Offshore transmission for wind: Comparing the economic benefits of different offshore network configurations

It has been argued that increasing transmission network capacity is vital to ensuring the full utilisation of renewables in Europe. The significant wind generation capacity proposed for the North Sea combined with high penetrations of other intermittent renewables across Europe has raised interest in different approaches to connecting offshore wind that might also increase interconnectivity between regions in a cost effective way. These analyses to assess a number of putative North Sea networks confirm that greater interconnection capacity between regions increases the utilisation of offshore wind energy, reducing curtailed wind energy by up to 9 TWh in 2030 based on 61 GW of installed capacity, and facilitating a reduction in annual generation costs of more than €0.5bn. However, at 2013 fuel and carbon prices, such additional network capacity allows cheaper high carbon generation to displace more expensive lower carbon plant, increasing coal generation by as much as 24 TWh and thereby increasing CO2 emissions. The results are sensitive to the generation “merit order” and a sufficiently high carbon price would yield up to a 28% decrease in emissions depending on the network case. It is inferred that carbon pricing may impact not only generation investment but also the benefits associated with network development.