Norwegian Hydropower and large scale Wind Generation in the North Sea
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- Institutt for elkraftteknikk 
The addressed issue for this report is the making of a model, which represents the power system in Great Britain. This model is connected to an already existing model of Northern Europe in order to study how the present power systems are affected by eventual connections between Great Britain and Norway and the profitability of these. A model for 2020 is also created in order to study how increased wind generation are affecting such cables. Electricity trading in Norway is normally done through the Nord Pool exchange which also covers the other Nordic countries. Most of the electricity is traded in the Elspot market where hourly contracts are traded daily for physical delivery in the next day s 24 hour period. The price for the volumes traded is based on the intersection between the supply and demand curves. Participants in Norway are normally trading their entire volumes at the exchange. This is distinct from trading in Great Britain where the base load and the shape normally are traded separately. Electricity trading in Great Britain is based on bilateral agreements which allow direct contracting between counterparts. Each transaction is made independently between the parties involved, giving the customers an opportunity to negotiate the best price from suppliers and generators without being constrained by any official price. Models for both a 2010 and a 2020 scenario of the Great Britain power system are created in the EMPS-model. The EMPS model is a market simulator which optimizes the utilization of a hydro-thermal power system based on stochastic supply and demand. Great Britain is divided into four areas in both scenarios. Each area has defined transfer capacities to other connected areas while the transfer capacity within each area is unlimited. These areas are therefore defined in such a way that boundaries with insufficient transfer capabilities in the real system are located at the boundary between two areas in the model. Coal, gas, bio and oil fired plants are represented individually in the model while nuclear, wind, small scale CHP, hydro and pumped storage capacities are aggregated for each area. Meaning that there is only one aggregated nuclear plant, one aggregated wind farm etc. in each area. An area also has a given demand which varies throughout the week and year. Price calculations in the model are based on the intersection between the supply curve and the demand curve. Pricing in the model is therefore more representative for the way of pricing in Norway than in Great Britain.For the 2010 scenario, three different cable alternatives are simulated. Two of these cases are equal except for the landing area of the cables in Great Britain. One cable is connected to Southern England while the other is connected to Northern Scotland. For the third case, the assumptions are similar to the other cases except for an equalization of the gas price in Europe. The landing area for the cable in this case is Southern England. All three cable alternatives returns a fair-sized congestion rent, but the congestion rent is not sufficient to cover the investment cost for any of the discussed cables based on the defined assumptions. Additionally, the cables result in large grid constraints across the boundary between the landing area in Norway and the other Norwegian areas connected to this area. Increased constraints are also an issue for the cable connected to Northern Scotland.Towards 2020, installed wind capacity is expected to rise considerably. This also includes offshore wind farms such as Dogger Bank. A cable from Norway could therefore be connected to Dogger Bank and utilize spare capacity on the cable from Dogger Bank to Great Britain. Three different cables are discussed for the 2020 scenario. The first case is a cable from Norway to Southern England and the second and third case are cables from Norway to Dogger Bank. All three cables have the same transfer capacity. The difference between the two cables connected to Dogger Bank is the transfer capacity from Dogger Bank to Great Britain. The second case has a transfer capacity towards Britain which equalizes the installed wind capacity at Dogger Bank. For the third case, the sum of both the cable towards Norway and the one towards Britain equalizes the installed capacity at Dogger Bank. As for the cases in the 2010 scenario, none of these cable alternatives generate a congestion rent which is sufficient to make the cable profitable based on the defined assumptions.