HVDC capacity study between Finland and Sweden Final version February 2019 Table of Contents 1 Summary .................................................................................................. 4 2 Introduction ............................................................................................. 6 2.1 Background................................................................................... 6 2.2 Scope ............................................................................................ 6 2.2.1 Studied alternatives .......................................................... 6 2.2.2 Assumptions and limitations ............................................. 6 2.3 Outline ........................................................................................... 8 3 Grid studies .............................................................................................. 9 3.1 Introduction ................................................................................... 9 3.2 Alternative SE2-FI, 800 MW HVDC connection ......................... 10 3.2.1 Thermal constraints ......................................................... 10 3.2.2 Dynamic constraints ....................................................... 13 3.2.3 Summary of alternative SE2-FI, 800 MW HVDC connection ...................................................................... 14 3.3 Alternative SE3-FI, 800 MW HVDC connection ......................... 14 3.3.1 Thermal constraints ......................................................... 15 3.3.2 Dynamic constraints ....................................................... 17 3.3.3 Summary of alternative SE3-FI, 800 MW HVDC connection ...................................................................... 18 3.4 Conclusions from the grid studies .............................................. 18 4 Technical review of the HVDC alternatives ......................................... 19 4.1 Background and the scope of the review ............................... 19 4.2 The future use of Fenno-Skan 1 HVDC cable ........................... 19 4.2.1 Background ..................................................................... 19 4.2.2 The main conclusions of the Fenno-Skan1 cable future use assessment ................................................................ 20 4.2.3 The main risks related to possible future use of Fenno- Skan 1 cable.................................................................... 20 4.2.4 Further clarification needs.............................................. 21 4.3 Conclusion from technical review ............................................ 21 4.3.1 The future use of Fenno-Skan 1 cable ........................... 21 4.3.2 The status review of HVDC technology and relevant configurations ................................................................. 21 4.3.3 Recommended next actions ......................................... 22 5 Routing and permissions ....................................................................... 23 5.1 Routing and environmental aspects......................................... 23 5.1.1 Finland ............................................................................. 23 5.1.2 Sweden ............................................................................ 26 5.2 Permit processes in Finland and Sweden ................................. 28 5.3 Conclusions regarding routes and permits ............................... 30 6 Market studies ....................................................................................... 33 6.1 General approach ..................................................................... 33 6.2 Scenarios and basic assumptions ............................................. 33 6.2.1 Scenarios ......................................................................... 33 6.2.2 Sensitivities ....................................................................... 35 6.3 Market simulation results ............................................................ 37 6.3.1 Prices ................................................................................ 37 6.3.2 Balance ........................................................................... 38 6.3.3 Flow .................................................................................. 39 7 Cost-Benefit Analysis ............................................................................ 41 7.1 Methodology and assumptions ................................................. 41 7.1.1 Net present value (NPV) calculation ............................ 41 7.1.2 Aspects to evaluate ....................................................... 42 7.1.3 Investment cost ............................................................... 43 7.2 Results .......................................................................................... 44 7.2.1 Market benefit................................................................. 44 7.2.2 Transmission losses ........................................................... 48 7.2.3 Net present value ........................................................... 49 7.2.4 Security of supply / System adequacy ......................... 52 7.2.5 Environmental and social impact ................................. 57 7.2.6 Integration of renewable energy (partly included in market benefits) .............................................................. 57 7.2.7 Flexibility and trade balancing ...................................... 58 7.3 Conclusions from the Cost-Benefit Analysis .............................. 58 8 Summary and conclusions ................................................................... 60 8.1 Comparison of the connection alternatives ............................ 60 8.1.1 Alternative Kvarken, SE2-FI, 800 MW HVDC connection ...................................................................... 60 8.1.2 Alternative Fenno-Skan, SE3-FI, 800 MW HVDC connection ...................................................................... 61 8.2 Summary and conclusion .......................................................... 61 Appendix ....................................................................................................... 63 Appendix 1 ....................................................................... Routing Finnish side ............................................................................................... 63 Appendix 2 Routing Swedish side - Essential features of the presented transmission line alternatives ...................................................... 65 Appendix 3 ............................................................................. Investment cost .............................................................................................. 68 Appendix 4 ..................................................................Market Simulation results ........................................................................................... 69 HVDC CAPACITY STUDY BETWEEN FINLAND AND SWEDEN 1 Summary Svenska kraftnät and Fingrid have prepared a joint study to analyse the possibility of installing a new HVDC connection to replace the existing Fenno-Skan 1 connection, as was recommended in the previous cross border study at 2016. Also, based on the findings in the previous study, additional studies were ordered to estimate the possibilities to use the Fenno-Skan 1 cable as a metallic return current path for Fenno-Skan 2 connection even after decommissioning of Fenno-Skan 1 connection. For the new connection, two alternatives were examined: Kvarken, 800 MW HVDC connection between SE2 and FI, Fenno-Skan, 800 MW HVDC connection between SE3 and FI. Grid studies were performed to investigate the feasibility of integrating the alternatives into the system. Only the Kvarken alternative was found feasible without additional internal reinforcements due to fault ride through (FRT) issues with the Fenno-Skan alternative. A technical study found it possible to use the Fenno-Skan 1 cable as a return current path for the Fenno-Skan 2 connection even after the decommissioning of Fenno-Skan 1 converter stations, thus avoiding additional investments for a new return current cable for Fenno-Skan 2. The routing, environmental aspects and permissions for the both alternatives have been investigated and both alternatives were found to be almost equally feasible in this respect, based on present information. Additionally, it was noticed that with the Kvarken alternative the Swedish connection point could possibly be changed from Hjälta to Stornorrfors. That would shorten the connection by almost 100 km and reduce the investment cost up to 25%, in addition the environmental impact would be significantly lower for the Kvarken alternative. However, more thorough grid studies would be needed to confirm if that change of connection point is possible In the market studies, the socio-economic benefits of the two HVDC alternatives were evaluated from a Nordic perspective, both in monetary and qualitative terms. The results indicated that a new HVDC connection between Sweden and Finland is beneficial. However, the market benefits are mainly seen in the 2040 situation, while the benefits in 2030 situation are rather modest. In 2029, Fenno-Skan 1 connection has been operating 40 years, which is considered as typical life-time of an HVDC connection. To evaluate the possibility to extend the life-time beyond 40 years, an assessment about the measures, their costs and risks to extend Fenno-Skan 1 life-time shall be performed, in order