Grid Development Plan

Transcription

1 Grid Development Plan June 2005

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3 SUMMARY Grid development at a rapid pace Statnett has a leading role in developing an effi cient Norwegian and Nordic electricity market. A key responsibility in this respect is to plan and develop Norway s main power grid. The objective is to establish rational and future-oriented systems that are robust in relation to alternative paths of development of the energy system. Objectives and criteria for the grid development The main grid will be developed on the basis of economic criteria. Although Statnett s primary focus is on the Norwegian grid, investments are assessed in relation to challenges and opportunities in the Nordic power system as a whole, when relevant. Potential environmental impact is emphasised on a par with other considerations, and increased utilisation of the existing grid is always considered as an alternative to building new power transmission facilities. Quality of supply is taken into account in the economic calculations through estimated outage costs, and through Statnett s policy for system utilisation. Security of electricity supply in extremely difficult power situations The Norwegian Government, in Report to the Storting No. 18 ( ) on Security of Electricity Supply, etc. (White Paper on Security of Electricity Supply) and the Regulations on Transmission System Operation, has assigned Statnett broader responsibilities for ensuring that there is momentary balance in the Norwegian power system at all times. In this connection, Statnett has a statutory duty to assess and to develop possible measures and initiatives to enable us to master extremely diffi cult power situations, and thus reduce the risk of power rationing. Statnett is now in the fi nal phase of identifying and evaluating relevant measures/initiatives to prevent and manage extremely diffi cult power situations. One conclusion from the work done to date is that preventive action, in the form of measures that enhance the fl exibility of the electricity market, has more favourable potential than acute measures that will only be set in motion when we are well on our way into an extremely diffi cult situation. Statnett aims to conclude this work in autumn 2005, following discussions with the authorities, our customers and other stakeholders. Green certificates and renewables The Norwegian authorities are planning to introduce a scheme of mandatory green electricity certifi cates from 1 January A green certifi cate scheme can trigger considerable investment in the main grid. For example, the scenario Wind Power and Integration (with 12 TWh wind power and 8 TWh new hydropower) will involve NOK 7.5 billion more in investment up to 2020 than in our Base Scenario. This scenario illustrates the need to see investment in new power generation in context with the need for grid investment. The certifi cate scheme will primarily trigger investment in wind power and small scale hydropower facilities. The power produced will vary with wind and precipitation and must be regarded as virtually unregulatable. This will create new challenges for Statnett as Norway s transmission system operator. However, the Norwegian power system is well equipped to handle an increasing share of unregulatable power production. Interplay of production/grid and between energy carriers Norway is facing a situation with increasing shortage of both production and grid capacity, and we can therefore expect to see considerable investment in the coming years. Many of Statnett s planned investments in the main grid are directly dependent on what happens on the production side. Currently, there are two situations in particular in which it is extremely important to see grid and production in context: Gas power or other new power production with long time-of-use in Central Norway (giving reduced grid costs) Hydropower and wind power in Northern Norway (giving increased grid costs). From 2005, Statnett has introduced a grid effi ciency phasing-in tariff. This gives a reduced grid leasing tariff on new power production facilities which offer favourable and effi cient localisation in relation to the current grid. Statnett is now continuing this work by assessing and framing various measures, also of a fi nancial nature, in relation to unfavourable and ineffi cient localisation of new production vis-à-vis the grid. During the current year we plan to present our assessments as to which measures and mechanisms may be most useful. The aim of our activity with regard to localisation signals is to give the market participants stronger and clearer fi nancial incentives in situations where the establishment of new power production will generate considerable grid-related costs and savings. Viewed in context with the interplay between investment in grid and production facilities, it is also an important task for Statnett to communicate the consequences for the grid of major changes in production and consumption. Natural gas will probably play an important role in the development of the Nordic energy system. To create an optimal energy system, the infrastructure for gas and electricity should be viewed in context. Statnett has therefore become engaged in work related to the use of natural gas in Norway, to ensure optimal system-wise interplay between electricity and gas. Grid Development Plan

4 Integration with the Nordic countries and Europe Norway is one of the countries in Northern Europe with the lowest power exchange capacity with other countries, despite the fact that Norway is highly dependent on electricity imports in dry years and exports in wet years. Viewed overall, the interconnections between the Nordic countries and the rest of Europe are weak. The variation in hydropower production indicate that the Nordic countries power exchange capacity should be considerably higher than it is at present. At the end of 2004, Statnett and the Dutch system operator TenneT decided to build NorNed, a 700 MW subsea cable link between Norway and The Netherlands. In addition to NorNed, Statnett wishes to establish a minimum of MW new cable capacity to other countries. There is an ongoing process of liberalising European electricity markets. This process is opening up new opportunities for Norway with a view to increasing value creation in the Norwegian power system through increased power trade with the Continent. In the Akureyri Declaration issued in September 2004, the Nordic energy ministers asked Nordel to assess the possibilities for greater co-ordination of system operation, joint organisation and fi nancing of grid investment and power management in the Nordic countries. On 24 February 2005, Nordel presented its report «Enhancing Effi cient Functioning of the Nordic Electricity Market» to the Nordic energy ministers. Statnett takes the view that Nordel s proposals should have been more ambitious in relation to facilitating an even more binding Nordic collaboration. Between now and the meeting of Nordic ministers on Greenland in August 2005, Statnett is working actively to help maintain the pace of the Nordic process. We are concerned to see a more binding collaboration taking shape, as the current form of collaboration within Nordel is not suffi ciently effective. Topics of particular importance for Statnett are congestion management and joint development of the Nordic power grid. Grid development scenarios Statnett has established a Base Scenario for analysing grid development in 2010 and 2020, which is based chiefl y on a continuation of the current energy policy. Up until 2020, general consumption is expected to grow by 12 TWh or an average of 0.8% per year, and consumption related to the petroleum sector is expected to increase by 8 TWh. Electricity production will increase by 5 TWh hydropower, 5 TWh wind power and 11 TWh gas power. This will leave the overall power balance at approximately the same level as today. The decision has been made to establish the NorNed link with 700 MW capacity to The Netherlands. In addition, we assume a further 600 MW cable capacity to Denmark. To assess the robustness of potential investment initiatives, we have developed three alternative scenarios: Wind Power and Integration, Gas Power, and Low Consumption. In addition, we are studying a potential situation with little new electricity production up until 2020, meaning that the shortfall in a normal year will rise to 18 TWh. With our current transmission capacity this will be close to the upper limit for what we can possibly import in a normal year. In a dry year this will create an import requirement far in excess of our current import capacity, with extremely high prices and reduced consumption as a result. In a situation like this, we can also expect to see power rationing. Main challenges and strategy in developing the main grid The biggest challenges in developing the main grid the coming years are associated with: Consumption increase in Central Norway (county of Møre og Romsdal) Plans for larger amounts of wind power production in Northern Norway Supply to the Bergen area Security of electricity supply. There is great uncertainty attached to the development of new production facilities, both in relation to the localisation of new wind farms and if and when the planned gas power plants will be realised. There is also considerable uncertainty surrounding trends in consumption, and particularly in relation to developments in power intensive industry. Developing the main grid in Norway will not resolve the challenges related to a growing power shortfall. To avoid such an unfortunate situation, what is needed is fi rst and foremost increased domestic production capacity and new interconnectors to other countries. Increasing capacity to other countries alone is not considered a rational solution to the problem, but should be combined with increased domestic production. The planning, development and construction process required to build new power lines is a long one, which represents a challenge in comparison with co-ordinating the system towards new production and new consumption which can be realised considerably more quickly. The principal strategy for future grid development will be: Increased utilisation of the existing system Expansion of transmission facilities (voltage upgrades and new power lines) Special measures to increase security of electricity supply. By increasing our utilisation of the existing system, Statnett has derived margins and raised transmission limits, in some cases considerably. The potential for future increases in capacity by further increasing utilisation of the existing system is limited. This is refl ected in the comprehensive investment plans for the coming years. 4 Grid Development Plan

5 Grid development The large growth in consumption in Central Norway is causing a power shortfall in the region. Extensive grid reinforcement projects within and into the region are currently on-going and also planned. A new power line from Viklandet to the new Fræna substation and onwards to the Ormen Lange terminal is under construction. To secure the electricity supply to Central Norway, Statnett is working initially on establishing a 420 kv interconnector from Nea to Järpströmmen in Sweden to replace the current 300 kv interconnector. In addition, we are considering alternative grid strengthening south-westwards towards Sogn (Ørskog-Aurland) and northwards from Møre to Tunnsjødal/Rana. We can resolve the challenges in Central Norway by reinforcing the grid, but in a situation with an increasing energy shortfall a solution based on reinforcement alone may create new challenges in other areas, which again will have to be resolved with new grid reinforcement. New power production in Central Norway is highly desirable, primarily gas power or other stable production with long time-of-use. New production south of the Trondheimsfjord will, up to a certain level, reduce or postpone the need for grid investment. In Northern Norway the requirement for grid reinforcement will depend on how much new wind power will be generated in Finnmark and Troms. With the current regulatory conditions for new production, the cost benefi ts of wind power expansion in Finnmark will not be suffi cient to compensate for the high grid costs. This development should therefore start further south, i.e. in Central Norway. The greatest challenge in Western Norway is to ensure security of electricity supply in the Bergen area. Statnett has forwarded a planning proposal for the project to build the Sima-Samnanger line, with a view to strengthening the grid into the area. In addition, BKK is considering a new line inside the area itself, between Modalen and Kollsnes. As a result of the gas power plant at Kårstø, the planned Sauda-Liastølen power line will not be realised. In the case of Southern Norway we are now studying the need for domestic grid strengthening as a consequence of the NorNed and Skagerrak 4 cables. A 420 kv line from Evje to Holen is the most likely initiative. The principal strategy for meeting future transmission requirements to and within Eastern Norway is to upgrade the voltage to 420 kv on the west-east lines. There will also be a requirement for increased transformer capacity in the region, and for installation of reactive compensation equipment. We are not assuming any signifi cant increase in capacity towards Sweden. With regard to developments in capacity to other countries, it has been decided to establish the NorNed cable link with 700 MW capacity to The Netherlands. A new power line on the Nea-Järpströmmen route will provide increased capacity to Sweden. In addition, Statnett wishes to establish a further MW new cable capacity to thermal power markets. A fourth subsea cable link to Jylland in Denmark (Skagerrak 4), with 600 MW capacity, is currently being assessed. In the Base Scenario, the investments in the main grid are estimated to cost NOK 9 billion up until This is approximately NOK 2 billion less than the comparable fi gure from last year s Grid Development Plan, and is chiefl y owing to the fact that investment in 2004 has, naturally, not been included this year, and that the grid system related to the Ormen Lange facility will differ from that assumed last year. A considerable share of the investment in the next few years nevertheless relates to the power supply in Central Norway. In addition, there is the cost of NOK 3.6 billion of building cables to other countries. There are in part some big variations in domestic grid investment between the different scenarios. In Wind Power and Integration, domestic investment increase by NOK 7.5 billion. In the Gas Power scenario, investment will increase by NOK 1.5 billion, while it will be reduced by NOK 1 billion in the Low Consumption scenario. With optimal localisation of new power production in relation to the existing grid, investment in the Base Scenario will be NOK 2 billion less. Grid Development Plan

6 TABLE OF CONTENTS INTRODUCTION An effective and robust power system 1. Objectives and criteria for grid development 7 2. Development trends in the power markets Developments in the EU Developments in the Nordic countries Security of electricity supply: extremely diffi cult power situations Green certifi cates and renewable energy production Localisation of new production challenges in a market-based power system Statnett and gas Trends in consumption and production scenario 2010 / Integration with the Nordic countries and Europe Nordic integration Interplay between the Nordic countries and Europe New interconnectors between Norway and other countries Development of the main grid up to Main challenges in the grid development Grid development strategy Grid development in Norway Scope of investment Investment in increased transmission capacity in the main grid (base scenario) Robustness of investment measures compared with alternative development 22 Statnett SF is the Transmission System Operator (TSO) in the Norwegian power system. This means, amongst other things, that Statnett is responsible for ensuring that there is balance at all times between electricity supply and demand in Norway, and for making the necessary investments in the main transmission grid, including interconnectors to other countries. Statnett is one of Norway s largest grid owners and owns approximately 85% of the main grid in Norway. Statnett has a leading role in developing an effi cient Norwegian and Nordic electricity market. In collaboration with the electricity market participants, the company is responsible for major wealth creation for customers and stakeholders by ensuring that there is suffi cient transmission capacity available with good quality of delivery and by facilitating effective market mechanisms. Statnett is continually focused on improving products and reducing costs. In the past decade, the electricity industry has been focused on promoting greater cost-effectiveness: there has been little investment in new power facilities aimed at increasing the physical capacity. The focus has been on increasing utilisation of the existing grid, which has again given Norway one of Europe s most effi cient power systems. In recent years, however, the focus has switched more to security of supply, with a view to enhancing the robustness of the system as a whole and improving the quality of the transmission grid. With the aim of contributing to a rational development of the power system, Statnett is faced with a number of important challenges. There is much uncertainty attached to future production capacity and consumption. Further development of the main grid in Norway aimed at satisfying future demand for transmission capacity will involve major investment with long-term tie-up of capital. Power transmission facilities have a long lifetime, and investment is only reversible to a very small extent. Therefore, it is important to seek grid solutions that are robust viewed in relation to alternative development trends in the energy system. The planning, development and construction process required to build new power lines is a long one, which represents a challenge in comparison with co-ordinating the system towards new production and new consumption which can be realised considerably more quickly. Statnett employs the Grid Development Plan as one of several tools aimed at contributing to a rational development of the power system. There is uncertainty attached to many of the investment initiatives outlined in the Grid Development Plan, and it must not, therefore, be regarded as binding but as a snapshot in time in the continual process of further developing the main grid. 6 Grid Development Plan

7 1. Objectives and criteria for grid development Statnett s objective is to facilitate a well-functioning electricity market. Our vision is to be Europe s leading and most effi cient transmission system operator (TSO). It is Statnett s responsibility to ensure that the Norwegian main grid is developed and operated in a societally rational manner. We will contribute to the development of the Norwegian and Nordic power systems by offering transmission capacity in Norway and to other countries, by facilitating market mechanisms, and by communicating developments in the power system. Statnett wishes to own the entire main grid. It is therefore our desire primarily to be responsible ourselves for planning and building all new facilities that become part of the main grid. Economy and environment Our overarching objective is to ensure the societally rational development of the power system. All planning in relation to the grid is done, therefore, on the basis of economic criteria. While benefi ts and costs are quantifi ed as far as possible, importance is also attached to other factors that are not quantifi able. The quantifi able cost-benefi t effects of a measure are the value of increased capacity in the grid and of reduced transmission loss-, outage-, tariff- and system operation costs. These benefi ts must overall exceed the investment and operational costs associated with the measure. Measures aimed at increasing utilisation of the existing grid are always considered as alternatives to building new power transmission facilities. Other factors that are also important are chiefl y environmental impact and security of electricity supply. We are concerned to fi nd solutions that are environmentally sound, and we emphasise the environment on a par with technical and economic considerations. Investments in the Norwegian main grid are assessed in relation to the Nordic power system as a whole. While our decision-making criterion is normally whether the investment will be socio-economically profi table for Norway, in analysing potential investment we also take into account the economic consequences for the other Nordic countries. Statnett is dependent on having a healthy corporate economy. The method chosen by the Norwegian authorities for regulating the revenues of the grid companies is important in order to enable Statnett to provide suffi cient grid capacity and quality in a long term perspective. Dimensioning criteria A key consideration in grid planning is to assess to what degree the society is prepared to accept outages. It is likely that the inconvenience to society in the case of widespread or serious blackouts is greater than that refl ected in the outage costs on which our economic analyses are based. This applies particularly in relation to breakdowns with very small probability of occurrence, but with major consequences if they do occur. Therefore, system security is also an important element. Traditionally, grid planning and load limitation has been based on the N-1 criterion, which means that a system must be able to tolerate the breakdown of one component without causing an outage in the electricity supply. The N-1 criterion was previously a decisionmaking criterion, but is now used more as an aid in planning. Nordel s dimensioning rules (see the Nordic Grid Code) provide a modifi ed N-1 criterion and specifi ed acceptable consequences of various combinations of operational conditions and fault incidents. Statnett bases its dimensioning and determination of load limits across national borders and in contexts where faults can have consequences for our neighbours, on Nordel s recommendations. Statnett s objectives with regard to quality of supply and a defi ned window of opportunity set limits for how large outages are acceptable. The main principles apply in operations and are a fundamental prerequisite for maintenance and grid planning. The grid must be strengthened if it is economically rational to do so, or if it has to be done to satisfy the limits in the given window of opportunity. Statnett s policy for system utilisation is to utilise the capacity of the grid within a given window of opportunity so as to minimise the sum of all expected costs. The defi ned window of opportunity is determined on the basis of the following factors: 1. Personal safety must not be compromised 2. Grid components shall be loaded within fi xed capacity limits, including the possibility for short-term overload 3. The consequences of a grid disturbance shall not be unacceptable: A grid disturbance shall not result in more than 1000 MWh non-supplied energy Points of delivery shall have voltage and adequate capacity within 2 hours (point of delivery with one-sided supply shall have voltage and adequate capacity within 4 hours) A grid disturbance shall not result in an outage of more than 1400 MW consumption A connection point in the main grid shall have maximum 2 outages per year 4. After an outage, the grid shall be operated so that there is little risk of a new outage in the same point until the cause of the fault has been clarifi ed and the necessary corrective action has been taken. Grid Development Plan

8 2. Development trends in the power markets 2.1 Developments in the EU The EU s single power market The EU s objective is to create a well-functioning European power market, where consumers can freely choose their electricity supplier and where power can fl ow freely across national borders. The EU s Electricity Directive came into force on 1 July 2004 and stipulates that, by July 2007, 100 % of the electricity market in the EU shall be opened to competition, enabling all EU consumers to freely choose their own electricity supplier. There are still some countries that have not begun the process of implementing the Electricity Directive. The European Commission stated in a report published in January 2005 that it was only in Sweden, Finland, Denmark, Norway and the United Kingdom that there were no formal barriers to the establishment of an effi cient electricity market. The Norwegian electricity market is thus regarded as functioning satisfactorily from the EU s perspective, even though the Directive has not yet been formally implemented in Norwegian law. Perhaps the most important step towards a more well-functioning market has been that the border tariffs for electricity trading were removed with effect from 1 January 2004 and replaced by a transit settlement system, of which Norway is also a part. The transit settlement system ensures that a country that transports electricity from one neighbouring country to another is compensated for doing so. Following the enlargement of the EU, a total of 19 countries are now members of the transit settlement system and the total cost is approximately NOK 370 million. It is being assessed whether the transit settlement system should be expanded to include more countries. With respect to congestion (bottleneck) management, the European Commission has in the past year adopted a more regional focus, in line with the EU s strategy of developing regional market areas. In the winter of , a number of regional mini-forums were organised, in which the Nordic countries, Germany and Poland are defi ned as one single region. The Commission continues to uphold the view that market-based principles should be employed and it highlights explicit and implicit auctions as the best models. Statnett supports this view, and the on-going work of establishing a market coupling (between Nord Pool and the German power exchange EEX) to replace the current capacity auctions on the border between Denmark and Germany. In summing up the results of the mini-forums, the Commission takes a positive view of the trading model agreed by TenneT and Statnett for capacity trading on the NorNed cable link. In the case of congestion management and the transit settlement system and tariffs, the Commission will issue guidelines. These guidelines will be set by a Comitology Committee appointed by the Commission and made up of members representing all the Member States. Norway is entitled to be present at meetings of the Committee, but is not entitled to vote. Decisions will be made by majority vote. Such decisions may involve a change in the model for transit compensation or changes in the rules for congestion management. If new legislation is proposed in the form of a directive or regulation, it will come as a proposal from the Commission after which it will be considered by the European Parliament and the European Council. In December 2003, the EU presented a draft directive on security of electricity supply in the wake of several blackouts that had occurred in Europe. The European Council reached political agreement in November 2004 following major amendments to the proposed directive compared with the Commission s draft, according to which a regulator was assigned a very important role in relation to investment in new capacity. This met with great opposition from ETSO (the organisation of European Transmission System Operators), and among national authorities in many countries. It is still not clear when the directive will be fi nally adopted. The solutions chosen for managing interconnectors, transit settlement and the drafting of regulations for security of electricity supply on the Continent will have direct consequences for the Nordic countries. Through the physical connections, the organisation of the market on the Continent has signifi cance for the electricity market in the Nordic countries. A more integrated European electricity market will increase competition and reduce price levels in Europe. Important contributions towards quickening the pace of European market development will be: Effective regulation in Germany Market coupling between different power exchange areas Stronger requirements for seperation between competing activities and monopoly activities A more effi cient balancing market. Towards the end of 2005, the Commission will prepare a report on the status of the market developments, and on this basis consider whether new legislation is required to hasten the process of market development. The power and energy situation in Europe Traditionally, there has been a considerable power surplus in Northern Europe. Power reserves as laid down in national requirements have accounted for a large proportion of the total installed power. However, the power surplus will gradually be reduced as a result of: Liberalisation, which can be expected to lead to phasing out of old and/or unprofi table capacity. Several large German companies have plans to close down unprofi table capacity. German nuclear power generators have also entered into agreements with the authorities to wind up nuclear power production. Consumption will increase as a result of economic growth. 8 Grid Development Plan

9 On the other hand, a shift from a national to a more regional supply focus could help reduce the need for power reserves and thus give increased access to production capacity in the market. The major blackouts that have occurred in recent years (Italy, North America, Sweden) have to a certain extent shifted the political focus from competition and effi ciency to securing the necessary margins to maintain the correct reliability of the system. UCTE (Union for the Coordination of Transmission of Electricity, the association of TSOs in Continental Europe) describes in its most recent report the projected power situation up until There appears to be no danger in the short-term of a power shortfall in the Northern European system. In the longer term, however, UCTE sees a possible reduction in margins, which by 2015 will fall below a recommended target for secure electricity supplies if investments are not made. Electricity prices on the Continent have recently been relatively high, leading to higher prices in the Nordic countries, too. This is primarily owing to the high price of fossil fuels (coal, gas and oil) and CO 2 quotas. It is likely that a tighter overall power balance is also contributing to the increased prices, particularly during that part of the day when consumption is greatest. Environmental policy The EU s environmental policy is signalling a commitment to prioritising the reduction of greenhouse gas emissions. While Norway s greenhouse gas emissions come from offshore, industry and transport, electricity generation is the biggest source of emissions in the EU. Most countries with Kyoto commitments are today saying that a signifi cant portion of their domestic emission reductions must be made in the energy sector. It is expected that the oldest and most polluting of the coal-fi red power plants on the Continent will be closed down, both in order to reduce local/regional pollution and greenhouse gas emissions, and because it will be unprofi table to maintain the capacity. The EU s quota directive (Directive 2003/87/EC) came into force on 1 January The Directive regulates a quota scheme for trading in CO 2 emissions. The purpose of the Directive is to assist the Member States to reach the targets set in the Kyoto Protocol. The quota scheme currently comprises some installations among 25 Member States and approximately 45 % of the EU s total CO 2 emissions. All electricity producers with installed output of over 20 MW who use fossil fuels, and some industrial activities (refi neries, cement works and timber processing plants), are subject to CO 2 emission quotas. The way in which the Norwegian quota system has been designed is close to that of the EU s own system, and we are planning to link the Norwegian system with the EU s quota system. Independently of this, quotas from the EU s quota system will be recognised for use in the Norwegian quota system. As part of its commitment to satisfying European climate obligations, among other things, the EU has decided to increase the share of renewable energy from the total electricity production from 13.9% (1997) to 21% (2010). This is equivalent to approximately 300 TWh of new renewable energy in the EU Member States viewed overall. In a European context, Norway is the country with the best wind power potential, and there is also the possibility of expanding hydropower more cheaply than on the Continent. In addition, there are big opportunities in bioenergy. Therefore, an international market in green certifi cates may promote a considerable expansion of renewable energy production in Norway. In connection with green certifi cates, Statnett has become engaged at national, Nordic and European level. The Association of Issuing Bodies (AIB), of which Statnett is a member, has in cooperation with the European electricity industry developed market-based systems for international trade in certifi cates from renewable energy sources. Through Nordel, Statnett is working towards developing market-based systems for guarantees of origin, product description and, possibly, a Norwegian/ Swedish mandatory certifi cates market, which will tie in with the underlying physical market. 2.2 Developments in the Nordic countries Energy production The Nordic power system is a mixed hydropower and thermal power system. In 2003, hydropower accounted for 46%, thermal power 52% and wind power 1% of all energy production. The breakdown of energy production in the Nordic countries is shown in fi g This kind of variation in production has for many years given rise to trade and cooperation across Nordic borders. The volume of electricity production in the Nordic countries in 2003 appears in fi g FIG. 2.1 Breakdown of Nordic energy production (2003) 99% 87% 61% 50% 28% Norway 1% Denmark 13% 24% Finland 12% Sweden 10% Total 2% Hydropower Nuclear power Wind power 27% 40% 46% Other thermal power FIG. 2.2 Volume of electricity production in the Nordic countries, 2003 Electricity production 2003 (TWh) Denmark Finland Norway Sweden Total Hydropower Nuclear power Other thermal power Wind power Electricity production in total Consumption (including transmission loss) Grid Development Plan

10 Production capacity (annual energy) in the hydropower systems can vary a great deal from year to year. In relation to a median infl ow year, low precipitation can reduce production potential in the Nordic system by up to 40 TWh. For Norway, this amounts to approximately 30 TWh reduced production. In 2003, Norwegian hydropower production was approximately 13 TWh less than normal, which contributed greatly to the fact that the share of hydropower in terms of the total energy production in the Nordic countries was less than normal (approximately 50%). The low variable production costs of hydropower and little short term price elasticity in demand give rise to major fl uctuations in electricity prices from wet years to dry years. FIG. 2.3 Energy production and consumption in Norway TWh per year Grid Development Plan, «Base Scenario» Min-max. inflow, ref Mean production, ref. NVE normal Actual production Actual consumption including transmission loss FIG. 2.4 Energy production and consumption in Norway-Sweden-Denmark-Finland, relative to % 90% Developments in the energy situation Since the mid-90s, we have seen a virtual halt to the establishment of new production capacity, while at the same time demand has gone on growing. Fig. 2.3 shows the actual amounts of energy consumed and generated in Norway from 1975 and up until today. It shows clearly a tighter energy balance and an increased likelihood that a shortfall situation may arise. In an extremely dry year there is a risk that the market will have problems in managing the imbalance between supply and demand. Fig. 2.4 shows the trend in installed production capacity and annual consumption in the joint Nordic electricity market. It demonstrates that a shift has occurred in the establishment of new capacity relative to the trend in demand. Current production capacity is still on a level with capacity in around 1997, while at the same time demand has gone on growing (consumption in 2003 was abnormally low owing to high prices, particularly in Norway). Developments in the power situation On a cold winter day, the Nordic system is dependent on energy imports. In a cold winter with temperatures with a probability of 1 year in 10 in each country, it is estimated that the maximum load can be up to MW. Under normally good conditions available production capacity is estimated to be in the order of MW (less reserves). The highest maximum load ever recorded was on 5 February 2001, with an aggregate load of approximately MW. Denmark has a positive power balance, Finland (including Russian imports) has a tolerable balance, while Sweden and Norway are in a shortfall situation. Nordel expects to see a tighter power balance. Assessments made with regard to the projected power balance in 2008/2009 show an import requirement of 2000 MW in a situation such as that described in the paragraph above. This means that the interconnectors to countries outside Nordel will be absolutely key in tackling the maximum load situation. The import capacity from Russia is expected to be 1400 MW. The maximum import capacity from the Continent is estimated to be 3250 MW. However, limitations on this capacity must be expected in a maximum load situation. Also in Norway, we can expect to see a steadily increasing import requirement under maximum load conditions. Up until the beginning of the 1990s, the trend in Norway in available production capacity provided a secure margin to expected maximum loads. Since then there has been a virtual halt to the establishment of new production capacity, while at the same time consumption has continued to rise. The base scenario assumptions describe a maximum load in 2010 of MW and in 2020 of MW at temperature conditions with a 10-year return time. The current maximum energy production available (less reserves) gives a limit of MW. The shortfall can be covered by new production capacity (power), by strengthening interconnectors to other countries, and by incentives to achieve a more price-elastic demand. 10 Grid Development Plan

11 2.3 Security of electricity supply: Extremely diffi cult power situations Follow-up of the White Paper on Security of Electricity Supply In the past couple of years, greater attention has been focused on security of electricity supply in the power system. The reasons for this are complex: Increasing shortfall in both production and grid capacity as a result of growth in consumption and very limited increase in capacity Reduced infl ow to reservoirs in autumn 2002, which created a diffi cult energy situation in the Nordic countries, and in Norway especially Major blackouts in several countries in 2003 Increasing vulnerability as a result of society becoming ever more dependent on a stable electricity supply. The biggest challenge we are faced with is the hability of the power system to tackle the big variations in precipitation. In Norway, reservoir infl ow can vary by about 60 TWh between a very dry and a very wet year. An inability to deal with such cycles leads to big price variations and the periodic risk of rationing intervention. Variations like this will impact in a number of ways on both business and industry, the public sector and household economy. The Norwegian Government, through Report to the Storting No 18 ( ) on Security of Electricity Supply, etc (White Paper on Security of Electricity Supply) and Regulations on Transmission System Operation, has broadened Statnett s responsibility for ensuring that there is momentary balance in the Norwegian power system at all times. Statnett has a statutory duty in this connection to assess and develop possible measures and initiatives to enable us to master extremely diffi cult electricity situations and thus reduce the risk of power rationing. The White Paper mentions reserve power, energy options and fl exible consumption as possible initiatives. In Report to the Storting No 1 ( ), the Norwegian Government requested specifi cally that the possibility of an energy options scheme should be assessed. The Government referred to the outline for an options scheme presented by the Federation of Norwegian Process Industries (PIL) as being a constructive proposal that should be considered further and has requested Statnett to do more work on an energy options scheme in collaboration with PIL, market participants and the Norwegian Water Resources and Energy Directorate (NVE). This work must be done within the framework drawn up in the White Paper on Security of Electricity Supply. In the light of the White Paper on Security of Electricity Supply and Report to the Storting No 1 ( ), Statnett will act on the basis that the assessment of an energy options scheme, on a par with other possible initiatives, should be carried out within the framework of the White Paper and in relation to the need for improved security of both the power system and the electricity market. The possible establishment of an options scheme will therefore have to satisfy the criteria set out in the White Paper and at the same time be competitive in relation to alternative measures. Statnett is now in the fi nal phase of identifying and evaluating possible measures/initiatives designed to prevent and manage extremely diffi cult electricity situations. One conclusion from the work done to date is that preventive action, in the form of measures that enhance the fl exibility of the electricity market, has more favourable potential than more acute measures that are only set in motion once we are on our way into an extremely diffi cult situation. Statnett aims to conclude this work in 2005, following discussions with the authorities, our customers and other stakeholders. 2.4 Green certifi cates and renewable energy production The Norwegian authorities are planning to introduce a scheme of mandatory electricity certifi cates with effect from 1 January The scheme will mean that generators of new renewable electricity, chiefl y wind power and small hydropower plants, will receive extra payment for their production in addition to the value of the electricity itself. This will be done by issuing certifi cates according to the amount of new renewable electricity produced. Electricity suppliers will be obliged to purchase certifi cates for a certain proportion of their supply to end-users. In the fi rst instance, the intention is to develop a Norwegian-Swedish certifi cates market. Norway has good access to renewable energy sources at low cost. The green certifi cate scheme will help to improve the power balance. Arrangements will also be made to enable Norwegian actors to participate in a future international certifi cates market. With international access, the value of Norwegian electricity resources will increase, which is interesting from both an environmental and a commercial perspective. A certifi cate scheme will give new renewable electricity production an economic advantage. Non-renewable electricity production is subject to a tax charge linked to pollution. Electricity production from new renewable sources will be supported through the certifi cate scheme, and any environmental costs will not be charged. For the authorities it may, therefore, be a challenge to fi nd a sensible point of balance between the use of measures relating to renewable and nonrenewable electricity production. Effects for the main grid A certifi cate scheme can trigger substantial investment in the main grid. For example, the scenario Wind Power and Integration (with 12 TWh wind power and 8 TWh new hydropower) will cost approximately NOK 7.5 billion more in investment up until 2020 than the Base Scenario. This is primarily because it is assumed that much of the wind power in this scenario will come in Finnmark Grid Development Plan

12 and Nord-Troms, which will require very extensive and costly investment in the main grid. This scenario illustrates the need to see investment in new electricity production in a context with the need for grid investment. Statnett is considering introducing new tariff schemes that refl ect the costs of the power system associated with localisation of new electricity production. The idea is that those responsible for new production should bear a larger part of the costs of necessary investment in the grid: the electricity producers will then have to take the relevant grid costs into account in their investment decisions. Statnett believes this will be economically rational. It takes a long time to develop and increase transmission capacity, a fact that will work as a short-term brake on development of new electricity production in cases where signifi cant grid reinforcement is needed. Statnett is seeking to reduce this time factor, but it will nonetheless take several years to carry out major expansion of the grid. Effects on the power system and the market The certifi cate scheme will give rise to investment primarily in wind power and small scale hydropower plants. The electricity produced will vary with wind and precipitation and must be regarded as virtually unregulatable. New renewable electricity will therefore greatly increase the challenges faced by Statnett as TSO in ensuring balance in the system at all times. In a Nordic and European perspective, this is a growing challenge. To date there has been little wind power development in Norway, although the Norwegian power system is well equipped to handle an increasing proportion of wind power. The readily regulatable hydropower is well suited for coordination with, for example, wind power. Wind power is the least predictable form of power. Variations in production are more challenging to manage than, for example, hydropower from rivers, which provides a relatively stable electricity supply in the short term. When the share of wind power and other more or less unregulatable electricity increases, there will also be greater need for resources for power regulation. This may mean increased costs for consumers. Different energy sources have different properties which are important for power grid regulation, predictable electricity production and environmental impact. For Statnett as TSO, it is important that the certifi cate scheme is designed in such a way as to take into account market conditions, grid costs and operational factors. This will enable the scheme to help make the electricity supply more secure. It will also provide new opportunities for electricity producers, without any unreasonable increase in grid costs. Statnett as registrar An important part of the electricity certifi cate scheme is to issue certifi cates and to develop, operate and maintain an electronic register, which will permit a safe and secure procedure for registration, trading and redemption of certifi cates. This register will be the responsibility of a registrar, a role which Statnett wishes to assume. For Statnett, the role of registrar will involve new activities that are not part of either our responsibilities as TSO or our role as grid owner. The reason why Statnett has been proposed as registrar and issuing body for certifi - cates is that we have measured values that will simplify the necessary data capture. In addition, Statnett has amassed sound experience from similar work in connection with our role as Issuing Body in RECS (Renewable Energy Certifi cate System), which is an international system for trading in certifi cates. The players in the industry also want to see Statnett assume the role of registrar and issuing body. Svenska Kraftnät fulfi ls this role in Sweden. SvK and Statnett already have a good working relationship on RECS, and work is being done on these matters at Nordel focused on ensuring good trading systems and effi cient operations. This applies to both voluntary and mandatory schemes. 2.5 Localisation of new production: Challenges in a market-based power system Interplay between transmission grid and production An important objective for the organisation and management of the electricity supply is to achieve an economically effi cient use of resources. In the long term, this means that we will seek a rational dimensioning and localisation of production, consumption and grid facilities, viewed in relation to the entire power system. In order to realise the most effi cient solutions viewed in totality, decisions will have to be made based on the overall economic consequences. The challenge is to make this happen within a market-based power system, where investments in production and consumption are implemented based on a purely commercial approach. The grid companies, and at national level the TSO, are responsible for measures carried out in the transmission grid. Statnett as TSO is responsible for rational operation and development of the main power transmission grid. This means that Statnett and other grid companies must assume chief responsibility for a societally rational development of the electricity grid and the power system. One cannot expect the market participants to see it as their responsibility to pay attention to the overall perspective. We have now arrived at a situation with an increasing shortfall of capacity on both the production and grid sides, and as a result we can expect to see substantial investment in the coming years. Many of Statnett s planned investments in the main grid are directly dependent on what happens on the production side. The challenge posed by coordination must be resolved, as mentioned, within the regulatory environment that applies to the industry, where the market participants 12 Grid Development Plan

13 focus is on their own profi tability but where Statnett invests on the basis of socio-economic criteria and is responsible for a rational development of the main transmission grid. There are two current situations in particular where it is very important to see power grid and production in context: Gas power or other new production with long timeof-use in Central Norway Hydropower and wind power in Northern Norway. Localisation of new production with long time-of-use (for example gas power) in Central Norway south of the Trondheimsfjord will mean considerably reduced investment in the grid. As a result of the sharp growth in electricity consumption in the county of Møre og Romsdal, extensive grid reinforcements into the region are now planned. These can be reduced or postponed should new production facilities be established. However, there are no special price signals through the ordinary grid tariff that price the gain to the grid that favourable localisation brings. In order to stimulate favourable localisation of new production in relation to the grid, Statnett has from 2005 introduced a grid effi ciency phasing-in tariff (see the description below). Plans to generate considerable amounts of wind power in Northern Norway will also infl uence the grid investment requirement, but in the opposite direction. Wind power production localised in Finnmark is considered very attractive by the market participants because of good wind conditions and consequently good production capability. Even with relatively small amounts of wind power in Finnmark, the question of substantial investment in new transmission capacity into and out of the region may arise. With the current design of the tariffs, the individual players are not charged the grid costs they amass through realising their projects. The generators thus have no incentive to make the most effi cient decisions, because they do not take into account the costs of developing new transmission capacity when choosing between different development alternatives. Statnett s approach Statnett s chief means of giving fi nancial signals relating to localisation are the main grid tariff and the establishment of new price areas. These measures work well where there is gradual development of the power system. In more extreme situations, for example where large amounts of new electricity production are established, they do not provide suffi cient incentives to ensure correct localisation. Statnett has therefore addressed these problems in a number of different internal projects, and is continuing to assess various mechanisms/initiatives in relation to the aim of rational development of the power system. As mentioned, from 2005 Statnett has introduced a grid effi ciency phasing-in tariff. This will give a reduced grid leasing tariff on new production facilities localised within certain areas, compared with the current level, for a period of 15 years. The criteria that must be satisfi ed in order to be eligible for the phasing-in tariff are that new production must be established within those areas and within those energy volumes where it is documented that new production will bring grid savings. Statnett is now continuing the task of analysing the interplay between grid and production. We are also working on framing various initiatives, also of a fi nancial nature, relating to unfavourable localisation of new production in relation to the existing grid. During the current year we will present our assessments of the initiatives and mechanisms that may be of interest. Our ambition for the activity concerning localisation signals is to give guidance in situations where there are big grid costs or savings that are not rendered visible to the market participants through the tariff and the area prices. Viewed in context with the interplay between investment in production and in the grid, it is also an important task for Statnett to communicate the consequences for the grid as well as the benefi ts and costs related to new production, to the electricity producers, the consumers and the authorities. This will assist us to realise an effi cient use of resources in the long term. Case: Optimal localisation of gas power Taking our starting point in our Base Scenario (see the description in Chapter 3), we have looked at the ways in which new gas power can be localised in the power system so as to minimise grid costs. The reason why we have chosen to look at gas power is that this is a relevant form of production technology in those regions where there is greatest need for new production, with gas power having favourable properties in terms of the power system in these regions. Over the next few years, there will be greatest need for new production in Central Norway (south of the Trondheimsfjord) and in the Bergen area. If the planned gas power plant at Tjeldbergodden is actually realised in the next few years, we can postpone the Aurland-Ørskog power line (see 5.3), or avoid building it entirely if electricity production in Central Norway in subsequent years is developed at a pace with consumption growth. If the gas power plant is localised close to the main concentration of consumption in the region, i.e. somewhere between the Hydro aluminium plant at Sunndalsøra and the Ormen Lange facility at Aukra, the costs of connecting the power plant up to the grid will in addition be substantially less than in the case of other possible localisations in Central Norway. In the Bergen area, previous analyses have shown that a 400 MW gas power plant at Kollsnes will postpone the need for the new Sima-Samnanger power line (see 5.3) until after Localising new production to Kollsnes will also enable us to avoid building the Modalen-Kollsnes line. With gas power both at Kårstø and in the BKK area, we may need to strengthen the grid from west to east, so that the overall reduction in grid investment will be less. Grid Development Plan

14 Given favourable localisation and timing of a new gas power plant, viewed in relation to the trend in consumption, the grid investment requirement up to 2020 could thus be up to NOK 2 billion less than in our Base Scenario. However, other paths of development might mean that other solutions prove to be more favourable. 2.6 Statnett and gas Background for Statnett s engagement Natural gas is likely to play an important role in the development of the Nordic energy system. To achieve an optimal energy system, the infrastructure for gas and electricity should be viewed in context and be developed on the basis of an overall Nordic perspective. Statnett s objective is to assist in realising solutions that bring greatest economic benefi t, and so our plans make allowances for alternative energy transmission systems. Synergies between the power grid and gas pipe transport are identifi ed through overall socio-economic assessments of the profi tability of different infrastructure investments. It will be desirable to have a Nordic perspective on the development of the gas infrastructure, in the same way as for the electricity grid. There needs to be a reasonable balance between production and consumption within large regions. One of the biggest challenges is a lack of investment in new production capacity. This production challenge is something that can only be partially compensated for through grid investment. To improve the energy balance, one needs to build new electricity production facilities in Norway. New hydropower and wind power facilities will make positive contributions. Gas power has in addition properties that will be of great value to the Norwegian power system: Increasing the robustness of the power system by bringing a new energy carrier into use Predictable production, independent of precipitation and wind More fl exible in terms of localisation. Continuing work The Norwegian Government is focused on facilitating increased use of natural gas in Norway, which will among other things help to secure our energy supply. The White Paper on Gas that was laid before the Storting in autumn contained a study of the profi tability of various forms of infrastructure. In the light of the Storting s debate on the Gas White Paper, Gassco has been charged with assessing the commercial basis for realising the laying of gas pipes to Skogn and Grenland. In the fi rst instance, Gassco will prepare business plans for pipes to Grenland and Trøndelag if there is a commercial basis for doing so. They will also map potential owners, assess the market basis and forms of fi nancing, and assist in establishing letters of intent. Then it will be up to the commercial players to assess the technical decision-making basis, draw up any agreements in principle, select the appropriate concept and if possible ensure that the pipe projects are realised. Statnett will be an important contributor to the work done by Gassco. One key task will be to assess the potential gains to be had in the main grid by establishing a gas pipe in Central Norway (see Case in 2.5) and to Eastern Norway. Some provisional assessments with respect to Eastern Norway are summarised below. There is currently little electricity production in Eastern Norway, which makes the region dependent on power transmission from other parts of the country. We expect to see growth in consumption continue in the Oslo region for years to come. New production close to the site of consumption can reduce grid investment, reduce grid losses and enhance security of the electricity supply. If major amounts of new production are established in Central Norway or Western Norway, the Oslo region can be supplied from there. However, that will demand the transmission of greater amounts of energy than the current grid has the capacity to transmit. In the long term, such solutions will demand substantial grid measures. With regard to possible imports from Sweden, there are limitations in the Swedish power system both with respect to production and transmission capacity. The Swedish west coast grid has limited capacity, so that export capacity to Norway will be restricted. It is also uncertain whether Sweden has a suffi cient power surplus available for Norway. 1. Report to the Storting No. 47 (2003/2004) on innovative activities for environmentally friendly gas power technologies, etc. 14 Grid Development Plan

15 3. Trends in consumption and production: Scenario 2010/2020 Base Scenario in 2010 and 2020 The assumptions for development of the grid are outlined as a scenario (Base Scenario) for 2010 and 2020 respectively. In addition, we have developed three alternative scenarios, in order to assess the robustness of the relevant investment initiatives. The Base Scenario describes a continuation of the current energy policy without any major changes in the regulatory conditions. Electricity taxes will be maintained at the current level, and Norway will adapt to moderate international environmental requirements (CO 2 price of NOK 40 per ton, which now seems to be a low estimate). We will have a moderate increase in alternative energy sources (water-borne heat, heat pumps etc), which will slow the increase in electricity consumption slightly. The power balance in a normal year is assumed to continue at about the same level as today, i.e. approximately 8 TWh shortfall in 2010 and somewhat better in The new subsea cable link to The Netherlands (NorNed) will be realised in 2008 (700 MW), and a new cable link to Denmark is envisaged for just after 2010 (Skagerrak 4, 600 MW). In Central Norway, the grid will be strengthened towards Sweden (Nea-Järpströmmen). Consumption is expected to increase overall by approximately 20 TWh from 2001 to General consumption will rise to 83 TWh, which is an increase of 12 TWh and equivalent to an average annual increase of 0.8%. This increase is assumed to be signifi cantly lower than in the last ten-year period. An important reason for this is that no further transition from oil to electricity as a source of heating is expected, while an increase in consumption of other energy sources of 4 TWh and 6 TWh respectively in 2010 and 2020 is assumed. Consumption by power intensive industry and the timber processing industry is assumed to continue at approximately current levels. We are also assuming new consumption of 4 TWh and 8 TWh respectively in 2010 and 2020 related to the production and processing of oil and gas (Snøhvit, Ormen Lange, Troll and other fi elds). By 2010 new electricity production will come as 3 TWh hydropower and 3 TWh wind power. This is consistent with a moderate level of ambition in the forthcoming green certifi cate scheme. It is assumed that there will be no new gas power production before 2010 apart from supplying the Snøhvit fi eld with 1.7 TWh. 1.4 TWh (400 MW) of new wind power is assumed in Finnmark and Troms and 1.5 TWh (520 MW) in Central Norway. With the exception of Sauda and Øvre Otta, the increase in hydropower is related to a number of minor projects. Between 2010 and 2020 we are assuming a further 2 TWh hydropower and 2 TWh wind power. It is also estimated that the gas power plants at Kårstø and Tjeldbergodden will produce a total of 9 TWh 2. The increase in wind power is located to Central Norway with 1.5 TWh as well as smaller amounts along the coast further to the south. After 2010 the wind power will be concentrated in Central Norway based on the fact that the total volume assumed will be too small to enable the required grid expansion with new power in Finnmark/Troms. Wind power in Finnmark/Troms appears in the scenario Wind Power and Integration. The other scenarios that have been assessed are referred to in Chapter 6.2. They are: Wind Power and Integration Gas Power Low Consumption. Case: Increasing power shortfall towards 2020 Analyses have been performed of a situation in 2020 in which, compared with the Base Scenario, little new electricity production has been established, while at the same time consumption continues to grow, so that the power shortfall in a normal year is 18 TWh. Norway s maximum import capacity with our current transmission interconnectors is between 16 TWh and 21 TWh. In addition, NorNed will provide a net import of approximately 3 TWh in dry years. A power shortfall of 18 TWh in a normal year is thus close to the limit for what it is possible to import. This is an extremely unfortunate and undesirable situation. The analyses show that increased prices in a normal year will result in a slight reduction in consumption. In a dry year, the situation will be considerably worse. Here, the analyses show a reduction in production of 21 TWh compared with a normal year (based on the infl ow year 1970, which represents the most diffi cult power situation in the past 40 years). Based on consumption in a normal year, this gives an import requirement of 39 TWh. This is far in excess of the import capacity Norway has today. The situation in a dry year will thus be one of signifi cantly higher prices and a reduction in consumption of TWh. Industry is most price-elastic and will reduce its consumption fi rst. Despite this, in such a situation we can expect to see extremely high electricity prices and the risk of rationing. We will not be able to resolve a situation with a big power shortfall by increasing domestic grid capacity. The measures required to avoid such a situation are fi rst and foremost: An increase in domestic production capacity New interconnectors with other countries, preferably non-nordic countries. Increasing the capacity to other countries alone is not considered to be a rational solution to the problems, but must be combined with increased domestic production. FIG. 3.1 Assumptions in the Base Scenario (changes from 2001) TWh Consump Prod Consump Prod Naturkraft decided in June that the gas power plant at Kårstø will be built. The power plant will become operational in autumn Changes in power production Thermal, Snøhvit etc. Gas power Wind power Hydropower Changes in consumption Gas processing plants etc. Boilers Power intensive industries and timber processing industry General comsumption Grid Development Plan

16 4. Integration with the Nordic countries and Europe 4.1 Nordic integration Nordel s prioritised cross sections With regard to Nordic grid development, readers are referred to the Nordic System Development Plan 2002 and the follow-up report Nordel s Prioritised Cross Sections. The Nordel analyses deal with some of the important problems and challenges faced by the Nordic power system, and also cast light inter alia on the need for increasing transmission capacity, better security of electricity supply and harmonisation of the rules and regulations. NORWAY DENMARK SWEDEN FINLAND Based on analyses from its Prioritised Cross Sections and on market-related and operational experience, Nordel has prioritised the following fi ve cross sections: The HVDC interconnector between Jutland and Norway (Skagerrak) with the establishment of a fourth cable. In association with this, it is also being considered whether to increase capacity between Jutland and Germany. A new HVDC interconnector over Storebælt, which will link Jutland/Funen and Sealand. Cross section 4 between Central and Southern Sweden. In addition, Svenska Kraftnät is considering strengthening the West Coast cross section in Sweden. A new interconnector between Central Norway and Central Sweden (Nea-Järpströmmen), to replace the existing low-capacity interconnector The HVDC interconnector between Finland and Sweden (Fennoskan), by building cable number two. This is particularly in the light of the expansion of nuclear power in Finland and large imports from Russia. These projects will signifi cantly improve the infrastructure in the Nordic market, and will provide a satisfactory balance between the Nordic countries. The projects will be followed up bilaterally. As of June 2005, the investment decision has been taken for Fennoskan, while Interface 4 is expected to be decided in August. The grid in north south direction in Norway must be developed in close interplay with the Swedish main grid. If we look at the Norwegian and Swedish grids together, we can better utilise the capacity in both countries grids. In order to achieve a signifi cant increase in north south capacity, it is necessary to strengthen both the Norwegian grid and the interconnections between Norway and Sweden. Nordic integration In September 2004, the Nordic energy ministers met on Iceland and upheld, in the Akureyri Declaration, their vision of a borderless Nordic market. Through the declaration, the ministers asked Nordel to assess the possibilities for practical and specifi c action to achieve greater coordination of system responsibility, joint organisation and fi nancing of grid investment and power management in the Nordic countries. On 24 February 2005, Nordel presented its report «Enhancing Effi cient Functioning of the Nordic Electricity Market» to the Nordic energy ministers. The theme and conclusions of the report are summarised briefl y below. Statnett takes the view that Nordel s proposals should have been more ambitious in relation to facilitating an even more binding Nordic collaboration. In our opinion, a «borderless Nordic market» will be important for increasing security of electricity supply within the Nordic countries. In that connection, both the optimal utilisation of existing Nordic grid capacity and expansion of new Nordic capacity will be necessary. Between June and the meeting of Nordic ministers on Greenland in August 2005, Statnett works actively to help maintain the pace of the Nordic process. We have been and remain concerned to see a more binding collaboration taking shape, as the current form of Nordel analysed the need for Joint congestion management Joint market for operational reserves Nordic investment Balance settlement and consumer market Organisation of Nordic systemwide responsibility & investment Measures required Develop joint principles for congestion management. Establish a joint market for operational reserves by 1 January Implement prioritised boundaries subject to the authorities approval and prepare a Nordic cost-benefi t model. Assess the possibilities for harmonised balance settlement and other assumptions for a harmonised consumer market. Assess the possibilities for a joint Nordic planning secretariat by 1 September Frame common defi nitions of system-wide responsibility. 16 Grid Development Plan

17 collaboration within Nordel is not suffi ciently robust. It is also extremely time-consuming. We believe it is particularly important to work for equal treatment of all the market participants in the Nordic countries, both as regards securing equal competitive conditions for the participants in a future joint Nordic consumer market, and in view of the consequences that arise from the fact that not all TSOs are managing internal congestion so as to give equal treatment to the power market s participants. Several of the major Norwegian players, both consumers and producers, have expressed support for Statnett s views in these areas. Joint congestion management It is important that at Nordic level we should make optimal use of the existing power system. We should adopt the principle of dividing the market into Elspot areas that follow physical structural bottlenecks and not national borders. However, Svenska Kraftnät s objective is to have a single price throughout the whole of Sweden, while at the same time Swedish consumption and production are prioritised before export and import by moving internal bottlenecks to the border. Statnett takes the view that this is a problematical approach, since the consequence will be discriminatory treatment between own and foreign market participants. Such a practice will affect the area prices, and will have major redistribution effects in the Nordic countries. This practice will make the Nordic countries more vulnerable to power and energy shortfalls, in both the short and long term. It will also prevent price signals emerging to the market, which will weaken investment signals and the fl exibility in the system. Joint market for operational reserves Agreement has been reached within Nordel on a joint Nordic area model, according to which Nordel members will jointly estimate the necessary volumes for operational reserves in the different sub-areas in the Nordic countries. There is also agreement to purchase these from consumers and producers in a joint Nordic market. Disparities in the form of fi nancing have not yet been resolved. The Nordic TSOs currently purchase power reserves in different ways. Methods of fi nancing and power management also differ. The schemes are expensive and do not provide good price signals to the market. Organisation of Nordic investment Statnett believes primarily that a Nordic investment company should be established, alternatively a Nordic planning secretariat. This is because structural developments in the Nordic market are moving at such a rapid pace that the TSOs will have to fi nd more effective ways of working together if in the future we are going to have a well-functioning Nordic market. Establishing a company will take time and be demanding as regards clarifying the terms on which it will operate, but in the longer term it will enhance our decision-making and implementational ability. The secretariat model will be a step in the right direction given the current model, and will enable a greater degree of Nordic thinking and thus increase the possibility of succeeding with a uniform Nordic grid development. The other Nordic TSOs prefer a solution whereby investment decisions are taken on the basis of negotiation between the involved parties. Following pressure chiefl y from Statnett, Nordel has agreed to look into the possibilities for a joint planning secretariat by 1 September Balance settlement and the consumer market Statnett is concerned to see the establishment of a joint Nordic consumer market. To achieve this, the Nordic regulators should be more active in facilitating a joint market for consumers. Currently, the balance settlement system differs between the Nordic countries. This leads to higher entry barriers than necessary for new participants in the Nordic market and thus helps reduce competition in the consumer market. The differences also give rise to considerable administrative costs for Nordic players. In order to create a joint consumer market, it is essential to have a joint balance settlement system. 4.2 Interplay between the Nordic countries and Europe New interconnectors between Norway and the Nordic countries and thermal-based power systems will bring many benefi ts, linked to the equalisation of infl ow variations, revenue from power exchange over 24 hours, and a more well-functioning market. Equalisation of inflow variations Norway particularly, but also the Nordic electricity market as a whole, is largely hydropower-based, with a production capacity that can vary greatly from year to year. As the variable production costs are low and demand in the short term is not very price-elastic, there is potential for very low prices in wet years and high prices in dry years. In an extremely dry year there is a danger that the market will have diffi culty in managing the imbalance between supply and demand. In a thermal market, there are no such variations in production capacity from year to year. At the same time, the variable costs of production are much higher than for hydropower, so that there is a limit to how low the prices can get. This means that the prices in a thermal market from year to year will be more stable than the prices in a hydropower-dominated market. When two such systems are joined together, economic gains are achieved in that hydropower is better utilised in wet years and restrictions on consumption are avoided in dry years. Norway has almost 100% hydropower production, and because of that we are extremely vulnerable to variations in precipitation. This indicates that Norway (and the Nordic countries) should have major capacity on the interconnectors to other countries. Fig. 4.1 shows that this is not the case. Norway is one of the countries in Northern Europe with the lowest power exchange capacity, despite being Grid Development Plan

18 FIG. 4.1 Power exchange capacity from one country to its neighbours as a percentage of maximum consumption. Ref most dependent on imports in dry years. Fig. 4.1 shows that our power exchange capacity accounts for 18 % of maximum consumption. When NorNed comes into operation this fi gure will increase to 21%. Short-term power trade transmission capacity towards the Northern European electricity market could therefore help to bring about lower prices in the Nordic electricity market. Interconnectors to other market areas will also increase competition in the Norwegian market and make it diffi cult to exercise market power. In Statnett s opinion, there is still a considerable potential for increased value creation by linking Norway more closely with thermal-dominated markets. Statnett wishes, in addition to NorNed, to establish a minimum of MW new cable capacity to thermal markets. Production in a hydropower plant can be regulated more effi cently than in, for example, a coal-fi red power plant. This means that prices will vary less over a 24- hour period in a hydropower-dominated market than in a thermal power-dominated market. It will therefore be possible to achieve signifi cant economic gains with spot trading between the two markets, and with trading in regulating power and system services. The Norwegian hydropower system s good capacity for regulation gives rise to several types of services that are very attractive in thermal-dominated markets (regulating power and various forms of reserves), although to date these services have been little commercialised. The EU s concentration on renewable (and unregulatable) electricity production will increase the demand for regulating services. In connection with the NorNed project, extensive work will be done to develop market systems for trading in energy and regulating power/system services between Norway and The Netherlands. This work will open up new business opportunities for Norwegian players on the continental market. By improwing the opportunites for short-term trading, it will be more attractive to expand capacity in hydropower plants and to implement measures that increase fl exibility in consumption, which will be positive with a view to the power balance in the Nordic market. Well-functioning market It would furthermore be an advantage in itself if prices in the Nordic system could be stabilised by linking them to a large thermal-dominated market. Major uncertainty with regard to future prices may involve an extra high risk premium being required for investment in new production capacity, which means that prices must be relatively high before it pays to invest in new production units. Suffi cient 4.3 New interconnectors between Norway and other countries Statnett is currently working on the following investment in new capacity between Norway and other countries: Norway - Sweden Statnett wishes to replace the existing 300 kv Nea- Järpströmmen interconnector with a new 420 kv interconnector. This will be the fi rst of several important measures to signifi cantly increase transmission capacity into Central Norway. The new interconnector is being planned in collaboration with Svenska Kraftnät, and will become operational during Norway - Jutland (Skagerrak 4) Statnett and Eltra (Energinet.dk) are working in partnership to explore the technical and economic aspects of investing in a fourth cable over Skagerrak. This is a continuation of a prestudy carried out in 2002/03. The investment costs on the Norwegian side are approximately NOK 1.2 billion. The companies aim to conclude whether they wish to carry out the project in autumn NorNed At the end of 2004, Statnett and the Dutch TSO TenneT decided to build NorNed, a 700 MW subsea cable link between Norway (Feda) and The Netherlands (Eemshaven). NorNed will become part of the two countries main grids. The Norwegian share of the costs is budgeted at NOK 2.4 billion. The construction work has begun, and the cable is expected to come into operation from the turn of the year 2007/08. Statnett also considers both Germany and England as highly interesting markets. Statnett will continue working up these markets with a view to preparing future cable links. However, in the short term we believe that the competition situation in Germany and the regulatory framework in England will make it diffi cult to establish cooperation and business models that will enable such links to be realised with an acceptable level of profi tability and risk. Nevertheless, there are developments currently on-going in both countries. Germany is preparing to establish a regulator, and in the United Kingdom there are on-going discussions on the regulatory framework for interconnectors. 18 Grid Development Plan

19 5. Development of the main grid up until Main challenges in the grid development The biggest challenges for future development of the main grid are associated with the following factors: Consumption increase in Central Norway (Møre og Romsdal), related in particular to the growth in industrial consumption. At the same time there are extensive but uncertain plans for establishing gas and wind power production in the region Supply to the Bergen area (BKK). There is also uncertainty here surrounding the establishment of new production (gas power plants) in the area Plans for considerable wind power production in Finnmark/Troms. New electricity production in the area will give rise to an increased transmission requirement both inside and out of the region Security of electricity supply (system security and dry year security). There is major uncertainty attached to developments in new electricity production. This applies both to the localisation and volume of new renewable electricity, and if and when any of the planned gas power projects will be realised. New production up to a certain level will be favourable and effi cient in grid terms both in Central Norway and in the BKK area. Even moderate amounts of new production in the far north will require some substantial grid reinforcement. A challenge in relation to coordinating decisions and realising new production and grid development is that new wind and gas power production can be realised relatively quickly once the decision for development is made, compared with the process of developing new grid facilities. At the same time, we cannot permit security of electricity supply in shortfall areas to suffer pending the possible establishment of new, local production. This can mean that decisions to reinforce the grid into vulnerable areas will have to be made even though there are plans for new production in the area or region. 5.2 Grid development strategy Statnett s principal strategies for future grid development will be: Increased utilisation of existing system - Current upgrading - Capacitator banks and similar - System protection (based on, for example, planned disconnection of producers or consumers) Development of transmission facilities - Voltage upgrades of important 300 kv power lines to 420 kv - New transmission facilities Special measures to increase security of electricity supply - Voltage compensation equipment (reactors/ capacitator banks/svc units). Increased utilisation of existing system In the past decade, Statnett has carried out various measures that have substantially increased capacity in the grid but without building new power lines. The most effective measure has been to utilise production disconnection during certain grid disturbances in order to increase transmission. This measure, together with current upgrading of current-limiting power lines, has made it possible for us today to transmit signifi cantly more power on some lines and in transmission interfaces than what we were able to permit only a few years ago. The potential for future capacity increases through further increased system utilisation is limited. This is refl ected in the major investment plans for the coming years. FIG. 5.1 Main challenges in grid development Possible reduced industry consumption in the North and increased production in Helgeland/Salten Increases transmission requirement southwards Wind power in Central Norway? Supply in Western Norway Weak security of supply in the Bergen area Wind power in Northern Norway? means greater transmission requirement: In Finnmark Southwards Consumption increase in Central Norway means increased transmission requirement In the region Into region from east/south/north Large production increase in Central Norway Need for reinforcements southwards Consumption increase in the Oslo area Cable to The Netherlands Cable to Denmark? Grid Development Plan

20 Voltage upgrading Upgrading the voltage on 300 kv power lines to 420 kv gives a 40 % increase in capacity at a relatively low cost. Voltage upgrading is therefore an important strategy for increasing the capacity in the main grid. During 2004, a very considerable effort was made in this area in connection with the coming into operation of the new Klæbu- Viklandet line (between Trondheim and Sunndalsøra). Thus, the foundation was laid for introducing 420 kv as the voltage level in large parts of Central Norway. Voltage upgrading is always considered as an alternative to building new lines wherever the conditions permit. The solution chosen will depend on, among other things, whether upgrading will provide a suffi cient increase in capacity, on the economic effi ciency of the measures and on the environmental impact. Like new power lines, upgrades provide increased capacity and a stronger grid with better voltage and lower losses; upgrading is quicker to carry out than newbuilding. As a rule, voltage upgrading will also be more environmentally sound. The investment costs are signifi cantly lower than for building new lines. For example, the cost of upgrading a simplex power line is less than half that of pulling it down and building a new 420 kv line. Upgrading of duplex power lines has signifi cantly lower costs. Security of electricity supply Typical of major grid disturbances has been the breakdown of the grid as a result of voltage collapse. An effective measure to render the grid more robust and able to withstand serious faults is to install equipment to provide the necessary voltage compensation (reactive power). We plan to install such equipment in both Eastern Norway and Central Norway. 5.3 Grid development in Norway Below, a summary is provided of the most important grid development measures for the fi ve Norwegian regions. Eastern Norway The main strategy for meeting future transmission requirement to and within the region is to upgrade the voltage on the west-east lines to 420 kv. The most likely routes where this will take place are Tveiten-Flesaker- Sylling and Flesaker-Tegneby-Hasle. In addition, there will be a need for increased transformer capacity in the region, and for installation of equipment for reactive compensation. No signifi cant increase in capacity is assumed towards Sweden. In scenarios with a large electricity surplus in Central and Northern Norway, we envisage increasing capacity between Central Norway and Eastern Norway with a new power line through Østerdalen, or possibly through Gudbrandsdalen. This alternative will not, however, be a good solution in the case of a considerable power shortfall in Central Norway, as in the Base Scenario. Southern Norway Regarding Southern Norway, we are now assessing the need for domestic grid reinforcements as a result of NorNed and Skagerrak 4. If both cables are realised, then a 420 kv power line on the Evje-Holen route will be the most likely measure. No conclusions have as yet been drawn as to whether Evje-Holen will be necessary if only NorNed is realised. Western Norway In Western Norway, the focus is on supplying the Bergen area. Without new electricity production, there will be a need for increased transmission into the area. The most likely option will be to invest in the Sima-Samnanger power line, for which Statnett has forwarded planning proposals. Without gas power, Modalen-Kollsnes is also a possible investment within the area (BKK). In the short term we are considering installation of an SVC unit. As a result of the decision concerning the gas power plant at Kårstø, there will be no need for the planned Sauda-Liastølen power line. In relation to the changes in consumption and production in Indre Sogn, it will be necessary to reinforce the grid in the area by expanding transformer capacity in the Fortun substation, or by building a 300 kv power line from Borgund to Årdal. Central Norway The situation in Central Norway is characterised by a substantial increase in consumption by industry and by the Ormen Lange terminal. Major reinforcements are planned and are on-going in the region. A 420 kv power line between Klæbu and Viklandet came into operation at the end of A new 420 kv line from Viklandet to the new Fræna substation and on to Nyhamna (Ormen Lange) is under construction: it will become operational in In order to secure the electricity supply in Central Norway, we also believe it will be necessary with substantially increased transmission capacity into the region. In the fi rst instance, Statnett is working on establishing a 420 kv interconnector on the Nea-Järpströmmen route to replace the current 300 kv interconnector. This will increase transmission between Central Norway, with its substantial power shortfall, and Northern Sweden, which has a large electricity surplus. This is also a prioritised project within Nordel. The power line between Klæbu and Nea was upgraded from 300 kv to 420 kv last year. The scale of new production in the region is very uncertain, and the possibility for several alternative grid reinforcements is currently being assessed/planned. If no gas power plants or other new electricity production with long time-of-use are established in the region, in a few years time further grid reinforcements will be required in order to attend to security of electricity supply. In such a situation, a reinforcement of the grid southwest towards Sogn (Ørskog-Aurland) would appear to be the best alternative. Without new production, the 20 Grid Development Plan

21 need will gradually arise for yet another new power line into the region. To connect up the planned gas power plant at Tjeldbergodden, a new power line will have to be built from Tjeldbergodden to Trollheim, and probably also on to Viklandet. With a gas power plant at Skogn, a new power line will be needed from Skogn to Klæbu. Grid reinforcements are also being considered northwards from Møre to Tunnsjødal/Rana, and possibly even further northwards depending on the developments in production and consumption to the north. Reinforcements to Tunnsjødal may be required in the event of a wind farm at Fosen, while reinforcements further northwards will be needed in the event of new production or a reduction in consumption to the north. In addition, a voltage-upgrade of the line to Nedre Røssåga may be needed to reduce losses in the grid and provide further capacity. In the event of a large overall electricity surplus in Central and Northern Norway, it will be of interest to build a new power line to Eastern Norway; see the passage on grid development in Eastern Norway. Grid reinforcements will be able to resolve the challenges in Central Norway through the supply of more energy to the region. But in a situation with an increasing power shortfall, a solution comprising grid reinforcement alone may create new challenges in other areas, which must in turn be resolved with new grid reinforcements. In addition to major investment in new grid capacity, extensive measures will also be needed to secure stability in the grid. This is not a rational way of resolving the challenges posed by an energy shortfall, as the cost will be rather high, and security of electricity supply will be weakened. New production in Central Norway is highly desirable, and then primarily stable production with long time-of-use (for example CCGT). New production south of the Trondheimsfjord will, up to a certain level, reduce or postpone the need for grid investment. The development of the Norwegian and Swedish main grids in a north-south direction, and the interconnectors between the countries, will have great reciprocal impact. the grid is strengthened with an HVDC interconnector. Statnett is working on clarifying the technical and economic aspects of HVDC solutions. The grid development to the south must nevertheless be seen in context with grid development in both Sweden and Finland. In Statnett s view, the grid costs of wind power development in Finnmark will be so high that the development should start further south instead (i.e. in Central Norway), where there is also a considerable power shortfall. Several players are working on plans for increased imports from Russia to Finnmark. A considerable import from Russia will have major consequences for the grid; compare the effects of wind power in Finnmark. On the other hand, greater integration of the energy markets in the northern regions can form the basis for better resource utilisation in both Norway and Russia. We can also envisage scenarios where the developments in the petroleum activity in northern regions will give rise to considerable investment in the main grid in Northern Norway. Northern Norway In Northern Norway, the need for grid reinforcement will depend on the amounts of new wind power in Finnmark and Troms. The scope of the investment will also depend on geographic localisation. Even with the establishment of more than, roughly estimated, 200 MW wind power in Finnmark, reinforcements will be required from Balsfjord towards Guolas and the Alta Kraftverk power plant. With the localisation of new production in the east of Finnmark, the grid will have to be strengthened further towards Varangerbotn. In order to secure supply in the region, Varanger Kraft is planning a new power line between Varangerbotn and Skogfoss. Large amounts of wind power in Northern Norway will also generate a need to reinforce the grid in a southerly direction. If a new AC grid is built, some of the electricity will fl ow over to Sweden. This can be avoided if instead Grid Development Plan

22 6. Scope of investment 6.1 Investment in increased transmission in the main grid (Base Scenario) With the given assumptions as regards consumption and production, the planned measures are estimated to require investment in increased transmission capacity in the order of NOK 4.6 billion in the period , or an average of approximately NOK 770 million per year. From 2011 to 2020, the investment requirement is estimated at NOK 4.4 billion, or NOK 440 million per year. This is the amount for the main grid excluding investment in cable links to other countries 3. The subsea cable link to The Netherlands (NorNed) will be realised before 2010 at a cost of NOK 2.4 billion. Further, it is assumed that Skagerrak 4 is brought into operation just after 2010 with investment of NOK 1.2 billion. Up to 2010, this level of investment will be considerably higher than that carried out in recent years, yet far lower than the years prior to Other grid owners than Statnett are estimated to account for approximately NOK 1 billion of the aggregate investment in the main grid up until Robustness of investment measures compared with alternative development In order to assess the robustness of possible investment measures, three alternative scenarios have been developed for 2010 and The Wind Power and Integration scenario envisages exploiting the advantages of Norwegian energy resources in a European context, with large-scale development of wind power linked to green certifi - cates. The wind farms, which it is assumed will generate approximately 4000 MW in total, will be located chiefl y in Finnmark/Troms (1600 MW) and in Central Norway (with, respectively, 700 MW and 900 MW north and south of the Trondheimsfjord). In addition, we are assuming 600 MW further south along the coast. In total, this will give approximately 12 TWh of new wind power production. Regarding cable capacity to other countries, by 2020 it is assumed that 2500 MW new capacity will be built (Denmark and the United Kingdom in addition to NorNed), where 1200 MW will be built by 2010 In the Gas Power scenario, developments are driven by a political focus which requires Norway to have a positive power balance with a secure and inexpensive supply of electricity, also in dry years. Investment is concentrated to gas power plants, which will be developed on a large scale. The gas power plants will be located in Central Norway (1600 MW), Western Norway (1080 MW) and in Grenland (400 MW). In total, this will mean approximately 23 TWh gas power. By 2020 a total of 1900 MW cable capacity to other countries will be built (1200 MW to the United Kingdom in addition to NorNed) FIG. 6.1 Investment by region , Base Scenario FIG. 6.2 Investment levels for the four scenarios 3. The estimated investment up to 2020 is approximately NOK 2 billion less than the comparable fi gure from last year s Grid Development Plan. This is chiefl y owing to the fact that investment in 2004 has naturally not been included this year, and that the grid solution related to the Ormen Lange facility will be different from that assumed last year. 22 Grid Development Plan

23 The Low Consumption scenario is characterised by an active environmental policy that is focused primarily on reducing electricity consumption and Norwegian CO 2 emissions. General supply will be stabilised at approximately the current level. The conditions for power intensive industry will be poorer and approximately 25% of our power intensive industry will be closed down (8 TWh). New cable capacity to other countries will be restricted to NorNed. There are some signifi cant variations in domestic grid investment between the different scenarios. The Base Scenario outlines NOK 9.0 billion in domestic investment up to In Wind Power and Integration, domestic investment will increase by NOK 7.5 billion. In the Gas Power scenario, investment will increase by NOK 1.5 billion, but be reduced by NOK 1 billion in the Low Consumption scenario. In the Wind Power and Integration scenario it is principally the assumption of extensive wind power development in Northern Norway that will drive up costs. This will have an impact on investment in both Northern Norway and Central Norway, in that a new power line will have to be built from Møre to Varangerbotn, at an estimated cost of approximately NOK 6 billion. Furthermore, the electricity surplus in Northern and Central Norway will as a whole be so large that the grid will have to be strengthened to provide suffi cient capacity out of this region. This will entail replacing the Ørskog- Aurland interconnector with a new power line through Østerdalen. At the same time, it is assumed that the Nyhamna-Ørskog line will be realised, primarily in order to secure the supply of electricity in Sunnmøre. The Gas Power scenario also envisages a substantial electricity surplus in Northern and Central Norway as a whole, so that here, too, Ørskog-Aurland will be replaced with a new power line through Østerdalen, and Nyhamna-Ørskog will be built. In addition, investment will increase as a result of connecting the gas power plant at Skogn to the grid. New electricity production in the BKK area will cause the line from Modalen to Kollsnes to be replaced with Mongstad-Kollsnes, at the same time as which the Sima-Samnanger line may be replaced by an SVC unit. In Eastern Norway, a gas power plant in Grenland will on the one hand necessitate the building of a new power line to strengthen the Flesaker interface, and on the other hand mean that there will be less of a need for reactive compensation. In the Low Consumption scenario, the need for grid investment will be less because there will be fewer changes in both consumption and production compared with the current power system. It is also assumed that, for environmental reasons, the authorities will be more restrictive with regard to permitting major new power lines to be built. Since there will be no gas power plant at Tjeldbergodden, there will be no need for the Tjeldbergodden-Trollheim line. Without Skagerrak 4, it is assumed in this scenario that the Evje-Holen line will not be realised. Grid Development Plan

24 Statnett SF Husebybakken 28B P.O. Box 5192 Majorstuen N-0302 Oslo Telephone: Telefax: fi r ma p ost@statn et t.no Design Kolonien Photo Trond Isaksen