Karlsgårde Landerupgård Statoil Syd Kirkeskovgård B Søstremose Nyrup 209 MW Bramdrup Ryttergård Karlstrup Endrup Revsing Tårup N Herslev Ostedgård Jersie Estrupvej Spanager Horns Rev Holsted Skærbæk- Graderup Fynsværket Esbjergværket Andst Odense SØ Storebælt Ørslevvester Bjæverskov værket 600 MW Ringsted Odense V Hejninge Lykkegård Kingstrup Herlufmagle Fraugde Haslev Ribe Fraugde V Rislev Næstved Fensmark DK-KF Magstrup Abildskov 400 MW Stigsnæs Østerholm Blangslev Kriegers Flak

Kassø N B Kassø Lillegrund Bredebro Svendborg Masnedø A Ensted DE-KF 400 MW Orehoved Baltic 2 DE Sønderborg COBRAcable Eskilstrup 700 MW Vestlolland Radsted Flensborg Gloslunde Idestrup Munkeby Rødby Sverige

Femern 60 kV C KONTEK 600 MW 585 MW Østkraft Rødsand

Holland Germany Tyskland 3.500 MW 36 SYSTEM PLAN 2018

expansions and restorations can be carried out in the "Application of the grid transmission grid. dimensioning criteria iden- The RUS plan tifies a need for changes in Energinet prepares an annual national network development the transmission grid, and plan called the RUS plan (Reinvestering, Udbygning, Sanering = reinvestment, expansion, restoration). The RUS plan details confirms that a selected the constraints that will exist in the national transmission solution can meet the grid under specified assumptions about long-term changes technical requirements" in consumption, generation and net transfer capacity, and in response proposes a far-sighted and interconnected transmission grid that removes the constraints and thereby supports long-term development. The long-term grid struc- ture constitutes a reference point, and in detailed planning, electricity transmission grid (bekendt- Energinet always seeks to find solutions that meet a specific gørelse om systemansvarlig virksom- need for changes in the transmission grid. The need for hed og anvendelse af eltransmission- expansion is coordinated with the need for reinvestment and snettet)) which apply to the Danish restoration. transmission grid above 100 kV and are recommended for the 50 kV and 60 kV The RUS plan and specific development solutions support level. The grid dimensioning criteria are the legislation currently in force and the political objectives updated as necessary, most recently in and agreements relating to electricity supply. Energinet, the 2013 after Energinet took ownership Danish Energy Agency and the Danish Utility Regulator have of the former regional transmission a tradition of dialogue while the RUS plan is being prepared, companies. In 2017, Energinet issued a and the two government agencies put it out for consultation summary memorandum setting out the before publication. existing grid dimensioning criteria and their current use in the preparation of The RUS plan gives an indication of the long-term reference the annual grid plan for the electricity grid and pays detailed attention to transmission capacity and transmission grid (the RUS plan) and in reinvestment requirements for the next 10 years. The RUS the grid analyses for specific projects. plan is based on the development specified in the defined analysis assumptions, reinvestment analyses of the existing The grid dimensioning criteria establish transmission grid and other factors such as the connection the framework within which the need of particular renewable energy facilities and consumers and for expansion in the transmission grid new instructions from the authorities. is determined, with the aim of: • Security of supply for consumers. The RUS plan is used as input for Energinet’s investment • Utilisation of electricity generated plan, contributes to Energinet’s portfolio overview, and helps from renewable energy facilities. to ensure that forthcoming construction and reinvestment • Market functioning in accordance projects start their maturation phase promptly. The RUS plan with international guidelines and also forms the basis for the project information presented obligations. on the Energinet website, where Energinet publishes and updates details of all projects for the next 10 years with the The detailed planning of specific aim of keeping citizens, government agencies, grid compa- projects also incorporates environ- nies and other stakeholders informed about the plans and mental considerations, for example their progress. by minimising landscape impacts, as well as incorporating contingency Basis for grid planning preparedness. The RUS plan is prepared on the basis of predefined and published design criteria (see the Danish Executive Order The grid dimensioning criteria describe concerning system operator activities and the use of the common faults and defects in the SYSTEM PLAN 2018 37

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transmission grid, and the permissible The grid dimensioning criteria are will remain the same. Three of consequences for supply, utilisation tested using dimensioning situations these projects have already been of generation facilities and market that are formulated on the basis of implemented. functioning. These criteria relating defined analysis assumptions. The di- • 400 kV connections will be estab- to transmission system outages and mensioning situations are formulated to lished with overhead lines with consequences and used for grid plan- represent supply situations, renewable the possibility of compensatory ning (grids, transformers, generation energy situations and market situations. undergrounding in selected sections facilities) correspond to the outages for and undergrounding of the 132-150 which the day-to-day operation of the Political guidelines kV grid in the vicinity of 400 kV transmission system is planned and Undergrounding and expansion of the overhead lines. are based on international rules. transmission grid follow the currently • New 132-150 kV connections will be applicable political guidelines. These undergrounded. Application of the grid dimensioning were last amended as part of the polit- criteria identifies a need for changes ical agreement on the abolition of the These principles form the basis for the in the transmission grid, and confirms PSO tariffs from 17 November 2016. choice of solutions in specific construc- that a selected solution can meet the The agreement states the following: tion projects and for Energinet’s RUS technical requirements. Energinet ex- • Overhead lines will initially be plans. pands international connections based retained for the existing 132 kV and on economic criteria, and reinvests, 150 kV transmission grid. Selected Maintenance and reinvestment expands and converts the national sections through areas of scenic Energinet achieved PAS 55 certification grid based on the cost-effectiveness beauty and urban areas will be in 2014 and ISO 55000 certification principle, i.e. the implemented solution undergrounded. in 2015. Both schemes require the will be the one with the lowest econom- • The six specific projects described implementation of asset management ic cost which also meets the specified in the report entitled ‘Improvement activities and methodologies relating technical requirements. of the visual impact of the 400 kV to the execution of activities, documen- grid’ (Forskønnelse af 400 kV-nettet) tation and processes. As part of the 38 SYSTEM PLAN 2018

The prerequisite for a condition and risk based approach to maintenance and FIGURE 19: VISUAL REPRESENTATION OF ESTIMATED reinvestment is that a large amount of REINVESTMENT VOLUME. data and information about the trans- mission grid is updated on an ongoing basis, is systematised and is evaluated in information systems that can be shared between the various players involved in the maintenance work.

Hareskovgård Glentegård To allow it to handle a significant Måløvgård Svane- Hovegård møllen volume of reinvestments, Energinet has: Mosbæk Ejbygård • Developed a reinvestment strategy Vejleå and associated strategic initiatives to Brøndbygård help meet commitments around high Mesballe Copenhagen Idomlund security of supply and an efficient Hasle transition. Teglstrupgård Videbæk • Started work on developing compo- Sdr. Felding Borup Stase- nent strategies to guarantee cost-ef- Kyndbyværket vang Ølstykke- fective and differentiated handling of gård Karlsgårde Asnæsværket Kamstrup our components. Ostedgård Skærbækværket Vindinge • Defined a number of reinvestment Lykkegård Spanager gård principles for a common framework Ribe Næstved and business case for managing and Magstrup Abildskov Stigsnæs configuring reinvestment projects. Kassø Ensted Masnedø • Introduced ‘reinvestment analyses’ Sønderborg Radsted covering the reinvestment need for a whole substation or an whole section. Percentage of substations to be replaced in 2017-2021 • Prepared a reinvestment report >80 ≤ 100 >60 ≤ 80 >40 ≤ 60 >20 ≤ 40 including a reinvestment plan.

The reinvestment report is an impor- tant input to the annual RUS plan, in which the initial coordination between implementation of asset management, Energinet is working reinvestments, expansions and towards a risk and condition based approach to maintenance restorations takes place. and reinvestments by assessing all assets based on condition, criticality and functionality in the overall grid. 2.6 Conversion, expansion and main- tenance of the power grid The aim of a risk and condition based approach to asset The next few years will see a significant management is to maintain a high ongoing level of security of need for reinvestment in end-of-life supply in a cost-effective way. Specifically, the method means components in Energinet’s substations. that asset maintenance and reinvestment are more accurately Many of these substations were differentiated than before and are prioritised according to need commissioned in the 1960s and 1970s, (condition) and risk (criticality) rather than just performing so many substation components are maintenance or replacement based on fixed intervals. The either approaching or have exceeded condition based approach results in significantly lower spend- their expected design life. ing compared to the interval based approach, and Energinet has used the approach in a structured way since 2016. Substation reinvestment programme In view of the anticipated need for SYSTEM PLAN 2018 39

reinvestment, Energinet decided in 2016 to launch the "In view of the anticipated substation reinvestment programme with the aim of ensur- ing that the task is approached methodically. The programme need for reinvestment, helps to simplify and streamline the existing process of Energinet decided in 2016 executing standalone projects, so the aim of initiating and ex- to launch the substation ecuting more uniform construction projects can be achieved. reinvestment programme The first group of about 40 substations is scheduled for rein- with the aim of ensuring vestment in the next 5-6 years. The selected substations are that the task is approached shown in figure 19. On the basis of the status reports created for the first group, Energinet has developed a standardised methodically" method to survey the necessary scope of reinvestment in each substation.

Each substation is surveyed in a site visits carried out by The electricity consumption of data experts in Asset, who assess the status of each individual centres is expected to be high in order plant component. The individual plant components, with to run and cool IT equipment, for their corresponding status report, are compiled in a example. Energinet’s analyses suggest substation template, which is then used to determine the that despite the uncertainty around the overall scope of reinvestment in this substation. The scope electricity consumption, the expected of reinvestment is defined as all fixed components whose increase in consumption does not pose expected residual lifetime is less than 10 years from the a challenge to security of supply or to scheduled reinvestment date for the particular substation. the transmission grid (taking account of The new method of implementing extended status reports the existing network expansion plans). follows the existing practice based on condition scores. The addition of data centres in future is Certain of the relevant reinvestment principles were expected to require network expansion developed and implemented alongside the introduction of in the transmission grid. asset management. Energinet is closely monitoring the The new method is resource-intensive in Asset, but it is an situation and expects to adjust its essential foundation on which the ever-increasing portfolio assumptions about electricity consump- of substations can be assessed and prioritised. The method tion in the data centres as it continues takes a balanced approach, aiming to operate the plant to collect data on patterns of operation components closer and closer to their optimum service life in the data centres over next few years. while taking proper account of risk. Furthermore, Energinet is engaged in ongoing dialogue with the individual con- The necessary reinvestments encompass high-voltage sumers and the Danish Energy Agency components and equipment for monitoring and protection. in order to estimate the collective future electricity consumption of data centres. Data centres Energinet handles the connection of large data centres to Viking Link, the West Coast Con- the Danish transmission grid, entering into contracts with nection and the 400 kV connection investors stipulating the financial and electrical conditions between Endrup and Idomlund that apply to the physical connection to the transmission In November 2015 Energinet’s Super- grid. The first connections were commissioned in 2018, and visory Board approved a combined what all the connections have in common is that Energinet investment in an electrical connection establishes, owns and operates them, while the total connec- between Denmark and the UK (Viking tion costs are paid by the particular data centre. This means Link), an additional connection between that the other electricity consumers are not responsible for Western Denmark and Germany (the data centre connection costs. West Coast Connection), and an internal reinforcement of the 400 kV grid 40 SYSTEM PLAN 2018

between Endrup near Esbjerg and Idomlund near Holstebro. the West Coast Connection at the end The three connections are mutually dependent and together, of 2023. they are designed to enhance market integration and encourage the adoption of electricity generation based on Reinvestment in 132 kV cables renewable energy in Europe. Viking Link and the West Coast in Copenhagen Connection are both included in the PCI list because analyses Large parts of the Copenhagen 132 indicate that the connections are of major regional benefit. kV cable grid have exceeded their technical service life, and the capacity The connection to the UK is a joint project with National Grid of electricity generating facilities in Interconnector Holdings Ltd. and will have a capacity of 1,400 Copenhagen is falling as a result of MW. Capacity to Germany will be increased by construction the closure of power station units. of the Danish section of a new 400 kV connection along the Combined with increasing electricity west coast of Jutland between Endrup and Klixbüll. This consumption in the area, this means will raise the total maximum capacity to Germany to 3,500 that security of supply in the area will MW in both directions. A cooperation agreement has been be challenged in the next few years. In signed with TenneT in Germany, which is building the German the opinion of Energinet, reinvestment section of the West Coast Connection from the border down is needed in the local 132 kV cable grid towards the river Elbe. The Danish and German sections of in order to maintain security of supply the West Coast connection, the internal reinforcement of the and thereby avoid the need for preven- grid between Endrup and Idomlund, and the connection to the tive disconnection of large amounts of UK were originally planned to be ready for commissioning at electricity consumption in the area. the end of 2022, but due to delays in approving the plans for Viking Link in the UK, the date of commissioning has been Even after completion of the planned pushed back to the end of 2023. and ongoing reinvestment projects in the Copenhagen area, the age of the Viking Link, the West Coast Connection and Endrup-Idomlund remaining part of the 132 kV connec- received section-4 approval from the Minister for Energy, tions in the Copenhagen area means Utilities and Climate on 30 October 2017. For Viking Link, a that further reinvestments in the 132 call for tenders is underway relating to cables and substation kV cable network will become neces- facilities for the project. The Board of National Grid decided to sary again within a few years. In the invest in Viking Link on 26 September 2018, and the owner- past five years, several of the cables ship and operating agreement for the connection is expected have suffered an increasing number of to be signed by National Grid and Energinet in a project faults that have resulted in long outage steering committee meeting at the end of December 2018. times for the sections concerned. The Contracts to supply cables and converters for Viking Link are old cables are expensive to operate and scheduled to be signed by June 2019 at the latest. expertise in the cable types is being lost, and combined with the fact that The EIA process for the Danish section of the West Coast many of the cables have a relatively Connection and for Endrup-Idomlund was launched on 9 low transmission capacity in relation March 2018. The first public hearing phase took place from to expected future needs, this means 9 April to 9 May 2018. On the basis of feedback from local that the Copenhagen grid must be citizens and politicians, the Minister for Energy, Utilities and reinforced to keep step with changing Climate decided to instruct Energinet to prepare a technical consumption patterns. report examining the options that might be feasible as an alternative to overhead lines in these two sections. The Min- Analyses indicate that there is a need ister for Energy, Utilities and Climate published the technical for expansion and reinvestment in the report on 1 October 2018, after which the report underwent Copenhagen electricity grid if security independent assessment by international experts. of supply is to be maintained. The need for expansion and reinvestment The schedule has been adjusted, with the Endrup-Idomlund is set out in Energinet’s RUS plan for connection planned to be commissioned in early 2023 and 2017, which describes the need for SYSTEM PLAN 2018 41

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reinvestment in the existing 132 kV 2.7 The wholesale market markets. Energinet Elsystemansvar is cable grid in the Copenhagen area. Denmark constitutes a link between actively involved in transforming these the Nordic and continental electricity markets from regional markets to Energinet has launched a project to markets, so one of Energinet Elsys- markets which are more pan-European analyse in detail the need to replace temansvar’s key responsibilities is to in scope – for example the market components in light of changing provide a resilient and well-functioning coupling project called Multi-Regional consumption patterns in the Copen- market coupling that creates value for Coupling (MRC) for the day-ahead mar- hagen grid. The project is designed Danish and Nordic market players. ket has been running since February to ensure that the final restoration 2014 and new areas are being added plan for the 132 kV cable grid in the As fluctuating renewable energy from all the time. Virtually all of Europe is Copenhagen area will be optimised as wind and solar occupies a growing linked through market coupling, and the far as possible in terms of changing share of our electricity system, a Euro- aim is to create a common day-ahead consumption patterns, residual lifetime pean intraday market is an important market covering the whole of Europe. of the existing cables, correct environ- element in balancing production and mental treatment of the old cables, and consumption just before the delivery More power exchanges in the market minimal disruption to citizens as the hour. Energinet Elsystemansvar The Guideline on Network Capacity replacement work takes place. expects the intraday market to become Allocation and Congestion Management increasingly important for the Danish has established a new role for power The ultimate goal is to ensure that the players, resulting in higher trading exchanges: Nominated Electricity Copenhagen area has a resilient and volumes in this new European market. Market Operator (NEMO). The designa- future-proof transmission grid that tion of market operators is intended to guarantees an adequate supply to meet European regulation of markets ensure that the common day-ahead and the growth in electricity consumption The Guideline on Capacity Allocation intraday markets are established in the and maintains security of supply at a and Congestion Management (CACM) relevant Member State. A Member State high level. is a European network code that lays must designate at least one NEMO. Nord down common rules for capacity calcu- Pool has been designated as a NEMO in lation and the day-ahead and intraday Denmark. EPEX Spot, designated as a 42 SYSTEM PLAN 2018

NEMO in Germany and other countries, been also been given optimises the allocation of available permission to offer day-ahead and intraday trading services capacity across Europe. in Denmark and the other Nordic countries. This means there will be more active power exchanges in Denmark in future, as XBID links the Nordic intraday market is the case in most of North-Western Europe. to large parts of Europe, ensuring greater liquidity and providing a much Working with the other Nordic TSOs, Energinet Elsystemans- larger trading area for Danish and var has launched a joint project implementing the More- Nordic market players. NEMO Arrangement (MNA). In the project, the TSOs have joined forces with Nord Pool, EPEX, the Nordic RSC (which is Regional calculation of net transfer responsible for the Nordic capacity calculation) and eSett (the capacity in the electricity system joint Norwegian, Swedish and Finnish balance settlement The CACM network code requires the company) in order to develop an effective and resilient TSOs to cooperate in several initiatives, process. The project is expected to be implemented in 2019. including the establishment of capacity calculation regions (CCRs). A capacity Intraday market platform calculation region is an area in which a After years of preparation, the common European intraday single, cross-border calculation of net market platform XBID (Cross-border Intraday) was success- transfer capacity is performed. The aim fully launched on 14 June 2018. That puts Energinet and is to harmonise calculation methods therefore Denmark among the first 14 Member States in in order to increase transparency in which intraday trading is now possible across borders. Apart the electricity market and optimise from Denmark, the other Nordic countries, the Baltic states, capacity allocation. At present, capacity Austria, Germany, Netherlands, Belgium, France, Spain and is release on the basis of bilateral Portugal are involved. The plan is for more countries to follow agreements and individual TSO cal- suit in a second and third wave of implementation, as soon culations. The introduction of regional as their TSOs and power exchanges are ready. calculations of net transfer capacity is the first step on the way to a single XBID is the official intraday market platform, so all European capacity calculation for the whole of exchanges and TSOs have entered into agreements requiring Europe, and the capacity calculation them to collaborate in the operation and ongoing develop- regions are expected to become the ment of the XBID platform. natural focal point for the development of regional electricity markets. At the heart of XBID is a shared order book that will even- tually cover the whole of Europe. Energinet Elsystemansvar Energinet participates in two capacity and other European TSOs make intraday capacity in the calculation regions – CCR Nordic, which international connections available by transferring it to a covers the established cooperation single capacity management module in XBID. In addition, the with the Nordic TSOs, and CCR Hansa, order books of all the exchanges are combined into a shared which involves Norway, Sweden, European order book. In this way, the XBID system matches Germany, the Netherlands and Poland bids depending on the available capacity and continuously with their respective borders with the SYSTEM PLAN 2018 43

Nordic countries. The Hansa region acts as a kind of buffer "The availability of export between the Nordic countries and the continent, and is only intended as a temporary structured. In April 2018, all the capacity on the European TSOs applied to the European utility regulators Danish-German border to add the Western Denmark-Netherlands bidding zone between Western Denmark boundary to CCR Hansa in anticipation of the commissioning of COBRAcable in the third quarter of 2019. and TenneT Germany’s grid areas has been very low in Under the CACM network code, the TSOs in the individual recent years" capacity calculation regions are generally required to introduce a new capacity calculation method that is more explicitly based on the physical energy flows when equi- librium quantities and equilibrium prices are calculated in the intraday and day-ahead markets – this is known as In June 2017, the Danish Ministry of flow-based market coupling. The flow-based method is Energy, Utilities and Climate issued expected to increase economic welfare in the Nordic system a joint declaration with the German by optimising the flow in the grid on the basis of the physical Federal Ministry for Economic Affairs reality and thereby allocating the capacity where there is the and Energy requiring a minimum level greatest economic value. of capacity to be made available for trade in electricity between Jutland and In September 2017, the Nordic region and the Hansa region Germany. The joint declaration between submitted proposed new capacity calculation methods to the the two countries will gradually national utility regulators for approval. CCR Nordic proposed increase the minimum capacity for the a flow-based capacity calculation, which was approved in day-ahead market in both directions July 2018, whereas CCR Hansa, which comprised just three to 1,100 MW in 2020. In 2018, the international connections in 2017 and is therefore unable to minimum capacity is 700 MW. Energinet benefit from the more advanced flow-based method, pro- and TenneT in Germany are responsible posed a capacity calculation method based on the coordinat- for implementing the joint declaration ed net transfer capacity approach. The method for the Hansa and must guarantee these minimum region has not yet been approved. The goal is to implement capacities in the day-ahead market the capacity calculation method for CCR Nordic in 2021 after by means of an operating agreement. a period of parallel operation of the existing calculation Depending on the performance of the method and the future flow-based method. day-ahead market, each TSO decides whether the minimum capacities Exports from Denmark to Germany necessitate countertrading due to The availability of export capacity on the Danish-German internal grid congestion. border between Western Denmark and TenneT Germany’s grid area has been very low in recent years. The reason for Energinet and TenneT are also discuss- this capacity constraint is a combination of very high produc- ing a possible extension of the existing tion from renewable energy sources in Northern Germany operating agreement to handle more and insufficient network expansion between Northern and capacity and countertrading on the bor- Southern Germany. The domestic German bottlenecks will der, and have jointly analysed a number be further exacerbated by a temporary reduction in grid of possible countertrading models. On capacity due to the ongoing grid expansion work taking place the basis of these analyses, Energinet in Northern Germany. conducts countertrading under a special regulation in Western Denmark, Energinet and TenneT Germany have been in close contact and TenneT uses the intraday market in recent years, and have been working with market players on the German side. The capacity and regulators on both sides of the border in an effort to constraints and countertrading by the resolve the issues. However, these initiatives are only set to TSOs mean that very little electricity is deliver a very small amount of extra capacity. physically exported. 44 SYSTEM PLAN 2018

In early 2018, DG COMP (the Directorate-General for Compe- The Nordic TSOs Fingrid, Statnett, tition of the European Commission) launched an investigation Svenska Kraftnät and Energinet jointly into TenneT’s cross-border capacity reductions. As part of the publish a quarterly capacity report process, the Commission presented TenneT’s commitment presenting the average capacity of to increase cross-border capacity, which was then put out interconnections in the Nordic coun- to consultation. Energinet is not party to the negotiations tries and the causes of any reductions. between TenneT and the Commission, and is not aware of the This report and other reports are result of this consultation. discussed by the Nordic TSOs and NordREG, the organisation in which the Trading with Sweden Nordic national regulators cooperate. From the point of view of Energinet and the market players, Potential initiatives will be presented the reductions in the Danish-Swedish international connec- and discussed with the market players tions are unsatisfactory, and Energinet and Svenska Kraftnät and other stakeholders in a NordREG are in constant dialogue to address the issue and identify workshop in late 2018 in Stockholm. possible solutions. Transmission rights The capacity of the West Coast cross-section is expected to Energinet currently offers physical be boosted when the planned 400 kV transmission line be- transmission rights in the form of tween Stenkullen and Skogssäter is commissioned in 2021. annual and monthly contracts in the However, there are several factors which may have an impact connections between Western Den- on the current situation on the borders. Among the issues are mark-Germany and Eastern Den- the expansion of the new Hansa PowerBridge international mark-Germany, and monthly contracts connection between Sweden and Germany, reinvestments in the Great Belt Power Link The in the connections between Finland and Sweden, a number contracts are auctioned off in the Joint of internal expansions, the phase-out of nuclear power in Allocation Office (JAO). The purpose of Sweden, and the expansion of wind capacity, all of which will transmission rights is to give the mar- have an impact, although the precise nature and extent are ket the opportunity to hedge against uncertain at this time. price differences between two areas. The current contracts relate to the physical delivery of electricity between two price areas, which in practice is not used. Instead, the rights are sold FIGURE 20: OUTLINE OF EXPECTED DEVELOPMENTS IN back to the TSOs for use in the day- THE ANCILLARY SERVICES MARKETS, LISTED BY ahead market, and the price difference EXPECTED COMMISSIONING YEAR. between the two price areas, which is equal to the congestion rent for the connection, is received in payment. In 2019 2020 2021 2019, the Western Denmark-Germany and Eastern Denmark-Germany prod- 15 minutes ucts will be converted into financial Nordic market for Nordic market for imbalance settle- transmission rights. This means that aFRR capacity aFRR activation ment period market players will no longer be able to make a physical delivery, but will Modified European Market instead receive a payment correspond- Nordic market for imbalance for aFRR ing to the price difference between the mFRR capacity settlement activation two areas. Energinet does not expect this to affect the market as it simply DK1 introduction European Market consolidates the existing practice. to European FCR for mFRR market activation In 2018, Energinet has also obtained approval for a method of securing SYSTEM PLAN 2018 45

services, because it creates more com- petition and larger and more resilient FIGURE 21: FORECAST AND STATISTICS ON ROLL-OUT OF markets. Two important internationali- FLEXIBLE SETTLEMENT. sation projects are the establishment of pan-European activation platforms for balancing energy based on the Europe- Thousands Million an network code Electricity Balancing 350 3,5 Guideline (EBGL) and on the Nordic 300 3,0 Balancing Concept (NBC). 250 2,5 200 2,0 Electricity Balancing Guideline (EBGL) 150 1,5 The EBGL came into effect on 18 De- cember 2017 with a fixed schedule for 100 1,0 the introduction of common European 50 0,5 platforms for activating frequency res- 0 0 toration reserves (FRR). Platforms will Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. be set up for manual reserves (mFRR) 2018 2019 2020 and automatic reserves (aFRR), and Number of metering Forecast, they will operate independently of each points converted scheduled conversion other. The platforms are due to go live in December 2021, but the preliminary Number of metering points Forecast, scheduled for conversion registered conversion design of the platforms will be released as early as December 2018. Number of metering points registered for conversion The European TSOs are all jointly responsible for developing the design proposals, and Energinet Elsystemans- var is actively involved. The goal is to create regional European marketplaces cross-border price hedging opportunities on the Dan- allowing activation of balancing energy ish-Swedish borders. This will improve the risk management bids for automatic and manual reserves. options available to players in the Nordic market and is likely to increase the volume of transmission rights sold in respect Nordic Balancing Concept of Germany. Primarily, it is expected to mean the reintro- In March 2018, the five Nordic TSOs duction of transmission rights in the northbound direction – Svenska Kraftnät, Kraftnät Åland, on the Western Danish-German border, and the introduction Statnett, Fingrid and Energinet – en- of financial transmission rights in COBRAcable during the tered into an agreement to develop summer of 2019. and implement the ‘Nordic Balancing Concept’, which includes the following 2.8 The ancillary services market milestones: Energinet, in discharging its duties, must contribute to • Pan-Nordic capacity market for aFRR ensuring that the best possible conditions are established (Q2 2019). for competition on the markets for electricity production and • Pan-Nordic capacity market for trade, see section 31 of the Danish Electricity Supply Act. mFRR (Q4 2019). Ancillary services are an area experiencing considerable • Introduction of 15-minute imbalance market development as a result of implementation of the settlement periods (ISP) (Q2, 2020). European network codes and the green transition in the • Nordic modernised ACE balancing electricity system. (Q1, 2021).

Internationalisation is an essential component of Energinet These new market initiatives are shown Elsystemansvar’s role in developing the market in ancillary in figure 20 with the anticipated year of 46 SYSTEM PLAN 2018

This scheme is called flex-settlement and Energinet is required to develop FIGURE 22: CHANGE IN NUMBER OF QUERIES PER MONTH a model for it, see Danish Executive BY THIRD PARTIES AND CONSUMERS. Order No. 1358 of 03/12/2013. Roll-out began in December 2017 and the pace picked up in the first half of 2018. Million 5 In 2013, the Danish Executive Order on 4 Remote-Read Meters (bekendtgørelsen om fjernaflæste elmålere) required 3 the grid operators to introduce smart meters, and instructed Energinet to 2 introduce a model for hourly settlement for all electricity consumers (approx- 1 imately 3.3 million). The aim was to ensure greater flexibility in Danish 0 October December February April June August electricity consumption so it can match 2017 2017 2018 2018 2018 2018 the fluctuating renewable energy production resulting from the green transition. Hourly settlement allows electricity consumers to be billed for their electricity consumption hour by implementation. The table also sets out the anticipated start hour, meaning they can reap rewards of participation in the European FCR market from Western by reducing consumption in hours with Denmark. high electricity prices. The development of an hourly settlement model was part 2.9 The retail market of implementation of the wholesale According to the Danish Electricity Supply Act, Energinet model in 2014-2016. The model (which supports well-functioning markets and formulates regula- was given the name flex-settlement) tions that are necessary for electricity market functioning. In was developed jointly with industry and discharging its duties, it must contribute to ensuring that the in consultation with the Danish Energy best possible conditions are established for competition on Agency. the markets for electricity production and trade. The model meant an extra cost for the The wholesale model was launched in 2016 as part of the 85,000 or so electricity consumers in development of the retail market. The wholesale model was net settlement group 6 (autogenerators the starting point for a new retail market with new regulations with yearly settlement, particularly and revised executive orders and legislation, in which the small solar cell systems), because this electricity supplier was given a central role, handling all group could no longer be billed for their customer contact and all billing of end customers. Generally net annual electricity consumption, speaking, the wholesale model was used as the basis for new but instead for their hour-by-hour features and future initiatives in the retail market, including electricity consumption and generation. hourly settlement of small consumers known as flex-settle- Exemptions for the net settlement ment. The wholesale model’s framework conditions, which were defined in Energinet regulations, were re-evaluated in 2017 and the resulting adjustments were made in the summer of 2018. 10 The formal title is Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons Flex-settlement with regard to the processing of personal data and The most significant change in the retail market in 2018 on the free movement of such data, and repealing is the start of hourly settlement of electricity consumers Directive 95/46/EC (General Data Protection Regulation). The Regulation is also often referred with an annual consumption of less than 100,000 kWh. to simply by its abbreviation GDPR. SYSTEM PLAN 2018 47

group have been discussed with the regional meetings, which are organised website publishes the data which authorities and industry. The Danish by representatives from Energinet once must be made available to the public Energy Agency recently ruled that there or twice a year across the country, and and which does not compromise were no alternatives to flex-settlement in which operation is a permanent item personal data security. This could be for net settlement group 6. Following on the agenda. Weekly Skype meetings data about grid area consumption, CO2 the Danish Energy Agency’s ruling, are held in which Energinet reports figures in energy consumption, or how Energinet has resumed implementation on operating status, and in which the much energy is exchanged with other of the planned flex-settlement method player are able toFOTO submit comments. countries. Everyone in Denmark and for autogenerators with yearly net abroad is able to access this data, and settlement, to start on 1 January 2019. Data in the retail market it is possible to communicate directly The situation in the first three quarters Energinet is experiencing an increase with Energinet via the service’s user of 2018 is that approximately 30 per in demand for data and also for digital forum, in which requests for new data cent of previously profile-settled energy data presentation solutions. Energinet sets can be made. The data sets that has been switched o hourly settlement, has also seen greater interest from are deemed to be the most useful for giving consumers the opportunity to abroad in DataHub solutions and the Danish market or Danish consum- react to price signals and contribute to presentation solutions for the collected ers are then implemented. demand flexibility, and thereby improve data. Meanwhile, implementation of security of supply. In total, this will General Data Protection Regulation9 Energinet is also active internationally affect around one million electricity has had a considerable impact. with regard to data sharing. In 2018, consumers. for example, a research project looking It has been a major task to ensure that into data sharing was carried out with DataHub all data and processes comply with Elering in Estonia. In a new pilot project, Energinet’s primary focus is to ensure the GDPR. DataHub was designed from Elering and Energinet are attempting to efficient and structured operation and scratch to comply with privacy-by-de- solve a tricky problem that is absolutely development of DataHub, including sign principles, so it already complied critical in allowing electricity con- supporting and collaborating with the with the GDPR in large parts. All sumers to become flexible electricity players. Through its core activities, employees who work with data in the consumers: making it possible for the business unit must provide direct retail market at Energinet have com- consumers to grant outsiders access assistance to the electricity market, pleted a course on the GDPR in order to to their power consumption data in a and DataHub plays a central part. The ensure that the data of individuals and simple and secure way. The solution market players in the Danish electric- businesses is protected. must be an open standard and must ity market are the primary users of be technology-neutral. Everyone must DataHub, which ensures that they have Energinet makes detailed data avail- be able to use it, both in Denmark and the information they need to bill each able to the public in one of two ways. abroad. other and their customers. The first is the website eloverblik.dk, in which electricity consumers are able Energinet is also working on ‘data as Energinet tries hard to the involve to access their own data in DataHub. a service’ in the retail market. This is industry in dialogue, and helps the This solution has managed to increase about extracting socially beneficial players safeguard operation and make the number of unique users and the data for further analysis, for example the necessary adjustments to optimise number of lookups by more than 50 for industry organisations or public procedures. In 2018, particular atten- per cent compared to the year before. authorities and similar bodies. These tion has been paid to supporting the The second solution, for third parties, data extracts are made available as real-world switch to flex-settlement allows electricity consumers to grant required. If a needs assessment indi- and its subsequent management. access to their data to other parties at cates that the data may be of interest Dialogue with the players takes place the retail level. This solution, too, has to the public, it is presented either in in various forums: Technology and also experienced a massive increase one of the regular public reports which implementation meetings are held six of over 50 per cent in the amount of Energinet publishes, or as part of the times a year, involving representatives downloaded data compared to the EnergiDataService. from the market and their IT suppliers. previous year. The meetings discuss topical issues, in- itiatives and solutions to any challenges Energinet presents public data via its that arise. Dialogue also takes place in website energidataservice.dk. This 48 SYSTEM PLAN 2018

GAS

The Danish gas system is The main events are the reconstruction final investment decision will be made facing a number of events of the Tyra platform, the establishment by the end of 2018. of a transmission connection between which in one way or another the Norwegian gas fields and Poland, The increase in the number of biogas affect Energinet’s respon- and the integration of green gas in the plants connected to the gas grid sibility to maintain a high grid. presents new challenges and invest- level of security of supply ments for Energinet. They partly relate To prepare for the period when Tyra is to the traditional use of the grid in the and efficient gas transport to be reconstructed and supplies from past, when the gas was transported to Danish production will be drastically the consumers from a small number of reduced (starting next year), a number sources. In future, the gas is expected of system and market initiatives have increasingly to be produced and been agreed. On the system side, the consumed locally, with an opportunity withdrawal capacity of the Lille Torup to return gas from the distribution grid gas storage facility is to be increased. to the transmission grid. In addition, extra northbound capacity on the German side of Ellund was put In addition, Energinet needs to invest up for auction in July 2018. However, in the gas grid as part of ongoing the extra capacity was not sold. On maintenance or as a result of other the market side, Energinet is placing socio-economic factors affecting the greater emphasis on communication gas grid, such as the construction of with the market, and is encouraging new railway lines. For new construction the market players to optimise capacity projects and normal maintenance alike, utilisation in Ellund. Energinet is also the economics and the environment striving to reinforce the balancing must be taken into account, and gas concept. grid operation must be optimised, for example by switching to more energy Energinet and the Polish TSO Gaz-Sys- efficient components. tem are collaborating on the Baltic Pipe project. The Baltic Pipe project Energinet Gas TSO is in regular is a new gas transport route which contact with the market participants makes it possible to transport up to 10 and involves them when new market billion m3 of gas per year from Norway initiatives are developed or new rules through Denmark to Poland. The are implemented in the gas market. project gives Denmark an extra source The reconstruction of the Tyra complex of gas and the additional gas volumes is a good example – Energinet involved are expected to help keep the transport relevant market participants in user tariffs stable in future, when Danish groups at an early stage in an effort gas consumption is predicted to fall. to find the best way of safeguarding The project will result in an expansion supplies to gas customers throughout of the existing gas system in Denmark, the reconstruction period. making it possible to transport large volumes of gas through Denmark. The SYSTEM PLAN 2018 49

M/R or M station FIGURE 23: THE DANISH GAS TRANSMISSION NETWORK. M/R or M station with remote control Compressor station L/V station L/V station with remote control Pipeline Harald Sea pipeline Gas storage facility at Lille Torup and Stenlille

Nybro Gas treatment plant at Nybro Control centre at Egtved Syd Arne Platform DGD suplylines

Nybro Aalborg Tyra Copenhagen Nøvling Elidshøj

Haverslev

Ll. Torup Enghave Brygge Amager Fælled + Artillerivej Vallensbæk Brøndby Ventil ved Artillerivej Viborg Hvidovre Vestamager Avedøre Karup Dragør

Farre FrijsenborgSkjoldelev SilkeborgVoel grænsestation F3 Engesvang Herning

Nogat Holland

North Sea Brande Lynge

Måløv Nørskov Sengeløse Egtved Nybro Torslunde Stestrup Torslunde II V. Nebel Lilballe Stenlille Brordrup Varde TaulovLyngsodde Karlslunde Helle Nr. Vitrup Middelfart Køge Hovborg St. Andst Nr. Åby

Pottehuse Skærbæk- BillesbølleKoelbjerg værket Blommenslyst Sorø Farris Højby Ringsted Skovse Fjenneslev Regnemark Slagelse Kongsmark Ll. Selskær Nyborg Bellinge Ullerslev Bevtoft Plantagevej Rangstrup

Hellevad

Vollerup Terkelsbøl

Krathuse Frøslev Ellund 50 SYSTEM PLAN 2018

Market dialogue is constantly prioritised. For example when "Energinet purchases the European gas balancing code was introduced, the market was consulted early in the process, and the players were gas for storage so it can subsequently involved whenever the balancing rules were supplement supplies to improved. This was noted by the European regulator ACER protected customers in in its annual report on gas balancing systems in the EU, which praises Energinet for the ongoing development of the Emergency situations" balancing system in collaboration with the market players.

3.1 Security of gas supply Energinet has overall responsibility for security of supply in Regional risk assessments must also the Danish gas transmission system. In order to discharge be prepared by the competent author- this responsibility, Energinet provides a well-developed ities, to ensure better coordination infrastructure and identifies market initiatives applicable gas between countries. Denmark is in market players, enabling them to offer Danish consumers the the following three groups: Denmark, quantity of gas they need. Energinet’s ongoing assessments Norway and Baltic Sea. The result of of security of supply in Denmark are published annually in the regional risk assessments must the Security of Gas Supply Report, and on an ad hoc basis also be incorporated into the national when serious incidents occur. Since the previous edition in risk assessments. December 2017, two factors in particular have arisen with relevance to security of gas supply – adoption of the revised And finally, a new preventive action EU Security of Gas Supply Regulation, and developments plan and emergency plan are due for concerning the reconstruction of the Tyra platform in the publication on 1 March 2019. North Sea. Developments concerning Tyra EU Security of Gas Supply Regulation The final decision on the reconstruction There is now a revised Regulation (EU) 2017/1938 of 25 Oc- of Tyra was made by DUC in December tober 2017 concerning measures to safeguard the security of 2017. The most recent schedule, from gas supply and repealing Regulation (EU) No 994/2010. Key July 2018, indicates that the shutdown is elements of this revision are a stronger solidarity principle, planned for March 2019, with production common risk assessments with a more uniform structure, ramped down slowly and complete preventive action plans and emergency plans in all countries shutdown from late 2019. The recon- with four-year validity. struction is expected to be completed in July 2022. Total’s takeover of Maersk’s The revision builds on a more regional approach to supply activities in the North Sea does not crises, with stricter requirements being introduced for help- change the schedule created by DUC. ing neighbouring countries to maintain supply to protected customers in regional gas supply crisis situations. This can The latest findings about the supply sit- be done by releasing gas from neighbouring countries to uation were published in August 2017, countries at the Emergency level (the highest crisis level and the conclusion is that supplies for which occurs very rarely) and by disconnecting customers Danish and Swedish consumers will re- which are not ‘solidarity-protected’. Disconnected customers main resilient during the reconstruction must be financially compensated. of Tyra, but that a combination of a cold winter and technical incidents involving According to the Regulation, inter-regional agreements must disruption of supply sources may pose be negotiated during the course of 2018, but work across the a challenge to supplies. In this context, EU did not begin in earnest until the spring of 2018, and they there are two significant critical are complex agreements requiring clarification of a number elements in the supply situation: the of fundamental issues. The expectation, therefore, is that available storage volume in the Danish final agreements will not be concluded until 2019. gas storage facilities, and capacity in the connection to Germany. SYSTEM PLAN 2018 51

Environmental Board of Appeal has ruled that the water from the cavern FIGURE 24: INJECTION INTO AND WITHDRAWALS FROM must not be discharged, in a reversal STORAGE FACILITIES 2017. of the Danish Environmental Protection Agency’s previous approval.

Million Nm3/month Gas consumption varies over the 200 year and over each 24-hour period. 100 Market players use the Danish gas storage facilities to store gas between 0 seasons and to supply the gas required over each 24-hour period. During the -100 summer, when gas consumption is low, gas is injected into the gas storage -200 facilities. In winter, when supplies -300 from the North Sea or Germany can no Jan. Mar. May July Sep. Nov. longer cover Danish consumption and exports to Sweden and Germany, gas Stenlille withdrawal Ll. Torup withdrawal is withdrawn from the storage facilities Stenlille injection Ll. Torup injection again. If supplies from the North Sea or Germany are disrupted, the two gas storage facilities can also cover the shortage.

The impact of biomethane on security of supply In 2019, Energinet estimates that the So far, the contribution to security of supply from biomethane storage requirements of commercial has been negligible, as the share in the natural gas grid has users for seasonal adjustments will be been very small, and as there have been ample opportunities 400-600 million Nm3. Energinet expects for natural gas supplies from the North Sea and Germany. In demand for withdrawal capacity in 2018, biomethane is expected to amount to almost 8 per cent normal situations to vary between of gas supplies to Danish customers, and with an expected 13 million Nm3/day and the current increase to about 15 per cent in 2020, the contribution is capacity of around 16 million Nm3/day. becoming more noticeable. This will be more pronounced In March 2018 the withdrawal capacity while Tyra is reconstructed, when supplies to Denmark and was fully utilised. Sweden will mainly come from a single source – Germany. Energinet purchases gas for storage so The impact of gas storage facilities it can supplement supplies to protected on the overall supply situation customers in Emergency situations. Due The two Danish gas storage facilities, Lille Torup and to the reconstruction of Tyra, purchases Stenlille, have a total volume capacity of 890 million Nm3, are expected to increase in 2019 from or just under 11 GWh. This corresponds to almost one third about 100 million Nm3 at present to of Danish annual consumption. The Danish gas storage about 200 million Nm3 in order to safe- facilities are an essential and integral part of the Danish gas guard supplies to protected customers system, in relation to the market, capacity, security of gas for up to 30 days in the event of loss of supply and daily operation. This will be especially true during the largest source of supply (Germany). the reconstruction of Tyra, when Germany will be the only Note that the working volume in the major source of supply. storage facilities will decrease by around 12 per cent in 2020 when the In Lille Torup, the volume capacity is still down by 60 storage facilities will be filled with million Nm3. This is because one of the caverns is filled with gas from Germany, which has a lower water as part of a maintenance programme. The Danish calorific value than North Sea gas. 52 SYSTEM PLAN 2018

Capacity of the connection to Germany is an imbalance throughout the The existing capacity from Germany must ensure that ade- market on a given day. quate volumes can be supplied over the year, and the storage – New mechanism for calculating the volume in the Danish gas storage facilities must ensure that imbalance price in the event of an volumes are available for seasonal adjustments and that emergency supply incident. supplies to the Danish and Swedish markets are maintained during the exceptional loss of sources of supply, primarily In addition, Gas Storage Denmark Germany. The players’ utilisation of capacities in the gas has decided to increase the physical system is therefore crucial in safeguarding security of supply withdrawal capacity of Lille Torup from 2019/2020. A long and hard winter is thought likely to storage facility by about 2 million m3/ cause supply problems even if optimum use of is made of the day before the reconstruction of Tyra, system capacity. to make additional withdrawal capacity available if supplies from Germany are In consultation with the players, Energinet is looking into disrupted for example. various other options to improve security of supply with market measures or physical initiatives. The aim is to reduce In addition to the above initiatives, the risk of disconnection of Danish and Swedish customers. the option for extra capacity at Ellund in the northbound direction has also In the course of 2017 and 2018, Energinet has discussed, in been considered. However, this option a number of user groups and bilateral meetings, how market is no longer possible, as Gasunie measures can be used to manage the situation when Tyra Deutschland did not receive sufficient shuts down in autumn 2019, with operations not expected to capacity bookings on an annual basis in be resumed until in mid-2022. In essence, the view among the Tyra period to justify increasing the the market participants is that as far as possible, the market Ellund capacity towards Denmark. As a must be able to operate as it does today, and that any result, the capacity to Denmark during regulatory market interventions must only be used in a crisis the Tyra period will stay the same as situation. The bilateral meetings and user groups concluded today, at around 5.1 GWh/h. in the following proposal for three categories of market measures: When Tyra reopens, expected in mid-2022, the Danish Energy Agency • Communication anticipates higher gas volumes from – Day-by-day display of the supply situation for the relevant the Danish part of the North Sea than season in a fixed graph online (called Minimal Storage today, and Energinet considers that Filling). security of supply will be higher than – The holding of so-called Emergency Workshops in which today. crisis situations are discussed actively with the market participants. 3.2 Maintaining gas balance, – Increased focus on general market analysis and including storage market monitoring, in cooperation with the Danish Utility Energinet is responsible for the phys- Regulator. ical balance in the gas transmission • Capacity utilisation – Ellund system in Denmark. This is primarily – Introduction of new possibilities for shippers to trade ensured via balancing rules that give capacity secondarily on PRISMA. the market players an incentive to – Introduction of an ‘over-nomination’ mechanism, so that balance their own gas portfolios. The shippers can nominate, without first booking capacity. majority of the natural gas transported – Focus on congestion management, depending on the via Energinet’s transmission grid competitive situation. comes from the North Sea fields. Most • Balancing of the gas from the North Sea is landed – Removal of price cap/floor to ensure that the balance via the Tyra and Syd Arne pipelines price always reflects the current supply situation. and sold to Danish consumers or – New method for calculating the imbalance price if there exported to Sweden and occasionally SYSTEM PLAN 2018 53

FOTO

Germany. Some gas is also exported to is safeguarded by including a flow to Denmark. The project gives Denmark the Netherlands via the NOGAT pipeline corresponding to the protected Swed- an extra source of gas and is expected system, which is outside the Energinet ish consumption in Energinet’s calcu- to be able to keep the transport tariffs system. lation of capacity requirements in the stable in a future in which Danish gas Danish transmission system. When the consumption is predicted to fall. The To the extent there is a need for common balance zone is established final investment decision will be made additional balancing, Energinet uses with Sweden, there will in practice be by the end of 2018. available linepack12, storage facilities no more capacity bookings to Sweden and the purchase and sale of gas. (more details in section 3.7). The new EU Gas Security of Supply Regulation is aimed at increasing soli- 3.3 Gas transit and transport capacity When Tyra reopens in 2022, the Danish darity between neighbouring countries. Under the Danish Natural Gas Supply Energy Agency expects higher gas For Denmark, this could mean solidar- Act, Energinet can enter into agree- volumes from the Danish part of the ity obligations with Sweden, Germany ments reserving capacity for security North Sea than today. This means that and the Netherlands. In 2018/2019, of supply for transit. With regard to there will be natural gas for transit to bilateral agreements must be entered Sweden, firm capacity is guaranteed in Sweden, Netherlands and Germany, into concerning the solidarity obliga- Dragør in normal situations. Energinet plus the option of supplies from tions, including payment for providing has also ensured that there is capac- Germany. solidarity to a neighbouring country. ity in Dragør to supply the Swedish The Danish Energy Agency will also protected market at Emergency level Energinet has also started planning the ensure that natural gas legislation and (the highest crisis level). This capacity Baltic Pipe project and a connection to other rules are amended so that the the Norwegian offshore gas system. principles of solidarity can be achieved. When the project is complete, Denmark will be connected to Poland with transit 3.4 Planning 11 Linepack is the ‘store’ in the gas grid that permits a of up to 10 billion Nm3 per year in 2022, Energinet is responsible for coor- certain time lag between supply and offtake in the gas grid. with the option of supplies from Poland dinated grid planning in the Danish 54 SYSTEM PLAN 2018

or GRIP), for which Energinet is in the North-West region (NW) and the Baltic FIGURE 25: EXISTING AND POTENTIAL UPGRADE FACILI- region (BEMIP). The Baltic Pipe project TIES. is a good example – it has been includ- ed in the Baltic regional plan (BEMIP) and the TYNDP since 2012-2013. Existing upgrade facilities Potential upgrade In addition to the TYNDP and the facilities lower-level regional network develop- ment plans, the Security of Gas Supply Report assesses the security of supply of natural gas, including infrastructure changes in the past year, the next winter and the next 10 years.

Finally, the Installation Report provides a technical and financial overview of completed, ongoing, approved and planned gas projects in Denmark. The Installation Report includes all of Energinet’s gas facilities, including gas storage facilities. It covers the next 5-10 years, and documents the short-term and medium-term parts of the planning effort. In addition to pipeline rerouting and maintenance, the Installation Report also contains plans to connect biogas plants with upgraded biogas to the transmission system.

3.5 Connection of new gas facilities Examples of new facilities that are connected to the transmission grid include biogas upgrading plants, LNG liquefaction plants and other major consumers or producers. The most gas system. This is intended to ensure the cost-conscious important new gas facilities to be development of a gas system that supports the green connected to the transmission grid in transition and the various opportunities and requirements in the next few years are biogas plants or the way the gas grid is used, culminating in connections of gas return plants to handle situations different kinds for offtake and production. in which more gas is supplied to the local grid than is consumed there. In this context, Energinet’s role is to analyse gas-related developments in order to carry out holistic planning. The Biomethane has been injected into the purpose of the analyses is to ensure that any change to the grid since 2011, and could account for gas transmission system is adequately examined in relation 15 per cent of gas supplies to Danish to possible alternatives. gas customers by 2020. Most biometh- ane is injected into the distribution grid. This work is published in the international network develop- ment plan (Ten Year Development Plan or TYNDP) and in the Thirty-one plants upgrading biogas to lower-level regional plans (Gas Regional Investment Plan natural gas quality are connected to SYSTEM PLAN 2018 55

the distribution grid. One plant is connected directly to the Conversion transmission grid. About 15 new plants and plant expansions Work has started on modernisation are expected to be connected by the end of 2019. As more of the electrical installations, instru- and more biogas upgrading plants are connected, gas is mentation, measurement and remote increasingly being delivered directly to the distribution control systems, and optimisation of grid. Some distribution grids are therefore changing role, gas preheating in the 11 meter stations from only receiving gas from the transmission grid, to also and meter and regulator stations, receiving gas from local production. which still have components dating back to the 1980s. The work will last Upgraded biogas has combustion characteristics which four years and is expected to finish in are chemically similar to natural gas, but may contain 2022. residual oxygen from desulphurisation. The limit value for oxygen content in the Danish gas system is higher than the Expansion requirements in the German transmission system, where the Baltic Pipe is the name of a new project limit values for certain facilities, such as storage facilities, for a gas transmission pipeline from can be as low as 10 ppm. As a result, in the summer of the Norwegian gas fields, across Den- 2016, Energinet faced some difficult issues with oxygen mark, and via the Baltic Sea to Poland. from upgraded biogas in the southbound flow via Ellund. The The project will help to support security issues were dealt with operationally by reducing capacity at of supply in Central and Eastern Europe the point. and to keep tariffs down for use of the Danish gas grid. The oxygen content in upgraded biogas is still a focus point. Energinet is working towards a balanced approach as Poland and the other Central and East- regards capacity and infrastructure risk on the one hand ern European countries have long faced and access for upgraded biogas on the other. Energinet has challenges due to their dependence on actively raised the issue in the European standardisation Russian gas for growth and prosperity. organisation CEN. CEN set up a working group in September That is why Poland and Denmark are 2018 to look into the issue. jointly exploring the potential for great- er diversification of supply, for example 3.6 Conversion, expansion and maintenance of the gas grid by establishing an alternative supply Europe’s gas systems are becoming more and more integrat- route from the Norwegian continental ed across national borders, as individual countries support shelf by 1 October 2022, when the each other in safeguarding security of supply, cost-effective- current gas supply agreement with the ness and availability of more climate-friendly solutions. In the Russian Gazprom expires. The pipeline coming period, Energinet is planning a number of conver- could carry gas produced in Norway sions and a possible large-scale expansion, and there is an to replace the Russian gas on which ongoing need for substantial renewal and modernisation of Poland and neighbouring countries are the technical grid components so that the same high level of currently dependent. security of supply can be maintained. 56 SYSTEM PLAN 2018

With the proposed expansion, the costs of using the Danish the project will be able to unlock con- transmission grid will be shared with consumers in Poland siderable economic benefits for both and neighbouring countries, making it possible to maintain Denmark and Poland. In 2017, after low tariffs despite declining Danish gas consumption. concluding a cooperation agreement with the Polish gas TSO Gaz-System, The gas pipeline has a total length of approximately 900 Energinet proceeded with the next km and is scheduled to be ready for operation in 2022. The phase of the maturation project, which expansion will result in a capacity of up to 10 billion Nm3 of involved two invitations to submit gas per year. For comparison, the total Danish gas consump- bids for capacity in a so-called open tion in 2016 was 2.5 billion Nm3. Baltic Pipe will comprise season, and the final technical and a new 120 km offshore gas pipeline in the North Sea from financial business case was prepared the Norwegian gas pipeline Europipe II in the North Sea to a for an investment decision. In the next receiving terminal north of Varde. The Danish transmission open season, contracts were signed to system will be expanded with approximately 220 km of new purchase most of the capacity in Baltic pipeline between Egtved in Jutland and South Zealand. A Pipe for a 15-year period. On the Danish compressor station will be located close to the Baltic landing side, it is the Minister for Energy, point in South Zealand to increase the pressure and therefore Utilities and Climate who will make the also the gas flow in the gas pipeline in the Baltic Sea. The final investment decision. At the end Polish gas TSO Gaz-System is responsible for constructing a of 2018, Energinet and the Polish TSO gas pipeline in the Baltic Sea between Denmark and Poland Gaz-System are due to make the final and the necessary expansion of the Polish transmission investment decision. system. Baltic Pipe is planned with a view to The preliminary studies for the Baltic Pipe project, which delivering a number of benefits: were funded by the EU and completed in 2016, showed that • Lower prices: A new supply

FIGURE 26: BALTIC PIPE ROUTING.

New gas transmission lines Existing gas transmission lines Compressor station SYSTEM PLAN 2018 57

connection from Norway will benefit consumers in the "The Baltic Pipe project form of lower costs for using the gas grid once Polish consumers contribute too. In Denmark, Baltic Pipe will will pave the way for therefore provide billions in savings at a time when increased trade and more consumption of natural gas is falling and there would competition in the gas otherwise be fewer consumers to cover the operating costs of the gas transmission grid. market"

• Security of supply: The Baltic Pipe project will open up more sources of supply, thereby creating a more resilient In the context of the ongoing EIA gas system and increasing the security of supply. process being performed by the authorities, Energinet has launched a • Increased competition: The Baltic Pipe project will pave the number of initiatives to ensure that the way for increased trade and more competition in the gas many affected landowners are involved, market. and that a route is found with the least possible impact. Local authorities and • Important project for Europe: The project appears on the landowners are involved in supple- EU’s list of projects of particular European interest known mentary EIA consultations and ongoing as PCI projects. The reason is that Baltic Pipe will contrib- adjustments of the project area. ute to the development of the internal market in gas and thereby improve security of supply and provide cheaper The second public hearing phase of the and more sustainable energy in several EU countries. EIA being carried out by the authorities is expected to take place at the begin- • Lower CO2 emissions: Baltic Pipe has the potential to ning of 2019. reduce the use of coal as fuel for power stations in Poland, Central and Eastern Europe and the Baltic countries. Return In so far as gas replaces coal, the project will help to Most biogas plants are connected to the reduce European CO2 emissions relatively quickly, as coal distribution grid. As more biogas plants typically produces twice the CO2 emissions per unit of are connected to the distribution grid, energy. Meanwhile, lower coal consumption will improve there more cases where biomethane the local air quality and will act to balance fluctuating production exceeds local consumption. renewable energy. There is therefore a need to be able to return biomethane from the distribution The Baltic Pipe project is also expected to affect the ability grid to the transmission grid so it can to support the integration of renewable energy sources such be used in a larger area. This leads to as biomethane in the gas pipeline network, as the lower the need for a number of return plants transport costs facilitate transport between the producer and in the gas transmission system. the consumer. The amount of gas returned from the On 1 March 2018, the project moved from the maturation distribution grid to the transmission grid phase to the establishment phase as Energinet’s Supervisory must be metered and the gas quality Board approved the business case of the project. This does must be determined for correct billing not mean that the decision has been made regarding final and the parties’ system balances. Gas in project execution – the final decision rests with the Minister the transmission grid does not contain for Energy, Utilities and Climate (expected in December 2018). any odorant (the characteristic odour that ensures that leaks are noticed), so it In the meantime, Energinet and Gaz-System in Poland will must be removed from the gas when the continue planning and designing the project in order to keep gas is returned to the transmission grid. the schedule on track. This also includes securing agree- ments with business partners concerning procedures for At present there are gas return plants invited tenders. at the Aalborg and St. Andst meter and 58 SYSTEM PLAN 2018

regulator stations. A gas return plant compresses the gas "Energinet has started from the distribution grid and injects it into the transmission grid at higher pressure. There is expected to be a need to work to strengthen joint return gas at three meter and regulator stations: Midtfyn, grid planning with the Viborg and Terkesbøl. Each project will be implemented in distribution companies close cooperation with the distribution companies. with a view to safeguar- Maintenance activities ding economically effe- Planned inspections of the entire transmission system ctive solutions and grid guarantee a high, but necessary, level of safety, and a detailed maintenance programme helps to keep the system reinforcement" in a sound state. Over the years, the executed maintenance programmes have delivered a gas supply with no outages and no accidents. Pipeline inspections are carried out every year to check the condition of the pipes. In 2019, internal pipeline inspections 3.7 Cooperation with other (pigging) will be performed in two selected pipe sections: grid operators and countries • Nybro-Egtved Nord, about 57 km. Under the Danish Natural Gas Supply • Kongsmark-Dragør (Kalvebod), about 108 km. Act, Energinet must enter into oper- ational cooperation with all adjacent As stated above, Energinet is carrying out a number of physical systems, i.e. storage facilities, initiatives relating to the reconstruction of Tyra. One of them the German TSO, the Swedish TSO, aims to guarantee high uptimes at the Egtved compressor the upstream company, distribution station, as this facility is key to maintaining gas imports from companies and biogas producers. Germany. The Egtved compressor station will be a critical Operational cooperation agreements asset, and during the period it will have more hours of opera- have been concluded with all adjacent tion than before. In addition, there will be less redundancy as systems, describing the framework for it will probably be necessary to run two out of the four units the operational cooperation. at all times. In some operating situations, three units will be needed. This requires adjustments in the planned mainte- Grid planning nance as well as enhanced callout arrangements in the event Energinet is responsible for working of a breakdown of the compressor station. In response to the towards developing the grid so that reduced redundancy, Energinet is also looking into purchas- biomethane is integrated effectively ing strategic spare parts for critical components with a long and contributes to an economic green delivery time. transition of the gas system. Apart from grid planning, the physical Asset management construction of connection facilities The gas infrastructure is covered by a comprehensive Asset and grid reinforcement, this also Integrity Management System (AIMS) to support secure and includes market measures to support cost-efficient operation of the gas transmission system. Many framework conditions and rules that service operations in gas facilities are mandated by law and safeguard efficient operation of the gas are carried out in accordance with the law. system and high security of supply as the gas system gets greener. Asset management has three focus areas: • Risk-based approach: We are dependent on our assets, In 2017, Energinet started work to and outages may have serious consequences. strengthen joint grid planning with the • Efficiency: Focus on making things more efficient and distribution companies with a view to constantly improving what we do. safeguarding economically effective • Methodology: Supporting effective procedures and solutions and grid reinforcement. In transparency, and reducing the risk of outages. accordance with the Danish Energy Agency’s announcement of principles SYSTEM PLAN 2018 59

Construction work Ellund-Egtved Gas Pipe

for the distribution of costs upon Market decision is expected in the second connection, Energinet is cooperating In terms of the market, effective and quarter of 2019. The initiative will with the grid companies to develop joint close cooperation with the adjacent improve security of supply while also decision-making criteria for decisions systems is an important prerequisite introducing more players into the gas on connection, uniform service stand- for a well-functioning gas market. market. This is in line with the EU’s ards etc. efforts to harmonise the markets Regarding Sweden, Energinet and within the Union. Operation Swedegas have intensified their Coordination of maintenance work with cooperation in recent years as a result Cooperation is being intensified with the Swedish and German TSOs takes of the decision to analyse the possibil- Germany, too, is it will become the place at annual operational meetings. ity of a common balancing zone and primary source of supply during In addition, there is ongoing contact market zone for the two markets (Joint the renovation of Tyra. That is why between the operational coordination Balancing Zone) with expected im- Energinet and Gasunie Deutschland units in the relevant companies and plementation in the spring of 2019. In have launched a joint project examining between the control centres to ensure 2018, Energinet and Swedegas decided the market measures and operational optimum operational cooperation to make the necessary investments steps that can be taken to manage the across the systems. in order to merge the Danish and period when Tyra is closed down. Swedish balancing area. This is based The preparation of the risk assessment, on detailed analyses of assumptions There will potentially be more adjacent preventive action plan and emergency concerning balancing and trade. systems for Energinet to work with plan, as described in EU Regulation in future as a result of the Baltic Pipe 994/2010, is coordinated with the Over the summer, Energinet consulted project, namely Gaz-System in Poland German and Swedish TSOs, and there the market on a method notification for and Gassco in Norway. Cooperation is close cooperation between all parties the common balance zone. The Danish with these systems has been underway in crisis situations in order to safeguard Utility Regulator will now form a view for some time in the context of feasibili- gas supplies across borders. regarding the method notification. A ty studies and project maturation. 60 SYSTEM PLAN 2018

"One of the reasons for the increased Utility Regulator for final approval. Discussions were held with the trade is the cold period from end-Fe- shippers as the new tariff method was bruary to mid-March in which Energinet being developed. declared an Early Warning. During this 3.9 The retail market period, several records were set for the In 2018, ownership of the largest volume traded on a single day in relation gas supplier in Denmark was divided to all previous years" between two new owners, Eniig and SEAS-NVE, which shared the customers between themselves. The agreement covers 215,000 gas custom- ers, of which the customers in Jutland 3.8 The wholesale market and on Funen – about 53,000 of them Energinet, in discharging its duties, must contribute to – were transferred to Eniig, whereas ensuring that the best possible conditions are established for the customers on Zealand switched to competition in the natural gas markets. Metrics for healthy Seas-NVE. market competition include the extent to which the price of gas correlates with prices in the surrounding markets, and At the end of 2018 there are expected the quantities traded. to be 17 active gas suppliers in the Danish gas market. There are four Denmark is part of the North-Western European wholesale large gas suppliers in the retail market, market in gas, which is a well-functioning market with more which have a combined market share or less the same prices in the different gas exchanges. In of 91 per cent. There are two medi- addition, it should be noted that more and more gas exchang- um-sized gas suppliers with a total es in the EU have the same prices as North-Western Europe, market share of 6 per cent, and the and this is a general sign of the health of the internal market remaining approximately 3 per cent is in gas. distributed among the remaining 11 small gas suppliers in the market. With regard to the volumes traded in Denmark, Energinet has found that after the fall in volumes traded in the gas In 2019, all gas suppliers are expected exchange in the winter of 2016/2017, trade picked up again to be able to offer their customers a in the winter of 2017/2018. On this basis, the traded volume single-invoicing solution, meaning that for the 2018 calendar year is expected to end on a par with consumers only receive bills from the 2016, which was the best year to date for Gaspoint Nordic, gas supplier and not the distribution with more than 60 per cent of consumption traded on the company. This single-invoicing solution exchange. is a joint industry solution in the retail market allowing all consumers to have One of the reasons for the increased trade is the cold period the option of receiving one bill from from end-February to mid-March in which Energinet declared their gas supplier, which also covers an Early Warning. During this period, several records were the distribution charge. Energinet has set for the volume traded on a single day in relation to all participated in the preliminary work previous years. and contributed to further development of the model in collaboration with Gas network codes players in the retail market. Energinet has worked closely with market players to imple- ment all the codes so far, and now only needs to implement the last of the major codes – harmonisation of tariffs (TAR NC) – to be completed in all Member States no later than the end of 2019. The status of TAR NC in Denmark is that the proposal to change the method has been sent to the Danish SYSTEM PLAN 2018 61 Tonne Kjærsvej 65 7000 Fredericia Tlf. 70 10 22 44 [email protected] www.energinet.dk