TenneT Vision2030. Foreword

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1 Vision2030

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3 Foreword This document describes Vision2030, TenneT s long-term vision of the 380-kV and 220-kV elements of the Netherlands national electricity transmission grid. Why have we developed this vision of the future? TenneT is constantly working to ensure that the Netherlands has a reliable and adequate high-voltage grid. As a basis for meeting the nation s needs, we publish a Quality and Capacity lan once every two years. Each plan looks seven years ahead and seeks to anticipate the changes that will be needed in that period in order to secure the electricity supply going forwards. The Quality and Capacity lan forms the basis for any extension of the grid in the medium term. However, the development and realisation of long-distance high-voltage links and the associated substations often takes considerably more than seven years, because of the procedures involved and the associated preparations. By contrast, new power plants ( the demand ) take only three to five years to develop. Since the regulator does not allow speculative investment, the annual monitoring does not reflect market players investment plans sufficiently promptly, yet society expects that new production units can be connected to the grid in good time, it is important to have a clear picture of what the grid will be like in the longer term. Only then can the necessary preparations be made sufficiently early. This implies forecasting future developments and the associated problems in good time. An analysis of the long-term developments in electricity supply in the Netherlands is very important in this regard. Vision2030 fulfils this need. With our long-term vision of the grid infrastructure, we are also seeking to respond appropriately to society s desire for transition to a sustainable energy supply system. J.M. Kroon CEO 1

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5 Vision2030 Foreword 1 Summary Introduction 6 Mission: operation of the national electricity transmission grid 6 The need for a long-term vision 6 The aim of Vision The scope of Vision General developments 8 Guidance note Scenarios for The scenario as a planning tool 16 Four scenarios 16 The Green Revolution Scenario 17 The Sustainable Transition scenario 19 The New Strongholds scenario 20 The Money Rules scenario Network analysis 24 Basic assumptions 24 Basic input data for the network model 24 Results of the network analysis 27 5 Vision2030 grid concept 38 6 Grid development: the medium-term position 42 7 Review and follow-up 46 References 48 Appendices 50 3

6 Summary As operator of the Netherlands electricity transmission grid, TenneT is committed to ensuring a safe, reliable and efficient power supply, now and in the future. Through our management of the electricity transmission grid, the backbone of the Netherlands power supply system, we are actively facilitating the reliable supply of energy, the development of the North-West European electricity market and the transition to energy sustainability. Vision2030 has been conceived as a clear and coherent long-term vision of the development of the electricity transmission grid in the Netherlands. The vision reflects our desire for flexible and lasting solutions. Vision2030 is intended to be an integrated view of the entire Dutch electricity transmission grid between 380 kv and 110 kv. That comprehensive vision is being developed in stages, with this report covering those elements of the grid rated at between 380 and 220 kv. The energy market is highly dynamic, and the energy landscape of the future will be defined by a variety of unconnected developments. The divergent nature of these developments means it is not easy to predict how they will affect electricity transmission needs. Four trend scenarios have therefore been developed as a basis for forward analysis. Each scenario involves an alternative pattern of factors shaping the development of the Netherlands high-voltage grid in the period up to The scenarios are characterised by different renewable power penetration levels and different degrees of regulatory constraint on market forces. The Green Revolution and Sustainable Transition scenarios assume a society committed to sustainability, while the Money Rules and New Strongholds scenarios envisage a society that remains largely dependent on fossil fuels. The Green Revolution and Money Rules scenarios are characterised by a high degree of market globalisation, whereas the Sustainable Transition and New Strongholds scenarios foresee a world in which the world s markets are organised predominantly along regional lines and there is more protectionism. The scenarios have been developed as a basis for forecasting future electricity grid transmission loads. 4

7 Realistically extreme estimates of the way in which the demand for and supply of electricity may develop have been made, in order to assess the consequences of peak loads on the grid. These extremes represent the outer limits of the range of possible developments in the electricity market. On the basis of the four scenarios, a number of possible transmission grid configurations and associated transmission capacities have been worked out and tested for their resilience. An initial analysis suggests that the direct connection of coastal production locations is undesirable, since it would lead to uneven power distribution across the various links and to mutual interference by transmissions from the various production locations. The network model therefore assumes that the new coastal locations will each be linked directly to a reinforced 380-kV ring structure. The network analysis and the associated network configuration are described for each scenario. Using the output from the analyses, we have developed a grid concept that is applicable to all scenarios and capable of accommodating further developments in the future. The philosophy behind the grid concept is: one strong 380-kV ring in the proximity of the load in the central and western parts of the Netherlands; direct connections from large scale production locations to load centres or the 380-kV ring. The ring concept maximises the scope for adapting not only to developments in the load and distributed generation patterns, but also to developments in grid input at the coastal locations, from new production units, offshore wind farms and international overland and undersea interconnectors. The report ends with a review, which includes conclusions and follow-up recommendations. 5

8 01 Introduction 1.1 Mission: operation of the national electricity transmission grid As operator of the national transmission grid, TenneT s role is to ensure that the Netherlands has a fully functional transmission grid and to monitor the continuity of the electricity supply. We are committed to ensuring a safe, reliable and efficient electricity supply now and in the future. The electricity transmission infrastructure forms the backbone of the Netherlands electricity supply system (security of supply): most of the nation s major power plants are connected to it, and it is linked to the European grid, thus making an international market possible. By ensuring the existence of a strong and independent transmission grid, TenneT actively contributes to the following: A reliable electricity supply The development of the North-West European electricity market Migration to a sustainable energy supply system 1.2 The need for a long-term vision Het Securing the electricity supply into the further future depends upon making timely modifications to the national high-voltage grid, in order to accommodate the needs of society. TenneT publishes periodic Quality and Capacity lans, which have a horizon of seven years. However, experience indicates that the development and realisation of long-distance high-voltage links and the associated substations often takes eight to ten years, or even longer. By contrast, the construction of, for example, distributed CH units, wind farms and large power plants can generally be achieved in only three to five years. Investments in the transmission grid tend to have a life expectancy of several decades. It is therefore necessary to consider how the Dutch electricity supply system is likely to develop in the long term. Vision2030 has accordingly been developed as a tool for remote-horizon analysis. 6

9 1.3 The aim of Vision2030 Vision2030 has been conceived as a clear and coherent long-term vision of the development of the electricity transmission grid in the Netherlands. The aim has been to facilitate flexible and lasting solutions by: guiding short term planning and development, thus bringing directional consistency to realisation activities; enabling preparatory planning activities to be initiated in good time ahead of new projects, such as the inclusion of new connections in the Electricity Supply Structure lan (SEV), National Integration lans and other structural visions and plans, so that realisation permits can be obtained more quickly; providing a foundation for the Electricity Supply Structure lan, national government policy and the Quality and Capacity lans; allowing early technology choices to be made, thus avoiding the risk of stagnation during preparatory planning and of debate continuing during the project implementation phase; providing explanations of the need for major grid modifications at an early stage, for the benefit of relevant government ministries (mainly the Ministry of Economic Affairs and the Ministry of Housing, Spatial lanning and the Environment) and the regulator, so that the necessary transmission and connection capacity is available in good time. 1.4 The scope of Vision2030 Vision2030 is intended to be an integrated view of the entire Dutch electricity transmission grid between 380 kv and 110 kv, as it will be in the year That comprehensive vision is being developed in stages. In 2006, we began by describing the anticipated shape of the national 380-kV transmission grid; this report covers those elements of the grid rated at between 380 and 220 kv. 7

10 02 General developments Many current and anticipated developments have implications for the electricity supply system. Global demand for fossil fuels The International Energy Agency (IEA) expects global demand for the main fossil fuels oil, coal and gas to increase by nearly 50 per cent in the next two decades [IEA]. This will considerably increase emissions of the greenhouse gas CO 2, thus accelerating global warming. ersistently high oil and gas prices are making the use of coal more attractive. In the period up to 2030, the IEA forecasts that demand for coal will grow by 73 per cent, to the point where coal provides nearly a third of the word s energy. Four fifths of the growth of coal consumption over the next two decades will be accounted for by China and India. Development of the North-West European electricity market Users buy electricity where it is cheapest and made available on the most attractive basis, while producers generate electricity where they can do so most economically. This is leading to intensification of the trade in electricity, both on the national market and on the European market. In North-West Europe, electricity is increasingly transmitted between countries by means of overland and undersea interconnectors. One result of this is greater fluctuation in long-distance transmission levels. In this increasingly liberalised market setting, the long-term challenge is therefore to maintain the necessary transmission reliability and supply quality. The international patterns of transmission that may develop in the long term are illustrated in Map 1. roduction locations in the Netherlands The Dutch government has identified the production locations with a capacity of more than 500 MW in the Electricity Supply Structure lan (SEV). Map 2 shows the present high-voltage grid and the production locations referred to in the Second Electricity Supply Structure lan (SEVII). The four locations shown in black are the coastal locations Eemshaven, IJmuiden, Maasvlakte and Borssele. 8

11 map 1 ossible international transmission patterns in the long term map 2 Arnhem 9

12 Migration of large-scale electricity generation Since the 1980s, there has been a general tendency in the Netherlands for large-scale inland production units that reach the end of their working lives to be replaced by new production units at coastal locations. The factors driving this trend are the availability of cooling water near the coast, the applicable environmental requirements, the availability of suitable sites and the economics of coal, biofuel delivery. Europe s electricity producers are influenced in their location decisions mainly by the (international) market for their output, the local business climate, the ability to bring in fuel and the availability of subsidies, rather than by national borders. Over a relatively short period of time, this can result in major migrations of production capacity within a region or country. In the European context, the Dutch coast is attractive for the siting of electricity production facilities. Map 3 shows how production capacity may migrate in the long term: A. Replacement of large-scale inland capacity with new capacity at coastal locations B. Displacement of some inland capacity by large-scale offshore wind-powered capacity C. Closure of nuclear power plants in southern Germany and investment in new plants in the Ruhr, leading to capacity migration from southern to central Germany [RWE] D. roducers with plans for new facilities in the Ruhr drawn to the Dutch coast by the attractive investment climate. Economic growth One of the main drivers of rising electricity consumption is economic growth. Other influential factors include changing production processes, computerisation, the introduction of new communication and entertainment technologies, the use of electrical applications to increase comfort and convenience, greater use of air conditioning, heat pumps and electric transport, and the growth of the service and care sectors. oad development in Europe The UCTE expects annual load growth in Europe to average 2 per cent in the period up to 2015, and less than 1.5 per cent thereafter, although there will be significant regional differences [UCTE] (see map 4). Development of load distribution in the Netherlands In the Netherlands, the electrical load is concentrated mainly in the central and western areas. Maps 5 and 6 show load distribution in the Netherlands, as it was in 2005 and as it is expected to be in 2030 (assuming 3 per cent load growth per year). Even if the level of growth is high, the geographical concentration pattern is expected to persist.

13 B C TenneT Vision2030 map 3 ossible ossible production production capacity capacity migrations migrations B A A D Annual load growth development map 4 (per cent) map 4 Annual load load growth growth development development map 4 (per (per cent) cent) oad distribution in 2005 source: UCTE System source: UCTE Adequacy System Forecast Adequacy Forecast < 1.5 < > > 3.0 oad distribution 2030 (assuming 3% annual growth) map 5/6 oad distribution in 2005 in 2005 oad distribution (assuming (assuming 3% annual 3% growth) annual growth) Average Average load load per per municipality municipality (MW/km (MW/km 2 ) 2 ) 00-0,4-0,4 0,8-1,50,8-1,5 0,4 0,4-0,8-0,8 1,5-5 1,

14 Sustainability objectives The EU member states have set themselves the objective of servicing 20 per cent of all their energy needs from sustainable sources in At both the European and national levels, ambitious objectives have also been defined for energy conservation and the reduction of CO 2 emissions. The definition of such objectives has led to many new initiatives, the further development of existing schemes and the application of new technologies. This may result in: downward pressure on electricity consumption due to the use of more efficient electrical equipment and lighting; downward pressure on electricity consumption due to greater awareness on the part of users; generation of electricity closer to the end user (distributed electricity generation), based on the use of industrial CH, domestic micro-ch, roof-mounted V panels, onshore wind turbines and small-scale distributed biomass power plants; generation of electricity further away from the end user, as a result of the construction of large-scale electricity production facilities at coastal locations (large-scale biomass plants, coal-fired plants with CO 2 capture and storage, nuclear power), offshore wind farms and international trade in sustainable electricity produced in other countries; a perverse upward pressure on electricity consumption in certain situations resulting from the integration of efforts to conserve energy and reduce CO 2 emissions, leading to the use of additional control equipment, computerisation (including Internet use), and the use of electric heat pumps and electric transport. Energy storage Scientific research indicates that the less controllable production capacity is, the harder it becomes to maintain a balance between supply and demand [Meeuwsen]. ack of control is an issue mainly when wind-powered capacity accounts for a high proportion of production [Cogen]. In the long term, energy storage is seen as an important aid to efficient supply-demand balancing. Energy storage can also be attractive when the price differential between peak and off-peak power is relatively high. In the Netherlands, three pumped energy storage methods are being considered: The use of compressed air energy storage (CAES) in the Netherlands would involve the compression and storage of air in the salt domes found in the provinces of Drenthe and Groningen. The plans for pumped energy storage (ES) entail pumping water into a so-called valmeer or fall lake off the coast of Walcheren. An underground pumped energy storage (UES) scheme is proposed, based on the use of chambers 1,400 metres beneath the surface in the province of imburg. In the further future, distributed storage may also become an option. So, for example, electricity might be stored overnight in the batteries of electric cars for use during the day, or energy could be stored in local hydrogen tanks, for use in combination with fuel cells. Development of wind-powered capacity in Europe Considerable growth in the use of wind power is forecast in Europe. The EWEA expects there to be 80 GW of capacity by 2010, 180 GW by 2020 and 300 GW by The latter is likely to be divided equally between onshore and offshore facilities [EWEA]. Map 7 shows the installed onshore and offshore wind-powered capacity forecast for a number of countries in North-West Europe by 2030 [EU Tradewind]. According to the Sustainable Energy Transition latform, the Dutch government s Clean and Economical objective is likely to lead to the installation of 6,000 MW of offshore wind-powered capacity and 4,000 MW of onshore capacity by Development of wind-powered capacity in the Netherlands By way of illustration, Map 8 shows the locations off the Dutch coast where the Department of ublic Works and Water Management believes offshorewind farms with a total capacity of 6,000 MW could be sited [RWS wind]. 12

15 map 7 Development of wind-powered capacity in Europe Offshore (GW) Onshore (GW) source: EU Tradewind map 8 ossible locations for offshore wind farms Based on RWS data dated

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17 Guidance note The general developments described in chapter 2 are very varied. Their electricity transmission implications are therefore hard to predict. TenneT has accordingly developed four trend scenarios. Each scenario has been systematically modelled in order to build up a picture of how it is liable to influence electricity transmission requirements. The modelling and analysis process is described in the following chapters, as follows: Chapter 3 describes each of the trend scenarios in turn and in three steps: -- First the prevailing characteristics of society are outlined. -- Next, the assumptions we have made in order to model the scenario are set out. In the interest of reproducibility, the assumptions are expressed in numeric terms, which are subsequently used for the network analyses. -- Finally, various extreme circumstances that might arise under some of the scenarios are defined, with a view to localising all potential problems. In Chapter 4, transmission grid configurations for the four scenarios are presented, along with the results of the network analyses. By simulating extreme circumstances, we have been able to indicate where capacity problems are liable to arise in the transmission grid. We then indicate what network configurations could be adopted to prevent such problems. Finally, the four projections are assessed in conjunction in chapter 5. The conclusions drawn from this assessment are translated into a grid concept that indicates the direction in which the 380-kV transmission grid can be gradually developed. 15

18 03 Scenarios for 2030 Regulated market 3.1 The scenario as a planning tool Numerous developments are in progress, whose effects may be mutually reinforcing or may counteract one another. From this complex of determinants, it is necessary to forecast how the electricity supply landscape and the associated electricity transmission requirements will develop. It is difficult, if not impossible, to cover all possible developments in a single forecast. We have therefore developed scenarios for the next twenty-five years, in order to guide our forward planning. Scenarios are not themselves forecasts, but descriptions of possible alternative courses of development, which may be used to test assumptions. Our long-term scenarios are the basis for our thinking on how the Dutch transmission grid is liable to develop in the coming decades. 3.2 Four scenarios Vision2030 utilises four distinct scenarios for market developments affecting the supply and consumption of electricity. figure 1 Sustainable Transition New Strongholds Focus on renewables Fossil based Green Revolution Money Rules Free market The four scenarios have been developed to reflect variation on the following two dimensions: The environmental dimension, with the development of a sustainable energy economy at one end of the scale, and continued reliance of fossil fuels at the other The market dimension, with a completely free global market at one end of the scale and strict regulation and strong regional focus at the other The annual rates of electricity consumption growth assumed for the four scenarios in the period 2010 to 2030 are as follows: New Strongholds 0 per cent Sustainable Transition 1 per cent Green Revolution 2 per cent Money Rules 3 per cent Along with load development and the level of distributed generation, the size and location of the large-scale production facilities have major implications for the structure and capacity of the 380-kV transmission grid. Since the Second Electricity Supply Structure lan places considerable emphasis on the use of coastal locations for new large-scale production facilities, particular attention is paid to these locations in the scenarios. In the context of each scenario, one of the four coastal production locations is considered in more detail: Green Revolution: Borssele Sustainable Transition: IJmuiden New Strongholds: Maasvlakte Money Rules: Eemshaven In the following subsections, each of the scenarios is described in general terms and by reference to certain quantitative parameters, namely the levels of load, production and interconnector capacity. A more detailed quantification of the Green Revolution scenario is presented, because it is in relation to that scenario that certain options are considered for the first time in this report. The large-scale use of wind power has major implications in terms of transmission requirements. For the Green Revolution and Sustainable Transition scenarios, therefore, two extreme weather variants are introduced: a windy, cloudy day and a windless, sunny summer s day. In the New Strongholds and Money Rules scenarios, the examination of one realistic extreme is considered sufficient. 16

19 3.3 The Green Revolution Scenario General description The social and political agenda is dominated by free-market principles. Globalisation remains a dynamic trend, with people working towards not only the removal of trade barriers, but also the exchange of knowledge and technology between industrialised and developing countries. Global efforts to tackle the greenhouse effect and the depletion of oil stocks bring about a strong shift towards sustainability. Europe sets itself the target of establishing a sustainable energy economy by 2050, in the context of which CO2 emissions are to be cut to 40 per cent of their 1990 level. There is a major increase in the amount of electricity produced not only from biomass and from on- and offshore wind energy, but also from photovoltaic systems. In Western Europe, large additional amounts of wind-powered capacity are installed, both on shore and off shore. Because wind-powered capacity and photovoltaic capacity are dependent on the unpredictable availability of solar energy and wind energy, storage systems are constructed so that these production modes can be accommodated. Further interconnectors linking the Netherlands to Denmark, Norway and Germany are also installed. Energy conservation is the second pillar supporting development of a sustainable economy. Major advances are made in the process industries, where a great deal of energy (sometimes as much as 80 per cent) is saved. Sophisticated applications of electricity, e.g. in the production of heat, are particularly influential in this context. The shortage of oil leads to the development of cars powered by fuel cells. This opens the way for the emergence of a hydrogen economy and the widespread domestic use of fuel cells in micro-ch units. The necessary hydrogen is produced using energy from various sources, such as sun, wind and biomass, as well as from coal and uranium. As a result, the gas and electricity infrastructures become closely interrelated. Quantification Despite the relatively strong economic growth and increasing electrification, we have assumed that, in this scenario, annual electricity consumption growth will be kept to an average of 2 per cent by the use of new energy-efficient technologies. To support this level of consumption, production capacity will need to increase by 10,000 MW in the period , to 30,000 MW. We have also assumed that electricity generation will be influenced by the automotive industry s development of the fuel cell, leading to application of the technology in micro-ch units. By 2030, the last year of the scenario period, it is assumed that 5,000 MW of micro-ch capacity will be installed. This figure is based on historical data concerning the market penetration of highefficiency boilers (60 per cent penetration of the domestic market over a period of fifteen years). If there are about eight million households and an average boiler capacity of one kilowatt, this equates to 5,000 MW of micro-ch capacity. In this scenario, the use of solar and wind power also increases dramatically. It is assumed that, by 2030, Europe has 300 GW of wind-powered capacity (150 GW offshore and 150 GW onshore). By the same date, the Netherlands is taken to have 6,000 MW of wind-powered capacity in the North Sea and a further 4,000 MW on land. The growth of onshore capacity is brought about mainly by the replacement of old wind turbines with new higher-powered models. We have additionally assumed that, by 2030, there is 4,000 MW of installed photovoltaic capacity. In order to accommodate so much solar and windpowered capacity within the electricity supply system, energy storage systems will be required. For this scenario, we have worked on the basis that, by about 2020, the Netherlands has two 600 MW CAES facilities in operation: one in the salt deposits near Veendam and one in the similar features near Hengelo. By 2030, it is assumed that there is additionally an energy island with a capacity of 2,000 MW off the Walcheren coast. 17

20 The assumption is also made that existing production capacity has a maximum service life of forty years. It follows that, by 2030, about 11,000 MW of the present thermal production capacity will have been replaced. In the calculations for this scenario, we have worked on the basis that, whenever a coal-fired plant needs replacing, its successor is constructed at a coastal location. By contrast, we assume that gas-fired plants will be replaced by new plants at the same sites. Most of the superseded plants are medium and peak-load units. It is assumed that, in this scenario, the development of cross-border interconnector capacity is governed by market forces, with free trade in surpluses and shortages. As a result, a 1,300 MW HVDC link is established with Denmark and there is a further AC interconnection with Germany (Doetinchem- Niederrhein link, 1,500 MW). Wind energy penetration in both Denmark and Germany is quite high. In addition, another HVDC cable (with a capacity of 1,300 MW) is laid between the Netherlands and Norway, so that the Netherlands can make use of energy from Norway s pumped energy storage plants. Since it is assumed that, in this scenario, an energy island capable of storing 2,000 MW will be built off the Walcheren coast, it was decided that Borssele should be treated as the preferred location for the expansion of large-scale production facilities. Hence, we have assumed that 3,000 MW of new coal/biomass-fired capacity will be built at Borssele (1,000 MW of it to replace old units), along with 1,000 MW of new wind-powered capacity. We have additionally worked on the basis that two new nuclear power plants will be built. Because the availability of solar and wind energy is variable and solar/wind-powered capacity is to be used in combination with energy storage, the calculations for this scenario take account of two extreme situations: A cold winter s day when there is a lot of wind and demand is high, and all the wind-powered and micro-ch capacity is therefore in use and the energy storage facilities are being charged. Because output from wind-powered plants is high, 3,300 MW is exported to Norway and Denmark, and only 3,000 MW has to be imported from Germany. It may be assumed that the UK is experiencing windy weather as well, so the maximum amount of power is exported from the UK to the Netherlands. On the basis of these assumptions, we have taken it that 4,000 MW will be imported via Borssele, as the result of 2,000 MW being drawn by the storage facilities, offset by the input of 1,000 MW of windpowered capacity, 3,000 MW of coal-fired capacity, 2,000 MW of nuclear capacity and 700 MW of gas-fired capacity. A hot and windless summer s day, when air conditioning use causes a peak in demand, all photovoltaic capacity and storage systems are feeding the maximum amount of power into the system and the micro-ch units are not being used. Output from the wind farms is negligible, so importation from Norway, Denmark and Germany is running at the maximum. Furthermore, similar weather conditions in the UK mean that exports to that country are at the highest possible level. In this situation, 6,300 MW is fed into the system at Borssele: 2,000 MW from the storage facility, 3,000 MW from the coal-fired plants, 2,000 MW from the nuclear plants and 500 MW from the gas-fired capacity. 18