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Energy needs new impetusEnergy needs new impetus

EnBW 2020Expansion of Transmission Grids

Dr. Hans-Josef Zimmer – Chief Technical OfficerCapital Market DayKarlsruhe, 13 September 2013

2

EnBW Capital Market Day 13 September 2013

Agenda

1. Contribution of EnBW AG to the Germany’s “Energiewende“

2. TransnetBW GmbH

3. Expansion of Transmission Grids

4. Direct Current Electricity Grids

5. Conclusions

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1. Contribution of EnBW AG to Germany’s “Energiewende“Our Mission: high grid quality and safe generation

Source: EnBW

› Onshore and offshore wind and hydropower in Germany and TurkeyExpansion of renewable energy generation

› Efficient, safe, reliable and cost-effective supply of power from

conventional power stations; main focus on Baden-Württemberg

› Decommissioning of unprofitable units

Development of the conventional power plant portfolio

› Decentralized generation in proximity to the customer

› Partnership models for commercial and industrial customers

Expansion of decentralised generation

› Development of pumped storage power plants to offset fluctuations

in load and power generation depending on how electricity market

conditions develop

Expansion of storage capacity

Total growth of regulated business from 40 % today to over 50 % in 2020

› Alternating current (AC) / direct current (DC), electricity grids,

gas grids

› Partnership models for communal and industrial partners

Expansion of transmission and distribution grids

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› 100% subsidiary of EnBW AG

› Certified independent transmission

grid operator (ITO-model)

› Annual revenue: € 5.5 billion

› Employees: 380

› Supply territory: 34,600 km²

› Network grid length: 3,331 km

(220- and 380-kV)

› Substations: 60

› Annual requirement of energy in Baden-

Württemberg: 11 GW (peak load)

› Annual demand for electricity in Baden-

Württemberg: 67 TWh (consumption)

Amprion GmbH

TenneT TSO GmbH

Amprion GmbH

50Hertz Transmission

GmbH

2. TransnetBW GmbH (1/3)EnBW’s ITO-certified transmission grid operator

Source: EnBW

TransnetBW GmbH

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2. TransnetBW GmbH (2/3)The link between generation and consumption

Source: EnBW

› Planning, construction and functioning of the transmission

grids

› Guarantee of supply security

› System management and accounting grid management

› Retention of contractually assured reserve capacities,

especially in winter

› Checking of requests to close power plants

› Creating transparent and non-discriminatory access to the

network for all participants in the market

› Integration of new conventional and renewable power

generation plants

› Marketing of renewable energy to the power exchange

Responsibilities and duties:

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2. TransnetBW GmbH (3/3)Volatile power generation impacts grid stability

Source: EnBW

› Increasingly volatile power generation

environment impacts grid stability

› Increasing number of grid stabilisation

interventions

› Many decentralised electricity generation

plants connected to the grid – load flow

reversals partly possible

› Germany as a transit country – large

proportion of cross-border trading

Main challenges for the grids:

PV

Wind

Biomass

Geothermal

GW

0Thu Fri Sat

Biogas

2015

10

20

30

40

50

7


3. Expansion of Transmission Grids (1/5)Electricity grids are the backbone of the German “Energiewende”

EnBW´s Solutions

Distribution

grids

Germany

totalOffshore

connection

Transmission

grids

Investments through to 2020 in Germany(€ bn)

Source: Federal Requirements Plan, network requirements plan 2012, draft of offshore network development plan 2013; dena Distribution Grid Study, DIW Berlin, EnBW

40

15

15

10

› New grids: new transmission lines can

bridge the distance between focal point of

production and consumption centres

› New technologies: use of high voltage DC

transmission grids and smart expansion of

distribution grids

› New partnerships: efficient and swift

expansion of the transmission and

distribution grids by municipal and industrial

partners

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3. Expansion of Transmission Grids (2/5)Economic growth of TransnetBWin regulated environment

Source: EnBW

New Grids – New Technologies – New Partnerships

› Attractive, sustainable returns through improved framework

requirements in the second regulation period

› Expansion of the existing AC transmission grids in Baden-

Württemberg

› Execution of DC measures in Baden-Württemberg

› Additional value creation through participation in the DC connections

outside of Baden-Württemberg

› Perspective: Activities together with partners abroad as an additional

source of growth in the area of transmission grids

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3. Expansion of Transmission Grids (3/5)Investments TransnetBW through to 2022 ca. € 2.7 bn

New constr. DC

New constr. ACGrid reinforcement AC

1 Direct current; 2 Alternating current Source: German Federal Ministry of Economic and Technology, EnBW, network development plan 2012

1

22

3

4

Amprion

Tennet

TransnetBW

AC grid reinforcement “Badische Rheinschiene”

› Grid section: 121 km

› Scheduled completion: 2017

AC grid reinforcement in southern Baden-Württemberg



AC grid reinforcement in north east of Baden-Württemberg



DC expansion corridor C up to 3,9 GW

› In partnership with TenneT



DC expansion corridor A 2 GW (“Ultranet”)

› In partnership with Amprion



1

2

3

4

5

50 Hz

Expansion TransnetBW-Transmission-Gridthrough to 2020

5

10


Emden (Ost)

Osterath

Wallstadt

Philippsburg

3. Expansion of Transmission Grids (4/5)Partnership with Amprion in Corridor A “ULTRANET”

Source: EnBW

› Construction of a DC power circuit that

includes a converter station; Corridor A

(Osterath – Philippsburg; length 340 km)

› Transport capacity: 2.0 GW

› Cooperation agreement with Amprion has

been finalized

› Planned implementation 2015-2019

› Costs: ca. € 0.4 bn (first estimate)

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3. Expansion of Transmission Grids (4/5)Partnership with TenneT TSO in Corridor C

Source: EnBW

› Construction of three DC power circuits

including converter stations

(Corridor C)

› Transport capacity: up to 3.9 GW

› Project partner TenneT TSO

› A mutual understanding of the project exists

› Planned implementation 2017-2022

› Costs: max. ca. € 1.4 bn (first estimate;

includes the connection to Goldshöfe not

approved by the authority)

Kreis Segeberg

Grafenrheinfeld

Wilster

Brunsbüttel

Großgartach

Goldshöfe

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3. Expansion of Transmission Grids (5/5)German Incentive Regulation

Source: EnBW

Regulatory framework

› The German Incentive Regulation has been in place since 2009

› The second five-year period will start in 2014

› Guaranteed regulatory interest on incurred capital

› 2014 - 2018: interest on equity 9.05%; interest on debt equity 3.98%

Investmentframework

› Further investment incentives due to the political and societal

importance of Germany’s “Energiewende” to be expected

› High interest rates compared to the market

› No risk of concession losses

› No market risk due to guaranteed regulatory revenues

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Source: EnBW

4. Direct Current Electricity Grids (1/2)Technology

Areas of ApplicationTechnical Base

› Connecting up islands

› Crossing oceans

› Connecting offshore wind parks

› Coupling of networks with various tensions

and/or frequencies

› Transmission of high tension electricity over

long distances

› Transmission of high tension electricity over

long distances with minimal losses

› Coupling of AC systems with various levels of

tension and various frequencies: only point-

to-point connections possible

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Source: EnBW

4. Direct Current Electricity Grids (2/2)Risks and possible countermeasures

CountermeasuresRisks

› Advance feasibility study completed

› Study/engineering phases during

preparation of proposal

› Project development with stringent

obligation to provide proof

› Feasibility of hybrid line has been confirmed

by a research study

› Authorisation processes have been legally

recorded in the Federal Requirements

Planning laws

› Size and performance capacity of the

converter (pilot character)

› Shift of DC and AC to one linkage (hybrid line;

pilot character)

› New authorisation process via the Federal

Network Agency

› Authorisation periods difficult to estimate

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Source: EnBW

5. Conclusions (1/2)Investments with headroom-conserving participation models

› Strategic features of the transmission grid:

› A unique selling point for the EnBW (100% subsidiary)

› Central player in the shaping of the “Energiewende” with

› permanent concession

› both Federal and European relevance

› EnBW considers TNG to be an important part of its portfolio.

Networks offer:

› growth potential in a controlled environment

› Adequate financial returns

› stabilised ratings

› TNG is also involved in DC connections outside of Baden-

Württemberg:

› Additional, stable value propositions

› Increase in the enterprise value

› Headroom-conserving participation models

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Source: EnBW

5. Conclusions (2/2)TransnetBW transmission grid expansion projects

› Timeframe: 2013 – 2022

› Investment totalling approx. € 2.7 bn,

of which:

› AC-lines and transformers: ca. € 0.9 bn

› DC-lines: ca. € 1.2 bn

› DC-AC converters: ca. € 0.6 bn

› Main projects:

› Corridor A ca. € 0.4 bn

› Corridor C max. ca. € 1.4 bn

of which:

› ca. € 0.7 bn for connection to Großgartach (approved by BNetzA)

› ca. € 0.7 bn for connection to Goldshöfe (not approved by BNetzA)

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