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European Grid Development, Market Development and Renewable Energy. International Energy Conference Copenhagen, 12 March 2008. Peter Jørgensen Vice President, Planning. Agenda. Third Package - Infrastructure Development Unique Role of TSO’s From National to Regional and European Planning
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European Grid Development, Market Development and Renewable Energy International Energy Conference Copenhagen, 12 March 2008 Peter Jørgensen Vice President, Planning New Tasks, New Tools
Agenda • Third Package - Infrastructure Development • Unique Role of TSO’s • From National to Regional and European Planning • From Planning to Investment Decisions – Incentives and Criteria’s • Public Authorization Procedures New Tasks, New Tools
Third Liberalization Package - infrastructure development • Unbundling • Avoid distorted investment incentives within integrated companies • Strong national regulators • Review investment plans of TSOs • Monitor network security and reliability • ACER – Agency for the Cooperation of Energy Regulators • Perform regulatory oversight of ENTSO – 10-year investment plans • Decide on regulatory regime applicable to infrastructure • ENTSO – European Network of Transmission System Operators • Identify, manage and finance research and innovation • Coordinate grid operation according to agreed codes • Perform investment planning – coordinated long term planning • Prepare system adequacy forecasts for summer, winter and long term New Tasks, New Tools
Responsibility of TSO’s - from long term planning to real-time operation and settlement -25 year -1 month -1 year -1 week -1 day Real-time Operation Planning and R&D Building and maintenance of infrastructure System operation Market operation and settlement Unique strength of TSOs to embrace the full responsibility! New Tasks, New Tools
Nordic Grid Master Plan 2008 • Nordel Scenarios for 2015 and 2025 • Proposals for internal and external reinforcements From National to Regional Planning- the Nordel example • 3 Nordic Grid Master Plans in last 10 years • Reinforcements in 5 prioritized cross sections proposed in 2004 • Comprehensive analysis based on common data and models • 4 projects decided – 1 pending New Tasks, New Tools
Security of supply • power and energy balances – statistics and modeling • margins to market failure and system failure – statistics and modeling Nordic Grid Master Plan • Market functioning • Price formation in the integrated NordPool spot market – statistics and modeling New Tasks, New Tools
Investments • Level for infrastructure investments will be tripled Nordic Grid Master Plan • Reinforcements • Internal and external reinforcements analyzed • Reinforcement of external Nordic interconnections in general shows a positive cost-benefit New Tasks, New Tools
Alternative 1 Sweden Glentegård Norge Skagerrak SK 1&2 SK 3&4 Konti-Skan KS 1&2 Ishøj Vester Hassing København Ferslev OVerloaded connections Overload > 150 % Overload > 125 <= 150 % Overload <= 125 % Tjele Tjele Idomlund Trige Sweden Gørløsegård Askær Hovegård Landerupgård Herslev Storebælt Bjæverskov Endrup SB 1&2 Fraugde Kingstrup Kassø Kontek Rødsand Germany Germany Danish Grid Development • Major reinforcements will be triggered by international power market and off-shore wind • Urgent need for: • New guidelines on the use of overhead lines/underground cables • Efficient and faster public authorisation procedures New Tasks, New Tools
Detected Bottlenecks during n-1 conditions of UCTE “Scenario North” source: EWIS study Obvious need for planning and investment decisions on European level! New Tasks, New Tools
Optimal interconnector capacity differs significantly between private and socio-economic welfare criteria’s From planning to investment decisions - incentives and criteria’s for investment decisions • New interconnector capacity may cause considerable redistribution of wealth compared to the net socio-economic benefit - distributed in several countries! Gen Con Cap Net Regulation, allocation of congestion rents & compensation mechanisms must support socio-economic optimal investments on regional/European level! New Tasks, New Tools
Summary Some basic prerequisites for the timely development of infrastructure to support a well-functioning European electricity market, security of supply and massive integration of RES are: • Efficient TSO-cooperation on European and regional level • coordinated and qualified planning procedures and investment decisions • Strong national and European regulation • investment criteria’s based on socio-economic welfare • incentives for investments supporting goals on regional and European level • Politically supported guidelines for new infrastructure • Efficient public authorization procedures New Tasks, New Tools