Value creation by interconnecting Norwegian hydropower and European markets in transition

German Norwegian Energy Forum - October 23th 2014

Øyvind Stakkeland, Director Regulatory Affairs

Agder EnergiMajor hydropower producer in Norway

Annual production: 7,800 GWh –6% of total Norwegian production

1,700 MW installed capacity

47 power stations

Experience in interconnector projects: NorGer and NorthConnect

Partner in CEDREN (Centre for Environmental Design of Renewable Energy)

The Agder Region

Power Stations

Tonstad – 960 MW

Skjerka – 110 MW

Brokke – 330 MW

Holen – 230 MW

Key points

1. The power markets

2. Value of interconnectors

3. Challenges to overcome

4. The way forward

Blåsjø 7.8TWh RESERVOIR

Total Norwegian reservoir 84TWh

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10000

20000

30000

40000

50000

60000

70000

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900001 35 69 103

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273

307

341

375

409

443

477

511

545

579

613

647

681

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749

783

817

851

885

919

953

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1157

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1327

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1633

1667

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1735

1769

1803

1837

1871

1905

1939

1973

2007

2041

2075

2109

2143

2177

Wind production in 2030 - North Sea region

Source: Cedren

7 x 24 h

7 x 24 h

7 x 24 h

-30 000 MW

+30

000

MW

5 TWh needed for balancing a low wind week

Intermittent energy in Germany in 2022- need for flexibility

Source: Agora

The spot markets

Key points

1. The power markets

2. Value of interconnectors

3. Challenges to overcome

4. The way forward

How to integrate renewables in the EU?

Source: Prognos

Indirectstorage

Generation

Batteries

Potentialsolutions

Loadmanagement

Networkextension

Energy trading across borders

Trading of RES commitments Energy trading based on interconnection

Lower risk of missing renewable energy targets

Lower cost delivery of renewable energy targets

Lower cost balancing services

Low-cost electricity imports

Lower CO2 emissions

Export market for European power

Improved security of supply

Interconnectors to Norway have high economic value

Source: Entso-E

DE-NO: Socio-economic welfare 370 Meur/Year

NO- UK: Socio-economic welfare 290 Meur/Year

Interconnectors NO-DE and NO-UK

Source: Entso-E, TyndP-Vision 4

Reduced CO2 emission

Increased renewable production

Key points

1. The power markets

2. Value of interconnectors

3. Challenges to overcome

4. The way forward

Market access

Challenge:Access to all markets through interconnectorsOptimize use of interconnector capasity across time frames.

Financing

• Legal framework – access for 3. party investors

• Business models attracting investors

Domestic grid bottlenecks

Grid planning for next generation grid

Key points

1. The power markets

2. Value of interconnectors

3. Challenges to overcome

4. The way forward

The way forward Market access PCI Projects

EU RES 2030Financing

www.ae.nooyvind.stakkeland@ae.no