Connecting new customers to the main grid

The Energy Act was amended on January 1st 2010 to introduce a requirement for tie-in of new production. This entails that everyone with licences for grid facilities has an obligation to tie in new facilities for generation and consumption of electrical energy.

Furthermore, the requirement entails that, if necessary, licensees have an obligation to invest in grid facilities. The licensee may apply to the Ministry of Petroleum and Energy for an exemption from the obligation to connect if a project does not makes good socioeconomic sense. Pursuant to Odelsting Proposition No. 62 (2008-2009), it is assumed that a project makes socioeconomic sense when it is socio-economically profitable.

 

The developer contacts the local grid company/Statnett

A developer/new consumer should always first contact his local grid company and request to be connected. If the local grid company (distribution grid or regional grid) is not the appropriate addressee, the developer must contact Statnett. In such cases, a letter must be submitted to Statnett requesting connection and providing a description of the project. The letter must contain information about the size of the facility (generation or consumption), where the facility will be located and when the desired connection should take place. Production projects must also specify what kind of production that will take place (hydropower, wind, gas, etc.).

 

Assessment of whether connection is prudent for operations

Based on the submitted information, Statnett will assess whether it is prudent to connect the planned facility from an operations point of view. In Odelsting Proposition No. 62 (2008-2009), the Ministry of Petroleum and Energy states the following about a connection being prudent for operations: “The Ministry interpret “prudent for operations” to mean that the connection will have acceptable effects based on a technical and professional assessment of the grid.” (unofficial translation).

 

Statnett’s assessment of whether a project is prudent for operations will initially be of a more general nature and will include:

 

  • Underlying generation and consumption in the area
  • Current grid capacity in the area and any planned or implemented reinforcement measures in the area in question
  • Operational experiences from the current situation in the area
  • Security of supply to existing consumption must not be impaired
  • Market access to existing production must not be curtailed

In general, the overall requirement is that connecting the new facility should not cause any problems for existing grid customers or for the operational reliability of the power system.

 

Based on these three overall assessments, there will be three alternatives:

  1. Operationally prudent with the current grid. This means that Statnett will determine when the facility should be connected and the further process towards commissioning.
  2. Operationally prudent given Statnett’s grid development plans over the next 5-10 years. This entails that Statnett will determine when the facility will be connected on the assumption that planned reinforcement measures are implemented or current projects completed. The time of connection will depend on the progress of the necessary reinforcement measures.
  3. Not operationally prudent with the current grid or with planned reinforcement measures. In such a case, Statnett will roughly assess the need for reinforcements in the existing grid, and consider whether the potential solution will trigger required facility contributions and, if necessary, find out whether there are grounds for an exemption from the obligation to connect.

 

Feedback for all three alternatives will be by letter.

 

Functionality of the installation

Pursuant to Sections 14 and 20 of the Regulations relating to the system responsibility in the power system, Statnett, as Transmission System Operator, shall ensure that new installations or changes in existing installations contribute to a satisfactory quality of supply, as well as efficient development and utilisation of the Norwegian power system. Information about installations that will be connected to the regional and main grid must be submitted to the system operator after the installation has been specified, and should be done before the installation is ordered from the supplier. This will provide the system operator with an opportunity to influence the installation’s functionality before any purchases are made, which may prevent any subsequent changes related to operational system requirements. When planning production facilities for the distribution grid, the area licensee must objectively assess whether the installations will have an overall, significant impact on the operation and utilisation of the regional and main grid. If the impact may be significant, the system operator must make a commissioning decision. A flowchart of the procedure for new tie-ins is available in Appendices 1 and 2 of the Statnett document ”Funksjonskrav i Kraftsystemet” (FIKS) (Functional requirements in the power system). The document is available here.

 

Connection Agreement for the main grid

As Transmission System Operator and operator of the main grid, Statnett must conduct its activities in a neutral and non-discriminatory manner. The main grid operations must be cost-efficient and the prime objectives are an efficient power market and satisfactory quality of supply.

 

Through its role as operator of the main grid, Statnett is party to the Connection Agreement. Section 13-6 of the Regulation on the Control of Grid Operations of 11 March 1999 stipulates that: “Agreements with terms and conditions for connection and utilisation of the grid shall be entered into directly between the grid companies and each individual customer.” (unofficial translation).

 

A standard connection contract has been negotiated between Statnett, Energy Norway, Distriktenes energiforening (Defo) (Norwegian Association of Rural Power Plants - transl. note) and the Federation of Norwegian Industries. The Connection Agreement also applies when the main grid is owned by other parties than Statnett.

 

The purpose of the agreement is, inter alia, to regulate Statnett’s and the customers’ rights and obligations when connecting to and using the main grid. The agreement must be entered into regardless of ownership of the main grid in question. Furthermore, the agreement aims to promote cost-efficient operation of the main grid, ensure that customers have access to information and co-influence over Statnett’s activities, as well as ensure continuous cooperation between customers and Statnett.


The agreement must be signed before commissioning.


Balancing Agreement

Statnett is responsible for settlement in the Norwegian power system. Pursuant to Section 4-7 of the Regulations relating to metering, settlement and coordinated joint action in connection with power trading and the invoicing of network services of 11 March 1999, entities with settlement and balance responsibilities shall regulate conditions in connection with settlement of regulating power in a separate agreement. The Balancing Agreement provides access to the Norwegian wholesale market for electric power. If the customer in question would like to become an operator, he must enter into a Balancing Agreement with Statnett. Alternatively, an agreement can be entered into with a third party who handles the customer’s balancing responsibilities vis-à-vis Statnett.

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