Integrated North Sea grids: The costs, the benefits and their distribution between countries
File(s)
Accepted version
Author(s)
Type
Journal Article
Abstract
A large number of offshore wind farms and interconnectors are expected to be constructed in the North Sea
region over the coming decades, creating substantial opportunities for the deployment of integrated network
solutions. Creating interconnected offshore grids that combine cross-border links and connections of offshore
plants to shore offers multiple economic and environmental advantages for Europe's energy system. However,
despite evidence that integrated solutions can be more beneficial than traditional radial connection practices, no
such projects have been deployed yet. In this paper we quantify costs and benefits of integrated projects and
investigate to which extent the cost-benefit sharing mechanism between participating countries can impede or
encourage the development of integrated projects. Three concrete interconnection case studies in the North Sea
area are analysed in detail using a national-level power system model. Model outputs are used to compute the
net benefit of all involved stakeholders under different allocation schemes. Given the asymmetric distribution of
costs and benefits, we recommend to consistently apply the Positive Net Benefit Differential mechanism as a
starting point for negotiations on the financial closure of investments in integrated offshore infrastructure.
region over the coming decades, creating substantial opportunities for the deployment of integrated network
solutions. Creating interconnected offshore grids that combine cross-border links and connections of offshore
plants to shore offers multiple economic and environmental advantages for Europe's energy system. However,
despite evidence that integrated solutions can be more beneficial than traditional radial connection practices, no
such projects have been deployed yet. In this paper we quantify costs and benefits of integrated projects and
investigate to which extent the cost-benefit sharing mechanism between participating countries can impede or
encourage the development of integrated projects. Three concrete interconnection case studies in the North Sea
area are analysed in detail using a national-level power system model. Model outputs are used to compute the
net benefit of all involved stakeholders under different allocation schemes. Given the asymmetric distribution of
costs and benefits, we recommend to consistently apply the Positive Net Benefit Differential mechanism as a
starting point for negotiations on the financial closure of investments in integrated offshore infrastructure.
Date Issued
2016-11-23
Date Acceptance
2016-11-16
Citation
Energy Policy, 2016, 101, pp.28-41
ISSN
0301-4215
Publisher
Elsevier
Start Page
28
End Page
41
Journal / Book Title
Energy Policy
Volume
101
Copyright Statement
© 2016 Elsevier Ltd. All rights reserved. All rights reserved. This manuscript is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Subjects
Energy
MD Multidisciplinary
Publication Status
Published