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Grid connection of offshore wind farms FSR Webinar Series Florence, 25 September, 2012 Leonardo Meeus (Florence School of Regulation, European University Institute) THINK (http://think.eui.eu)

Florence School of Regulation

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Grid connection of offshore wind farms Why this topic? … the buzz

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Grid connection of offshore wind farms Why this topic? … EU context

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Offshore wind technology • Expected to increase from 3 GW to about 40 GW by 2020 in Europe

Offshore grid connection • Tennet is investing 6 billion to connect offshore wind in North Germany • The UK is expected to invest 6-10 billion pounds

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Grid connection of offshore wind farms Why a webinar?

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Grid connection of offshore wind farms Webinar focus

Who should design and develop the grid connection?

Who should pay for the grid connection?

Who should be the regulator for the grid connection?

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First poll: Who should design and develop the grid connection of offshore wind farms? “choose a statement”

• A: Transmission System Operator (TSO) • B: Offshore wind farm developers (Generators) • C: Tender (Third parties)

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1. Who should design and develop the connection? Onshore

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Connection regime • First-come-first-serve

Principles • Planning limited • Element of competition no

Importance of the principles • Onshore: limited • Offshore: important

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1. Who should design and develop the connection? Increasing cost and technology uncertainties (THINK, 2012)

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1990 1995 2000 2005 2010 2015 2020

Dist

ance

(km

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Year Commissioned

HVACHVDC VSCMVAC

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1. Who should design and develop the connection? Offshore wind farms in Germany (THINK, 2012)

# Name of the

wind farm Country

Year commissione

d

Distance to shore (km)

Power (MW)

Voltage (kV) Transmission technology

1 Alpha Ventus Germany 2010 52.5 60 110 HVAC 2 Baltic 1 Germany 2010 16 48.3 150 HVAC 3 Breitling Germany 2006 0.5 2.5 - - 4 Ems Emden Germany 2004 0.6 4.5 - - 5 HVDC BorWin 1 Germany 2009 200 400 150 HVDC VSC 6 HVDC BorWin 2 Germany 2012 200 800 HVDC VSC 7 HVDC DolWin 1 Germany 2013 330 800 320 HVDC VSC 8 HVDC HelWin 1 Germany 2013 130 576 380 HVDC VSC 9 HVDC SylWin 1 Germany 2014 205 864 HVDC VSC

Total Germany 3500

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1. Who should design and develop the connection? Germany offshore

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Connection regime • Connection obligation

Planning • Offshore electricity plugs

Element of competition • No

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1. Who should design and develop the connection? Offshore electricity plugs (Tennet)

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1. Who should design and develop the connection? Offshore electricity plugs (Elia homepage)

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1. Who should design and develop the connection? Offshore electricity plugs (ABB, Borwin alpha)

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1. Who should design and develop the connection? Offshore wind farms in Sweden (THINK, 2012)

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# Name of the

wind farm Country

Year commissione

d

Distance to shore (km)

Power (MW)

Voltage (kV) Transmission technology

1 Utgrunden Sweden 2000 8 10.5 21 MVAC 2 Yttre Stengrund Sweden 2001 4 10 20 MVAC 3 Lillgrund Sweden 2007 7 110.4 130 HVAC 4 Bockstigen Sweden 1998 3 2.5 - - 5 Vanern Sweden 2009 7 30 - -

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1. Who should design and develop the connection? Sweden offshore

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Connection regime • Generators design and develop their connection

Planning • No

Element of competition • Yes

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1. Who should design and develop the connection? Offshore wind farms in the UK (THINK, 2012)

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# Name of the

wind farm Country

Year commissione

d

Distance to shore (km)

Power (MW)

Voltage (kV) Transmission technology

1 Beatrice UK 2007 23 10 33 MVAC 2 Blyth UK 2000 1.6 4 11 MVAC 3 Burbo Bank UK 2007 6.4 90 33 MVAC 4 Inner Dowsing UK 2009 5.9 97.2 33 MVAC 5 Kentish Flats 1 UK 2005 10.75 90 33 MVAC 6 Lynn UK 2009 5.9 97.2 33 MVAC 7 North Hoyle UK 2004 7.2 60 33 MVAC 8 Rhyl Flats UK 2009 8 90 33 MVAC 9 Scroby Sands UK 2004 2.3 60 33 MVAC

10 Barrow UK 2008 7.5 90 132 HVAC 11 Greater Gabbard UK 2008 26 504 132 HVAC 12 Gunfleet Sands UK 2010 7 172.8 132 HVAC 13 Robin Rigg UK 2010 8 180 132 HVAC 14 Thanet UK 2010 11.4 300 132 HVAC 15 Walney 1 UK 2011 14.4 183.6 132 HVAC

Total UK 1478

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1. Who should design and develop the connection? Offshore wind farms in the UK (National Grid, 2011)

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1. Who should design and develop the connection? UK model for offshore (Martin Crouch, 2011)

Connection regime • Offshore Transmission Owners (OFTO)

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1. Who should design and develop the connection? UK model for offshore

Connection regime • Offshore Transmission Owners (OFTO)

Planning • More planning being considered

Element of competition • Yes • Ofgem: not only technology innovation

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First poll: Who should design and develop the grid connection of offshore wind farms? To sum up

Alternative models A) TSO B) Generators C) Third party

Experiments with these models Germany Sweden UK

Planning

Element of competition

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First poll: Who should design and develop the grid connection of offshore wind farms? To sum up

Alternative models A) TSO B) Generators C) Third party

Experiments with these models Germany Sweden UK

Planning

Element of competition

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First poll: Who should design and develop the grid connection of offshore wind farms? To sum up

Alternative models A) TSO B) Generators C) Third party

Experiments with these models Germany Sweden UK

Planning

Element of competition

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Second poll: Who should pay for the grid connection of offshore wind farms? “choose a statement”

• A: Offshore wind farm developer (Generator) • B: Grid users (Transmission tariffs)

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2. Who should pay? Example (Auer, 2007)

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2. Who should pay? Deep charges

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2. Who should pay? Shallow charges

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2. Who should pay? Super shallow charges

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2. Who should pay? Assessing current practice

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Importance of having a price signal • Decision to locate • Timing decision

Current practice • Germany: super shallow charges • Sweden: shallow charges • UK: super shallow, but with locational G-component

Relevance offshore • Constrained by concessions • Electricity pugs

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Second poll: Who should pay for the grid connection of offshore wind farms? To sum up

E.g. Germany Sweden UK

Planning

Element of competition

Price signal

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Third poll: Who should be the regulator for the grid connection of offshore wind farms? “choose a statement”

• A: National regulatory authorities • B: Regional or EU regulatory framework

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3. Who should be the regulator? Kriegers Flak

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3. Who should be the regulator? Standalone solution

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3. Who should be the regulator? Combined solution

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3. Who should be the regulator? Problems due to not aligned national regulatory frameworks

• E.g. Swedish TSO is not responsible for connection of offshore wind farms

• E.g. German TSO obligation makes cooperation difficult

• … (THINK, 2012)

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3. Who should be the regulator? Future could bring many more Kriegers Flak type of offshore grid projects

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Grid connection of offshore wind farms Answers to the three questions

Who should design and develop the grid connection?

Who should pay for the grid connection?

Who should be the regulator for the grid connection?

What matters is to have advanced connection planning, and an element of competition

Offshore wind developers should at least pay shallow charges

Offshore grids require collective action at regional or EU level

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Thank you very much for your attention leonardo.meeus@eui.eu http://think.eui.eu

Florence School of Regulation

THINK reports (published 2011 - 2012)

1) Public Support of RD&D

2) Smart Cities

3) Energy Roadmap for 2050

4) Public Budget of EU Member States

5) Offshore Grids

6) Transmission Grid Tarification

7) Building refurbishment

8) Electricity Storage

Ongoing (to be published in 2013)

9) EU technology policy for 2050

10) CBA for infrastructure package