“Statnett’s main task is to ensure that we have a power system with a reliable supply of electricity – now and in the future. We are progressing well with our main grid upgrades and several major grid projects have been completed in the last few years,” says Bente Monica Haaland, Executive Vice President, Corporate Strategy and Communications.
A fine balance
“However, major investment initiatives will be required in the years ahead. It is important that such investments take place in a way that takes into consideration progress as well as cost-effectiveness. Our objective is to prepare a plan which balances the various needs of society with the power system, so that we will succeed in supplying enough grid facilities at the right time and cost, with an acceptable implementation risk,” Haaland emphasises.
According to the draft 2015 Grid Development Plan, Statnett will prioritise facilitating renewable energy and new consumption, and increase international power trading in the years to come, in addition to implementing the projects necessary to ensure reliable security of supply.
“To develop the grid in line with society’s need, and to prevent any major cost increases in the period leading up to 2020, we have, however, emphasised a phased development for many of our planned projects. We have also decided to reschedule some of our planned reinvestment projects,” says Haaland. In the short term, we will compensate for this by intensifying maintenance and replacing individual components.
Safe and efficient
“We are working continuously to improve and become more efficient. We are continuing to increase our development capacity in a cost-effective manner, e.g. by making more extensive use of standardised solutions, strategic procurements with new implementation models and by more actively qualifying new technology in our project portfolio. This will help reduce unit costs throughout the entire project portfolio,” says Håkon Borgen, Executive Vice President, Technology and Development.
“We can see that we have improved. In 2014, projects were completed on time and within budget, and we see a positive HSE trend. As a result of systematic HSE work, we have reduced the number of lost-time injuries by 50 per cent among company employees, suppliers and subcontractors,” Borgen points out.
High activity level towards 2020
The planned investments for the ten-year period between 2016 and 2025 are at the same level as the projected level for the decade in the previous 2013 Grid Development Plan. Two factors have increased the level: Higher unit costs and the introduction of new projects. Two factors have reduced the costs: Project completion and rescheduling of some of the planned projects. The total number of projects that are currently under planning and implementation will in a few years reach a peak investment level, and then decline after 2020.
Greater uncertainty after 2020
After 2020, there is greater uncertainty related to the total investment level. The uncertainty is associated with new elements that have emerged in the last few years. This relates to new investments as a result of the EU’s third energy market package, which entails that Statnett will acquire parts of the main grid currently owned by other grid companies. Furthermore, it is a result of new needs that we are currently considering solutions for in Northern Norway, Central Norway and Western Norway. These are referred to as concept choice assessments. We also see that around 2025, it will be necessary to upgrade many of the existing substation facilities. New grid needs may also arise that we are not aware of at present.
Even though there is uncertainty relating to the grid needs after 2020, we still expect the total investment level to fall in the long term, compared with the level leading up to 2020. It is important to point out that there is great uncertainty associated with the scope of new projects and when they will be realised. Coming assessments and continued planning will clarify the scope in more detail in the years ahead.
New system for allocation of spare grid capacity
In some geographic regions, the current grid capacity is insufficient to enable connection of all planned renewable energy projects. To help improve predictability, Statnett is preparing a new system for allocation of spare grid capacity in some areas. Only projects with a final licence may request a confirmation of spare grid capacity.
The system is based on objective and non-discriminatory criteria and will ensure competitiveness between the projects as envisioned by the Norwegian Water Resources and Energy Directorate (NVE). Statnett will submit a proposal for how such a system would function and submit it for consultation before the new system would be implemented.
The Grid Development Plan to be submitted for consultation
Statnett will, for the first time, submit the 2015 Grid Development Plan for consultation. On 9 April, the draft 2015 Grid Development Plan will be submitted for public consultation, a process which will last for two months. At the beginning of the consultation period, four power system meetings will be held in four different areas to present the plan.
“This is an important step for Statnett,” says Bente Haaland. “Transparency and involvement are at the core of how we want to work. We anticipate a need for more advanced interaction between consumption, production and power transfer, based on new technologies and market solutions. To succeed, constructive dialogue and coordinated efforts with power producers, other grid companies, industry, the authorities and other relevant players, are vital.
The consultation period will be concluded on 4 June and the 2015 Grid Development Plan submitted to the NVE on 1 October.
Martha Hagerup Nilson, Vice President Corporate Communications. Mobile: +47 971 71 310