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Allocating Grid Infrastructure Costs

There is no doubt that the transmission and distribution infrastructure will have to be extended and reinforced in most EU countries when large amounts of wind power are connected. However, these adaptations are necessary not only to accommodate wind power, but also to connect other electricity sources to meet the rapidly growing European electricity demand and trade flows.

However, the present grid system is not used to its full capacity and present standards and practices of transmission lines by TSOs are still largely based on the situation before wind energy came into the picture. As wind power is producing in a whole range of partial load states, wind farms will only utilise the full rated power transmission capacity for a fraction of the time. In some cases, where there is adjustable power production (such as hydro power with reservoir), the combination of wind and hydro can use the same transmission line.

The need to extend and reinforce the existing grid infrastructure is also critical. Changes in generation and load at one point in the grid can cause changes throughout the system, which may lead to power congestion. It is not possible to identify one (new) point of generation as the single cause of such difficulties, other than it being ‘the straw that broke the camel’s back’. Therefore, the allocation of costs required to accommodate a single new generation plant to one plant only (for example, a new wind farm) should be avoided.

In the context of a strategic EU-wide policy for long-term, large-scale grid integration, the fundamental ownership unbundling between generation and transmission is indispensable. A proper definition of the interfaces between the wind power plant itself (including the 'internal grid' and the corresponding electrical equipment) and the 'external' grid infrastructure (i.e. new grid connection and extension /reinforcement of the existing grid) needs to be discussed, especially for remote wind farms and offshore wind energy. This does not necessarily mean that the additional grid tariff components, due to wind power connection and grid extension/reinforcement, must be paid by the local/regional customers only. These costs could be socialised within a “grid infrastructure” component at national, or even EU level. Of course, appropriate accounting rules would need to be established for grid operators.