Efficient access to offshore wind resources

Transcription

1 the cnsulting cmpany f DIW Berlin Efficient access t ffshre wind resurces Lessns frm Germany, UK, the Netherlands and Denmark fr efficient cnnectin f ffshre wind t the nshre grids Study cmmissined by Ørsted Wrkshp n Offshre Grid - Hw t ensure a cst efficient ffshre grid develpment in Eurpe? Hamburg, September 2018

2 Different scenaris Develpment/peratin/wnership the cnsulting cmpany f DIW Berlin Mtivatin Wh is respnsible fr cnnecting the ffshre wind farm t the nshre substatin? Theretically, the fllwing allcatins f respnsibilities cncerning the ffshre cnnectin are pssible: The (lcal) transmissin system peratr () has a mnply and wns, develps as well as perates the ffshre transmissin asset; s are regulated by a natinal regulatry authrity (NRA) r are public cmpanies A third party 2 wns, develps and perates the ffshre transmissin asset The ffshre wind farm peratr () is nt just respnsible fr the ffshre wind farm, but als wns, develps and perates the ffshre transmissin asset A furth pssibility is a mixed slutin (as in the UK), where the is respnsible fr the develpment f the transmissin asset and a third party perates and finally wns the asset after the cmpletin. In general, the might als be in charge f perating the ffshre transmissin asset Overview f ptential respnsibilities f the ffshre transmissin asset Offshre wind farm peratr () Offshre wind turbines Offshre substatin 1 Offshre transmissin peratr Offshre cnverter statin (develpment) Third party Third party Onshre cnverter statin Third party r (perat.) Onshre substatin Assumptin: The ffshre transmissin peratr is nt entitled t trade electricity. He is nly respnsible fr the transmissin. 1 In the UK the ffshre substatin is part f the OTA. 2 A third party can be any cmpany that is nt the r the (lcal). 2

3 the cnsulting cmpany f DIW Berlin Mtivatin Different appraches/utcmes regarding the allcatin and respnsibilities fr the ffshre cnnectin definitins Respnsibilities fr develpment and peratin (incl. wnership) f the transmissin asset t shre (ex-pst allcatin decisin) Outcme Apprach vs. - Ex-pst utcme : Develpment, peratin and wnership f ffshre wind farm and ffshre transmissin asset by tw distinct parties : Develpment, peratin and wnership f ffshre wind farm and ffshre transmissin asset by the same party Mnply Cmpetitin Third party/ Mnplistic vs. Cmpetitive - Ex-ante apprach Regulatry assignment Winning tender bid Mnply: One party is legally assigned t develp, perate and wn the ffshre transmissin asset. N cmpetitive tender. In mst cases this will be and nt the. Cmpetitin: Cmpetitive tender in rder t determine wh will be in charge t develp, perate and wn the ffshre transmissin asset. Third party 3

4 the cnsulting cmpany f DIW Berlin Evaluatin f the different appraches (generic discussin) Legend (in relative terms, rdinal scale): - Mst advantageus - Medium advantageus - Least advantageus Dimensins f the market design (cmpetitive vs. mnplistic and integrated vs. segmented) affect the strategic behavir f the market participants and impact the csts f ffshre wind energy transmissin Offshre wind develpment planning Cst f develpment and peratin f ffshre transmissin asset Least-cst selectin effects f a cmpetitive tender (vs. mnply) Cst effects thrugh synergies (ecnmies f scale and scpe, flexibility) Crdinatin csts Cst f misaligned time schedules (cnnectin delays) Cst f idleness (e.g. thrugh different lifetimes f transmissin and generatin assets) Other transactin csts Cst f a cmplex tender bidding prcess Cst f the regulatry system (t determine netwrk charges) Innvatin incentives Transparency abut the cst f electricity generatin Attracting additinal finance int the business Assessment criteria Offshre wind develpment planning Cst f develpment and peratin f OTA Crdinatin csts Other transactin csts Innvatin incentives Transparency w.r.t. cst f electricity generatin Attracting additinal finance r new market players Mnply Cmpetitin Third Party planning and envirnmental impact cst efficiency cst synergies risk f cnnectin delay risk f unused transmissin capacity lifetime ptimizatin risk f inslvency csts f tendering csts f the regulatry system innvatin incentives cst transparency market penness (fr new entrants) attractiveness fr private funding 4

5 the cnsulting cmpany f DIW Berlin Internatinal practice Cmparisn f different internatinal regulatry appraches Cuntries chse different appraches fr rganizing ffshre transmissin. We cmpare regulatry appraches in different cuntries and, mre imprtantly, hw their design differs. The fllwing cuntries are in the fcus f attentin in this sectin: United Kingdm (UK) Germany (DE) The Netherlands (NL) Denmark (DK) Sweden (SE) Assignment f cuntries t the regime matrix Outcme Apprach Mnply DE, NL, DK --- Cmpetitin UK UK, DK Map f investigated cuntries 5

6 the cnsulting cmpany f DIW Berlin Internatinal practice United Kingdm Germany The Netherlands Denmark Current market apprach The Office f Gas and Electricity Markets (Ofgem) established a regulatry regime fr ffshre transmissin in cllabratin with the Department f Energy and Climate Change (DECC). Since 2009 there are tw ptins: The decides t build his wn transmissin infrastructure and transfers it t the Offshre Transmissin Owner (OFTO) after cmpletin fr the peratin OR The OFTO develps, builds, perates and maintains the ffshre transmissin asset S far, all prject develpers have chsen the -build ptin UK has a mixed design Cnstructin: r segmented cmpetitive apprach Operatin: cmpetitive apprach Assignment f cuntries t the regime matrix Outcme Apprach Mnply Cmpetitin UK UK Apprach/ Outcme Respnsible party Regulatry authrity Ofgem, DECC Cst f develpment and peratin f ffshre transmissin asset Crdinatin csts COUNTRY PROFILE Cnstructin: r segmented cmpetitive; Operatin: cmpetitive Cnstructin: ; Operatin: Third party (OFTO) Cst pressure fr cnstructin and peratin thrugh tw separate tender prcesses. Cnstructin: Bidder wins based n the least csts; Operatin: Bidder wins based n the revenue request. Cst synergy: Ecnmies f scale and scpe Cst recvery: Cnstructin - Cst cvered by the price the OFTO pays; Operatin - Revenue stream fr OFTO High incentives t cmplete wind farm and transmissin simultaneusly; high incentives t increase availability f the transmissin. Partial ptimizatin f lifetime f transmissin and generatin t 20 years. Sme prjects have a lifetime f transmissin up t 40 years. 6

7 the cnsulting cmpany f DIW Berlin Internatinal practice United Kingdm Germany The Netherlands Denmark Cst recvery Cnstructin Operatin CAPEX fr the transmissin asset (invested by the ) are cvered by the price the OFTO pays t the determined thrugh the tender prcess A 20-year revenue stream unrelated t the OWF perfrmance is prvided t the OFTO in return fr perating, maintaining and decmmissining the transmissin asset The payment is made by the Natinal Electricity System Operatr (NE) and is funded by transmissin charges that the and the cnsumers pay The apprach enables cst pressure thrugh cmpetitive tender prcesses fr the cnstructin and peratin f the transmissin asset Ecnmies f scpe fr the cnstructin and ptential ecnmies f scale fr the peratin f the transmissin asset can be captured The apprach prevents that additinal csts are allcated t the cnsumer since the revenue stream is fixed fr 20 years Pwer Bill Payment fr transmissin Tender Revenue Stream Cnsumers Electricity supplier NE OFTO Pwer Supply Payment fr electricity Payment fr transmissin Offshre Transmissin Services Pwer Supply Surce: CEPA, BDL (2014): Evaluatin f OFTO Tender Rund 1 Benefits - The Office f Gas and Electricity Markets, p. 3. 7

8 the cnsulting cmpany f DIW Berlin Internatinal practice United Kingdm Germany The Netherlands Denmark Current market apprach Tw private s (TenneT and 50Hertz) have a natural mnply fr the transmissin asset (nshre and ffshre) The (lcal) s are legally bliged t build and perate all ffshre transmissin assets Germany has a segmented mnplistic apprach Assignment f cuntries t the regime matrix Outcme Apprach Mnply Cmpetitin Apprach/ Outcme COUNTRY PROFILE DE mnplistic Cst recvery Respnsible party Lcal s are TenneT (Nrth Sea) and 50Hertz (Baltic Sea) A revenue cap determines the level f grid charges fr the s Grid expansin investment csts are recuped by additinal charges n tp f the revenue cap N cst pressure due t the lack f a cmpetitive tender prcess. Althugh the s might benefit frm ecnmies f scale, the apprach ffers n incentives fr cst reductins. Regulatry authrity Cst f develpment and peratin f ffshre transmissin asset Crdinatin csts BNetzA N cst pressure due t missing tender prcess Cst synergy: Ecnmies f scale Cst recvery: s recup investment csts n tp f their grid charges Csts f time mismanagement: Cmpensatins paid by the t the N ptimizatin f lifetime f transmissin and generatin 8

9 the cnsulting cmpany f DIW Berlin Internatinal practice United Kingdm Germany The Netherlands Denmark Current market apprach By law the is respnsible fr the planning, cnstructin and peratin f the ffshre transmissin asset The (TenneT NL) is a state-wned enterprise The is regulated by the Authrity fr Cnsumers and Markets (ACM) Assignment f cuntries t the regime matrix Outcme Apprach Mnply Cmpetitin Apprach/ Outcme COUNTRY PROFILE NL mnplistic Cst recvery Respnsible party (TenneT NL) Subsidy fr the t cver the cnstructin csts f ffshre transmissin assets (Electricity Act 1998) N cst pressure due t the lack f a cmpetitive tender. Althugh the s might benefit frm ecnmies f scale, the apprach des nt ffer cst reductin incentives because csts are cvered thrugh grid charges. Regulatry authrity Cst f develpment and peratin f ffshre transmissin asset Crdinatin csts ACM N cst pressure due t missing tender prcess Cst synergy: Ecnmies f scale Cst recvery: s recup investment csts n tp f their grid charges N incentive t reduce csts f time mismanagement: Cmpensatins paid by the t the Optimizatin f lifetime f transmissin and generatin t 20 years. 9

10 the cnsulting cmpany f DIW Berlin Internatinal practice United Kingdm Germany The Netherlands Denmark Current market appraches The Danish, Energienet.dk, is wned by the Ministry f Energy, Utilities and Climate and regulated by the Danish Energy Regulatry Authrity A gvernment tender fr the wind farm Official cnnectin pint frm OWF t the is ffshre is respnsible fr develpment, cnstructin and peratin f transmissin asset Open dr prcedure The fficial cnnectin pint frm the OWF t the is nshre is respnsible fr the develpment, cnstructin and peratin f the transmissin asset First cme first serve allcatin mechanism Until 2017 n prject has been established under this prcedure Assignment f cuntries t the regime matrix Outcme Apprach Mnply Cmpetitin Apprach/ Outcme Respnsible party Regulatry authrity Cst f develpment and peratin f ffshre transmissin asset COUNTRY PROFILE DK DK Tender fr wind farm: mnplistic; Open dr: but n cmpetitive tender Tender fr wind farm: (Energienet.dk); Open dr: Danish Energy Regulatin Authrity N cst pressure due t missing tender prcess Cst synergy: Ecnmies f scale Cst recvery: recups csts thrugh tariffs (grid charges) Crdinatin csts Csts f time mismanagement: Cmpensatins paid by the t the 10

11 the cnsulting cmpany f DIW Berlin Internatinal practice United Kingdm Germany The Netherlands Denmark Cst recvery The is a state-wned nn-prfit enterprise All csts are cvered by tariffs (grid charges) Outcme Apprach Mnply Cmpetitin COUNTRY PROFILE Assignment f cuntries t the regime matrix DK DK Current discussin abut a regulatry change t the integrated cmpetitive apprach Apprach/ Outcme Tender fr wind farm: mnplistic; Open dr: but n cmpetitive tender A new OWF with apprx. 800 MW is planned t be cnnected between 2024 and 2027 t the grid Respnsible party Tender fr wind farm: (Energienet.dk); Open dr: The transmissin asset cnnecting the wind farm t shre is expected t be part f the tender Regulatry authrity Danish Energy Regulatin Authrity Cst f develpment and peratin f ffshre transmissin asset N cst pressure due t missing tender prcess Cst synergy: Ecnmies f scale Cst recvery: recups csts thrugh tariffs (grid charges) Crdinatin csts Csts f time mismanagement: Cmpensatins paid by the t the 11

12 the cnsulting cmpany f DIW Berlin Cnclusin The advantages f a cmpetitive tender apprach and the trade-ff between an integrated and a segmented ffshre transmissin asset peratin Intensifying cmpetitin in cmbinatin with sphisticated planning Well defined decisin (n a case-by-case basis) whether r nt a hub cnnectin is ecnmically preferable and deduce implicatins fr the cmpetitive tender whether develpment and peratins can be (in principal) carried ut by the r peratins require an independent third party (third party r ) Intensify cmpetitin (where apprpriate) (Ex-ante) Full flexibility f wh will be in charge in terms f wnership, develpment and/r peratin f the OTA (,, third party) Least cst selectin thrugh cmpetitive tender will slve (ex-pst) the allcatin prblem (segmented vs. integrated utcme) Cmpetitin will lead t highest incentives regarding Decreasing develpment and crdinatin csts, higher innvatin activities as well as higher cst transparency. On the ther hand, tender and regulatry cmplexity might increase. 12

13 the cnsulting cmpany f DIW Berlin Cntact Manager DIW Ecn GmbH Mhrenstraße Berlin Germany Phne Fax ygirard@diw-ecn.de URL: Head ffice: Berlin, Germany, Reg.-N.: HRB B, Lcal curt: Charlttenburg 13

14 the cnsulting cmpany f DIW Berlin Thank yu fr yur attentin! 14