APG-Network Development Plan 2016Executive Summary

Planning period: 2017 - 2026

Planning state: August 2016

APG Network Development Plan 2016

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Executive Summary

Power Industry Development

Power industry in Europe is in the middle of a far-reaching transformation. Political decisions (Kyoto climate targets 1997, 2008 set 20/20/20 and respectively 2014 set 2030 climate targets of the EU, the results of the world climate conference in Paris 2015 and following national and regional implementation packages, the nuclear phase-out in Germany) collide with present power industry conditions (grown grid structure, generation system), and respectively with hesitant implementation (framework conditions for grid expansion). New electricity generation forms (e.g. wind energy) at the borders of Europe can hardly be transported to regional consumption centers on the continent with present grid infrastructure. Measures such as national promotion of green electricity coupled with missing expansion and adaptation of electricity grids result in endangering of electricity supply in Europe.

„Energiewende“ – massive increase in share of renewable energy

The increase of renewable energies‘ share on total electricity generation is a deciding contribution to attainment of climate and energy goals of the European Union and Austria. Until 2030, around 27% of European energy consumption should be covered by sustainable generation forms. This means a significantly rising share of wind and photovoltaic energy in Europe and brings increased volatility in the area of electricity generation. This must be managed by high capacity power lines and respectively storage systems.

By prioritizing the feed-in of renewable energies in power grid (legislative feed-in preference), requirements on grid constantly rise. As an example, the following number can be named: Up to around 38 gigawatt feed-in power from PV is available in Germany during the day and gets fed into power grids. In doing so or at high wind energy generation (up to about 40 GW), conventional base load power plants, which are necessary for grid stability, are becoming unprofitable and producers take them off-line or in a further step put them out of service. The availability of baseload power plants is inevitable for a safe operation of the network.

Summarized: only increase in grid transport capacities can ensure security of supply in Europe and Austria in the future.

Austria is in a geographical center of Europe and therefore significantly confronted with these international developments. Bottlenecks or false allocations in neighboring grids are directly noticeable in Austrian grid and must be prevented.

Consequences for Power Grids

The expansion and respectively optimization of transmission grids in Europe and Austria is sine qua non for attainment of climate and energy goals, as well as for maintaining the

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security of supply. This is confirmed by the fourth edition of the 10-year network development plan (TYNDP 2016), created and issued by ENTSO-E (network of European transmission grid operators) on behalf of the European Commission. It defines a development demand of around € 150 billion in the next 15 years.

Solely in Germany, according to the DENA II study from the year 2010, around 3.500 km of transmission grid infrastructure development is necessary. According to updated scenarios, in the draft of the German network development plan 2025, a network development demand of around 10.000 km is stated. Besides that, requirements for the area of network operation are rising dramatically, and therefore new technology concepts like backbone high voltage direct current power lines and smart grids are being developed.

Within the framework of European Energy Infrastructure Act, around 100 grid infrastructure projects in Europe are defined, which realization has preferential importance for the integration of renewables, security of supply and European market integration (currently five APG network development projects are in the second PCI list and therefore approved as „Projects of Common Interest (PCI)“).

When concentrating on the „Energiewende“, one should not forget that market forces and changes of the European liberalized electricity market must be considered as well as the demand side (including developments regarding the power intensive industry).

Massive expansion of green electricity in Austria

Given the Green Electricity Act 2012, which substantially increases subsidies for green electricity, Austria is now facing major challenges. The installed wind power capacity should be increased to 3,000 MW by 2020. The development of the installed wind power capacity from 1,000 MW in 2010 to meanwhile nearly 2,400 MW (at the end of 2015) as well as planned windfarm projects in the eastern part of Austria with a total capacity of 1,000 MW show, that these are not just theoretical plans. The goal of the Green Electricity Act in the field of photovoltaic electricity generation is even more ambitious with an increase of about 1,200 MW. As an essential part of Austrian electricity generation, further expansion of domestic hydro power is also possible.

If the required grid capacities will not be provided for the coming sustainable forms of electricity generation in Austria, several negative knock-on effects have to be feared in the long term:

• Increased necessity for transmission system operators to interfere with the electricity market (cost-intensive congestion management)

• Investment in renewables will become less attractive • Security of supply in Austria will be endangered • Quality of Austria as an industrial location will be reduced

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Specific framework conditions for grid expansion and reconstruction in Austria

A significant factor for the implementation of the necessary reinforcements of the transmission grid is the duration of permitting procedures. These are currently very complex (federal and provincial legislation) and hence time consuming. Moreover, additional specific factors (existing or planned routes not or insufficiently secured; diverging limit values in the area of noise and/or EMFs; no separate authorization system for the upgrade of power lines, lack of standard public participation process) are further obstacles for the establishment of procedures or increase of acceptance of involved stakeholders.

In order to eliminate those deficits and, hence, implement the energy turnaround in Austria in a sustainable fashion, federal framework conditions have to be improved in the following areas:

• Equality of the transmission grid with roads and rails in terms of permitting procedural aspects and standardized public participation process

• Harmonization of limit values for commissioning and operation

• Implementation of the principle „Upgrade rather than (new) construction“

• Protection and conservation of existing routes (i. a. regarding substructures) and planned corridors

• Acceptance of network development as substantial part of the energy transition

• Definition of system relevant power plants and there regulatory classification

APG-Masterplan 2030

In accordance with legal responsibility – to develop secure and reliable transmission grid in Austria – APG issued APG-Masterplan 2030 in 2013. Therein APG defines its long term strategic network expansion planning with European power industry developments as a basis. Several projects defined in APG-Masterplan are classified by European Commission as TEN-project and by European Energy Infrastructure Act as PCI-project and therefore rated as extremely urgent. Besides that, expansion and grid enhancement projects defined in Masterplan are coordinated Europe-wide and a part of 10-Year Network Development Plan (TYNDP) of ENTSO-E.

Network Development Plan 2016

The Network Development Plan (NDP) is a legal requirement (in accordance with § 37 ElWOG 2010) and is based on the long-term strategic planning in the APG Master Plan 2030, the TYNDP 2014 and 2016 and the NDP 2015. By publishing this plan, APG informs all market participants about the important transmission infrastructures in transmission grid of APG that need to be upgraded or expanded in the next ten years (2017 – 2026). The NDP contains projects that must be implemented in the next three years.

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In addition, the NDP also presents plans for the transmission system for the next decade on the basis of the development forecast for the energy sector. The projects presented in the NDP are categorized into projects of national and European interest as well as network connection projects. The latter are included in the Network Development Plan and therewith submitted for approval insofar as there had been a coordinated planning and sufficient project progress.

During the consultation period from mid of June to mid of July 2016, all relevant market participants had the opportunity to submit comments on the NDP 2016. After APG had processed and checked all these comments on the NDP, it was submitted to E-Control Austria for approval at the beginning of September. The approved NDP was published at the end of 2016.

Extensive grid reinforcement and expansion measures will have to be implemented in Austria by 2026 to meet the outlined challenges. The projects described in the APG Network Development Plan 2016 include:

• New transmission line projects extending over approx. 370 km

• Conversion of 390 km of transmission lines to a higher voltage level and installation of new conductors

• Construction and expansion of numerous substations with approximately 150 switchyards at voltage levels of 380/220/110 kV

• Plans are in place for the construction of approximately 35 transformers with a total capacity of approx. 13,000 MVA to facilitate the coupling of grid levels and supply of distribution grids

• Extensive line coordination and optimization measures are being implemented within the framework of major projects, e.g. the 380-kV Salzburg line, leading to the removal of approx. 400 km old, low-capacity lines

• Furthermore, extensive reinforcement and reconstruction measures of substations and lines are planned

The processing of the projects described in the Network Development Plan will require a major effort both from APG and the authorities responsible for approvals.

The completion of projects in the Network Development Plan and the associated expansion of grid capacities are essential prerequisites to ensure the implementation of the „Energiewende“ (transition of the energy system). In addition to the integration of renewable energy sources, attention is focused in particular on guaranteeing the existing high level of security and reliability of supply of electricity in the long term and the further development of the electricity market.