Europe’s 2030 15% Interconnection Target: Challenges & solutions for a timely project implementation

Presentation for Power Transmission Tech 2015 Dr. Volker Wendt, Director Public Affairs, Europacable

Vienna, 25 March 2015

Europacable, Boulevard A. Reyers, 80 1030 Brussels

www.europacable.com

1

Voice of all leading European wire and cable producers World’s largest cable makers providing global technology leadership Highly specialized SMEs from across Europe 70.000 people globally of which more than 50% in Europe Over € 20 billion turnover in 2014

Product scope covers full range of energy & communication cables Optical fiber cables for high-bandwidth telecommunication networks High & extra high voltage electricity cables for transmission grids Low & medium voltage power cables for smart distribution grids High performing low fire-hazard cables improve security in buildings

Listed in EU transparency register 453103789-92 Partner of CENELEC

Introducing Europacable

2

Europacable objectives Provide reliable technical information on Extra High Voltage (EHV) underground and submarine AC & DC cables to all interested parties Raise visibility of wire and cable industry as key European infrastructure industry with global technology leadership

Introducing Europacable

3

Europacable EHV Member Companies

Europacable Partners

4

The Challenge: Europe needs more grids

25 Feb 2015: Commission Communication “Energy Union Package”

“Energy infrastructure is ageing and not adjusted to the increased production from renewables.”

“the current market design and national policies do not set the right incentives and provide insufficient predictability for potential investors.”

„Building up investment in high-tech, globally competing companies through stable policies will bring jobs and growth to Europe.“

Infrastructure issues not initially on agenda for EU 2030 climate & energy framework

But ultimately major focus of the package

Copyright E3G

5

The Challenge: Europe needs more grids 23 October 2014: EU Council adopts infrastructure target

“Commission supported by Member States will take urgent measures to ensure min target of 10% as a matter of urgency, and no later than 2020”

“15% by 2030”

“Commission to monitor progress towards and report annually”

“Commission invited to bring forward a Communication before March 2015 EU Council on how 10% target will be met, including financing mechanisms”

2002 Barcelona Targets

6

The Challenge: Europe needs more grids 25 Feb 2015: COM Communication “Achieving 10% Interconnection Target”

“Building these interconnections will require mobilisation of all efforts at all levels as a matter of urgency”

„The interconnection of the electricity markets must be a political priority for the EU at all levels for the years to come“

Interconnection Target to be reached through PCI implementation

7

Implementing the 10% Target Projects of Common Interest (PCI)

1st Projects List 2013: 248 projects, 137 electricity, 52 interconnectors

2nd Project List currently under review – adoption October 2015

Priority to projects to increase interconnection capacity to 10% target

Trans-European energy networks Regulation (TEN-E)

Holistic approach to infrastructure planning and implementation

Recognises that PCI projects need specific regulatory treatment

Cost Benefit Analysis (CBA) to demonstrate supra-national benefits and allows for cross border cost allocations

Addresses lengthy permit granting procedures and public acceptance Binding overall time limit of 3.5 years

„One-stop-shop“ as competent authority

New rules on consultation and transparency

Member States to fully apply TEN-E Regulations to avoid delays

Projects 2013 PCI 2014 Funded 2015 PCIs

Electricity 137 18 €254m 198

Gas 107 16 €393m 173

8

Implementing the 10% Target Available Financial Instruments

Connecting Europe Facility (CEF) 2014 – 2020: €2bn for electricity PCIs

European Fund for Strategic Investment (EFSI) €315bn private & public investment with multiplier effect, could cover PCIs

Other possible sources: ESIF, ERDF

Commission estimates €200bn required by 2020 to interconnect all EU MS of which €35bn for PCI interconnections to reach 10% target

TEN-E Regional Groups focal points

Baltic Region / Iberian Peninsula / Northern Seas / Central & South Eastern Europe

4 regions to establish an Action Plan with concrete milestones including concrete interconnection proposals to achieve 10% target

Commission to work closely with Member States and ENTSOe to report annually to European Council on progress toward 10% target

9

The Challenge: Europe needs more grids 2014 ENTSO-E TYNDP

44.700 km EHV power lines to be built/refurbished by 2030

€150 billion of investment by 2030

Interconnection capacity must double on average throughout Europe (RES)

But: Risk of delays

32% of current grid projects across Europe are delayed

>100 bottlenecks identified

How do we minimise delays?

mainly due to “social resistance & lengthy permitting procedures”

we need innovative solutions!

9

10

The Concept of Partial Undergrounding Europacable Concept since 2005

The majority of Europe‘s new transmission lines will be built using established overhead line technolgoy In sensitive areas, partial undergrounding will complement overhead lines to facilitate public acceptance

The Concept of Partial Undergrounding is available for 380 kV AC as well as HVDC power transmission projects

11

Cable technology: Fully available Joint Paper Europacable & ENTSO-E, January 2011

“Extra high voltage cross linked polyethylene cable XLPE are mature & reliable technology” “Partial undergrounding is a means to upgrade & expand Europe’s EHV electricity grid” “Solutions are to be considered on a case-by-case basis”

Available on DG Energy website

XLPE Cables AC: upto 400 kV DC: upto +/- 320 kV (800 MW & 1000 MW) with higher voltages expected

Massimpregnated Cables DC: upto +/- 500 kV 1600, currently the most used, in service for more than 40 years, has proven highly reliable

12

Cable Installations 2010 – 2014 globally (km)

0 1000 2000 3000 4000

HVDC Submarine

HVDC Land

HVAC Submarine

HVAC Land

Series 1

Series 2

Series 3

Series 5

Series 6

AC 345 – 500 kV

AC 220 – 275 kV

AC 132 – 155 kV

DC XLPE 200 – 320 kV

DC MI 350 – 500 kV

13

Cost of Partial Undergrounding The essentials

Investment cost factor for 400 kV XLPE AC cables is 3 – 10 dependent on project details and soil conditions (up to 60%) 3 – 10 cost multiple applies to undergrounded section only Cost factor for investment for entire line project will be 1.2 – 2 Speedier realisation will reduce or may even neutralise investment cost

Life cycle costs of project are to be considered

TenneT 380 kV Randstadt Ring Construction

14

Partial Undergrounding: Best Practice Amprion: 380 kV AC Raesfeld Project, Germany

Total length: 181 km Meppen – Wesel with 3 underground sections Raesfeld section: 7 km partial undergrounding Double circuit 380 kV, transmission capacity 2x1800 – 2300 MVA

Innovation Strong focus on soil treatment & refillment Cable laying in pipes

15

Partial Undergrounding: Best Practice TenneT: 380 kV AC Randstadt Project, The Netherlands

Total length: 85 km linking Rotterdam, Amsterdam & The Hague Double circuit 380kV, transmission capacity 2x2635 MVA

Twofold innovation New pylon design for overhead line „Windtrack“ Partial undergrounding on total of 20km:

Southern section: 10,8 km undergrounding operational since Sept 2013 Northern section: 9,5 km undergrounding to be built 2015 - 2017

16

Partial Undergrounding: Best Practice REE / RTE: INELFE, HVDC France – Spain Interconnector

Total length: 65 km fully undergrounded HVDC +/- 320kV, transmission capacity 2 GW 20 Feb 2015: Officially opening

Innovation +/- 320 kV XLPE HVDC Cable with VSC Converter

Highest power rate of 2GW

8.5 km tunnel under Pyrenees

€ 700 Mio, of which € 225 Mio EU Funds

17

Partial Undergrounding: Best Practice TenneT: SuedLink HVDC Project, Germany

Total length: 800 KM Transmission capacity 2x 2GW, about 500kV Operational by 2022, planning currently under way

Innovation Option for partial underground foreseen by regulator Longest HVDC land point-to-point interconnector

18

Partial Undergrounding: Policy Innovation Numerous initiatives driven by various actors across Europe

Creating decision frameworks Communications & Funding Constructing & Learning from innovation leaders Forward thinking & communicating to involved parties

Creating policy & regulatory framework to enable partial undergrounding

19

Partial Undergrounding: Policy Innovation Emerging legislation: Germany

Recognition that partial undergrounding may help to address local concerns and therewith facilitate grid deployment in sensitve areas higher investment costs for partial undergrounding need to be put into perspective against the total project costs

Create framework for partial undergrounding in more projects Additional environmental criteria when to underground

BMWi Paper: „EHV Transmission Technologies“, 2014

20

Conclusions 1) EU Policy framework is in place

10% interconnection target sets clear objective Initial financial support mechanisms have been created Public Acceptance is key bottleneck to timely completion of grid projects

2) Technology is available The Europacable „Concept of Partial Undergrounding“ complementing overhead lines in sensitive areas can help to facilitate grid deployment HVAC & HVDC Underground cable technoloy is fully available Partial undergrounding projects are going on line & under construction

3) Implementation and adoption at Member State level Innovative thinking is shaping new legislative and regulative frameworks This will allow for the gradual inclusion of partial undergrounding into Europe future tranmission grids

More deployment of partial undergrounding will Europe‘s wire and cable manufacturers to demonstrate their global technology leadership in their home market: The Europe Union

21

Dr. Volker Wendt, Director Public Affairs

Europacable, Boulevard A. Reyers, 80 - 1030 Brussels

www.europacable.com