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Germany

Germany

Grid congestion at danger point

Germany's relatively new electricity market regulator is looking to the European Commission to pressure the country's transmission system operators into increasing network capacity where it is most needed for uptake of wind generation

Expansion of the German electricity network for delivery of ever larger volumes of wind power to customers is happening so slowly that the stability of the system is threatened. Sounding the alarm is Germany's energy regulator, the Bundesnetzagentur (BNA). It says the power system is being overloaded by a combination of rising levels of wind generation and cross border flows of transit electricity resulting from the growth of business on Germany's electricity exchange.

BNA president Matthias Kurth warns that temporary or longer term bottlenecks in Germany's transmission system networks "can't be ruled out." There is "a quite considerable need for investment," he adds. BNA has commissioned Consentec and Frontier Economics to jointly evaluate different ways of managing inner German bottlenecks, including the potential for implementing price zones as incentives for investment.

Wind energy plays a substantial role in the challenges. In a list of 58 network expansion activities underway over a five year period up to 2010, 24 are related to wind energy. These are set out in an evaluation by BNA, published last month, of reports from transmission system operators (TSOs) on the condition of their networks. Grid expansion is not just needed for wind. TSO E.ON Netz makes it clear that its efforts in northern Germany to expand the network to assimilate wind energy "also fulfil transit tasks from Denmark, to the Netherlands as well as imports and exports to Sweden."

Delays

Several network expansion projects are planned by the TSOs, but long permitting procedures are causing unexpected delays, complains BNA. Important projects, some of which are listed by the EU Commission in its Priority Interconnection Plan, will not be completed on schedule, says Kurth. The interconnection plan was introduced in October as part of the EU Strategic Energy Review published by the Commission in January, 2007. Getting a new overhead line built in Germany usually takes more than ten years, or longer than construction of a conventional power station. BNA now intends to "seek a dialogue with the relevant planning authority" when specific network upgrades are being stymied.

Upgrades to cross-border transmission capacity are also not being pursued sufficiently, says BNA. The TSOs have three options for spending the revenues accrued from auctions of the limited cross-border capacity to Germany's neighbours: they can reduce network charges to customers; they can guarantee the availability of transmission capacity through so-called counter-trade or re-dispatch measures; or they can make investments in maintaining and expanding connection capacity between transmission networks. So far not a single cent has been spent on improving network capacity. The TSOs have preferred to use it to reduce network charges to customers, leading BNA to suspect that incentives to invest in network improvements are lacking.

Wielding a big stick

Improvements may be on the way, however, thanks in good part to the determination of the European Commission to see a strong and interlinked European transmission system. BNA welcomes a Commission initiative, under the Priority Interconnection Plan, to set up expert groups and European co-ordinators for, among other projects, connecting offshore wind stations in the North Sea and Baltic Sea to the onshore electricity network via shared transmission lines at sea.

The work program shouldered by the European co-ordinator for offshore wind, Georg Wilhelm Adamowitsch, a German national, covers the connections to offshore wind power in northern Europe from both the North Sea and Baltic Sea. "It is clear that offshore wind power generation and transmission need to be addressed simultaneously," he said in a brief statement at the end of November when his work program was endorsed by EU energy Commissioner Andris Piebalgs. Since then, however, Adamowitsch has gone to ground, declining to make his views public until he has an overview of the current situation.

Adamowitsch's remit involves extensive consultations with policy makers in member states in northern Europe, the corresponding national regulation authorities and the TSOs. Following consultations in the UK, Finland and the Netherlands, more visits are scheduled so that first conclusions could be made within two or three months. The work program foresees a report at or before the end of the first year of work, in September, and at 12 month intervals thereafter.

Meantime, BNA welcomes a coming revision of the Commission's guidelines for trans-European networks that will propose national procedures to speed up the planning and permitting of transmission projects of special European interest so that procedures are completed within five years. The EU Commission is also to examine whether its budget for transmission reinforcement projects should be increased.

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