Tor Eigil Hodne - Interconnecting Germany and Norway: Nordlink in the Context of Energy Security,
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Interconnecting Germany and Norway: Nordlink in the Context of Energy Security, Climate Change and Market Integration Tor Eigil Hodne, Head of Brussels Office, Statnett SF
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Tor Eigil Hodne - Interconnecting Germany and Norway: Nordlink in the Context of Energy Security,
- 1. Interconnecting Germany and Norway: Market, Grids and Technology Tor Eigil Hodne, Senior Vice President European Affairs Berlin, German-Norwegian Energy Forum, 23 October 2014
- 2. Kvilldal Tonstad Feda Kristiansand Tjele Blyth Nord.Link (1400 MW) Eemshaven Peterhead Hunterston Hawthorn Pit NO SE DK DE NL GB 2018 BE FR PL CZ I E Maasvlakte Isle of Grain Mandarin s Sellindge Esbjerg Wilster NSN (1400 MW) 2020 Lindom e V. Hastings Kruseber g Stämö Slupsk Wierzbleçio n Herrenwyk Bentwisch NordBalt Nybro Rush Deeside Zeebrugge SK4 (700 MW) 2014 "The North Sea Ring"
- 3. 1. Why interconnect ? Security of Supply Value creation Climate
- 4. Why we do it: Connecting & balancing renewables… • Linking variable renewables optimizes efficiency of our energy systems • Enables renewables to play increasingly important role and supports the green shift • A natural balancing market • Advances a European Energy Market • Norway imports German solar and wind power when surplus and exports hydropower when the sun is gone and the wind is missing in Germany • Stabilizes power prices and grids Fremtiden er elektrisk
- 5. Connecting renewables = value creation Price difference between Germany and Norway 5 60 40 20 0 € / MWh Spot prices in Germany and Norway 2009‐2014 – average week Norge Tyskland Week day Weekend Norway Germany
- 6. The Project- NordLink 1400 MW at +/- 515 kV DC VSC converter technology Grid connection points Tonstad (NO) Wilster (DE) Schleswig- Fremtiden er elektrisk Holstein Cable 514 km submarine cable route 55 km underground cable route in Germany 53km Overhead line in Norway Investment 1,5-2 billion € Planned in operation 2018
- 7. Nord.Link Ownership • 50% share • Norwegian state-owned TSO • Owns and operates the Norwegian grid, incl. interconnectors to Denmark, Sweden, the Netherlands and the UK (future) • 25% share • Dutch/German TSO • Owns grid at connection points in Germany Fremtiden er elektrisk • 25% share • German development bank, government owned • Invests in Energiwende
- 8. The Norwegian government interconnector licence Granted 13th October 2014 3 weeks time period for lodging an appeal Capacity markets: "Statnett must ensure that the interconnector is included in a potential capacity market in Germany, provided that doing so increases socio-economic profitability. The participation scheme shall be presented to the Ministry of Petroleum and Energy for approval well before the changes become effective." If the introduction of capacity markets is deemed necessary, they must be designed so that all market players, also interconnectors, are allowed to participate Political support for both interconnectors, from 2012 and onwards Fremtiden er elektrisk
- 9. License to build - NordLink Fremtiden er elektrisk Granted Pending
- 10. 3. Nord.Link answering to European energy challenges • Key concerns • Affordability • Security of supply • Energy security • Sustainability • Integrating markets • Upgrading and extending infrastructure Fremtiden er elektrisk Commission communication 14 October 2014 on Internal Energy Market Nord.Link answers to all these concerns and is on EU list of Projects of Common Interest (PCI) & part of the Federal Requirement Plan Importance of the project to EU and German energy market
- 11. European energy infrastructure : Investment requirements for 2030 and beyond • Energy-only markets • We believe the Internal Energy Market is the best capacity market - free flow of electricity • Capacity markets impacts business case for interconnectors; if introduced its important to allow participants and interconnectors access • EU state aid guidelines is a good fundament • A strong ETS • With ambitious target for GHG emission reduction • A stable regulatory framework • Electricity price lays the premise for investment decisions and is influenced by regulatory interventions Fremtiden er elektrisk
- 12. “I want to reform and reorganise Europe´s energy policy (…) into a resilient Energy Union with a Forward-Looking Climate Policy Jean-Claude Juncker, incoming European Commission president MORE INTERCONNECTORS ARE NEEDED …and an infrastructure overhaul that has the green shift as a strategic orientation 12 Looking to 2030: EU-summit 23 October 40 % GHG reduction 2030 27 % RES 15 % inter-connection ?? 27 % efficiency
- 13. Enabling ambitious climate policy Estimated change in CO2-intensity from the power sector and cross border capacity in North of Europe (Statnett BID-model) g/kWh GW 330 82 45 180 90 80 70 60 50 40 30 20 10 0 350 300 250 200 150 100 50 0 2013 2030 CO2-intensity Cross border Capacity 13
- 14. Conclusion: • Interconnectors for a renewable future • Improves security of supply on both sides • Socioeconomic viable projects • Contributes to a resilient energy system which better absorb shocks • Grid strengthening is needed on both sides • If capacity markets are deemed necessary, they should be designed so that all market players, also interconnectors, are allowed to participate Fremtiden er elektrisk