Implementation strategies for infrastructure development for large scale wind and RES integration

1. Implementation strategies for infrastructure development for large scale wind and RES integration Marian Klobasa, Inga Boie Fraunhofer Institute for System and Innovation Research Integration in electricity systems and markets EWEC 2012, 17/04/2012, Copenhagen

2. Agenda • Introduction • SUSPLAN project • Future scenarios and infrastructure needs • Major barriers for implementation • Strategies for infrastructure development • Conclusions TREN/FP7/EN/218960/SUSPLAN

3. Introduction • Deployment of low cost RES potentials makes additional infrastructure necessary (especially for offshore wind) • Progress in the past has been limited: • 1 out of 3 projects of the TYNDP 2010 are experiencing delays of implementation due to permitting procedure • 12 of 24 projects with priority status in Germany are delayed, only 2 projects are finished so far • Extension of capacity between Spain and France took 11 years (2003 until 2014) • Strategies are needed to secure sufficient infrastructure development in the future => Major goal of SUSPLAN project

4. SUSPLAN in briefDevelopment of regional and Pan-European guidelines for more efficient integration of renewable energy into future infrastructures • Develop and evaluate grid related RES integration scenarios at regional and trans-national level in the long term perspective 2030-2050 • Synthesize results from the scenarios to identify the best development paths for integration of RES at regional and trans-national level • Establish guidelines for decision makers at regional and trans-national level by generalizing results from the scenario studies • Establish an advanced toolbox to support the RES integration scenarios by combining the best available tools and knowledge • Disseminate results to relevant decision makers through regional and trans-national workshops, reports and project web-site • Duration:38 months (September 2008 – October 2011) • Consortium: 16 partners • Coordinator:SINTEF Energy Research, Norway TREN/FP7/EN/218960/SUSPLAN

5. Initial data set 2050 – Contribution of wind energy RES share: 70 % RES share: 79 % RES share: 60 % RES share: 40 % Source: based on SUSPLAN and Green-X TREN/FP7/EN/218960/SUSPLAN

6. Major electricity grid extension • Green storyline • High demand for additional grid infrastructure • Status 2010: > 50 GW cross border capacity • Model 2050: > 250 GW cross border capacity • If infrastructure is in place limited curtailment of RES • Market price is at similar level across EU Note: Not all extensions are shown Source: MTSIM/RSE basedon Susplan D3.1 report TREN/FP7/EN/218960/SUSPLAN

7. Barriers for RES integration & grid extensions • Four main fields of barriers were distinguished: • Infrastructure development issues (mainly lack of coordination and stream-lining of planning processes) • Inefficient authorization procedures (lengthy and complex, multitude of stakeholders, lack of public acceptance) • Lack of appropriate financing schemes (for national & transnational infrastructure investments, transnational cost allocation and compensation schemes) • Deficits in infrastructure management (coordination of technical aspects, RES connection and grid congestions) • The relevance of the barriers varies regionally: • Barriers with general / trans-national relevance • Barriers with particular importance in individual regions TREN/FP7/EN/218960/SUSPLAN

8. Regional context of barriers Social & accep-tance issues National financing Interna-tional cost allocation TREN/FP7/EN/218960/SUSPLAN Source: SUSPLAN regional case studies

9. Key findings and major measures • Infrastructure development • Long term approach for offshore grid development • Enhance regional planning structures and foster integration in national and transnational planning • Authorisation procedures • Early involvement of the public and NGOs • Incentives and regulation to minimize impacts of new lines • Financing • Offshore financing solutions • Compensation of involved local communities • Grid management • Foster efficient methods for congestion management & increase flexibility of the energy system TREN/FP7/EN/218960/SUSPLAN

10. Regional and Pan-European planning • Current situation • Substantial changes of planning procedures in the last years • Implementation of ACER and the TYNDP to improve coordination of grid development • Recent proposal for regulation by EC on grid development • Definition of criteria to identify relevant projects of common interest. • Rules for permitting procedures (one national authority, limited duration of granting process, EU coordinator if necessary) • Legislative changes in member states, e.g. implementation of grid planning on national level (Bundesfachplanung) TREN/FP7/EN/218960/SUSPLAN

11. Regional and Pan-European planning • Strategies for future development • Enhanced coordination of energy infrastructure planning with spatial planning and other policy goals (environmental policies) • A more complex planning process considering a multitude of issues can help to increased public acceptance • Improved public acceptance could compensate longer lead times for grid projects • Definition of infrastructure corridors should become a common EU wide practice TREN/FP7/EN/218960/SUSPLAN

12. Key findings and measures • Infrastructure development • Long term approach for offshore grid development • Enhance regional planning structures and foster integration in national and transnational planning • Authorisation procedures • Early involvement of the public and NGOs • Incentives and regulation to minimize impacts of new lines • Financing • Offshore financing solutions • Compensation of involved local communities • Grid management • Foster efficient methods for congestion management & increase flexibility of the energy system TREN/FP7/EN/218960/SUSPLAN

13. Offshore Financing • Current situation • Not sufficient incentives for offshore grid development • Missing long term vision, incentives needed for countries with limited net benefits • Recent approach by proposal of EC • Set-up rules to access financial support by EU funds • Rules for cross border cost allocation, cost-benefit sharing • Capability of TSOs to build several offshore connections in a short time is limited • Intensive discussion by German TSO how to finance additional offshore grid connections TREN/FP7/EN/218960/SUSPLAN

14. Measures for offshore development • Establish sufficient incentives for offshore grid infrastructure development • Recent approaches are special returns on equity (e.g. in Germany) or the proposal for EU funds (proposal of EC) • Inter TSO compensation (ITC) mechanism should be used and adapted to compensate TSOs for investing in offshore grids, fund should be increased • Create sufficient support for offshore wind deployment • Ongoing activities (CA-RES) are looking on cooperation mechanisms which are feasible under current RES directive (statistical transfer, joint projects or joint support schemes) TREN/FP7/EN/218960/SUSPLAN

15. Compensation for transit communities • Next to early participation and transparent authorization process public acceptance can be increased by financial compensation mechanisms • First experiences with compensation mechanisms for transit communities exist. Possible solutions are: • Payments per km, • Financing of compensation projects • Citizen grids with direct involvement of local community • Commissioning fees • Tax splitting TREN/FP7/EN/218960/SUSPLAN

16. Key findings and measures • Infrastructure development • Long term approach for offshore grid development • Enhance regional planning structures and foster integration in national and transnational planning • Authorisation procedures • Incentives and regulation to minimize impacts of new lines • Early involvement of the public and NGOs • Financing • Offshore financing solutions • Compensation of involved local communities • Grid management • Foster efficient methods for congestion management & increase flexibility of the energy system TREN/FP7/EN/218960/SUSPLAN

17. Congestion management • Current situation • Several activities are initiated by EC and ACER • In the past NTC values with explicit auctions have been used for cross border capacity allocation • Recent changes (Framework guidelines on congestion management, market coupling), e.g. ACER proposed a flow based allocation combined with an implicit auction • An internal EU wide electricity market with market coupling should be in place until 2014 • Recent coupling of balancing zones across Germany and neighbouring countries (Grid Control Cooperation) • Cross border dispatch of balancing capacity, common merrit order TREN/FP7/EN/218960/SUSPLAN

18. Strategies for congestion management • Foster efficient methods for congestion management and enhance flexibility • Allow for short term adaptation to production changes also on cross border transmission lines • Extend grid control cooperation to other countries • Consider nodal pricing as an option for efficient power plant dispatch • In the case of large grid congestions nodal pricing is most beneficial as it includes grid congestions in the dispatch optimization • Use the monitoring data of ACER on grid capacity extension to decide if a nodal pricing scheme could be beneficial • Nodal pricing can also provide clear signals for grid capacity extensions TREN/FP7/EN/218960/SUSPLAN

19. Conclusions • Crucial actions for infrastructure development • Creation of broad public acceptance • Coordinated planning procedures • Mechanisms for financing cross border infrastructure • Improved congestion management procedures • Current policy is already addressing various aspects on EU and on national level • Major conflict to be solved is the establishment of a fast and efficient granting process while maintaining a high level of local stakeholder participation • EU commission has central role for coordination of future development TREN/FP7/EN/218960/SUSPLAN

20. Thank you for your attention ! Contact: Marian Klobasa, Inga Boie Fraunhofer Institute for System and Innovation Research BreslauerStrasse 48, 76139 Karlsruhe Email: M.klobasa@isi.fraunhofer.de www.susplan.eu Acknowledgement: Parts of the research were funded under FP7 research program of the EU in the SUSPLAN project.