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Creating an integrated North Sea power grid could save the surrounding countries up to £70 billion by 2050, a new study has suggested.
However, these savings will not materialise without a new approach to network design, changes to electricity trading arrangements and leadership from the top.
The analysis conducted by Imperial College London and the think tank E3G was based of modelling of two main scenarios – a medium ambition scenario in line with the UK government’s 2030 deployment target in which fixed-base turbines provide 340GW of wind capacity by the middle of the century, and a high ambition scenario in which the deployment of floating turbines in later decades raises the figure to 490GW.
The report said linking multiple windfarms to hubs in the North Sea, allowing electricity to be transmitted onshore through a single transmission line would lower networks cost by between £23 billion and £45 billion by the middle of the century.
Using multi-purpose interconnectors to provide the onshore connections and fully integrating the hubs into the power grid in the UK and EU would save a further £25 billion between now and then. By contrast, establishing offshore networks between hubs merely within national waters would only create additional savings of £2 billion to £5 billion.
“Currently all UK offshore windfarms have their own direct link onshore to transfer the electricity they generate to where it is needed – the so-called ‘radial’ approach,” the report explained. “Separately, there are also cross-border interconnectors that allow the direct trade of electricity between the UK and European neighbours.
“There is already a significant body of evidence that radial connection and separate interconnectors are not the right approach to support significant expansion of offshore wind capacity. Not only would it be unnecessarily expensive, but it would require a large amount of new infrastructure with associated environmental impacts. This is in addition to conflicts with other spatial demands such as military and fishing.
“An alternative integrated offshore grid design, which would combine these two types of infrastructure, offers the prospect of allowing more offshore renewable energy to be developed, cheaply and efficiently by limiting the amount of grid infrastructure involved.”
But the report said achieving this vision would require new governance arrangements and shared control between countries: “These are difficult political decisions and will not emerge from bottom-up technical working groups.”
It said the UK government should immediately initiate talks with the EU to identify the governance structures required to coordinate network planning and agree efficient trading arrangements: “It is crucial that this includes top-level political agreement to ensure that a new approach is established by the mid-2020s.”
The report said the current processes and institutions cannot be relied upon to deliver coherent, integrated infrastructure planning: “It is not appropriate that important judgements about future infrastructure requirements are made by regulators and network operators through planning processes conducted as part of separate price control reviews.”
It said the government should establish a “transparent and independent” process for forecasting the future costs and potential deployment of offshore wind and emerging technologies such as green hydrogen, preferably by creating a technical expert body that is free of “vested interests”.
Based on its findings, the Electricity System Operator (ESO) could then identify the optimal sizes and locations for the offshore hubs: “The connection capacities provided should be readily scalable to accommodate future increases in the level of ambition and provide the basis for creating a fully integrated offshore grid.”
“The most immediate policy challenge is to migrate as much of the current and future pipeline of offshore wind projects as possible to co-ordinated grid connection without incurring excessive cost and disruption to projects,” it added.
“The government should work with the ESO, project developers and environmental advocates to identify an implementation plan before the end of 2021. The longer this is delayed, the more avoidable economic cost and environmental impact will be incurred.
“Ideally, this decision would be announced before COP26 as part of a package to reinforce UK leadership in the deployment of offshore wind.
It continued: “Once network development proposals are approved by regulatory authorities, they can be packaged into a construction programme that ensures timely provision of offshore connection assets and allows for competitive tendering to procure network build and operational services.”
This would also provide a long-term trajectory for offshore wind, giving a schedule for when and where new connection capacity will become available, to which Contracts for Difference auctions could be aligned.
The report said the expert body should constantly review whether the rate of growth can be accelerated, for example, if the costs of floating wind become cheaper: “The processes should be in place to ensure such recommendations are transparent and promptly reviewed by government. This will allow immediate instructions to be given to Ofgem and the ESO to increase network capacity accordingly.”
It also called on the government to conduct analysis into the comparative benefits of a “fully meshed” network in which the offshore hubs are connected to each other, something not explored in the study.
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