Key note speech at Navingo Offshore Wind at the Amsterdam RAI on October 12 2015.
Making an integrated offshore grid can be realized by taking the right steps. And it should be started today. Studies show that major cost savings for society are achievable by installing an international grid using offshore wind farms as connection points. In this presentation I show how these cost savings can be achieved and the first steps to get there.
Main take away: National Governments should start making offshore interconnection an integral part of offshore wind policy by analyzing potential connections for all windfarms in development. The feasible options should then be taken up as (pilot) projects for realization.
2. 2
Introduction: Benefits studied by European Commission
Cost reduction in 20 year (nominal) :
*Assignment by European Union:
written by PWC, Ecofys, Tractabel
3. 3
Introduction: Benefits studied by European Commission
30-97B€ ~15-45 wind farms
Cost reduction in 20 year (nominal) :
*Assignment by European Union:
written by PWC, Ecofys, Tractabel
CO2 reduction
22-45MT/y
~All coal plants NL
10. 10
Cost reduction: Feasibility Studies 3*3: Synergies At Sea WP1
Studies
WP1: feasibility study UK-NL
UK-BE-NL
UK-NO
DE-NL
Cost
reduction
Case specific, for the profitable cases:
WP1: feasibility study UK-NL
UK NL
1 connection:
100-200M€
1 connection:
350-1.213M€
*Nuon/Vattenfall, Groningen Centre of
Energy law, ECN
Annual:
4.900-1.500M€
Nominal 20y:
30-97B€
NPV: 100 - 200M€
11. 11
Cost reduction: How does that work?
Interconnection
=
cost reduction
Wind farms & interconnections
=
more cost reduction
1
2
12. 12
Cost reduction: Interconnection leads to more efficient generation
0
20
40
60
80
100
Installed capacity [MW]
Merit order UK
0
20
40
60
80
100
Installed capacity [MW]
Merit order NL
UK NL
Demand Demand
60€/MwH
30€/MwH
No interconnection
Average
45€/MwH
13. 13
Cost reduction: Interconnection leads to more efficient generation
0
20
40
60
80
100
Installed capacity [MW]
Merit order UK
0
20
40
60
80
100
Installed capacity [MW]
Merit order NL
UK NL
New demand New demand
- Lower av. Price: use of most efficient power plants
- Avoided investments new power plants
- Better implementation renewables
Interconnection
New Average
37€/MwH
14. 14
Cost reduction: Interconnection via wind farms lead to faster and
higher returns
UK NL
Cheaper
Interconnection
Faster and more development of interconnection
Redundant connection wind farm
15. 15
Possibilities and Challenges
Economic
benefits
Technology
- HV-AC
- HV-DC
Regulatory
Interests
Mandates
- Technology ready for first steps
- Further development delayed due to ‘lack of market’
- A transnational grid cannot be developed under the current framework
- Problems known and identified*
- Who is going to take action??
*Studies e.g.:
Synergies At Sea
North Sea Grid, 2015
Institution:
Groningen Centre of Energy Law
- Problems known and varies per project.
16. 16
Possibilities and Challenges
Economic
benefits
Technology
- HV-AC
- HV-DC
Regulatory
Interests
Mandates
- Technology ready for first steps
- Further development delayed due to ‘lack of market’
- A transnational grid cannot be developed under the current framework
- Problems known and identified*
- Who is going to take action??
*Studies e.g.:
Synergies At Sea
North Sea Grid, 2015
Institution:
Groningen Centre of Energy Law
- Problems known and varies per project.
- Opportunities are lost
- Planning wind farm is leading
- Action needed: national governments
- Interconnection needs to be integral part of offshore wind policy
17. 17
Problem: Opportunities leaking away
EU-level
European
Commission
ENTSO-E
National level
Grid Operator
Government
Developers Opportunities lost:
Preparing framework
• Studies
• Adjusting regulation
• Harmonisation
• Support Mechanism
Mandate to implement
option in offshore
substations
18. 18
Problem: Opportunities leaking away
EU-level
European
Commission
ENTSO-E
National level
Grid Operator
Government
Developers Opportunities lost:
Preparing framework
• Studies
• Adjusting regulation
• Harmonisation
• Support Mechanism
Close the loop
Mandate to implement
option in offshore
substations
20. 20
Close the loop: Study benefits for all offshore substations
Agreement north-sea member states:
- Study all options
21. 21
Summary
Offshore grid:
- Ready to take the first steps
- Significant benefits: leaking away
Solution
- Close the loop: Interconnection integral part of offshore wind
- Study benefits and build optionalities: No regret approach
And now?
Start acting: Key advantage of offshore wind