Will accept zero the first year. Both Statnett and the government are working to reach a solution with the Germans.
It was in February that Statnett sounded the alarm . In a letter to the Ministry of Petroleum and Energy, they wrote that the German Ministry of Energy has published a plan which stipulates that new international connections shall have zero minimum starting capacity for one year after they are put into operation.
"For Nordlink, this could mean that the connection will have zero in minimum capacity in 2020 and 2021, and then a linear increase from zero in January 2022 and to 70 percent at the end of December 2025."
Statnett describes it as unacceptable:
"In our view, this is not in line with the political intentions that were the basis when Norway and Germany agreed to build the connection," wrote Executive Vice President Gunnar G. Løvås in February.
Germany would like to export
The Nordlink cable between Norway and Germany is scheduled to be put into trial operation in December, while testing of IT and trading solutions will start as early as September. Both Statnett and the government are therefore working to reach a solution with the German energy authorities.
But why will Germany not use a cable that they themselves have helped to build?
They want to use the opposite route and export power to Norway when they have negative prices. But most of the day, Norway is lower in price, so for us it is about sending electricity to Germany. Our simulations indicate that there should be a lot of flow back and forth. If there are restrictions on it, you destroy the market mechanism, says Tor Reier Lilleholt, head of analysis at Wattsight.
Germany should have had two price zones
He says that northern Germany has for many years developed too much wind power, while consumption is greatest in the south. Work on building transmission lines to the south has been delayed.
- Germany also does not have two price zones, as they should have in terms of power. So when there is a lot of wind in the north, Germany will not receive power from the Nordic countries, even though prices indicate that the flow is going that way.
This has led the Germans to pay for Danish power producers to stop their wind turbines .
- The Nordlink cable will have somewhat more favorable conditions because it landed somewhere else in the network than the Danish cable. So there is hope that more power can flow. But Germany is a large exporting country, so it is unusual for them to import electricity, says Lilleholt.
Power producers can lose billions
What will happen to the profitability of the project if Germany gets what they want?
Statnett lives on bottleneck revenues, so if power does not flow, all profitability is gone. It is strange that the German side is not also interested in these revenues, but here there are also technical considerations to take; the power system in northern Germany may collapse.
Lilleholt reminds that power exports via Nordlink are also important for the large power producers in southern Norway.
50 TWh has been produced in southern Norway in the last six months. If they could get 2 øre extra per kilowatt hour, it is one billion kroner, says Lilleholt.
ACER says 70 percent flow
What happens if Germany physically does not have room for more electricity in its network?
Then the market will sort out and the price will be so low that Norway does not want to send electricity there. Had Germany had two price ranges, the price in the north would have been much lower than in the south, and there would have been less incentive to export to Germany.
Can Germany unilaterally set the flow to zero? If so, what does Acer say?
That's what I'm excited about. Acer's rules say 70 percent flow, and we have based this on our calculations. So it was surprising when the proposal from Germany appeared. For the sake of the market, I hope that it will be as Acer wants, and that it will not be possible to make counter-purchases on the entire volume.
Translation to English using Google Translate