The North Seas Countries' Offshore Grid Initiative - Initial ... - Benelux

5.1.4.1 Annual Production Cost Savings
The main measureable benefits calculated in this study relate to the savings in electricity
generation production costs. The variable cost of production comprises fuel costs, VOM
costs and CO emissions costs. Figure 5-11 shows the savings in the 2030 production
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costs within each country for the radial and meshed designs over the initial 2020 grid. It is
important to know that these are changes in production costs within each country, and
not energy costs. The impact of imported energy it therefore not included.
The most significant savings arise in Great Britain where higher cost (gas fired generation)
is replaced with generation in other countries, thereby reducing the overall production in
Great Britain. The costs of production in Belgium and Ireland also fall with the 2030 grid
designs.
Germany and Netherlands see the largest increases in production costs, as they generate
more to export to the higher price countries.
In the other countries there are only small differences.
The total savings for the NSCOGI region are also presented in the graph. As can be seen,
the total production costs savings are very similar (around 1450 M€ per year) for both
radial and meshed configurations. This means that the total production costs have come
down from 43.6 billion € to 42.1 billion €.
Figure 5-11 Difference in the variable production costs by NSCOGI country for the Reference Scenario in
2030, between the Grid2030 Radial case and the Grid2020 case, and between the Grid2030 Meshed case
and the Grid2020 case
The additional grid build therefore reduces average production costs in formerly high
price countries and increases prices in formerly lower priced countries by virtue of their
additional exports.
The following sections provide more insight into the production cost results.
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