NORD.LINK
Status of a transnational project

Foto:
TennetT

German Norwegian Energy Forum
Berlin 24. October 2013
Content
• Partners
• The rationale
• The project
– Key figures
– Status progress

• Economics – the investor perspective
Connecting
renewables
The NORD.LINK Partners
• Norwegian TSO
• Owner and operator of the Norwegian
grid, including interconnectors
• 50% project...
Strategic fit

•
•
•
•

Increase security of supply
Market integration in Europe
Create value for stakeholders and society...
Key figures
• Tonstad – Wilster
• 514 km submarine cable
• 53 km overhead line, Norway
• 55 km underground cable,
Germany
...
Status progress – NORD.LINK
Required licenses
License
according
to the
Offshore
Energy Act

Technical
license

Norwegian Water
Resources and
Energy
Di...
Socio-economic business case
Overall economic benefit
> (Investment + increased variable cost)

=> Profitable

NPV (2013 M...
Investments in the electricity sector,
- complex decisions, high uncertainty
ELECTRICITY PRICE DRIVERS
• Fuel prices

• Ne...
Capacity Mechanisms –
a challenge for the European EM integration
Capacity Markets
– important for the business case for our planned interconnectors
• UK
Authorities have published a draft...
Closing remarks
 We support market coupling and the development of
an integrated European electricity market. It will:
 ...
BACKUP
Market Coupling – a success story

Percentage of the hours of the
day

Market coupling of Germany and The Netherlands
100%...
Interconnectors contribute to
security of supply
Capacity availability of
nuclear power and interconnectors
Capacity availability [%]
for 35 HVDC interconnectors
around th...
Upcoming SlideShare
Loading in …5
×

Statnett - Nord.link - Status of a Transnational Project - Ingard Moen

1,161 views
955 views

Published on

Presentation at the 17th German Norwegian Energy Forum in Berlin 2013

Published in: Technology, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,161
On SlideShare
0
From Embeds
0
Number of Embeds
55
Actions
Shares
0
Downloads
27
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Statnett - Nord.link - Status of a Transnational Project - Ingard Moen

  1. 1. NORD.LINK Status of a transnational project Foto: TennetT German Norwegian Energy Forum Berlin 24. October 2013
  2. 2. Content • Partners • The rationale • The project – Key figures – Status progress • Economics – the investor perspective
  3. 3. Connecting renewables
  4. 4. The NORD.LINK Partners • Norwegian TSO • Owner and operator of the Norwegian grid, including interconnectors • 50% project ownership • Dutch and German TSO • Owner and operator of the grid at the connection points in Germany • 25% project ownership • German government owned financial institution • Active in financing Energiewende projects • 25% project ownership DC Nordseekabel GmbH & Co.KG
  5. 5. Strategic fit • • • • Increase security of supply Market integration in Europe Create value for stakeholders and society Facilitate integration of renewable Connecting hydro to wind • Reduce CO2 emissions 5
  6. 6. Key figures • Tonstad – Wilster • 514 km submarine cable • 53 km overhead line, Norway • 55 km underground cable, Germany • In operation 2018 • 1400 MW • VSC converter technology • Investment 1.5 – 2.0 billion EUR
  7. 7. Status progress – NORD.LINK
  8. 8. Required licenses License according to the Offshore Energy Act Technical license Norwegian Water Resources and Energy Directorate Ministry of Petroleum and Energy Interconnector license Offshore license Ministry of Petroleum and Energy Danish Energy Agency Exclusive Economic Zone (EEZ) Federal Maritime and Hydrographic Agency (BSH) State Mining Authority (LBEG) Regional Planning Procedure Amt für Plannfeststellung Energie (AfPE) Stadt und Kreis - Wegennutzung - Wasserung - Private
  9. 9. Socio-economic business case Overall economic benefit > (Investment + increased variable cost) => Profitable NPV (2013 MEUR) |  Congestion rent interconnector Revenue from trade with reserves Compensation from capacity mechanisms Investment cost cable and converter Operation‐ and maintenance costs "Interconnector" profitability Producer‐ and consumer surplus Reduced congestion rent other interconnectors Transit costs System operations costs Losses in the Norwegian grid Norwegian grid reinforcements (net) Residual value Socio‐economic profitability, Norway IRR Repaid in year 1 325 100 240 700 ‐40 925 1 350 ‐340 ‐20 ‐250 ‐200 ‐220 20 1 260 11 % 2029 Wider benefits 10 % 2031 Approximate numbers from the Norwegian Interconnector License application Flat exchange rate 1 EUR = 8 NOK used for conversion
  10. 10. Investments in the electricity sector, - complex decisions, high uncertainty ELECTRICITY PRICE DRIVERS • Fuel prices • New renewable generation • CO2-price • New nuclear / dismantling of old nuclear • Interconnector capacity • Energy efficiency • Development of demand and demand response … regulatory intervention in the markets increase uncertainty for investors
  11. 11. Capacity Mechanisms – a challenge for the European EM integration
  12. 12. Capacity Markets – important for the business case for our planned interconnectors • UK Authorities have published a draft solution for a national capacity market (27. June and 11. October) • Germany Has not concluded yet – have strategic reserves for the coming winter • Norway In the interconnector license applications, we have estimated that each interconnector could earn 30 MEUR/year from CM participation • Our view As a general principle market developments should facilitate trade and follow the principles behind the Internal Energy Market
  13. 13. Closing remarks  We support market coupling and the development of an integrated European electricity market. It will:  Facilitate competition and provide effective resource utilization  Provide cost efficient security of supply  Our planned interconnectors will contribute to the same by:  Allowing Norwegian flexible hydropower capacity to play along with other production capacity to the common benefit of the systems on both sides, thus  providing a contribution to the transformation of the European electricity system  If the introduction of capacity markets is deemed necessary, they must be designed so that all market players, also interconnectors, are allowed to participate
  14. 14. BACKUP
  15. 15. Market Coupling – a success story Percentage of the hours of the day Market coupling of Germany and The Netherlands 100% 80% Flow from high price to low price 60% No flow from high price to low price 40% 20% 0% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 1 3 5 7 9 November 21 23 25 27 29 2 4 6 8 10 December 22 24 26 28 30 11 13 15 17 19 12 14 16 18 20 October Okt Before market coupling Nov Des After market coupling Benefits of the integration due to market coupling, implemented across EU, is estimated to be between €2.5bn to €4bn per year (booz&co, 2013)
  16. 16. Interconnectors contribute to security of supply
  17. 17. Capacity availability of nuclear power and interconnectors Capacity availability [%] for 35 HVDC interconnectors around the world (2010) Capacity availability [%] for 29 countries with commercial nuclear reactors (2010) 100 100 100 90 90 90 80 80 80 70 70 70 70 60 60 60 60 50 50 50 50 40 40 40 40 30 30 30 30 20 20 20 20 10 10 10 10 0 0 0 0 90 80 AVERAGE Countries 1 - 29 AVERAGE HVDC interconnectors 1 - 35 Sources: IAEA (2013) and CIGRE (2012) 100

×