4C is now TGS

We are excited to announce a significant milestone in 4C Offshore's journey. Our integration into the TGS family marks the beginning of a new era in offshore wind market intelligence.

Learn what this means for you!

Swedish Energy Agency investigate cheaper grid-connections

By: Matthew White 21/03/2018 Swedish Energy Agency

General Grid

The Swedish Energy Agency has stated that they have been commissioned by the Government to investigate potential ways to remove the grid-connection costs for offshore wind power.

The agency expects that the removal of connection costs could lead to a change in the competitive conditions faced by different types of power generation and it might also introduce an additional risk factor for stakeholders in the electricity certificate system and a risk of other, new forms of renewable electricity production being unable to compete.

On the other hand the removal of costs may make Swedish offshore wind power more competitive in the European context, which, given that this could lead to an expansion of offshore wind power, might lead to increased profit margins in electricity production if there are rapid changes in the electricity market that cannot currently be predicted, according to the Agency. Two different models have been examined which could lead to these changes.

The first model entails moving the grid connection point to the offshore wind farm. This means that Svenska kraftnät (The Swedish National Power Grid) would be responsible for the planning, construction, and operation of the undersea connection cable and, therefore covering the costs. Funding of the measure could be provided through an increased grid tariff.

However, this model could create unequal conditions for onshore wind power in the Agency's opinion, as onshore wind power and other electricity production facilities would continue to pay connection costs. It is also the Agency's view that there would be no incentive for wind power producers to select locations that lead to cost-efficient connections if they are not obligated to pay any portion of the connection costs.

The second model entails the introduction of subsidies to wind power producers for a portion of the connection costs. The Agency proposes that this support be limited to covering the undersea cable and associated transformers. This is expected to create conditions more comparable to those of onshore wind power.

Another benefit of this model, in the Agency's estimation, is that the total cost of the removal of connection costs might be limited while still retaining an incentive to connection locations that are cost-effective. The Agency propose that the subsidies under this model be financed through the introduction of a special surcharge paid by all electricity consumers.

In order to continue promoting the provision of cost-effective energy in the event of a removal of the connection costs, the Agency believes that it is important, regardless of which model is chosen, to have some form of selection criteria and minimum requirements for proposed offshore wind projects connecting to the grid.

Premium

4C Offshore Premium, our most popular subscription, gives you full access to use the 4C Offshore WebApp which includes exclusive offshore wind, transmission and vessel reports, news and downloads.

Request a 30 minute Demo

Swedish Energy Agency investigate cheaper grid-connections

Back to News

Trending News!