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Fingrid Current: Lotta Medelius-Bredhe, Director General, Svenska kraftnät

Vision for the baltic sea electricity market fingrid

Presentation by Lotta Medelius-Bredhe, Director General, Svenska kraftnät

In Fingrid Current, 10.3.2020.

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Fingrid Current: Lotta Medelius-Bredhe, Director General, Svenska kraftnät

  1. 1. Vision of the Baltic Sea Region´s Electricity Market Lotta Medelius-Bredhe, Director General, Svenska kraftnät Fingrid Current Event, 2020-03-10
  2. 2. Why the Baltic Sea Electricity Market is important to us
  3. 3. Svenska kraftnät > Governmental agency > Owner of the national grid (400 and 220 kV) > System responsible authority > Sweden's Authority of Electricity Contingency Planning
  4. 4. Some figures in short > Swedish power grid has 17,000 km of management, 160 stations and 16 international connections. > During the 2020s, we plan to build 4800 km of overhead lines and 100 stations, new and retrofits > In 2019, we input 121.8 TWh of energy, extracted energy was 118.5 TWh. > In the next 10 years, we plan to invest approximately SEK 60 billion.
  5. 5. Over the next decades Svenska kraftnät will be engaged in heavy investment programs Programs to renew the grid and meet the need of a changing power system
  6. 6. Balancing Green deal Security Market development Peak load & SoS System stability and resilience Wind power integration Many issues that we as TSOs need to handle
  7. 7. The Nordic/Baltic region constitute one well-integrated regional power market > The Baltic Sea region has been the basis for the first international power market > Strong interconnector capacities between the countries in the region > Key focus going forward: Ensuring that the infrastructure is used optimally. > Focus on continued development of the market – EU regulation
  8. 8. Exchange of energy has been the central value driver. Ancillary services and reserves are growing in importance > A changing power system requires a new way of operating it. Deteriorating frequency quality in the Nordics. > Cost or reserves are likely to increase – large increase in Sweden over the last years > With the Nordic Balancing programme annual net benefits of >50 MEUR of exchanging aFRR capacity across borders have been identified > Optimal usage of grid infrastructure cannot only focus on energy trading 0 500 1 000 1 500 2019 2016 MSEK 2017 2018 +85% Benefits of a Nordic aFRR capacity market Source:NBMprogramme 0 20 40 60 Net benefit of capacity market 2018 Benefits of aFRR capacity exchange MEUR Cost of allocating CZC for aFRR capacity exchange Net reserve cost for Svk (MSEK) Source:Svenskakraftnät
  9. 9. Developed cooperation around operation and markets important. European platforms are key elements. > European balancing platforms under development > Exchange of balancing energy will be done on a European level through the platforms. Key also for Nordic/Baltic integration. > Real-time balancing critical for the system. Each TSO has the responsibility for its own system. Fallback solutions will be essential to ensure SoS. Members in MARI (for mFRR) Members in Picasso (for aFRR)
  10. 10. Appropriate bidding zones key for efficient market and system operation SE 1 SE 5SE 3 NO 3 NO 5NO 1 NO 2 NO 6 NO 4 FI DK 1 DK 2 SE 1 SE 2 SE 3 SE 4 NO 3 NO 4 NO 5NO 1 NO 2 DK 1 DK 2 FI Proposals for further analysis Today BZ review to enable correct pricing and efficient congestion management
  11. 11. Growing import dependency to cover peak load > National and regional import dependency to cover peak load is increasing > Open and well-functioning power markets are crucial for meeting this joint challenge > But, if all are import dependent – where will the import come from?
  12. 12. Enabling the green transition is a key task for TSOs > The EU Green Deal envisages a power system based largely on renewable sources. > Wind power is growing fast. Forecasts indicate more than a doubling of Swedish onshore wind power in the next few years. Increasing from about 20 TWh in 2019 to about 44 TWh in 2023* > Svenska kraftnät has connection applications for close to 25 GW offshore wind power. 5 10 15 20 25 30 35 40 45 50 2013 2016 Twh 2017 2015 2020 2011 2021 2012 2014 2018 2019 2022 2023 +125% Development of on-shore wind in Sweden * Swedish Wind Energy Association. Base case forecast Q4 2019.
  13. 13. > Large amount of off-shore wind possible to connect efficiently through radial connections. We expect that this will be more efficient, bring larger net benefits and go faster than more complex solutions. > Hybrid solutions combing connections and interconnectors could be an option in individual cases. Has to be assessed on a case-by-case basis. > Complex solutions – from a technically, regulatory or market perspective – implies a significant risk of delay. > Important that the capacity of the internal grid is matched > Permit process a challenge Fast and efficient connection of off-shore wind power important
  14. 14. Offshore wind yet to take off in Sweden ~9.5 GW ~14.6 GW > Currently very limited offshore wind in Sweden, but significant potential > Svenska kraftnät has connection applications of about 25GW of offshore wind power. Not all projects can be expected to be realized. Very large increase from summer 2019 > Current regulation: > Obligation to connect > Connecting party has to pay the costs of connection > Energy policy agreement from 2016 included abolishment of connection fee for offshore wind. No concrete proposal yet > From TSO perspective the localization of offshore wind important – wrong locations could be very costly
  15. 15. Stronger focus on security > The electricity system is a critical infrastructure for any modern society > Markets and systems are interconnected and increasingly depending on IT solutions > Commonly operated real time markets such as European balancing market platforms need to uphold a strict security level, with robust fall- back solutions.
  16. 16. Conclusion > The Nordic-Baltic system is well interconnected. Key issue is to utilize the infrastructure optimally. Ancillary services & reserves growing in importance and costs – optimal utilization of the infrastructure cannot only focus on energy trading. > Continue to develop the markets. European balancing platforms key also for Nordic-Baltic integration. > Long-term the Nordic region is becoming import dependent to cover the peak load. Increase in interconnectors cannot solve the peak load problem if we jointly are import dependent. > The TSOs need to be the enabler of the energy transition. Fast increase of wind introduces new challenges. Large potential for off-shore wind in the Baltic Sea region – needs to be connected fast and efficiently. From a Swedish perspective: radial connections may often be the best solution. Internal grid must be matched. > Increased focus on security
  17. 17. Thank you