Countries around the North Sea need to implement a harmonised regulatory and economic framework to fully exploit the potential of a ‘meshed’ offshore grid in the North Sea. This was a key conclusion of the EU-funded PROMOTioN (Progress on Offshore Meshed HVDC Transmission Networks) research project
The recommendations were developed as part of work package 7 of the PROMOTioN project, which aims to tackle technical, regulatory, financial and legal challenges to implementing offshore meshed HVDC transmission networks. The project includes 33 partners ranging from major European high-voltage direct current (HVDC) equipment manufacturers, transmission system operators (TSOs) and academia to industry associations, research groups, test labs and consultants. The project received funding from the European Union’s Horizon 2020 research and innovation programme.
TenneT chief executive Tim Meyerjürgens said, “Development of a cross-border HVDC grid is one of the most promising opportunities for a sustainable energy future in Europe. TenneT is co-operating closely with other transmission system operators to develop the idea of a meshed and efficient offshore grid in the North Sea. This will require the creation of a common regulatory framework. PROMOTioN’s research shows how to make this happen.”
DNV GL Energy chief executive Ditlev Engel said, “Development of a transnational European offshore transmission grid will be an enabler of the energy transition. This project delivered a great framework, with regulatory and financial guidelines for national governments to speed up collaboration on the joint development of offshore transmission grids, which are needed to accommodate the rise of renewables and help meet the goals of the Paris Agreement.”
PROMOTioN’s report on work package 7, ‘D7.9 Regulatory and financing principles for a meshed HVDC offshore grid,’ summarises key findings on the design of a legal, regulatory and financing framework for cross-border HVDC offshore connections and provides recommendations for policymakers and other stakeholders to take appropriate measures to enable the first hybrid assets to be built.
In the short-term, the report recommended that work needed to be done to define hybrid assets, that is, assets which combine both interconnection and windfarm export functionality. It also recommended funding for novel ideas and technology, such as energy storage, investment in delivering a meshed offshore grid (such as island hubs). The report also supported early communication between developers, authorities and other key stakeholders about new windfarm projects to enable early identification of meshed offshore grid development needs, and the formalisation of Cross-Border Cost Allocation (CBCA) as a binding contract between parties with a clear specification of non-compliance penalties.
To provide long-term regulatory stability, PROMOTioN recommended that member states, third countries and the EU consider adopting a North Sea treaty, containing the aims and principles of the offshore grid. This would provide a stable governance and decision-making structure, common interpretation of maritime law, and processes for long-term windfarm and grid planning. It would also allow for formal operational regulatory governance, fixing the terms of co-operation between national regulatory authorities.
“Long-term legal and regulatory stability is especially important for financing the offshore grid,” said the project partners. “Investors rely on stable and predictable conditions. It is essential that transmission owners’ income is regulated, with long-term predictable revenue streams which create certainty for investors and attracts investment in offshore grids.”