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Can Norway be Europe’s “green battery”?

Published on: 27. January 2011



 

Key researchers from CEDREN recently travelled to Düsseldorf to meet with German researchers and representatives from energy industry and grid companies. Held 15-16 December, the meeting enhanced knowledge about balance power and contributed to CEDREN’s work on identifying the advantages and drawbacks of Norway’s becoming Europe’s “green battery”.

Can Norway be Europe’s “green battery”?
Centre Director Atle Harby presents the CEDREN research centre to workshop participants. Photo © Claude R. Olsen

 

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The workshop confirmed unequivocally that Norwegian hydropower could play a vital role in Europe’s, and particularly Germany’s, path toward a society powered by renewable energy. The German representatives, however, had different opinions on the scale of future energy needs and on the pace of development.

Four essential questions emerged from the workshop, and these will be the target for continued efforts by CEDREN: 

 
 
Foto: Claude R. Olsen
 
 
 
 
How great is European demand for Norwegian balance power?
 

Europe is in full transition away from reliance on fossil fuels towards utilising renewables-based energy. The bulk of electricity production is to come from wind power and solar energy, both of which are subject to fluctuations in production. Despite low subsidies, the rapid pace of development for wind power and solar energy is expected to continue. This makes energy storage necessary to ensure power for consumers when the wind is still or the sun is not shining.

Fully half of Europe’s reservoir capacity lies in Norway, making the country an attractive partner. A German study on how Germany could procure all of its electricity from renewable resources by 2050 identifies Norwegian dams as the only realistic way to store large volumes of energy. The study, conducted for the German Advisory Council on the Environment (SRU), estimates that in 2050, Germany will need close to 60 GW of balance power, which far exceeds Norway’s current capacity.

Norway’s state-owned Statkraft has carried out a study to quantify the technical potential for pumped storage capacity in southern Norway. This potential depends on how soon energy companies are allowed to manipulate reservoir levels and on the length of time the water is to be stored. Capacity is estimated at 30 GW for a typical scenario that assumes reservoir levels can be changed by up to 50 cm per hour in the dams, and that discharge can be distributed over five days. Under stricter regulation of dams, however, where changes in reservoir levels are limited to one centimetre per hour, capacity is reduced to one-tenth, or 3.2 GW. These calculations exclude any future reservoirs that may be established.

SRU regards the linking of German solar energy and wind power with Norwegian hydropower as a win-win situation. German grid companies caution that plans to increase wind and solar production in Germany will be in trouble if national grid capacity is too low – since wind power is produced by wind farms in the north of Germany, while consumption is highest in the south. By 2020, some 4 000 kilometres of new transmission cables will be needed; just 90 kilometres in length has been constructed so far, according to grid company 50Hertz Transmission. Local residents strongly resist grid expansion when it means new power lines in their neighbourhood; many experts consider this the single largest obstacle to developing renewable energy.

Poor transmission capacity has already led to periods with negative spot prices in northern Germany, where the proportion of wind power is high. Suppliers have had to pay for delivery of electricity – and this challenge will only intensify with the development of more wind power.

Germany was the first country to create scenarios for how Norwegian reservoirs could balance renewable energy, but the UK has now entered the picture as well. England and Scotland are planning to construct a number of large-scale offshore wind farms, dramatically increasing the need for balance power. A recent UK study identifies Norway as the most preferable solution for storing sufficient energy to fill in during periods when winds are still. On the Continent, The Netherlands wants a second transmission cable stretching from its shoreline to Norway, in addition to the one already in place.

So Norway could find itself in a very advantageous position as an energy supplier.
 

 

What are the alternatives to Norwegian balance power?
 
Norwegian pumped storage power is not the only solution for balancing Europe’s variable supply of renewable energy.

German grid companies are looking at several alternatives.

In terms of costs, the solution closest to pumped storage power is compressed air energy storage (CAES). Air is pumped into underground salt caverns in surplus periods, then the compressed air is used to generate power when winds are calm. Salt caverns are common where wind power is being developed, such as in Germany and the North Sea. Under ideal conditions, the costs of CAES can be on a par with pumped storage power: roughly EUR 1 000 per kW, according to the energy company EnBW. This solution could be commercialised within five to ten years. The main challenge when pumping air is that sudden pressure changes can cause the cavern walls to collapse.

Another method is to produce hydrogen in high-wind periods, then use that hydrogen to generate power when there is little wind. This alternative, however, is not energy-efficient and is far more costly than other methods.

If the European grid could be expanded across national borders and opened to the free market, as the European Commission is working towards, much of the demand for balance power could be provided via the grid. Often, for example, it is windy off the coast of Spain when the North Sea is calm, and when there is little sunshine in southern Germany, winds may blow high in the North Sea.

Thermal power plants, particularly gas-fired plants, can be adjusted up or down to increase flexibility in the German energy system. The country has sufficient potential in its salt caverns to store over 500 TWh of natural gas, according to the research institute Fraunhofer IWES.

Southern Germany already has access to pumped storage power, albeit a limited amount. Current installed pumped storage power in Germany, Switzerland, Austria and Liechtenstein combined is 7.5 GW, with an additional 8.4 GW in planning phases and a potential of 8 GW more. Although the installed output at these pumped storage power plants is high, their reservoirs are low-capacity and suitable for supplementing only short-term fluctuations, typically 8-12 hours, before going empty. So “battery” capacity is no more than 40 GWh. By comparison, Norway’s total reservoir capacity is 82 TWh, which is some 2 000 times greater even though the installed output of 29 GW is just four times higher.
 
What is the economic feasibility of multiple transmission cables?
 
A study commissioned by Nordic interests and conducted by Thema Consulting and Econ Pöyry indicates it would be profitable to lay far more cables between Norway and Germany, but only up to 8 GW of capacity – far below SRU’s estimate of 42 GW. Typically, each cable has a capacity of 700 MW, so a great many cables would be needed. Combined capacity from Norway to Denmark, Germany and The Netherlands is currently less than 2 GW.

The profitability of laying multiple cables lies in energy price disparities between Germany and Norway. Due to the volume of wind power in Germany, prices fluctuate far more than in Norway, where they are relatively stable. This works to the advantage of pumped storage power producers as well as grid companies. If too many cables are laid, however, profitability would be lost since energy prices between Norway and the Continent would even out.

Investors are also hesitant to finance a large number of cables since the demand for large volumes of pumped storage power may only arise a few times a year – when winds are calm for more than 10 days in a row. In 2008 and 2009 there were no such periods, according to EnBW. Such low and unpredictable frequency makes profits uncertain.

At the same time, one scenario of the Thema Consulting study indicates that by 2020, the Nordic region could be producing a power surplus of 45 TWh per normal year, thanks to the development of renewable energy, which is mandated by the EU Renewable Energy Directive. Without new cables this power, as much as 25 TWh in a wet year, could go to waste.

For Norway to position itself in the balance power market, the network of cables should be constructed before other players have invested heavily in compressed air energy storage, gas-fired power plants or other competing technologies.

From the German viewpoint, Norway has no reason to delay. The first 10 GW of transmission capacity does not require any follow-up expansion of pumped storage power.

The choice that the Norwegian authorities and energy companies must make is whether to move quickly to sign bilateral agreements with Germany and the UK in order to secure a competitive advantage, or wait for a multinational agreement with the North Sea countries or the entire EU in order to gain greater security for investors and a larger market.

 

 

What must be done to gain acceptance in political and popular circles?
 
Pumped storage power is a new way of running Norway’s energy system. For 80 years, local communities have been accustomed to reservoirs being drained down in spring and then refilled by winter, with changes being gradual. Utilising pumped storage power, on the other hand, involves frequent variations in water levels all year long. Winter ice will be less safe and skiers may not be able to cross their favourite reservoirs. Furthermore, some studies indicate that compared to the current system, pumped storage power may lead to reservoir filling beginning earlier in spring, and higher filled levels on average. This is due to periods of likely large surpluses of wind power in autumn and winter.

Changes in the way natural resources are utilised will require acceptance from political circles and the public at large – particularly in light of the debate about energy prices and calls to stop exporting power during certain periods. More precise information and knowledge are needed in this debate.

Arguments in favour of supplying Europe with pumped storage power are that this is a way that Norway can support an industrial plan to establish renewable energy in Europe, while making Norway’s power supply more stable. Higher revenues are the reward.

These revenues must benefit more than just the energy companies and the state. The municipalities that are home to these pumped storage reservoirs, transmission lines and coastal entry points for the international cables must be compensated with a share of the revenues. Devising fair models for revenue sharing will be a challenge.

A new energy system must also benefit consumers. The greater the number of cables laid between Norway and the rest of Europe, the more energy prices will even out. One suggestion is that earnings from pumped storage power should serve to keep Norwegian consumers’ energy prices from rising, perhaps even lowering them.
 
 

Written by: Claude R. Olsen.
English translation: Darren McKellep and Carol B. Eckmann

 

 

Contact persons for CEDREN:

Ånund Killingtveit, NTNU - projectleader HydroPEAK

Atle Harby, SINTEF - Centre director CEDREN

 
 
 
Additional information
 

 

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