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Danish TSO Experience with Interconnectors

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Danish TSO Experience with Interconnectors Danish TSO Experience with interconnectors Peter Markussen Energinet Associated Activities Nordic, 399 TWh 9% 14% Thermal Nuclear 19% Hydro 58% THE ENERGY BACKBONE Wind+solar We operate and develop the transmission grids and gas pipelines in Denmark ENSURE BALANCE Denmark, 33 TWh We have the day-to-day and long-term 17%, imports responsibility for the overall electricity and 33% gas system in Denmark 50% WORKING FOR THE SOCIETY We are owned by the Danish Ministry of Climate, Energy and Utilities . Europe, 2806 TWh VISION 15% 26% GREEN ENERGY FOR A 13% BETTER WORLD 46% Dok. 19/10007-1 INTERCONNECTORS ARE IMPORTANT PART OF DANISH ELECTRICITY SUPPLY First AC connection to Sweden established in 1915 and HVDC to Norway in 1976 Exchange capacity expected to increase in Annual import, export and net export the future 20 From seasonal to hourly flexibility from TWh 15 exchange of electricity : 10 • Reduce end consumer electricity price 5 import export - • Security of supply from balancing, sharing Net reserves and ressource adequacy - 5 export - 10 • 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Efficient integration of renewables 2005 BUSINESS CASE FOR Energinet (benefit/costs Socio economic variables (not INTERCONNECTOR effecting accounts) affecting Energinet acounts) Congestion rent/fee Net consumer/producer Approval based on socio economic surplus benefit Net effect on costs for Net effect on security of reserves and balancing supply Business case setup Other ancillary Net effect on costs for • Optimization of investment (technology choice, capacity, services/capacity markets balancing timing, onshore connection, routing, internal grid Investment costs Net effect on support for investments) renewables • Tenderdesign (lots), multi contract or EPC Operation costs/spare parts Increased competition • Comparison with alternative investments and impacts etc. Regulation Grid loss/Transit income Net environmental impact • Regulated or merchant • Non-proft, cap and floor regime, tariff, other incentives Funding Other socio economic impacts (jobs, electrification etc.) • Grid codes for connection and operations Energinet owned interconnectors financed by loans from Danish National Bank and depreciated based on technical life-time (30/40 year) VIKING LINK Viking Link: 1400 MW HVDC (SVC technology and 750 km) West coast: 1000 MW AC connection to Germany. Commissioning expected 2023 (Energinet board approval in 2015) Main value driver: • Higher electricity price in UK than in Denmark (thermal power in UK and hydro/wind in Nordic system) • Capacity market and ancillary service benefits in the UK (limited effect in DK as already covered by other interconnectors) • Internal grid extension part of Danish business case • Costs and income shared between National Grid and Energinet NPV, mill. US$ (2015 prices) Socio economic Energinet Benefit: 2179 1830 Average influence on end consumer power price in Denmark (US$/MWh) Congestion income 1684 1684 spot price 1,7 net producer surplus 349 tariff -1,2 other benefits 145 145 Public Service Obligation -0,8 Costs 1323 1312 Total -0,3 investment 1047 1047 Source: figures are based on public available information and recalculated to operation/outage 197 169 Reduced curtailment, illustrate difference in socio economic and Energinet impact and may differ from other costs 79 96 2030: 78 GWh final business case Net benefit 856 518 Great Belt: 600 MW HVDC (LLC technology and 57 km) GREAT BELT Commissioned 2010 Main value driver: • Part of Nordic grid development plan to strengthen robustness and security of supply • Improving security of supply from sharing of reserves, ressource adeqaucy and balancing • Internal Danish HVDC link between Eastern and Western Denmark - two different synchronous areas • Limited price difference and expected flow from West to East Denmark mill. US$ (2005) Socio economic Energinet Benefit: 609 245 Congestion income 14 14 net producer supplus 138 0 security of supply 365 231 other benefits 92 0 Costs 508 508 Source: figures are based on public available information and recalculated to investment 452 452 operation/outage 55 55 illustrate difference in socio economic and Energinet impact and may differ from other costs 0 final business case Net benefit 102 -263 APPROVAL OF BUSINESS CASE Energinet approval process of interconnectors (appr. 2-4 years and investment execution 5-8 years): Political Minister of Executive Danish agreement Creation Energinet Supply, committee Energy DK/other of BC Board Energy & Energinet Agency TSO Climate Law about Energinet prescribes major investments to be approved by European and regional transmission grid planning Ministry of Climate, Energy and Supply before tenders. Criteria for approval: • Overall positive socio economic business case for Denmark, connecting TSO and neighbouring countries • All consents and national/international approvals for investing TSO’s achieved • Investment costs after tender in line with business case Coordination of European, regional and national transmission grid planning in 2-year continuous process (TYNDP: Ten years national grid plan, Planning the future grid - TYNDP (entsoe.eu)) Project of Common Interest (PCI) : accelerate approval processes and consents and possible funding of development costs 7 MAIN PRINCIPLES FOR HVDC OPERATION a F OPERATION AND CONNECTION MAINTENANCE SYSTEM OPERATION EU grid codes Shared or delegated Capacity availability Active power control and responsibility (outsource) (market rules) frequency support Maintenance strategy, ie Financial/physical Reactive power control strategic spare parts transmission rights and voltage support Insurance Ancillary services FRT capability Portfolio optimization of Outage coordination Control (ie. oscillation) interconnectors Ramping restrictions Power system restoration Communication 8 INVESTMENT IN SYNCHRONOUS CONDENSERS TO IMPROVE ROBUSTNESS IN AVAILABILITY AND UTILIZATION OF DANISH SYSTEM WITH HIGH SHARE OF HVDC AND INTERCONNECTORS IN 2019 RENEWABLES SC synchronous Storebaelt condenser 5,3 6 skagerrak 4 3xLCC skagerrak 3 4,2 1xVSC SC 2xLCC skagerrak 2 2,1 SC skagerrak 1 2,1 AC kontiskan 2 1xLCC SC 3,2 SC SC 2xVSC AC kontiskan 1 3,2 1xVSC – 1xVSC AC Back-to- kontek 5,3 1xLCC Back cobra cable 0,9 0 20 40 60 80 100 % transmission not used unavailable Interconnectors decisive for Adapt regulation to reflect efficient integration of socio economic benefit in renewables and part of long business case term energy policy and planning Approval process, consents, HVDC technology and technical Operations to be carefully integrated procurement, construction takes standards develops continously in approval process and project 8-10 years in total – focus on for stable operation of electricity execution value creation in all parts systems with HVDC 10 SPØRGSMÅLQUESTIONS Contact: Peter Markussen, [email protected] 9 8 3 TWh 2018 7 2 DANISH INTERCONNECTORS 2019 TWh 6 2020 1 Commissioned Technology Capacity, MW Length, km 5 0 import eksport Cobra 2019 VSC 700 325 4 DK1- SE Kontek 1995 LCC 600 160 3 2 Kriegers Flak AC/VSC back-to- 4 CGS 2020 back 400 240 1 TWh 3 Kontiskan 1+2 1988/2008 LCC 370/370 150 0 import eksport 2 236/236/ 478/ DK1-NO Skagerrak 1-4 1976/1977/ 1993/2015 LCC/VSC 700 212 1 Storebælt 2010 LCC 600 57 0 import eksport 1951/1964/1973/1985 DK2-SE Øresund (2020) AC (132 kv/400 kv) 1700* 36 DK1-DE (east coast) 1957/2020 AC (220 kv/400 kv) 2500* - Viking link 2023 VSC 1400 750 DK1-DE (west coast) 2023 AC (400 kv) 1000* - *export capacity 3 5 3 2 2 TWh TWh 4 Energinet share of congestion income from interconnectors, mio. Euro TWh 1 1 100 3 0 0 Total 2 80 import eksport import eksport 2016 51 1 60 DK1-NL DK2-DE 2017 66 40 0 2018 73 import eksport 20 2019 100 DK1-DE 0 2020 179 Norway Sweden DK1-DK2 Germany Holland ITC 2016 2017 2018 2019 2020 12.
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