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Grid Development Plan 2019 Short Version Executive Summary Grid Development Plan 2019

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Grid Development Plan 2019 Short Version Executive Summary Grid Development Plan 2019 Executive Summary Grid Development Plan 2019 Short version Executive Summary Grid Development Plan 2019 Executive Summary Planning and expanding the transmission grid is one of • We have a strong existing grid structure that will Statnett’s main tasks. In 2009, Statnett launched a plan for facilitate balanced grid development in the future the next generation central grid. The measures set out in the • In order to achieve our social mission in a world of rapid 2009 plan have largely been implemented, and now form the change, we must work efficiently, digitalise the power backbone of the power system that will facilitate Norway’s system and focus on green solutions within the industry electric future. In 2019, it is clear that the future is electric and that we are moving towards that future at an ever faster pace. In summary, the plans and measures set out in the Grid Development Plan 2019 provide for balanced and efficient The power supply makes an important contribution to the grid development that will facilitate restructuring and competitiveness of Norwegian society. The Norwegian power competitiveness in a fully electric society. system, which is based on almost 100 per cent renewable sources, is efficient and highly utilised, with some of the most affordable Climate and data are changing the power system – power transmission per megawatt hour in Europe. Statnett’s and we are capable of handling it mission is clear – we must ensure Norway’s continued compet- The transition to a green energy system has become clearer and itiveness, while guaranteeing continued high security of supply. is happening faster than we expected when we published the Grid Development Plan 2017. Political goals and instruments This mission is challenging. Increasing electrification needs, more for dealing with climate challenges also increase our confidence renewable power generation, new industries, changing consump- that this trend will continue. Solar and wind power are becoming tion patterns and expanding cities are all increasing the pressure more competitive, and onshore wind power is now profitable on the power system. At the same time, the grid costs should be without subsidies in Norway. Electrification is a cost-effective supported by users in a way that ensures broad understanding way of replacing fossil energy use, thus reducing greenhouse gas for the required development. There may also be cases where it is emissions. Digitalisation and technology development are also challenging to gain acceptance of necessary solutions. opening up new industries in need of electricity. Consequently, we expect both electricity consumption and production to We should and must develop the power grid in close dialogue increase significantly over the next 20 years. with society and users. There are a number of stakeholders involved in developing projects that have needs which must be Since 2009, Statnett has made major improvements to the resolved faster than Statnett can realistically develop projects. grid, which has consistently provided better status and capacity At the same time, it is important that consumption and in the transmission grid throughout the country. We have production can make the most of grid investments that have completed several major projects, including more than 1,300 already been realised. This requires balanced development and km of newly constructed cables and over 900 km of upgraded accurate information about needs and developments in society. cables. In 2018, we passed our investment peak, and we are the Nordic grid company that has made the most investments in Statnett’s Grid Development Plan 2019 has four key messages: recent years. We have improved security of supply in vulnerable areas such as Northern Norway, Greater Oslo, Hordaland and • We are strengthening supply to several regions and to the the Stavanger region, boosted capacity for new consumption larger cities and production and constructed two new interconnectors to • We are investing NOK 4–6 billion annually to facilitate respectively Germany and the UK. Together, these investments increased electrification create significant value for society. The grid improvements 2 Executive Summary Grid Development Plan 2019 behind us put us in a better position to deal with the major investment, based on a gradual strengthening of existing main changes in the power system going forward, through balanced grids. Grid investments facilitate value creation, secure the power continued development of today’s transmission grid. supply and reduce greenhouse gas emissions, but also entail high costs. Accordingly, we make careful assessments of costs In our analysis report “An electric Norway – from fossil fuel and benefits when proposing solutions for projected needs, to to electricity”, we outline a scenario with a higher degree of ensure that solutions are in the best interests of society. electrification than we included in the scenarios in our long-term market analysis (LMA 2018), where we show that increased The growth we see moving forward will affect the need for grid annual power consumption of 30–50 TWh is possible with reinforcements in several ways: proper localisation and gradual development of the existing power grid. In order for the conversion from fossil fuels to • Long-distance transmission capacity electricity to produce the desired reduction in greenhouse • Capacity to rural areas and to larger cities gas emissions, it is essential to have a balanced development • Maintenance and renovations to maintain system functions between consumption and production. Wind power on land is • Transformer capacity between the transmission grid and currently competitive without subsidies, but further development the regional grid may lead to conflicts with outdoor activities and natural assets. At the same time, it will take time for the costs of offshore wind Completed and ongoing grid reinforcements are helping reduce along the Norwegian coast to fall to a competitive level. In our congestion in the grid. The same applies to projects intended to documentation for the National Framework for Wind Power, improve utilisation of existing grid capacity in system operations, we demonstrated that the major transmission channels have such as the introduction of a flow-based market algorithm. capacity to handle large volumes of new production if they are Despite this, we will probably see greater congestion internally correctly located in the grid. In several cases, grid capacity was in Norway, driven by various factors, including higher levels of taken into account in the Norwegian Water Resources and unregulated renewable power generation. This is especially true Energy Directorate’s proposal for a national framework, while for the north–south direction. Nevertheless, the socio-economic there is also a strong focus on environmental interests. benefits that are generated in the power market by reducing congestion will, in many cases, cover only a small part of the In the short term, we can clearly see that the reinforcements investment costs for vital projects. As such, there is currently we have made in recent years have the potential for significant little evidence that it would be socially economically profitable to value creation. From January 2018 to the summer of 2019, we develop the power grid in a fundamentally different way so as to allocated capacity to around 3,000 MW of consumption and facilitate the transmission of large surpluses over long distances. around 3,000 MW of production within current grid capacity. In A rational approach would be to gradually strengthen our current total, we have processed applications for new consumption of main grid structure in connection with renovations of existing about 11,000 MW over the past two years. There is a great deal power lines. Proper placement and balancing of production and of uncertainty about how much will actually be implemented, consumption will help save costs by allowing us to postpone and there will be a need for grid investments to connect the or avoid grid investments. Consequently, efficient price signals rest of the volume. The large number of new connection cases through grid tariffs and the power market, in addition to more is one change since the previous Grid Development Plan, and accessible information on favourable placement within the grid, are this affects grid development overall. Increased investments to a crucial aspect of rational grid development. At the same time, we connect more consumption have less of an impact on grid tariffs must safeguard our neutral role in the development of the power than renovations of facilities and connecting production, partly system. because the volume increases and partly because some of it is financed through construction grants. The greatest need to strengthen capacity going forward will be out to rural areas and in to larger cities. In addition to the Balanced grid development is necessary to prioritise fact that grid capacity will soon be fully utilised in a number of between several different considerations areas, there are plans for a significant increase in consumption The power system is changing and becoming more and more from industry, the petroleum sector and commercial interests complex, where Statnett’s role is to be a neutral societal actor in Haugalandet, the Bergen area, the northern region of with a responsibility to weigh many considerations, which often Western Norway, in Trondheim, in Lofoten/Vesterålen and in pull in opposite directions. Although
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