Offshore Electricity Infrastructure in Europe - European Wind Energy ...

esults
and NordSee Ost Group into the Cobra cable can
save roughly €207 m and €280 m respectively (see
Table 4.2).
Reduction in system benefits
However, while the infrastructure costs are reduced,
teeing-in reduces the available capacity for electricity
trade between two countries as the cables are now
also loaded with wind energy. In each hour, the produced
wind power from the teed-in wind farm will be
sent to the country with the highest electricity price.
The interconnector capacity for trading electricity from
the country with the lowest price towards the country
with the highest price is thus reduced, leading to
a lower system benefit than in the case of a direct
shore-to-shore interconnector. As can be seen from
Figure 4.11, trade is only constrained more than in
the Business As Usual (BAU=No Tee-in, wind farm connected
to country A, direct interconnector built) case
when electricity flows from country B to country A 15 .
The reduction in system benefit happens in most
cases, as is shown by the results for the BritNor and
Nordlink cables. Teeing-in the Dogger Bank A wind farm
into the BritNor cable increases the system costs over
the lifetime by €400 m 16 , while the tee-in solution for
the Dan Tysk group into the NordLink cable increases
system costs by €63 m (Table 4.2). In some other cases,
particularly when the wind farm is located in a third
country with lower electricity prices, different results
are obtained. This is shown in the Cobra cable cases,
which will be further explained in Section 4.4.3.
The eventual reduction in system benefits depends
strongly on various parameters, such as the capacity
of the interconnector cable, the capacity of the teed-in
wind farm, the price difference between the countries,
and the correlation between price difference and
wind farm production over all hours. Additionally the
overall trade, demand and generation situation in the
European power system cannot be neglected 17 .
Comparison and discussion
Three of the four investigated cases have a net benefit
for the European power system (Table 4.2). While the
tee-in solutions on Nordlink and Cobra are beneficial,
this does not hold for the BritNor Cable where over the
lifetime there is no net benefit and additional costs
of €110 m arise. In the latter case, the lower trade
benefits are not outweighed by reduced infrastructure
costs. The other three cases clearly have a lower significance
for trade, and teeing-in the wind farms only
leads to a relatively low reduction in system benefits.
FIGURE 4.11: SchEMATIc EXPlANATION OF ThE REdUcTION OF SYSTEM bENEFITS bY TEEING-IN WINd FARMS INTO
INTERcONNEcTORS, FOR TRAdE FROM cOUNTRY A TO b (lEFT) ANd FROM cOUNTRY b TO A (RIGhT).
Trade constrained
Trade constrained
Trade unconstrained
Trade constrained
Prices Country A < Prices Country B Prices Country A > Prices Country B
15 In the scheme on the top left of this figure, trade is in fact unconstrained and the wind flows into country A. However, from a system
point of view this gives the same result as the scheme on the bottom left.
16 Present value of a cash flow of yearly system benefits over a lifetime of 25 years and with a discount factor of 6%.
17 In practice, as for direct interconnectors, the benefits are of course also dependent on future development of other interconnectors
in the region. These improve market efficiency further and reduce the possible benefits of trading electricity due to a lower price
difference.
44 OffshoreGrid – Final Report