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Interconnecting Germany and Norway: Market, Grids and Technology
Tor Eigil Hodne, Senior Vice President European AffairsBerlin, German-Norwegian Energy Forum, 23 October 2014
Kvilldal
Tonstad
FedaKristiansand
Tjele
Eemshaven
Hawthorn Pit
NO SE
DK
DE
NL
GB
BE
FR
PL
CZ
IE
MaasvlakteIsle of Grain
Mandarins
Sellindge
Wilster
Esbjerg
NSN (1400 MW)2020
Lindome
V. Hastings
Kruseberg
Stämö
Slupsk Wierzbleçion
BentwischHerrenwyk
NordBalt
Nybro
Rush
Deeside
Hunterston
Peterhead
Zeebrugge
Blyth Nord.Link (1400 MW)2018
SK4 (700 MW)2014
"The North Sea Ring"
1. Why interconnect ?
Value creation
Climate
Security of Supply
Why we do it: Connecting & balancing renewables…
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• Linking variable renewables optimizes efficiency of our energy systems
• Enables renewables to play increasingly important role and supports the green shift
• A natural balancing market • Advances a European Energy Market
• Norway imports German solar and wind power when surplus and exportshydropower when the sun is gone and the wind is missing in Germany
• Stabilizes power prices and grids
Connecting renewables = value creationPrice difference between Germany and Norway
5
0
20
40
60
€/ MWh
Spot prices in Germany and Norway 2009‐2014 – average week
Norge
Tyskland
Week day Weekend
NorwayGermany
The Project- NordLink
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1400 MW at +/- 515 kV DC
VSC converter technology
Grid connection points Tonstad (NO) Wilster (DE) Schleswig-
Holstein
Cable 514 km submarine cable route 55 km underground cable route in
Germany 53km Overhead line in Norway
Investment 1,5-2 billion €
Planned in operation 2018
Nord.Link Ownership
• 50% share
• Norwegian state-owned TSO
• Owns and operates the Norwegian grid, incl. interconnectors to Denmark, Sweden, the Netherlands and the UK (future)
• 25% share
• Dutch/German TSO
• Owns grid at connection points in Germany
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• 25% share
• German development bank, government owned
• Invests in Energiwende
The Norwegian governmentinterconnector licence
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Granted 13th October 2014 3 weeks time period for lodging an appeal Capacity markets: "Statnett must ensure that the interconnector is
included in a potential capacity market in Germany, provided that doing so increases socio-economic profitability. The participation scheme shall be presented to the Ministry of Petroleum and Energy for approval well before the changes become effective."
If the introduction of capacity markets is deemed necessary, they must be designed so that all market players, also interconnectors, are allowed to participate
Political support for both interconnectors, from 2012 and onwards
License to build - NordLink
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Granted
Pending
3. Nord.Link answering to European energy challenges • Key concerns
• Affordability
• Security of supply
• Energy security
• Sustainability
• Integrating markets
• Upgrading and extending infrastructure
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Commission communication 14 October 2014 on Internal Energy Market
Nord.Link answers to all these concerns and is on EU list of Projects of Common Interest (PCI) & part of the Federal Requirement Plan
Importance of the project to EU and German energy market
European energy infrastructure : Investment requirements for 2030 and beyond
• Energy-only markets• We believe the Internal Energy Market is the best capacity
market - free flow of electricity• Capacity markets impacts business case for interconnectors; if
introduced its important to allow participants and interconnectors access
• EU state aid guidelines is a good fundament
• A strong ETS • With ambitious target for GHG emission reduction
• A stable regulatory framework• Electricity price lays the premise for investment decisions and is
influenced by regulatory interventions
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MORE INTERCONNECTORS ARE NEEDED
“I want to reform and reorganise Europe´s energy policy (…) into a resilient Energy Union with a Forward-Looking Climate Policy
Jean-Claude Juncker, incoming European Commission president
12
…and an infrastructure overhaul that has the green shift as a strategic orientation
Looking to 2030: EU-summit 23 October
2030
40 % GHG reduction
27 % RES
15 % inter-connection
??
27 % efficiency
330
18045
82
0102030405060708090
0
50
100
150
200
250
300
350
2013 2030
GWg/kWh
CO2-intensity Cross border Capacity
Estimated change in CO2-intensity from the power sector and cross border capacity in North of Europe (Statnett BID-model)
13
Enabling ambitious climate policy
Conclusion:• Interconnectors for a renewable future• Improves security of supply on both sides• Socioeconomic viable projects• Contributes to a resilient energy system which better absorb shocks• Grid strengthening is needed on both sides• If capacity markets are deemed necessary, they should be designed
so that all market players, also interconnectors, are allowed to participate
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