Transmission & distribution
First steps to harmony in Europe1 August 2010
Europe’s TSOs have produced the pilot for their 10 year plan, a response to the EU directive demanding harmonisation of national regulatory frameworks and greater transparency during the process.
The European Union’s Third Legislative Package for the Internal Market in Electricity was adopted in 2009 and will come into force in 2011. It resulted from the EU’s Electricity Directive of 1999 for the liberalisation of Europe’s national electricity markets, but in the intervening ten years the development of the continental transmission network has undergone fundamental changes. The TSOs have had to develop their networks to accommodate European policy objectives without the guidance of a formal Europe-wide integrated plan for generation and network assets.
The package provides for institutions and legislative tools that promote the close co-ordination of the operation and development of the national networks and harmonisation of the various European regulatory frameworks. It calls for the creation of the European Network of Transmission System Operators for Electricity (ENTSO-E) and sets it the task of adopting a non-binding Community-wide ten year network development plan, aka the TYNDP, to ensure greater transparency regarding the Community’s entire electricity transmission network and to support the decision making process at regional and European level.
This includes the modelling of the integrated network, present and future, a European generation adequacy outlook and an assessment of the resilience of the system. It must do this with due regard for national investment plans, the guidelines for trans-European energy networks, the reasonable needs of different system users and it must identify investment gaps, notably with respect to crossborder capacities.
Deliverables to date
This TYNDP pilot project marks some progress in fulfilling the objectives set forth by the Regulation. Some ‘bottom up’ scenarios have been developed by TSOs, describing midterm trends, investment needs and projects deriving from co-ordinated modelling of integrated networks between TSOs. these derive from numerous market and network studies, such as the EWIS study, the PLEF Regional Adequacy Forecast and so on. A comprehensive assessment of resilience has been presented synthetically, and a detailed description of current projects provides the necessary data to enable monitoring of the implementation of the plan.
ENTSO-E is at present also setting up common procedures so that TSOs share the same methodological standards, enabling future TYNDPs to be based on consistent regional studies. A consultation regarding scenarios will be launched to prepare the next issue of the TYNDP.
Aims and objectives
The European TSOs decided to establish ENTSO-E ahead of time in December 2008 as a fusion of the existing organisations. Its aim is to promote important aspects of energy policy in the face of significant challenges concerning the security of the operation of the network, the adequacy of the power system, market integration and transparency, and the sustainability of development through the integration of renewable energy sources. This view presupposes the recognition of certain challenges:
• Europe’s reaction to the climate change issue implies huge investments in renewable energy sources and their efficient integration into the grid
• the objectives of the TYNDP will require dedicated resources and the implementation of processes and methodologies never before applied at a pan-European level
• the TSOs should continue to ensure maximum transparency concerning the operation and development of their grids.
Following consultation with major stakeholders and with the European Energy Regulators’ Group for Electricity and Gas ENTSO-E decided on an early release of its plan, which has four main objectives:
• to gain feedback concerning the content, and the input stakeholders expect, in later reports
• to illustrate existing trends in European energy policy objectives,
• to test the necessary processes and methodologies,
• to provide the political debate with an in depth review of existing trends.
The pilot TYNDP therefore sets out to provide the best information available on planned or envisaged transmission projects of European importance, an overview of the likely future power system in Europe, discussion of the development of generation demand scenarios on a multiple basis, and describes the challenges related to the development of the transmission network, and initiates a shared learning process. But it does not cover investments in IT and smart devices, which, although they are of key importance to monitoring and operating the network, are beyond the scope of the TYNDP.
Challenges for grid development
A hundred years of developments has resulted in a grid with a high reliability standard that copes with defaulting system components, anticipates risks, and proposes necessary measures. Drivers for grid development are essentially the same as they have been for several decades, namely accommodating load and generation development, but changes in the legal and regulatory framework have produced major challenges for TSOs, such as:
• Responding to EU energy policy, especially market integration, and connecting large scale renewables (RES) generation, often in remote locations, while maintaining security of supply ;
• Dealing with a globally complex legal and regulatory context stemming from a multitude of different authorities;
• Securing the finance for expected developments in due time;
• Dealing with the lack of social acceptance that delays or jeopardises projects.
Although TSOs play a key role in meeting these challenges, meeting EU energy policy targets and treaty obligations by 2020 and 2050 will demand co-ordinated efforts from all concerned stakeholders.
Other uncertainties that have to be met by system planners will include predicting the future location of generation and consumption, changes in the way electricity is generated, transported, and consumed, and the medium and long term impact of parallel policies such as energy demand efficiency, renewable energy sources integration, CO2 emissions reduction, and decommissioning of polluting units.
Broad investment needs
Six clusters of different investment needs can be identified (Figure 1). In the Northern part of Europe, where the integration of very large renewable assets is required, the connection of renewable sources, mainly wind, is one of the most important triggers. Wind farms are often located in remote areas where the network was not initially developed to accommodate large sources. Furthermore, the impact of these new plants on flow patterns can be noticeable. Produced renewable energy has to be evacuated either within the North Sea and the Baltic Sea regions or to the east and to the south. Therefore, impacts are not limited to these two regions but also to the surrounding ones, triggering new investment.
The south of Europe also reuqires extensive renewables integration. The connection and evacuation of renewable sources, mainly wind, hydro and solar in the Iberian Peninsula, is one of the most important investment needs in the South-Western and Centre-South regions of Europe. The ambitious renewables plans in Italy, Spain and Portugal necessitate an important investment in transmission infrastructure. It triggers not only internal reinforcements but also emphasises the need to increase the interconnection capacity with the rest of the continent and especially with France. In Italy wind farm development in the South has triggered huge reinforcement in transmission capacity.
In the Central South / South-East Region investment needs are dictated by the power balances and market prices of the member countries. The block including Greece, FYR of Macedonia, Albania, and Italy is usually importing electricity. Strengthening of the regional network in the predominant directions of power flow, in order to assist market integration, is a main driver that stimulates investment needs. North-south flow will actually rise in importance as new generation in Bulgaria, Hungary and Croatia will have to be accommodated. The same increasing trend is valid for the east–west flows but for different reasons, namely the interconnections of new systems with continental synchronous systems (possibly Turkey’s system in the short term, with Moldova’s and the Ukraine’s following later). Also, the marked increase in generation and pumping capacity (new hydro pump storage power plants of several thousand MW) especially in the Austrian and Swiss Alps will have a marked influence. A strong correlation with wind power generation, especially in North Germany, is expected.
For the Baltic states the EU has launched a Baltic Sea Energy strategy, which supports the results from the Multiregional plan and an Energy Market Interconnection Plan (BEMIP) launched in autumn 2008 by the EU. The goal is the full integration of the three Baltic States into the European energymarket, through the strengthening of interconnections with their EU neighbours.
Complementary to renewables integration, connection of new conventional power plants totalling more than 100 GW is foreseen all over Europe in the next decade either to replace old, decommissioned plant or to cope with load growth and system balancing.
The power supply of some European cities and regions will be an issue in Europe, (in Spain, France, Hungary, Slovakia, Poland, Czech Republic, etc.)
With new sitting and clustering of generation units, and greater variations of the generated power, market integration is more than ever the key, needing the adaptation of grid access rules complement each other to propose the most appropriate market framework.
Grid development projects
Hundreds of planned or envisaged transmission investment projects of European importance proposed by TSOs are described in the TYNDP report*. The principal ones are listed in Table 2. Almost all are the result of co-operation between TSOs to address the requirements of users, or European policies. They consist of both tie lines and national projects. These projects repre sent roughly
42 100 km of new or refurbished network routes, of which 18 700 km are expected in the midterm. The economic situation may delay some projects but is not expected to trigger significant changes in these figures.
At about 23200 km, new 400 kV AC overhead lines account for slightly over half of the total. About 25% concerns new DC links, almost all subsea or underground cables. The refurbishment of 6900 km of existing AC lines is also planned. New 400 kV AC OHL projects are in technical, economic, and ecological terms the most efficient solution for long distance electricity transmission, and integrate straightforwardly into the existing grid.
The ENTSOE transmission network consists of about 300 000 km of lines, so TSO investments correspond to more than 14 % of the existing network in either new (12 %) or refurbished (2 %) power lines for the next ten years. The assets due to be completed within the next five years represent investment costs ranging from 23 to 28 billion Euros, spread all over Europe. This represents only a fraction of the total investment efforts of TSOs because it does not include local investments, but it does demonstrate the magnitude of the challenge.