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The impact of an offshore electricity hub at Kriegers Flak on power markets

The impact of an offshore electricity hub at Kriegers Flak on power markets. Sascha T. Schröder, Helge V. Larsen, Peter Meibom Systems Analysis Division Risø DTU April 22 nd , 2010 EWEC 2010, Warsaw. Outline. Setting: Offshore hub at Kriegers Flak The model: WILMAR Results

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The impact of an offshore electricity hub at Kriegers Flak on power markets

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  1. The impact of an offshore electricity hub at Kriegers Flak on power markets Sascha T. Schröder, Helge V. Larsen, Peter Meibom Systems Analysis Division Risø DTU April 22nd, 2010 EWEC 2010, Warsaw

  2. Outline • Setting: Offshore hub at Kriegers Flak • The model: WILMAR • Results • Socio-economic benefits • Congestion rents • Duration curves of power flows • Conclusions

  3. Setting: Offshore hub at Kriegers Flak • Denmark, Germany and Sweden planned offshore wind farms in close proximity at Kriegers Flak, Baltic Sea (2x 600MW, 1x 400MW) • Idea: Use interconnectors also for trading Figure source: Kriegers Flak feasibility study, 2009

  4. Kriegers Flak: Chronology of events • Common TSO pre-feasibility study, 2009: Denmark, Sweden, Germany • EU envisaging financial funding with 150 Mio. Euro (economic recovery package) • mini-case for North Sea offshore grid • Latest developments: • Feasibility study, 02/2010 • Swedish TSO withdrew/postponed participation, 01/2010 • German wind farm size decreasing from 400 to 300 MW • EU acknowledges that they will also support a Danish-German solution

  5. Setting: Offshore hub at Kriegers Flak • 4 topologies originally discussed • Goal: Compare feasibility study results with own computations Figure source: Kriegers Flak feasibility study, 2009

  6. The model: WILMAR • developed under the projects Wind Power Integration in Liberalised Electricity Markets (WILMAR) and SUPWIND • hourly time resolution, 1 year, covering up to 31 European TSO regions • here: geographical area in analogy to TSOs’ pre-feasibility study • chosen year: 2015 • Stochastic element treated with the Scenario Tree Tool • wind power generation modeled as perfect foresight, deterministic or stochastic forecast error • here: deterministic forecast error Figure source: Kriegers Flak feasibility study, 2009

  7. Results I • Fuel price assumptions: lower than World Energy Outlook 2008 • Socioeconomic benefits of the 4 cases after correction for different hydropower usage: • benefits (Mio. €2005/a) 22 34.7 43 • Congestion rents, if Kriegers Flak is a single price zone (Mio. €2005/a): 40.4 47.7 51.1 • Congestion rents, if national wind power imports from Kriegers Flak are deducted (Mio. €2005/a): 17.5 19.4 31.7 Figure source: Kriegers Flak feasibility study, 2009

  8. Results II • CO2 emission reductions: about 0.04% for cases C and D • Impact on power prices: minor decrease in Germany, minor increase in Denmark, rather remarkable increase in Sweden • but: average hydropower year. In dry years, Sweden would benefit from an additional interconnector.

  9. Discussion and conclusion • Focus at a single offshore node in the Baltic Sea • Flow patterns on interconnectors in line with results from the feasibility study • Economic benefits from interconnected solution in 2015: about 1/10 of investment costs (according to feasibility study) • Funding by the EU • Still a number of regulatory issues to be solved • How to integrate day-ahead wind forecasts and power markets • Offshore balancing responsibility • Support schemes • Main benefits from Swedish-German interconnection. The impact of the current downscaling is to be assessed critically. Interconnectors separate or modular approach? • Different Swedish price zones from Nov. 2011 • Gain experience for a possible North Sea offshore grid

  10. Thank you for your attention! Sascha Thorsten Schröder sasc@risoe.dtu.dk +45 4677 5113 Risø National Laboratory for Sustainable Energy Technical University of Denmark – DTU Systems Analysis Division Building 110, P.O. Box 49 DK-4000 Roskilde, Denmark Tel +45 4677 5100 Fax +45 4677 5199 www.risoe.dtu.dk

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