SMART ENERGY EUROPEAN TRANSMISSION NETWORK DEVELOPMENT PLANNING MEETING THE 2020 CHALLENGES AND BEYOND By Jean Verseille, Kai Adam, Chavdar Ivanov, Edwin Haesen and Felix Maire Renewable energy source (RES) contributions and fluctuations play an important role and cause a growing need for smart grid- enabled demand response which will bid into the European markets, building on a strong Europe-wide transmission grid which remains necessary even if many RES and demand response capacities come from the distribution grid. 2020 CHALLENGES AND BEYOND The European market operates in Europe’s trio of energy policy goals – of ensuring security of supply, promoting the decarbonization of the energy sector and creating competitive, liquid markets which benefit consumers – is well known. However, it is also important to acknowledge the close interaction between the three objectives and to recognize that focussing on only one or two of them has the potential to have a detrimental impact on the others. As such, a comprehensive and consistent optimization needs to be undertaken. This consistency is particularly challenging when considering new European legislation. The three objectives converge at the transmission system level, which is the rationale for assigning the task of developing network codes to ENTSO-E. Hence, the network codes in development seek to set out a balanced set of rules which reflect Europe’s desire to promote all three of these objectives equally. Across Europe the generation mix is changing significantly. There is a greater potential for active consumer behaviour. Historically electricity customers were, in the main, passive users of energy whose behaviour changed little in response to prices or system conditions. Political vision coupled with recent technological developments and ongoing research in the field of smart grids and demand side response capabilities have opened up new potential. Smart grids have the potential to facilitate a change from national markets in which only generation is adapted to meet load, to a European market in which demand will also adapt to meet generation. In addition, the electricity system is becoming increasingly interconnected and the electricity market is becoming much more pan-European. This provides opportunities for generators to sell into different markets, based on price signals, and gives consumers a greater choice over who they buy energy from. The Scenario Outlook and Adequacy Forecast 2013, released in April 2013, shows that 38 GW of reliably available capacity are needed in the European system until 2020 in addition to the confirmed investments in generation in order to maintain the current adequacy levels. Depending on the penetration of variable generation to the overall energy mix, this could imply that the level of needed investments in installed capacity is significantly higher. In addition, under the European TSOs’ best estimates of the load and generation evolution, generation adequacy will be maintained in 2020. This paper gives an overview of actions to ensure reliable European transmission network development planning in a system in which 84 smart grids and in particular demand response will operate. The overview first summarizes the European forecasts, scenarios and visions for loads and generation mixes described in the ENTSO-E Ten-Year Network Development Plan (TYNDP) and its associated Scenario Outlook and Adequacy Forecast (SO&AF), for 2020 and 2030. The most important Europe-wide rules are implemented and enforced through the network codes which become binding European Regulations and which are drafted by ENTSO-E. A large consortium with ENTSO-E involvement is committed to realize the e-Highway2050 project. One of the objectives of the project is to define scenarios based on general assumptions and boundary conditions to cover 2020-2050 taking into account technology performance and prices. It will propose a set of the candidate solutions for grid capacity enhancement for 2050 in order to limit congestions over an entire year for the pan-European grid, facing the 2050 possible scenario. PLANNING THE GRID FOR THE NEXT DECADES Network development planning is a complex process which requires information from various parties involved in the energy sector. A set of forecasts of the future is necessary for creating reliable transmission planning scenarios. Successful realization of the planned grid reinforcements is dependent on public acceptance, funding and technological challenges. With the Third EU Energy package, the European Union took a step toward ensuring coordinated planning of the pan-European transmission grid. Regulation 714/2009 stipulates “ENTSO-E shall adopt a non- binding Community-wide 10 year network development plan, including a European adequacy outlook, every two years.” The ENTSO-E TYNDP complies with the requirements of the Third EU Energy Package. The objectives of the TYNDP are to ensure transparency regarding the electricity European transmission networks and to facilitate the decision making process at both regional and European levels. The TYNDP suite of documents consists of a pan-European report and six Regional Investment Plans as well as the SO&AF which aim to give a comprehensive and up-to- date European-wide reference to the anticipated development of transmission networks. Such development is a key step in achieving the European energy policy goals. Released in July 2012, the TYNDP 2012 [1] highlighted that the major changes expected in terms of generation mix with large wind and solar capacities will lead to more volatile flows over larger distance across Europe, requiring the grid to adapt. About 100 bottlenecks were identified in the ENTSO-E perimeter by the end of this decade and above 100 transmission projects of pan-European significance have been designed to address the challenges described above. Several projects have been proposed using HVDC connections, with around 9,000 km of METERING INTERNATIONAL ISSUE - 3 | 2013