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Nordic Grid Development Plan 2019 Presentation for stakeholders March 2018 Agenda Background Purpose Scope Relation to European, regional and national plans Overall timeline Nordic reference scenario Harmonized CBA


  1. Nordic Grid Development Plan 2019 Presentation for stakeholders March 2018

  2. Agenda • Background • Purpose • Scope • Relation to European, regional and national plans • Overall timeline • Nordic reference scenario • Harmonized CBA methodology • Bilateral studies • Stakeholder interaction Photo: Thomas Ärlemo

  3. Background - Purpose • Communicate status of ongoing, planned, and potential Nordic investments, and how they contribute to Nordic socioeconomic welfare • Communicate a common Nordic view on the development of the future system, and how grid investments may help meet system challenges • Communicate results of new system analysis investigating the cost/benefit of further increasing the transmission capacity in the Nordic system • Function as a “bridge” between the ENTSO -E process and the national planning processes in the Nordics

  4. Background - Scope • Establish a common Nordic Reference Scenario based on ENTSO-E/TYNDP scenario “Sustainable transition” • Harmonize CBA methodology for the evaluation of socioeconomic welfare • Carry out non-binding bilateral studies of the five corridors for an early assessment of potential benefits from a Nordic system perspective • Involve and interact with stakeholders to ensure quality

  5. Background - Relation to European, regional and national plans National plans The way forward Nordic Grid Nordic – Solutions for a … complementary Nordic Development changing Nordic publications … Plan 2019 power system Scenario TYNDP 2018 Regional Plans, Pan European Scenario TYNDP2020 +++ ENTSO-E TYNDP 2016 Mid-term Adequacy Forecast System Needs, TYNDP 2018 MAF 2019 2016 2017 2018 2019

  6. Background - Overall timeline 2017 2019 Sep Oct 2018 June Dec 2019 Jun Nordic Reference scenario Oct 17 – June 18 Harmonized CBA methodology Jan 18 – June 18 Bilateral studies Feb 18 – Dec 18 Jan 19 – Jun 19 Final report, communication

  7. NGDP 2019 Nordic Reference Scenario

  8. Drivers and major changes in the Nordics – Recap from NGD 2017 A. Integration with the continent/UK B. Integration of renewables leading to increased north-south flows C. New consumption D. Baltic integration E. Decrease of nuclear and thermal capacity Drivers are similar and becoming stronger when we look towards 2040.

  9. Fundamental assumptions and storyline • Based on ENTSO- e scenario “Sustainable Transition” for continental Europe • Both coal and gas is competitive in the merit order, coal is forced out due to national regulation ie EU ETS CO 2 price is still not the only driver for de-carbonization • Rapid deployment of new renewable production. • Demand is growing only due to new demand types • A mix of energy only and capacity market • New sources of flexibility enters the market as thermal and nuclear is phased out Photo: Magnus Mikaelsson

  10. Fuel prices and merit order

  11. Demand • Demand driven by new consumption types eg EVs, Heat Pumps , new industrial applications Continent

  12. Energy Balance • Renewables replace nuclear and thermal

  13. Power balance • Conventional generation is phased out and replaced by new flexibility • Capacity margins will be much tighter

  14. New flexibility • Additional flexibility in some EVs as well • Large scale storage could be hydrogen production • Load shifting could be industry changing fuels

  15. Price volatility • More volatile price but the pattern is changing

  16. Annual prices and energy mix in 2030 & 2040 • Nordics closely tied to the continent after new interconnectors

  17. Continental prices • Convergence with UK and divergence with Poland

  18. Economics of power plants • Low return for thermal plants from spot market • Achieved price drops for renewable generation

  19. Sweden & Finland • Future of nuclear is a key uncertainty

  20. Norway & Denmark • Y • Z

  21. Baltics • Continued deficit situation both in terms of energy and capacity

  22. NGDP 2019 Harmonized CBA methodology

  23. Purpose and scope • To agree on a common Cost Benefit Analysis methodology for evaluating new potential grid investments of Nordic significance based on previous work in both ENTSOE and the Nordic region. • The aim is not to include all potential costs and benefits, but rather those that are deemed most important and possible to calculate/assess in the very early stages of investigating potential grid investments. Photo: Thomas Ärlemo

  24. Work done so far • All benefits are calculated for the Nordic countries • Pan-European benefits reported for discussion Harmonized Non-harmonized • • Net Present Value – method Investment costs • • 4 % real discount rate Each TSO reports their best estimate of • 40 years of analysis period capital expenditure & operating expenses (25 years in sensitivity analysis) in their network area. • Currency: Euro • CO2 is calculated for the whole modeled area

  25. Included indicators • Socioeconomic welfare • Grid losses • Impact on CO2 emissions Monetized • Costs • Security of Supply Generally not monetized, may be done if it is a key • Integration of renewable electricity economic driver for the investment • Environmental impacts Always assessed – degree depends on the investment • Flexibility, Balancing resource trade, Assessed when relevant to the specific investment, Reserves non-harmonized methods • Resilience, Robustness

  26. NGDP 2019 Bilateral studies

  27. Bilateral studies Corridor Focus/Drivers NO2-DK1 Aging of infrastructure of Skagerrak 1-2 NO1-SE3 Impact of the Swedish nuclear decommissioning SE3-DK1, SE4-DK2 Aging of infrastructure of Kontiskan 2 Investigate consequences of large wind expansion and industry in NO4-FI the far North Confirm results from 2016 studies and prepare for decision to SE2-FI (Kvarken) move forward with planning

  28. Stakeholder interaction

  29. Stakeholder interaction • Q1 2018: • Communicate the purpose and scope of NGDP2019 • Collect input from market actors on scenario and sensitivities, important aspects to investigate etc. • Q4 2018: • Present status on the bilateral studies • Collect input to the bilateral studies

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