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

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produced. The offshore w<strong>in</strong>d farms considered <strong>in</strong><br />

<strong>Offshore</strong>Grid produce about 530 TWh annually<br />

which is almost the annual consumption of<br />

Germany. Over 25 years, this amounts to 13,300<br />

TWh. Assum<strong>in</strong>g today’s average spot market price<br />

of €50/MW, the value of this electricity is €421<br />

bn. In this relation the <strong>in</strong>frastructure costs only represent<br />

about a fifth of the electricity value that is<br />

generated offshore.<br />

• Meshed grid designs with three- and four-leg nodes<br />

can result <strong>in</strong> high net benefits and large benefit-to-<br />

CAPEX ratios, as proven by the mesh configuration<br />

<strong>in</strong> both the Direct and the Split Design. In both designs,<br />

the mesh serves primarily as a North-South<br />

<strong>in</strong>terconnection, which supports the conclusions<br />

that the North-South w<strong>in</strong>d generation correlation<br />

was the lowest (see Section 4.1). Moreover, this<br />

also confirms the need for connection to the flexible<br />

and cheap Norwegian and Swedish hydro power<br />

resources.<br />

• An offshore grid will be built step by step. Every<br />

new generation unit, <strong>in</strong>terconnection cable, political<br />

decision or economical parameter has a serious<br />

impact on both the future and the exist<strong>in</strong>g projects,<br />

and thus <strong>in</strong>fluences the design of a future offshore<br />

grid. However, the two designs presented <strong>in</strong> this<br />

report br<strong>in</strong>g useful understand<strong>in</strong>g and conclusions<br />

that allow the grid development to be brought forward<br />

with modular steps <strong>in</strong> the best possible way.<br />

Recommendations on overall grid design<br />

• Any <strong>in</strong>terconnector has a negative impact on the<br />

<strong>in</strong>terconnectors that already exists because they<br />

reduce price differences between the countries.<br />

The bus<strong>in</strong>ess case for any new <strong>in</strong>terconnector<br />

should therefore be very strong to withstand the<br />

negative impact of future <strong>in</strong>frastructure measures.<br />

Split w<strong>in</strong>d farm connections are less dependent<br />

on the trade than a direct <strong>in</strong>terconnector, and can<br />

therefore still be beneficial even with lower price<br />

differences.<br />

• Follow<strong>in</strong>g the same reason<strong>in</strong>g, the policy for<br />

merchant <strong>in</strong>terconnectors which receive exemption<br />

from EU-regulation can be questioned. The<br />

<strong>Offshore</strong>Grid – F<strong>in</strong>al Report<br />

merchant <strong>in</strong>terconnector concept can <strong>in</strong>centivise<br />

<strong>in</strong>vestments that bear large risks. However, <strong>in</strong>vestors<br />

<strong>in</strong> and owners of merchant <strong>in</strong>terconnectors<br />

are encouraged to obstruct any new <strong>in</strong>terconnector,<br />

as this will reduce their return on <strong>in</strong>vestment.<br />

It is therefore absolutely necessary that there are<br />

no conflicts of <strong>in</strong>terest, for <strong>in</strong>stance with private <strong>in</strong>vestors<br />

that have key roles <strong>in</strong> grid plann<strong>in</strong>g, grid<br />

operation or political decisions process for these<br />

issues. Otherwise the endeavour to have a s<strong>in</strong>gle<br />

EU market for electricity is put at risk.<br />

• In addition to the techno-economic advantages, the<br />

Split Design has environmental benefits because it<br />

reduces the total circuit length. Moreover, it improves<br />

the redundancy of the w<strong>in</strong>d farm connection, which<br />

improves system security and reduces the system<br />

operation risks, the need for reserve capacity, and<br />

the loss of <strong>in</strong>come <strong>in</strong> case of faults. When do<strong>in</strong>g<br />

detailed assessments for concrete cases, these<br />

merits should not be forgotten. These technical<br />

advantages also come along with tee-<strong>in</strong> and hubto-hub<br />

connections and of course <strong>in</strong> particular for<br />

the mesh grid design (step 3 of the two design<br />

approaches).<br />

• On the other side, tee-<strong>in</strong> solutions, hub-to-hub<br />

solutions and split w<strong>in</strong>d farm connections are<br />

confronted with the unsolved problem of potential<br />

regulatory framework and support scheme<br />

<strong>in</strong>compatibilities between <strong>Europe</strong>an countries. The<br />

reason is that renewable energy that is supported<br />

by one country can now flow directly <strong>in</strong>to another<br />

country, so that the country pay<strong>in</strong>g for it cannot<br />

“enjoy” all the benefits. For split w<strong>in</strong>d farm connections,<br />

this is even more difficult as the connection<br />

to the country <strong>in</strong> which the w<strong>in</strong>d farm is located<br />

is reduced. As these complexities add risks to<br />

the development of <strong>in</strong>tegrated and especially split<br />

connections, they should be solved at <strong>in</strong>ternational<br />

or bilateral level as soon as possible.<br />

• The ongo<strong>in</strong>g development of direct <strong>in</strong>terconnectors<br />

should not be slowed down, as this concept can<br />

already be realised today without large w<strong>in</strong>d farms<br />

far from shore. However it is advisable to anticipate<br />

tee-<strong>in</strong> connections for suitable future w<strong>in</strong>d farms.<br />

95

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