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Smart regulation for far and large offshore wind integration

Research problem
Far and large offshore wind is expected to be a major contribution towards a sustainable European energy system. This study focusses on the contribution of meshed offshore grids as an important facilitator for the realization of the ambitious political targets towards offshore wind energy provision. In efforts to meet renewable energy targets of the European Union for 2020, offshore wind continues to be planned with radial connections to shore. The continuation of this “business as usual” would be a missed opportunity to plan for future grid possibilities to integrate offshore wind optimally. Moreover, it would deprive the energy sector, and ultimately consumers, of a more cost-efficient renewable energy mix.

Research method
This project analyzes reports of the European Union, The Offshore Grid Project, the North Seas Countries Grid Initiative, European Network of Transmission System Operators for Electricity (ENTSO-E), Greenpeace, and the North Sea Transnational Grid project because they generally agree  that a grid would be technically feasible and efficient, and financially viable. Despite  these studies we are far from having a grid that integrates OSW. This project draws on academic and professional literature on law, regulation, and policy, to describe and synthesize analyses of the social barriers to the development of an offshore grid. (Please see the formal report of this project Smart Regulation for Far and Large Offshore Wind Integration: Toward a Transnational North Sea Meshed Grid by Donna C. Mehos.)

Radial connections vs meshed grids
Current business as usual is to construct single radial connections from wind farms to national grids on shore rather than to coordinate grid development transnationally.  Problems associated with them include wasted cable capacity, losses of  generated energy, environmental disturbance by submarine cables, and spatial planning concerns for commercial fishing. The advantages of a transnational meshed grid are numerous. A coordinated meshed grid, thus fewer radial cables, would increase re-routing possibilities for energy as well as alleviate problems associated with cable routes. Wind farms connected to each other could decrease dramatically the total length of cables necessary and the number of onshore connections to national grids. Meshing would provide alternative and increased  energy transport routes thus compensating for the intermittency of OSW as well as for geographical wind variability and possible cable malfunctions. Taken together, characteristics of a meshed grid would serve well the objectives of security of supply, decarbonization of energy generation, sustainability, and the integration of the European energy markets.

Conclusion: barriers are not technical but social
This project concludes that, in the context of international legal frameworks, national laws and regulations regarding grid construction and subsidy schemes, radial connections prevail because of the myriad of legal and regulatory uncertainties for transnational projects. The barriers are not technical but rather social. Uncertainties for OSW in the international legal and regulatory structure abound because a cross-border grid would be comprised of not only of cross-border cables but also hubs, (inter) connectors and wind farms. Furthermore, the EU energy agreements, while binding, leave energy policy for compliance to the individual states. This results in for example, incompatible TSO mandates and RES subsidy schemes of individual states that create obstacles and disincentives for international coordination of a North Sea grid. 

Potential for cost savings 
While models, calculations, and technical grid configurations differ, the reports mentioned above point to potential long-term cost savings from coordinated investments in a transnational grid.

• EU Study of the Benefits of a Meshed Offshore Grid in the North Sea Region
  • If short-term investments increased by €4.9 - 10,3 billion,  OSW integration could save €1.5 – 5.1 billion by 2030.
• EU commissioned report Offshore Grid Project Final Report 2011 (on three different technical designs)

• The Hub Base scenario in which wind farms are connected by a hub could lead to investments of €69 billion rather than €83 billion. 
• The Direct Design scenario with transnational interconnectors would  cost an estimated €86 billion.
• The Split Design of a grid around a wind farm estimated investments of €84 billion.

Put briefly, the infrastructure investments represent 20% of the value of the electricity that would be generated in 25 years and the additional costs of a meshed grid are marginal.

• The North Sea Countries Offshore Grid Initiative (NSCOGI)
  • Compared to radial design, a meshed grid would generate 3% increase in revenue for 55GW OSW, or 77M€ annually. Higher volumes of RES (117GW in 2030) would lead to a 7% cost reduction.

The benefits of a cost-saving meshed grid would benefit the society and its realization is critical for the future of the European energy system.

Recommendations
We make recommendations to reduce uncertainty for OSW development drawing in part from published literature review performed. A reassessment for OSW of unbundling laws intended to promote competition onshore. For offshore developments, bundling would lead investors to more certainty.

• International agreements on technical standardization now would improve interoperability later.
• The establishment via multi-lateral agreements of a single North Sea regulatory authority and a joint subsidy program for offshore wind would both facilitate grid development and be realized more efficiently than changes in national laws.
• A single international framework of governance agreed upon multi-laterally could remove barriers and promote regional developments that benefit all coastal states.
• International treaties should address the governance not only of individual projects but also the regional development, more generally.

 

Presentation

Windkracht 14: (Smart) regulation for far and large wind integration