“Offshore substations should have a standard size of 900MW”
This is key to a responsible realisation of the Energiewende” says Lex Hartman, Director Corporate Development of TSO TenneT. “After all, the German ambition implies building one turbine every day.” The recent Atomausstieg and the subsequent Energiewende brought about a revolution in the German offshore wind sector. Over the next ten years, 13GW of offshore wind energy is planned in German waters, 11GW of which in the North Sea, TenneT’s territory.
TenneT obtained a stake on the German energy landscape when it bought transpower from the energy firm E.On for €885m in 2010. With this purchase TenneT became the world’s first transnational TSO.
Transpower controls 11,000km of high voltage overlay cables with its domain roughly stretching from the North West to the South East of the country. Mr Hartman considers the takeover successful. “We now have a much stronger position with regard to the purchasing of energy for balancing the net, which saves consumers millions of euros. The takeover of transpower also contributed to the Netherlands no longer being an isolated price area. Prices in the Netherlands now equal those in Germany for 90% of the time. That’s a huge economic benefit for Germany’s neighbour.”
When the tsunami hit Japan and destroyed the Fukushima nuclear power plant, TenneT’s world was turned upside down. The Bundestag decided to shut down all 17 nuclear power plants in Germany before 2022.
The energy shortage created because of this decision will largely be filled by renewable sources. In the North Sea, the government has laid out 5 5 plots for the construction of wind farms. “We were shocked. Well, actually, it was more like a pleasant surprise. Before the Energiewende life for TSO’s was considered dull, but now we are in the centre of the public debate. These are great times for TSO’s”, Mr Hartman says.
In most European countries, the offshore wind farm operator is responsible for transporting the energy generated to the mainland. Not so in Germany; here the TSO’s are responsible for the development and management of the offshore cables, converter and transformer station. So far, TenneT has finished one such connection, the BorWin Alpha. A second platform, DolWin Alpha, is currently under construction. Manufacturer ABB won the European tender for the work, with a value of “around €lbn” each. The Swiss-Swedish company built the technology for the converter station and for the DC export cable. After DolWin and BorWin, seven more of these projects are in the pipeline, which together will transport 5GW of wind energy to shore. The remaining 6GW will follow later.
New technologies far at sea
The technology used in TenneT’s offshore connection is quite unique, in the sense that AC-DC converters have never been used this far offshore. Moreover, the platforms are designed to act as the connection for multiple wind farms. Mr Hartman: “Direct current is becoming more common as our wind farms are being developed at ever greater distances from the shore. A DC cable system is more efficient than AC at distances over 70km. These DC export cables also have more capacity, which is good because it means we will need fewer of them. In the Wadden Sea nature reserve there are only a few corridors where we are allowed to lay our cables. There simply is not enough space to lay a large number of cables.”
Converter Connection & Conformity
This innovative situation brings with it some challenges. The technique is still in its infancy, so there are not many suppliers. Mr Hartman believes that the right converters in fact can only be built by ABB, Siemens and Alstom. Cable suppliers are just as scarce: “Nexans, Prysmian and ABB, and that’s about it.”
“The consequence of this scarcity is that delivery times can be as much as 50 months, whereas wind farms must be completed in 30 months from the moment of their launch”, Mr Hartman says. Notwithstanding these planning difficulties, TenneT completed its BorWin Alpha project some time ago. Mr Hartman is annoyed by the delay of BARD’s wind farm that connects to the platform. “Only 20 out of the 70 planned wind turbines are connected now.” This case strengthened Mr Hartman in his opinion that coordination between all parties involved is key to the development of wind energy.
One way to circumvent this issue is standardisation. “From a planning point of view, wind farms benefit from standardisation. It is very difficult when every converter has to convert different amounts of energy. We don’t want to connect 672MW here and 550MW there. We therefore advocate a standard connection of 900MW. This can be delivered by one wind farm, but also by two or three, as long as it adds up to a fixed amount.” In February TenneT contacted the German government with this request, but so far the company has not received a satisfactory answer.
Autobahnen ohne Abfahrt
TenneT’s offshore plight runs deep into the mainland. Mr Hartman: “There is not much sense in producing huge amounts of wind energy if it cannot be distributed on land.” North West Germany has always been thinly populated and never really industrialised, so the high voltage grid is, at best, rudimentary in those areas. But even if a solid grid were present there, it would not be enough to siphon off the energy produced by the wind turbines in the North Sea. “We must be able to transport the energy to places that need it, ‘load centres’ such as the Ruhrgebiet, Stuttgart, Karslruhe and Munich.” DC highways are the solution, according to TenneT. “Autobahnen ohne Abfahrt”, says Mr Hartman in plain German -motorways without exits. This means that the current does not enter the existing high voltage grid until it reaches its destination. Direct current is the appropriate technology to do this, TenneT argues, but it has yet to be decided whether the cables will go underground or not. When the current arrives at the load centre, it can be diverted through ‘multi terminal technology’, which does not yet exist, Mr Hartman explains.
At the request of the German regulatory agency, the Bundesnetzagentur, in late May, the four German TSO’s collectively presented the Bundesnetzplan. In the plan, the companies outlined the required investments in the high voltage electricity grid for three future scenarios. Over the coming months, the parties involved can submit their input to the plan. Whatever the chosen scenario, it is becoming clear that reinforcement of the grid is necessary. Most of these reinforcements will run from the north to the south. So, just as with offshore wind, these plans will mean an investment obligation for TenneT greater than for the other TSO’s.
Fiannce – a question of responsibility
However TenneT, on its own, has insufficient resources to accomplish this onshore task. It has therefore drawn up a new plan and presented it to the government. TenneT advocates the creation of a Netz Ag, or a nationwide DC TSO, in which multiple shoulders bear the costs. In the same presentation it asked for a legal grounding of financial liability in case something goes wrong with the DC projects. This is important if potential financial investors are to be persuaded to participate. Finally, TenneT has asked the government to centralise decisions on grid reinforcement. Mr Hartman: “To raise the capital necessary, we want a DC TSO for all future onshore and offshore projects.” The four German TSO’s involved will use their own money, but capital from financial investors will still be needed.
Mr Hartman says that many politicians like the idea of a DC TSO. The three other TSO’s, though, appear to be less enthusiastic. Mr Hartman does not understand this: “The Energiewende is something that concerns us all. We are
all in this together and it must be clear that TenneT with its sales volume of €1.5bn cannot finance investments of €145bn alone. The politicians decided to take the road of the Energiewende. That is good, but structural reforms should now follow. This is not just TenneT’s problem, but that of Germany as a whole.”
It should be noted though that TenneT was able to find an investor for its projects BorWin 1 and BorWin 2. The Japanese company Mitsubishi bought 49 percent of the shares for €240m. TenneT kept the majority of 51 percent. The two companies have also signed a letter of intent for the next projects HelWin 2 and DolWin 2. One condition for all four projects is clarity about the liability. As stated above, TenneT has sent a letter to the government to solve this issue. Mr Hartman thinks a decision is pending. “Our agreement with Mitsubishi is strictly financial. TenneT will manage and maintain the equipment.” TenneT’s director says that investors are interested in participating in projects because of the low risk profile. “Profits are low, but
some investors seek security above big margins in these times”, Mr Hartman explains.
TenneT is the first transnational TSO in Europe and therefore the company can be regarded as a European forerunner in an ever more integrated European energy market. Entso-e, the European agent of the national TSO’s, has recently calculated that 10,000km of underwater cables are needed to create a truly European market. According to Entso-e, this will cost €23bn.
In November, the European Commission launched its initiative to invest €9.1bn in the European energy grid (gas and electricity), to serve as a lever for private investments. The European investment Bank says it is also ready to support investment in the offshore electricity grid.
So it seems that money, even in the current economic climate, is abundant, but two projects prove that European transnational cooperation needs more than just money. The first is the European darling Kriegers Flak, in which TSO’s from Sweden, Denmark and Germany planned to collectively build wind farms that would be connected to each country with three export cables. However this plan did not come to fruition because the Swedish TSO Svenska Kraftnât pulled out.
TenneT itself also encountered transnational problems when working out how German wind farms could connect to the planned Cobra interconnector between Denmark and the Netherlands. Money is not the problem, says Mr Hartman. Different regulations between European member states are bigger obstacles.
“German wind farms will never connect with the Cobra cable, because that would exclude them from the generous German subsidies. Technically this is feasible; again, money is not the problem, but regulations prevent us from developing it. Harmonisation is more important than subsidies.”
Tijdo van der Zee