Will the European grid smarten up?

Since 1 July 2007 all European Union citizens have been able, in theory, to freely choose their electricity and gas supplier. Reaping the benefits of full liberalization of the electricity market in practice remains a daunting goal. While technology has the answers to a pan-European electricity grid, finding the money and the political will to put the necessary infrastructure in place continues to raise still more questions.

By: Chris Webb

European member states are finding that it is one thing to implement a directive, yet another to see its rewards. We are talking, of course, of the opening of Europe’s energy markets à‚— electricity and gas à‚— to full competition. There are a few exceptions to take account of special circumstances where it is not possible to introduce competition yet, such as the Baltic countries and in member states where gas was introduced only recently. But the basic rule of freedom of choice has become firmly established in the European Union (EU).

In practice, though, a legacy of structural diversity across 27 disparate states is proving to be a major challenge if a fully functioning European energy market is to be achieved. This is particularly true of the electricity sector, where legislators want to see interconnectivity bring affordable, reliable and sustainable supplies to every European citizen.

Yet a pan-European grid, whatever that means, need not be a pipedream. Duncan Botting, head of technology and business development for ABB Power Technologies in the UK, and vice chairman of the Smartgrids European Technology Platform looking at future electricity networks, says the technology is already there to make European interconnectivity a reality. “Technology is not the problem,” he told PEi, “and in September a third legislative package was announced that, among other things, will harmonize regulatory standards across Europe.”

A Smartgrid Future?

On the face of it, good news, then, but Botting continues: “But it’s highly unlikely that in Europe we’ll see a common grid, per se; more probably we’ll see national or regional grids connected in much the same way as computers, a bit like fire-walling, in a manner that will ease cross-border trading in accordance with 2020 targets. The technology has come of age and the various systems that can bring about connectivity are quite mature.”

Smartgrids will connect large and small centalized and dispersed power sources. Is this shape of things to come?
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Smartgrids unveiled details of the revolution it foresees for electricity networks across Europe and the steps needed to make the vision a reality in early November. Smartgrids of the future will connect large and small centralized and dispersed power sources. They will link and coordinate generation local to users and remote from users. Bringing together, for example, solar power from the south of Europe, wave power from the Atlantic coast and wind power from northern Europe to blend with large-scale hydropower, clean coal or gas fired generation.

Aging network infrasctructure

The problem with much of Europe’s existing infrastructure is that electricity networks are in the main more than 40 years old. The question Smartgrids has attempted to address is: are companies going to replace them as they are, or take the opportunity for fresh thinking and innovation? There are very real and significant challenges of climate change, security of supplies, and Europe’s competitive position to consider, along with contemporary customer requirements and new technology. The result is a concept developed by more than 200 experts across Europe; the combined vision of stakeholders from engineers to business people, from academics to politicians.

It is, says Smartgrids, about much more than just wires; it is about a revolution for the whole electricity ecosystem, a whole new architecture to enable a sustainable future for Europe. But to bring it about there is still much more research to be done, along with a great deal more investment in Europe’s electricity networks. And, like the Smartgrids publicity material says, technology alone is not enough. Success will depend on marrying technical issues together with their commercial and regulatory implications in the liberalized market.

It is two years since the EU heads of state and government met at Hampton Court, UK, and underlined the need for a strengthened policy to facilitate the completion of priority infrastructure projects. Previously, at the Barcelona European Council in 2002, it was also agreed that minimum interconnection levels between member states should be increased to 10 per cent. Today a significant number of the member states have still not achieved even that modest target, and as a consequence in March 2006 the European Council called for the adoption of a Priority Interconnection Plan as part of the Strategic European Energy Review (SEER). In June of that year the European Council gave its full support to external infrastructure projects aimed at enhancing security of supplies.

Three key issues topped the agenda: sustainability, competitiveness and security of supply. Substantial new energy infrastructure was needed, the Council considered, if it was to succeed in integrating electricity generated from renewable energy sources. By the same token, such a measure would also improve the efficiency of the new and installed generation capacity at the European level. Moreover, true competition would only be possible through the effective performance of energy infrastructure. It would serve to bolster inter-regional trade and reduce the scope for market power abuse. And, finally, due to the high dependency of the internal energy market on external supplies, diversification of sources and adequate interconnected networks would be needed to strengthen security of supply and build solidarity among member states.

Policies for cross-border transmission

The EU has formulated a series of policies aimed at supporting the development of an effective energy infrastructure in Europe. First of these is its ‘Guidelines for trans-European energy networks (TEN-E Guidelines), in which the EU has identified 314 infrastructure ‘projects of common interest’ whose completion should be facilitated and speeded up. They include 42 high priority ‘projects of European interest’ that may be cross-border in nature or have significant impact on cross-border transmission capacity. The guidelines provide a framework for increased coordination, for monitoring progress in implementation and, where appropriate, for European Commission (EC) financial support, including loans from the European Investment Bank.

The EU’s second initiative concerns recently introduced specific rules to ensure an appropriate level of electricity interconnection and gas supply between member states, while facilitating a stable investment climate. And thirdly, in June 2006, the importance of the realization of an ‘interconnected, transparent and non-discriminatory internal energy market, with harmonized rules’ and ‘the development of cooperation to meet emergencies, in particular in the case of disruption of supply,’ were highlighted.

Yet despite legislation, progress on the development of networks has been slow, and by the EC’s own admission, significant and intractable obstacles remain. In its Communication of the Commission on ‘Prospects for the Internal Gas and Electricity Market,’ it reports that, at present, ‘the EU is far from being able to guarantee to any EU company the right to sell electricity and gas in any member state on equal terms with the existing national companies, without discrimination or disadvantage.’ In particular, non-discriminatory network access and an equally effective level of regulatory supervision in each member state do not yet exist.

Furthermore, the EU has not yet adequately addressed the challenge of investing in the right level of new infrastructure based on a common stable European regulatory framework in support of the internal market. The necessary degree of coordination between national energy networks in terms of, for example, technical standards, balancing rules and other issues that are necessary to permit cross-border trade to work effectively is at present largely absent.

In a Communication from the Commission to the Council and the European Parliament in early 2007, it was noted that amounts invested in cross-border infrastructure in Europe were ‘dramatically low.’ Only g200 million ($295 million) yearly is invested in electricity grids with the increase of cross-border transmission capacity as the main driver (TEN-E invest study 2005). This represents a mere five per cent of total annual investment for electricity grids in the EU, Norway, Switzerland and Turkey.

This is in spite of the fact that networks are operating each year closer to their physical limits with an increased probability of temporary power interruptions. Many countries and regions, says the communication, are still ‘energy islands,’ or largely cut off from the rest of the internal market. This holds true in particular for the Baltics and the new member states of southeast Europe.

Present levels of investment do not even match the needs of an effective infrastructure in line with the objectives of the Energy Policy for Europe (EPE).

Enshrined in the EPE is an independent mechanism for national regulators to cooperate and take decisions on important cross-border issues, specifically: the creation of a new community mechanism for transmission system operators (TSOs) to improve coordination of network operation and grid security building on existing cooperation practices and a more efficient and integrated system for cross-border electricity trade and grid operation, including elaboration of technical standards. The mechanism also stands for the enhancement of competition and security of supply through facilitated integration of new power plants into the electricity grid in all member states, in particular encouraging new market entrants, and; relevant investment signals contributing to the efficient and more secure operation of the transmission grid.

Total Grid Investment

The EU will need to invest, before 2013, at least g30 billion in infrastructure à‚— g6 billion of it accounting for electricity transmission alone à‚— if it wants to address fully the priorities outlined in the TEN-E Guidelines. Yet this amount is only part of the total EU grid needs. IEA projections for total grid investment needs in the EU between 2001 and 2010 are, for instance, g49 billion. Moreover, connecting more electricity generated from renewable sources to the grid and internalising balancing costs for intermittent generators will, for instance, require an estimated g700-800 million yearly.

A priority interconnection plan, drawn up to address the most urgent requirements of European interconnectivity, sets out five priorities:

  • Identifying the most significant missing infrastructure up to 2013 and ensuring pan-European political support to fill the gaps;
  • Appointing four European co-ordinators to pursue four of the most important priority projects (the power-link between Germany, Poland and Lithuania, connections to offshore wind power in Northern Europe, electricity interconnections between France and Spain, and the Nabucco pipeline, bringing gas from the Caspian to central Europe;
  • Agreeing a maximum of five years within which planning and approval procedures must be completed for projects that are defined as being ‘of European interest’ under TEN-E Guidelines;
  • Examining the need to increase funding for the Energy Trans-European networks, particularly to facilitate the integration of renewable electricity into the grid, and;
  • Establishing a new Community mechanism and structure for TSOs, responsible for co-ordinated network planning.

Rather worryingly, the EC reports that, if the EU continues on its present infrastructure course, none of the EPE objectives will be met. An analysis of the current state of affairs, conducted in early 2007, noted that at present 20 of the 32 projects of European interest faced delays à‚— 12 of them of one to two years, while eight were delayed by more than three years. Only five projects had been fully or almost completed.

Smartgrids could bring together solar power from the south of Europe, wave power from the Atlantic coast and wind power from northern Europe to blend with large-scale hydro, clean coal or gas fired generation
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As a result, the Commission has attempted to identify key projects that are vital to completing the internal market, integrating generation from renewable energy sources into the market and significantly improving security of supply, and where facts are know which may lead to delays in implementation. They include, for example, the Kassàƒ¸-Hamburg link, which is considered essential for integrating large volumes of wind-generated electricity in Denmark and Germany for trading with northern Europe. Often, as in this case, the reasons for delay include opposition from locals in densely populated areas, where negotiations must be conducted with numerous and often hostile landowners.

Technology rises to the challenge

While many political and fiscal hurdles have yet to be scaled if pan-European connectivity is to become a reality, the technology, at least, appears to be rising to the challenge. And ABB’s Duncan Botting is not alone in his optimism. “There’s competition now, which is healthy, and it shows that the technology has come of age,” he told PEi. And some of that competition, at least, is from the direction of Siemens, whose Power Transmission and Distribution (PTD) division boasts a number of advances that will play a role in realizing long distance transmission with minimal losses. They include Ultra High Voltage Direct Current (U-HVDC) 800 kV transmission facilities capable of transporting 5 GW of power over distances of more than 1500 km. And Siemens’ HVDC Plus technology, which it says can convey large volumes of power into urban areas, while occupying only a small footprint. A 400 MW HVDC Plus scheme is due to go live in San Francisco, USA, in 2010.

As Siemens PTD points out, electrical transmission and distribution lines in Europe today are physically connecting Scandinavia to the coast of Africa, as well as the UK, across Scandinavia and central Europe to the Russian Federation. Yet while these and other physical connections exist, Siemens says, reliability and security of supply require the grid to be operated according not only to EU rules, but also national regulations and with due attention to technical constraints such as controllability.

Successful grid coordination in such cases can exist, however, and Siemens cites the UCTE grid in Brauweiler, Germany, and in Laufenburg, Switzerland as examples where the required stability may be achieved. But it is essential to know some key system parameters à‚— generation to load ratio, load flow, load/frequency control and voltage stability.

Another requirement is to predict system conditions fast enough to be able to react to changes in real time. Computer simulation of grid performance, and flexible alternating current transmission system (FACTS) controllers, based on power electronics that allow reactive power injection and load balance are just some of the other tools at the disposal of grid managers that enable these requirements to be met.

While bilateral connections of grids are state-of-the-art in Europe, Siemens says, there are considerable opportunities for improvements in the area of transmission capacity. Some grids are changing from a regional centralized load management regime to superimposed transmission. There is also a growing demand for line upgrades, intelligent FACTS solutions and enhanced grid automation solutions.

Superconducting Cables

There is another area where huge advances are being made that will benefit transmission of power over large distances without significant losses. In light of intensifying needs for increased energy network capacities in the Western world, industry and policy leaders are looking for new solutions to increase the capacity and flexibility of the grids.

Superconducting cables, which can transport three to five times more power than conventional cables, are regarded as one of the most promising and cost effective new technologies to address these issues. They enable operators to make substantial savings as they can re-use existing right-of-ways, eliminating the needs for land acquisitions, while minimizing any substation upgrade costs. Another advantage is that they have no thermal or electromagnetic impact on the environment. Nexans is a company that is working in this area, along with OEMs, to supply cables capable of delivering significant power à‚— and ultimately cost à‚— savings.

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In August, 2006, during a scorching heat wave, the Long Island Power Authority (LIPA) inaugurated the construction phase of the world’s largest and highest-voltage superconductor electric transmission cable system. The 138 kV cable system, 600 meters in length, is the world’s first superconductor cable installed in a live grid at transmission voltages, and will carry more power than all previous HTS cable demonstrations combined.

The real story gets interesting when cables go underground, says Pierre Kayoun, Nexans’ vice president of marketing, infrastructure markets. There are many benefits arising from obtaining permits to bury cables underground. “Its important if we want to accelerate interconnection,” he says. “Underground cables are very reliable, a lot more environmentally friendly, and while it can take up to ten years to get permission to build overhead cables, it can be as little as two years by putting them underground.”

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