Will the offshore wind market envisage a breakthrough for HVDC grid connections?
In the past HVDC connections of offshore wind farms were typically common in German (or Chinese) waters, with big and heavy platforms, voluminous equipment and all together a high CAPEX. The market was dominated by TSOs only and their regulatory obligation to connect offshore wind to the grid on time but not necessarily on an ambitious budget. Meanwhile, the latest projects outside Germany tend to have a greater distance to the shore and developers like Ørsted, RWE and Vattenfall have also entered the HVDC market and have begun to break up the closed shop. At the same time TSOs were asked to reduce the LCoE so that TenneT has reported a CAPEX drop of 15% for the latest grid connection on Dolwin6.
If you, for instance, look to the Netherlands, Ijmuiden Ver OWF, only 62 kilometres off the coast will be provided with an innovative grid connection with 2 HVDC converters with a capacity of 2GW each on 525kV level to be commissioned in 2027 and 2029 respectively. TenneT in this case has decided not to connect this capacity with AC for the following reasons: grid stability, planning flexibility, cable route permitting and LCoE. The evaluation of such concept has been done between RVO, TenneT and an experts’ review. While detailed calculations and verified assumptions have not been published so far, it seems to be obvious that the “general rule” that anything closer to shore than 100km/55 nautical miles would not justify the additional effort/cost to choose a DC connection, no longer applies.
Therefore, what will be the HVDC opportunities for the more recently emerging markets such as Poland? The Polish government currently plans to award CfD contracts for 5.9GW in their first offshore round in 2021 and until 2030 projects shall be commissioned with a total volume of 10.9GW. One of the projects with the slightly longer distance of about 80km to cover to the onshore connection point, for example, will be Baltica1 with a capacity of 900MW on its own. Considering the recent developments and seeing the LCoE drop, we expect that HVDC systems will definitely be an option that should be carefully evaluated for projects with a size and distance much lower than we assume today.
Furthermore, the bundling of wind farms leading to huge generating capacities obviously appears to be a main factor that drives down the cost and thus shifts the decision-making regarding AC versus DC in favour of the latter. And, last but not least, the planning and permitting of export cable routes with 2 HVDC cables instead of, say, half a dozen AC ones with the same number of trenches should make the development of the connections a lot easier.