Summary of the Essential Results

of the Study

Planning of the Grid Integration of Wind Energy in

Germany Onshore and Offshore up to the Year 2020
(dena Grid study)

by the Project Steering Group

Deutsche Energie-Agentur GmbH

Chausseestrasse 128 a
D 10115 Berlin
www.dena.de
Editorial note

The summary with the essential results of the project*:

Planning of the Grid Integration of Wind Energy in Germany Onshore and

Offshore up to the Year 2020
(dena grid study)

has been agreed by the Project Steering Group with the following members:

Bundesverband Windenergie e.V., ENOVA GmbH, E.ON Netz GmbH,

EWE AG, Offshore-Bürger-Windpark Butendiek GmbH & Co. KG,
Offshore Forum Windenergie, Plambeck Neue Energien AG,
Projekt GmbH, RWE Transportnetz Strom GmbH,
Vattenfall Europe Transmission GmbH, VDMA Fachverband Power Systems
e.V.,
Verband der Elektrizitätswirtschaft e.V., Verband der Netzbetreiber e.V.,
VGB PowerTech e.V., WINKRA-ENERGIE GmbH,
Wirtschaftsverband Windkraftwerke e.V.,
Zentralverband Elektrotechnik und Elektronikindustrie e.V.,
Federal Ministry of Economy and Labor,
Federal Ministry of Environment, Nature Protection and Nuclear Safety (guest).

*
This translation has been carried out by dena without official approval of the Project
Steering Group. The original version is written in German and can be found at:
www.dena.de

2
Table of Contence

1. Background of the dena Grid Study................................................................................... 4

2. Goals and Framework of the Investigation........................................................................ 1
3. Development of Wind Energy ............................................................................................. 7
4. Grid Upgrade and Grid Extension ..................................................................................... 8
Onshore Network Extension ..................................................................................... 9
Offshore Network Extension..................................................................................... 9
Reliability of the Extra High Voltage Transmission Network............................... 9
5. Effects on Conventional Power Stations .......................................................................... 11
Basic Scenario without CO2 Surcharge ................................................................. 11
Basic Scenario with CO2 Surcharge ....................................................................... 11
Alternative Scenario with CO2 Surcharge............................................................. 12
Regulation and Reserve Power Requirements ...................................................... 12
6. Cost Development............................................................................................................... 13
Change of Costs for Non-Privileged Consumers (Private Households).............. 14
Change of Costs for Privileged Consumers (Industry)......................................... 14
CO2 Avoidance Costs ............................................................................................... 14
Grid Extension Costs and Changes in Use of System Charges............................ 15

Appendix with Tables and Figures ....................................................................................... 16

Berlin, March 15th 2005

3
1. Background of the dena Grid Study

Energy supply is an important location factor for the development of a national economy. In
industrialized countries like Germany medium to long-term energy-economy and energy-
policy decisions require long-term preparation and planning procedures. Thus a favorable
climate for investments for a sustainable economic development can be promoted.
At present, nuclear and fossil energy sources dominate the electric-power generation mix in
Germany. In order to reduce global environmental problems and risks connected with power
generation from natural gas, coal, oil and nuclear fuels – such as the greenhouse effect, the
consumption of finite resources, air pollution, nuclear radiation and final storage of nuclear
waste– the energy supply system will have to make fundamental changes. The German
Federal Government has set a target for reduction of CO2 emissions from the current 859
million tons per year to 846 million tons by the year 2008/2012. In energy-generation and
industry, CO2 emissions will have to drop from the current 503 million tons per year to 495
million tons by the year 2008/2012. One important way to accomplish these CO2 reduction
goals is an increased use of renewable energy sources. In Germany, the share in electric
power generation from renewable energy sources reached 10% in 2004 and is further
increasing. Wind power has attained industrial policy significance due to its enormous growth
rates and its prospective further development, onshore and offshore, as well as due to its
export potential.
The Federal Government is substantially supporting this development, and aims for the
further extension of renewable energies. Till 2010, the share in electric-power generation
from renewable energy sources shall rise to at least 12.5%, and by 2020, to at least 20%.
Additional major increase of capacity can be achieved by 2050. Wind power will contribute
substantially to accomplishing these goals. In accordance with the strategy of the Federal
Government for the development of offshore wind power generation in the North and Baltic
Seas, an installed wind power capacity of 2 to 3 GW can be expected by 2010, and 20 to 25
GW by 2025/2030. The implementation of this strategy will lead to a very strong geographic
concentration of wind power in Northern Germany, a region with low electricity demand.
Moreover, wind power is characterized by strong daily and seasonal variations. This creates
new challenges for the entire power station park.
The renewal and restructuring process of the German energy economy due to plant age and
the phasing-out of nuclear power stations give wider scope for more integration of wind
power. Of the 121,000 MW of gross power-generation capacity presently installed in
Germany, the plants to be shut down in this process by 2020 account for about 40,000 MW.
Planning for the upcoming replacement investments in fossil power stations are also affected
by the increasing share of renewable energy, and by the priority being given to this kind of
generation under the Renewable Energy Act (EEG). The technical characteristics of the
conventional power plants have to be adapted to the fluctuating feed-in from wind power,
which has to be accepted with priority.
The interconnected power system has to synchronize the various power generation and
consumption characteristics. The specific demand profiles of single consumers
(households/enterprises) and/or regions (urban/rural) have to be balanced with different power
stations following various cost and load profiles. An efficient cooperation within the
interconnected power system shall lower overall system costs, ensure the reliability of energy
supply and further maintain a secure operation of the interconnections to European partners.

4
The development of the national power system is also affected by the establishment of the
European electricity market.
The transmission system operator (TSO) is responsible for the secure and reliable operation of
the overall power system. Within his control area he balances both planned and also
unexpected load variations, power station failures and bottlenecks in the transmission lines.
Reserves for ancillary services ensure customers a high quality of supply with regard to
frequency and voltage stability. This is maintained by use of primary-control, secondary-
control and minute reserves. To balance more extended power outages or load deviations also
hourly reserves are used.
In recent decades the transmission network has been extended to guaranty reliable energy
supply and grid stability mainly following technical requirements of fossil and nuclear power
station. The ever more powerful generation units have largely shaped the manner of network
extension in the past.

2. Goals and Framework of the Investigation

For the further development of renewable energy, an efficient integration of onshore and
offshore wind energy into the power system is very important. In the medium term, wind
power has the greatest potential for increasing the share of renewable energy in electricity
generation.
The upcoming changes in energy supply will require capital-intensive investments. First be
made, the affects will last over several decades. The prerequisites for optimum solutions
include reliable framework for energy-economy planning and agreements on the goals
between the stakeholders involved. The German Energy Agency (dena) has commissioned the
study “Planning of the Grid Integration of Wind Energy in Germany Onshore and Offshore up
to the Year 2020” (dena Grid study). The goal of this study is to enable fundamental and long-
term energy-economy planning, supported by as many stakeholders as possible.1 The dena
grid study has been proportionately financed by associations and private companies in the
wind-power, power-grid, facility-manufacturing and conventional power-station sectors, as
well as by the Federal Ministry of Economy and Labor.2 They were directly involved in the
preparation of the study by help of a Project Steering Group and an Expert Advisory Board,
which accompanied the study. All decisions were taken by consensus. Dena initiated the
overall project, led the Project Steering Group and the Expert Advisory Board, and was also
responsible for project management.
The results of the dena grid study were evaluated by two independent experts3 who
accompanied the study. They gave advice to the Project Steering Group and to the Expert

1
The German Energy Agency awarded the contract to prepare the study to a consortium headed by the Institute
of Energy Economy at the University of Cologne. The consortium also includ the German Wind Energy Institute
GmbH, E.ON Netz GmbH, RWE Transportnetz Strom GmbH and Vattenfall Europe Transmission GmbH

2
The following institutions participated in the study: Bundesverband Windenergie, ENOVA GmbH, E.ON Netz
GmbH, EWE AG, Offshore-Bürger-Windpark Butendiek GmbH & Co. KG, Offshore Forum Windenergie,
Plambeck Neue Energien AG, Projekt GmbH, RWE Transportnetz Strom GmbH, Vattenfall Europe Transmission
GmbH, VDMA Fachverband Power Systems e.V., Verband der Elektrizitätswirtschaft e.V., Verband der
Netzbetreiber e.V., VGB PowerTech e.V., WINKRA-ENERGIE GmbH, Wirtschaftsverband Windkraftwerke e.V.,
Zentralverband Elektrotechnik und Elektronikindustrie e.V., the Federal Ministry of Environment, Nature
Protection and Nuclear Safety, and the Federal Ministry of Economy and Labor.

3
Dr. Schmieg (DIgSILENT GmbH, Gomaringen) and Prof. Schmid (ISET, Kassel).

5
Advisory Board, and also evaluated the intermediate and the final report. They finally
documented the results of their evaluations in written statements. The Project Steering Group
has formulated this summary taking into account these statements and criticisms. The further-
reaching suggestions formulated by the independent experts have also been used for the
formulation and task-assignment for a part II of the dena grid study.
First of all, the dena grid study drafted scenarios for the increased use of renewable energy
sources for the years 2007, 2010, 2015 and 2020. The primary aspect here was a
geographically differentiated scenario for wind-power development onshore and offshore,
with the assignment of wind-power feed-in to particular network nodes. Based upon these
scenarios, the effects of wind power feed-in on the transmission network and on the power
station park were investigated. Weak points in the power system have been identified and
solutions developed.
The proposed infrastructural measures for the overall system, particularly regarding the
conventional power station park and in the transmission network, are to contribute to the
sustainable development of the energy supply and to the implementation of the
recommendations of the Council for Sustainable Development of the German Parliament.
For methodological reasons, the external costs connected with energy generation, i.e., the
effects on the environment and nature, were not included in the cost calculation of the study.
During the preparation of the study it became clear that within the given framework
conditions of the study it would only be possible to draft technical solutions for the
integration of renewable energy sources into the existing power system up to a share of
approx. 20% in electric power generation (5% offshore-wind, 7.5% onshore-wind, and 7.5%
other renewable sources). A further major increase in geographically concentrated offshore
wind farms in Northern Germany, as it is planned after 2015, would require a more extensive
investigation to develop viable technical solutions.
The results from this part I of the dena grid study show that for the scenarios of wind power
development from 2015 to the year 2020, considering the assumptions and framework
conditions put forward by the Project Steering Group, no system solution for the integration
of wind power could be found. Technical solutions are to be investigated under new, modified
framework conditions. Additional investigations must be carried out on fundamental technical
and energy-economy issues in order to allow for the preparation of viable statements. The
dena grid study has therefore been modified in terms of the time horizon to be investigated,
and has been split into two parts: The present report on part I covers the time period up to
2015, with a share of renewable energy sources in power generation of 20%, while the
planned part II of the dena grid study will examine the time period up to 2025.
The following aspects are to be examined in part II:
ƒ Extension of the existing integrated grid system as a transmission network: For this
purpose, the various options for an overlay network must be compared, and technically
and economically solution found;
ƒ Implementation and effects of power output control systems for wind farms,
ƒ Demand site management,
ƒ Application of new storage capacities and adopted supervisory control schemes for
already available storage systems in the interconnected power system,
ƒ Investigations on the resilience of overhead lines on different environmental conditions,

6
ƒ Frequency assessment and general evaluation of grid bottlenecks.
Part II of the study will also take a more thorough look at issues raised in part I of the study,
and examine additional issues to allow an analysis of the entire time period up to the year
2025.
These investigations could not be carried out within the constraints of the projected schedule
and budget of dena grid study part I. The Project Steering Group has therefore unanimously
approved the preparation of a part II, and has contracted dena to make the necessary
preparations.
In the following, the essential results of part I of the dena grid study are summarized from the
point of view of the Project Steering Group. The results are applicable only within the stated
framework conditions and under the stated assumptions. In this summary, the results are
presented only cursorily, and can be investigated in more detail in the original study, which is
some 500 pages long.

3. Development of Wind Energy

The further development of installed wind energy capacity is forecasted geographically

differentiated for various regions for the years 2007, 2010 and 2015, and 2020. The compiled
data allow for a distinction between the German states, between new turbines and “repowered
plants” (replacement of old wind turbines by more efficient plants), and also between onshore
and offshore wind farms in the North and Baltic Seas.
An increase of installed wind energy capacity of 26.2 GW onshore and of 9.8 GW offshore is
forecasted up to 2015. By 2020, it is expected that there will be 27.9 GW onshore and 20.4
GW offshore. A breakdown of wind energy capacity for the years 2007, 2010, 2015 and 2020,
differentiated in onshore, offshore Baltic Sea and offshore North Sea, is shown in Table 1.
The schedule of the forecasted offshore wind power development in the dena grid study is
ambitious in terms of:
ƒ Availability of offshore technology for specific conditions in the North and Baltic Seas,
ƒ Handling under the maritime zoning regulations as of January 1st 2006,
ƒ Availability of the infrastructure for the construction and operation of offshore wind farms,
ƒ Insurance and financing concepts for offshore wind farms,
ƒ Increase of efficiency of wind turbines to compensate the decreasing feed-in tariffs fixed
by the Renewable Energies Act (EEG),
ƒ Time-frames for grid enforcement and grid extension measures.
The onshore and offshore wind power development scenarios have been drafted under the
assumptions of largely positive political and economical framework conditions. If these
conditions should remain valid only in parts, the assumed 20% share of renewable energy
sources in power generation already expected for the year 2015 could only be realized with a
delay of some years. The development of onshore wind power has however been estimated
under the limiting condition of a larger specific area needed per installed kW of wind power
capacity. By this, possible new legal regulations regarding minimum distances to buildings
have already been taken into account. Thus, a conservative approach has been used as the
basis for future onshore wind energy development.
7
By 2015, a total capacity of 47.3 GW of renewable energy sources should be installed, raising
the share of renewable energies in total electric power generation from today’s 10% to some
20%.
The average full-load-hour figure for wind turbines is calculated to be 1650 h/a in 2007, rising
to 1960 h/a in 2010, and to 2150 h/a in 2015. The reason for the increase by about 30% is
increasing replacement of old by more efficient wind turbines, and the use of productive sites
in the North and Baltic Seas.
With the onshore and offshore extension of wind power under the EEG, the average energy
production is projected to rise from 23.5 TWh in 2003 to 77.2 TWh in 2015. In 2015, some
42% of that should come from offshore wind farms.
Due to the further decrease of feed-in tariff under the EEG and an assumed inflation rate of
1.5% per year, the average real tariff per kWh under the EEG will drop from 8.3 ct€/ kWh in
2007 to 7.0 ct€/ kWh in 2015.
These forecasts and calculations up to 2015 form the basis for the investigations in the section
of the study titled “Grids” and “Power Stations”. The forecast up to 2020 is to be investigated
and examined in detail in the context of the projected part II of the dena grid study.

4. Grid Upgrade and Grid Extension

For the further integration of renewable energy sources into the interconnected power system,
an extension of the extra high voltage transmission network will be necessary. This will
include an upgrading of existing overhead lines, the construction of new extra high voltage
lines, the implementation of quadrature-regulators to control power flows, and the
implementation of units to provide reactive power. In order not to endanger the further
development of wind power, implementation of these measures within the near future will be
a prerequisite.
Although the identified grid extension measures account for only about 5% of the existing
transmission network,4 there are various bottlenecks to rapid implementation. Compared with
the new construction of recent years, the timeframe for necessary network extension is very
ambitious.
In order not to endanger the further development of wind power, not only the immediate
ongoing implementation of planning and investment decisions, but also in particular the legal
approval procedures for network extension must be accelerated.
In the future, a denser network of extra high voltage transmission lines could also be used for
additional activities in energy trading. However, this issue has not been examined.
The further extension of the transmission network will decisively affect the speed of growth
of renewable energy sources, and also power generation by very efficient conventional power
plants. This particularly applies to wind energy use in the North Sea.
With regard to grid extension, the dena grid study shows the following detailed results:

4
The stock of extra high voltage lines (380/220 kV) in Germany amounts to a length of approx. 18,000 km.

8
 Onshore Network Extension

The necessary new grid constructions up to 2015 will extend the existing transmission
network by a total of 850 km. This corresponds to a share of 5% of the currently existing
extra high voltage line tracks.
ƒ Onshore grid upgrading and extension up to 2007: Three existing overhead line sections
in Thuringia and Franconia will have to be upgraded to a total length of 269 km. Two
overhead line sections with a total length of 5 km will have to be built.
ƒ Onshore grid extension up to 2010: In addition to the measures mentioned above, another
455 km of new 380-kV double overhead lines must be built. Moreover, 97 km of existing
lines must be upgraded.
ƒ Onshore grid extension up to 2015: In addition to the above-mentioned measures, another
390 km of new 380 kV double overhead lines must be built, especially to enable
transmission of wind power from the North Sea. Also, 26 km of existing lines must be
upgraded.
Onshore grid extension beyond 2015: Further extension of offshore wind power, as expected
beyond 2015, would require massive grid extension measures to transmit the power from
geographically concentrated offshore wind farms and regions with low energy consumption to
the German regions with high energy consumption. Three approaches for grid extension
measures between 2015 and 2020 were evaluated in terms of their fundamental advantages
and disadvantages. They principally show how wind power could be transmitted from the
North Sea to Germany’s centers of high electricity consumption. A thorough investigation of
the technical realization and an economical optimization of further grid extension measures
beyond 2015 (approximately 1,000 km) will be necessary. Both will be addressed in part II of
the dena grid study. It will only be possible to make conclusive statements about these aspects
when part II has been finished.

Offshore Network Extension

Technical solutions are available for power transmission from offshore wind farms in the
North and Baltic Seas to the onshore points of grid connection. The transmission of huge
amounts of wind power over long distances is considered as technically feasible.
For the period beyond 2015 a system model has been developed for the further expansion of
wind farms in the North Sea which avoids a large number of parallel submarine cables. This
system model should be implemented as soon as possible. It consists of four offshore
collection stations, to which several wind farms could be hooked. Wind power could then be
transmitted to shore from these collection stations by use of only one common submarine
cable (see Figure 4). Due to the investigations required (part II of the dena grid study), no
conclusive statement can yet be made on this issue.

Reliability of the Extra High Voltage Transmission Network

Dena grid study has been comprehensively investigated the reliability and stability of the
extra high voltage transmission network up to the year 2015. Critical grid conditions were

9
identified, possible effects were described and approaches for technical solutions were
developed.
For 2003, the dena grid study found that safety criteria of the UCTE (Union of the European
Transmission System Operators) would have been violated: Assuming that under strong wind
conditions, certain faults will occur in the transmission network (three-pole short circuit of a
power line or busbar), or that major conventional power stations could fail, there would have
been large-scale regional voltage sags and critical grid situations. The voltage sags could have
continued and caused so called “fault-run through” situations. If the voltage had dropped by
more than 20% in a network segment, “older” wind turbines which went into operation before
2003/04 would have disconnected themselves from the grid, in accordance with the relevant
grid codes in force at that time. These additional outages would possibly have worsened the
critical grid situation considerably and led to risks for the security of energy supply in
Germany and the European interconnected network (transgression of the 3,000 MW reserve
capacity level maintained by all UCTE members).
The “old” grid codes were already supplemented by improved codes in 2003: New wind
turbines shall now disconnect themselves from the grid only in case of voltage sags far below
80%, or only with a time delay. The dena grid study shows, that the new grid codes and
enhanced technical performance of wind turbines will improve system security by 2015 in the
Northeast grid area and by 2010 in the Northwest grid area. The critical grid situations found
for 2003 would not remain. In 2015 however, the situation in the Northwest grid area would
worsen again, because major shut-downs of power plants are to be expected due to age or to
the phasing-out of nuclear power stations. Without countermeasures in place, serious grid
failures and resulting power station outages can be expected. To solve these problems
technical solutions in the grid and for wind turbines principally exist and could further ensure
system stability. Only if the technical solutions are implemented on time the forecasted wind
power development up to 2015 can be realized without raising the mentioned “fault-run
through” problem. This study has not investigated the costs connected with these measures,
their concrete realization, or the time needed for the complete implementation.
It is to be expected that in addition to the use of phase shifters and the adoption of improved
shut-down criteria for older wind turbines (following new grid codes), an increased
“Repowering” (replacement of old wind energy converters by new ones) will considerably
improve the situation.
The implementation and optimization of proposals for technical solutions must be further
examined.
In certain situations (strong wind and low load), Germany sees a surplus in power generation
on a few days a year. In such situations, huge power flows to neighbored countries can be
observed. Further solutions, such as additional storage facilities, demand site management and
reduced power output from wind energy converters are to be examined in the planned part II
of the dena grid study.
Large scale power generation from wind energy converters in Germany impairs considerably
the reliable operation of the grids in neighboring countries. Particularly during weekends with
strong wind conditions and during low load nighttime hours, the cross-border interconnectors
and the transmission lines in frontier areas are operated close to the (n-1) limit.

10
5. Effects on Conventional Power Stations

For the future development of the conventional power station park, two options are compared,
in order to extract the effects caused by wind power use. For the first option the installed wind
power capacity in 2007, 2010 and 2015 is assumed to be the same as in the year 2003. Under
the second option, the installed wind capacity is increased in several stages up to 2015
according the scenarios developed in chapter 3. Differences between the two options
regarding the configuration of the conventional power station park and the related costs were
then extracted. Both options were investigated under three different scenarios (the basic
scenario with no CO2 surcharge; the basic scenario with a CO2 surcharge; and the
alternative scenario with a CO2 surcharge).
The development of fuel prices assumed for this study reflects a long-term development (see
Table 3.) In view of the experiences of the past years, even higher fuel prices are possible.
They can be examined in the context of the planned part II of the dena grid study. No external
costs related with energy generation were taken into account in any of the three scenarios.

Basic Scenario without CO2 Surcharge

This scenario assumes no significant change in the prices of natural gas, oil or hard coal.
Furthermore, a constant real price of brown coal was assumed, based on the full costs of
brown-coal excavation. The CO2 certificates are assumed to be allocated both for existing and
for new plants under the National Allocation Plan, in accordance with need, and free of
charge. It is assumed that the CO2 price will not affect the cost and price calculations of the
companies. Under these conditions, brown-coal and hard-coal power stations used as base-
and medium-load power stations have a competitive advantage compared with natural-gas-
fueled power stations.
Under the Basic Scenario without CO2 Surcharge the extension of wind energy use up to
2015 will stabilize CO2 emissions at today’s level. That would compensate for the additional
emissions connected with the phasing-out of nuclear power stations. Without wind power
extension, emissions would increase by 39 million tons of CO2 (see Table 4).
By 2015, electricity generation by hard-coal power stations will increase in comparison with
that of 2003 by 15 TWh, and generation by brown-coal power stations by 17 TWh.
In view of the fact that emissions trading have already been introduced in Germany, this
scenario merely serves as a standard for comparisons.

Basic Scenario with CO2 Surcharge

This scenario assumes the same fuel prices as the basic scenario without a CO2 surcharge. The
CO2 certificates would here be auctioned and resulting prices would increase (2007: 5 €/t of
CO2; 2010: 10 €/t of CO2; 2015: 12.5 €/t of CO2; 2020: 12.5 €/t CO2). CO2 costs would be
completely incorporated into the cost and price calculation of the companies. As a result,
between 2003 and 2015, the following price changes would take place: brown coal: +170%;
hard coal: +69%; natural gas: +14%; light fuel oil: +6%; and heavy fuel oil: +12%. This

11
would considerably worsen the competitive position of the CO2-intensive energy sources
brown coal and hard coal, particularly for medium-load power stations.
Under the Basic Scenario with a CO2 Surcharge, with wind-power extension, CO2 emissions
would drop from 251 million tons of CO2 to 228 million tons of CO2 by 2015 (see Table 4).
By 2015, electric power generation by hard-coal power stations would drop by 44 TWh,
compared with 2003. Power generation by brown-coal power stations would drop by 35 TWh.
The drop in electric power generation by hard-coal power stations due to wind power would
be around 9 TWh, and for brown-coal power stations by 6 TWh.

Alternative Scenario with CO2 Surcharge

This scenario assumes an increase in the natural gas and oil prices, connected with the
assumption that the increased CO2 prices would be fully incorporated into the cost and price
calculation of companies. Between 2003 and 2015, the following price changes would result:
brown coal: +170%; hard coal: +69%; natural gas: +33%; light fuel oil: +20%; and heavy fuel
oil: +18%. The competitive advantage which natural gas enjoys in case of rising CO2 prices
over such CO2-intensive sources as brown- and hard-coal is partially offset under this
scenario. This is due to the increasing fuel prices for natural-gas. The higher gas prices would
lead to a development which is like that under the basic scenario.
Under the Alternative Scenario with a CO2 Surcharge, with wind power extension, CO2
emissions would drop from 302 million tons of CO2 to 264 million tons of CO2 by 2015 (see
Table 4).
Electricity generation by hard-coal power stations would increase by 16 TWh by 2015 over
2003, and that of brown-coal power stations by 3 TWh.

Regulation and Reserve Power Requirements

The guarantied capacity of wind power describes how much of the total installed wind power
capacity can be considered as statistically guarantied for the coverage of maximum seasonal
load, at a given level of reliability of energy supply. From this result, it is possible to derive
how much of the conventional power plant capacity does not have to be maintained as long
term reserve, in order to guarantee reliability of energy supply.
The guarantied capacity of wind energy (capacity credit) clearly changes with the season,
since wind conditions vary over the course of the year (see Table 5). From the total installed
wind power capacity of 36,000 MW in 2015, the capacity of approx. 1,820 MW to 2,300 MW
can be considered as guarantied for the coverage of maximum seasonal load (at a level of
reliability of energy supply of 99%). This corresponds to a share of approx. 6% of installed
wind power capacity.
In 2003, the guarantied capacity was between 890 MW and 1,250 MW, rising to between
1,190 MW and 1,600 MW in 2007, and to between 1,600 MW and 2,050 MW in 2010.
The needed amount of wind-related regulation and reserve power, directly dependents on the
quality of short term wind power prediction and the resulting deviation between predicted and

12
actual values of wind power feed-in. In the dena grid study, an further improvement of wind
power prediction quality has been assumed.
To balance unforeseen variations in wind power feed-in immediately, minute and hourly
reserves must be provided as positive and negative regulation capacities: Positive reserve
capacity is needed to compensate for unexpectedly low wind power feed-in. Negative reserve
capacity is needed to compensate for unexpectedly high wind power feed-in. These capacities
must be maintained in operational readiness. Due to the priority regulation under the
Renewable Energy Act (EEG), negative reserve capacity has to be maintained.
In 2003, an average of 1,200 MW and a maximum of 2,000 MW of wind-related positive
regulation power had to be available one day ahead in Germany. By 2015, that amount would
rise to an average of 3,200 MW and a maximum of 7,000 MW. The mean value corresponds
to 9% of the installed wind power capacity and the maximum to 19.4%. These capacities have
to be available as positive minute and hourly reserves.
In 2003, an average of 750 MW and a maximum of 1,900 MW of wind-related negative
regulation power had to be available one day ahead. By 2015, that amount would rise to an
average of 2,800 MW and a maximum of 5,500 MW. The mean value corresponds to about
8% of the installed wind power capacity, and the maximum to 15.3%.
The wind-related regulation and reserve capacities can be covered by the conventional power
station park and its operating method as developed in this study. No additional power stations
need to be installed or operated for this purpose.

6. Cost Development

The development of the cost of electric power has been calculated in the dena grid study for
the three scenarios: basic scenario without CO2 surcharge, basic scenario with CO2
surcharge, and alternative scenario with CO2 surcharge. The total costs will be presented
below, and a distinction made between the area of conventional power station park including
regulation and reserve power demand on the one hand, and the area of electrical grid on the
other. All costs are real costs related to the year 2003.
The development of wind power shifts the structure of the power station park in the direction
of more flexible power stations with lower capital costs and higher fuel costs. A further
extension of wind power thus implies a reduction of capital costs in the area of conventional
power stations, in addition to an overall saving of fuel costs. This savings have to be balanced
with the additional costs from feed-in tariffs. The costs for regulation and reserve power
demand are contained in the total costs, and are not listed separately in the study, for
methodological reasons.
The cost savings in the conventional power station park are less than the compensation for
additional wind-power feed-in in all scenarios examined. However, that gap narrows between
2007 and 2015 in all the scenarios. This is due on the one hand to the rise in the level of
savings, and on the other to the reduction in the average feed-in tariff for wind power. A rate
of inflation of 1.5% per year was assumed for the calculation up to 2015. In 2007 according to
this study, the real cost of every additionally generated kWh of wind energy would amount to
6.3 to 6.5 ct€, depending on the scenario. By 2015, that cost would be reduced to 4.3 and 3.0
ct€/kWh. It must be taken into account that the total amount of energy, generated by wind
turbines will more than triple between 2003 and 2015 (see Table 2). The total additional net

13
costs for the generated energy by wind turbines between 2003 and 2015 amounts to €1.6 to
€2.3 billion, depending on the scenario (see Table 6).
Changes in costs for privileged and non-privileged consumers, CO2 avoidance costs of wind
power, grid extension costs, and changes in use of system charges are presented below.

Change of Costs for Non-Privileged Consumers (Private Households)

The further extension of all renewable energy sources (including wind energy) in the period
from 2003 to 2015 will increase the cost for non-privileged consumers by 0.905 to 1.105 ct€
per kWh, depending on the scenario. These costs cover the poor energy costs and the use of
system charges. They also incorporate the costs for the feed-in tariffs (EEG) for all renewable
energy sources. However, to evaluate this costs figures, it has to be considered, that no
optimization potentials were investigated regarding the implementation of renewable energy
sources other than wind power.
The further extension of wind energy capacities in the period from 2003 to 2015 would rise
the costs for non-privileged consumers by 0.385 to 0.475 ct€ per kWh depending on the
scenario. The total cost breaks down into the following components:
ƒ 0.36 to 0.45 ct/ kWh of wind-related cost increase in the power station park, including
costs for regulation and reserve power, minus savings for fuel and capital costs. The costs
of EEG compensation are also included.
ƒ 0.025 ct/ kWh for the extension of the extra high voltage transmission network (220/380
kV).

Change of Costs for Privileged Consumers (Industry)

The energy costs for privileged consumers under the hardship clause of the EEG would
increase by 0.03 to 0.04 ct€ per kWh by 2007 due to wind power extension, depending on the
scenario. By 2015, the increase would be 0.15 ct€/ kWh in all scenarios. The energy costs
cover wind-related cost increases in the power station park, including those for regulation and
reserve power, minus the savings for fuel and capital costs. The corresponding costs for a
reduced purchase of energy under EEG hardship clause are also included in the figures.

CO2 Avoidance Costs

The CO2 avoidance costs of wind power drop in all scenarios investigated. Based on the 2007
figures, with CO2 avoidance costs of € 95 to € 168 per ton CO2, they drop to € 77 and € 41 per
ton CO2 by 2015.
These figures are in reference to the international climate-protection debate. No possible cost
increases for fossil fuels or external costs of power generation were taken into account.

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 Grid Extension Costs and Changes in Use of System Charges

The extension of the onshore extra high voltage transmission network (380/220 kV) up to
2007 will cost approx. € 280 million, from 2007 to 2010 approx. € 490 million and from 2010
to 2015 approx. € 350 million. This will yield a total of € 1.1 billion.
Costs to the distribution grid for the connection of wind farms were not within the scope of
the present investigations, nor were upgrades of the 110 kV grids.
The investment costs for submarine cables to connect the offshore wind farms in the North
and Baltic Seas with the points of grid connection onshore up to the year 2010 will amount to
approx. € 2.6 billion and to about € 5 billion up to 2015. The costs of the submarine cable
connection up to the point of grid connection on the shore are covered by the wind farm
developers from the revenues from feed-in tariff under the Renewable Energy Act (EEG).
The investment costs for the connection of the wind farms in the North Sea (extension level of
2020) are estimated at approx. € 11 -12 billion. These costs are also covered by the wind farm
developers from the revenues from feed-in tariff under the Renewable Energy Act (EEG).
Due to the investigations still required in part II of the dena grid study no conclusive
statement can be made yet. The schedule of financing will in any case be closely linked with
the actual construction of offshore wind farms. A step by step realization is possible.
Compared with 2003, the use of system charges will increase up to 2007 by 0.05 ct€ per kWh,
up to 2010 by 0.015 ct€ per kWh and by 0.025 ct€ per kWh up to 2015. This is only due to
grid extension costs. The additional costs caused by wind-related regulation energy are
contained in the assessments of the power station park. However, they are prorated through
the use of system charges.

15
Appendix with Tables and Figures

Table 1: Development of installed wind capacity in Germany up to 2020 in GW

Installed wind capacity in Germany, in GW
Year 2003 2007 2010 2015 2020
Onshore 14.5 21.8 24.4 26.2 27.9
North Sea 0 0.4 4.4 8.4/8.1 18.7
Baltic Sea 0 0.2 1.0 1.4/1.7 1.7
Total 14.5 22.4 29.8 36.0 48.2

Table 2: Development of wind energy (W.E.) production up to 2015 in GWh

Wind-power feed-in, in GWh
Year 2003 2007 2010 2015
W.E. onshore 23,500 34,900 40,300 44,700
W.E. offshore 0 1,900 18,000 32,500
Total 23,500 36,800 58,300 77,200

Table 3: Long-term development of real fuel prices (free power station)

Year 2003 2007 2010 2015 2020
Basic scenario without CO2 surcharge
€ / MWh thermic (NCV)
Brown coal 3.0 3.0 3.0 3.0 3.0
Hard coal 6.1 5.8 5.9 6.1 6.4
Natural gas 14.6 13.2 13.6 14.2 14.7
Light fuel oil 25.4 23.4 23.5 23.6 23.8
Heavy fuel oil 15.4 12.6 12.6 13.6 14.2
Basic scenario with CO2 surcharge
€ / MWh thermic (NCV)
Brown coal 3.0 5.0 7.1 8.1 8.1
Hard coal 6.1 7.5 9.2 10.3 10.6
Natural gas 14.6 14.2 15.6 16.7 17.2
Light fuel oil 25.4 24.7 26.2 26.9 27.1
Heavy fuel oil 15.4 14.0 15.4 17.2 17.8
Alternative scenario with CO2 surcharge
€ / MWh thermic (NCV)
Brown coal 3.0 5.0 7.1 8.1 8.1
Hard coal 6.1 7.5 9.2 10.3 10.6
Natural gas 14.6 15.5 17.7 19.4 20.4
Light fuel oil 25.4 24.7 27.9 30.6 32.3
Heavy fuel oil 15.4 14.0 16.4 18.2 19.1
Abbreviation: NCV = Net Calorific Value (lower heating value)

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Table 4: Development of CO2 emissions with and without further extension of wind energy,
given in million tons per year

2003 2007 2010 2015

W.E. W.E. W.E. W.E. W.E. W.E.
f.e. 2003 f.e. 2003 f.e. 2003
Basic scenario without CO2 279 287 292 293 317 279 318
surcharge
(CO2 emissions in million t)
Basic scenario with CO2 279 282 289 258 276 228 251
surcharge
(CO2 emissions in million t)
Alternative scenario with CO2 279 280 284 281 307 264 302
surcharge
(CO2 emissions in million t)
Abbreviations: W.E. f.e.= with further extension of wind energy; W.E. 2003= wind energy use as of
the year 2003

Table 5: Statistically guaranteed power from total installed wind power capacity
Year 2003 Year 2007 Year 2010 Year 2015
in MW in MW in MW in MW
Winter 1,199 1,542 1,941 2,163
Spring 1,245 1,605 2,057 2,289
Summer 889 1,187 1,599 1,824
Fall 1,040 1,352 1,750 1,970

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Table 6: Real cost savings in the conventional power station park through the extension of wind
power (vs. wind energy use as of 2003)
Basic scenario Basic scenario Alternative scenario
+ CO2 + CO2
Year 2007 2010 2015 2007 2010 2015 2007 2010 2015
Additional W.E. production 13,26 34,81 53,67 13,26 34,81 53,67 13,26 34,81 53,67
compared with 2003 in GWh 7 0 5 7 0 5 7 0 5
Saved production-related costs
in ct€/kWh of wind power 1.32 0.9 1.55 1.32 2.1 2.26 0.83 1.69 1.96
Saved fixed maintenance costs
in ct€/kWh of wind power 0.1 0.18 0.14 0.11 0.07 0.11 0.12 0.31 0.24
Saved capital costs 0.33 0.6 0.87 0.32 0.3 0.66 0.64 1.38 1.73
Total cost savings in convent.
power stations per add.
produced kWh, in ct€/kWh of
wind power 1.76 1.68 2.57 1.75 2.47 3.03 1.59 3.38 3.93
Average feed-in tariff for the
additional W.E. feed-in, in
ct€/kWh of wind power 8.1 7.67 6.92 8.1 7.67 6.92 8.1 7.67 6.92
Specific additional costs of
additional W.E. feed-in, in
ct€/kWh of wind power (feed-
in tariff minus cost savings) 6.34 5.99 4.35 6.35 5.2 3.89 6.51 4.29 2.99
Costs of the additional W.E.
feed-in, in million € (2003) 834 2.079 2.332 835 1.806 2.085 856 1.489 1.603

Table 7: Development of the CO2 avoidance costs with extension of wind power
(vs. W.E. production as of 2003):
Year 2007 2010 2015
Basic scenario without CO2 reduction in million t 8.0 28.3 39.5
CO2 surcharge CO2 reduction in million t, in kg per 605 817 738
add. MWh of W.E. feed-in
CO2 prevention costs in € / t 104.7 73.4 58.9
Basic scenario withCO2 CO2 reduction in million t 8.8 20.8 27.2
surcharge CO2 reduction in million t, in kg per 667 600 508
add. MWh of W.E. feed-in
CO2 prevention costs in € / t 95.1 86.8 76.6
Alternative scenario + CO2 reduction in million t 5.1 26.3 39.4
CO2 surcharge CO2 reduction in million t, in kg per 387 758 735
add. MWh of W.E. feed-in
CO2 prevention costs in € / t 168.0 56.6 40.6

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Table 8: Development of energy costs, by customer groups (cost increases in €(2003) per MWh)
For Non-Privileged Consumers
2007 2010 2015
W.E.-
W.E. W.E. W.E. W.E. W.E.
Difference Difference Additional Difference
f. e. 2003 f. e. 2003 2003
construction
Basic scenario 37.5 35.9 1.6 41.6 37.3 4.4 46.1 41.6 4.6
Basic scenario+ CO2 40.9 39.4 1.5 47.2 44.0 3.2 51.0 47.1 3.9
Alternative scenario 40.6 39.2 1.4 49.2 45.8 3.5 53.4 49.8 3.6
For Privileged Consumers (EEG hardship clause)
2007 2010 2015
W.E.-
W.E. W.E. W.E. W.E. W.E.
Difference Difference Additional Difference
f. e. 2003 f. e. 2003 2003
construction
Basic scenario 32.6 32.1 0.4 35.1 33.3 1.8 38.3 36.8 1.5
Basic scenario+ CO2 36.2 35.8 0.4 41.5 40.6 1.0 44.4 42.9 1.5
Alternative scenario 36.0 35.6 0.3 43.9 42.4 1.5 47.3 45.8 1.5
Abbreviations:W.E. f.e.. = with further extension of wind power; W.E. 2003 = no further extension of
wind power after 2003

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Figure 1: Grid upgrades of the extra high voltage transmission network up to 2007

20
Figure 2: Grid upgrades and network extension of the extra high voltage transmission network
between 2007 and 2010

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Figure 3: Grid upgrades and network extension between 2010 and 2015

22
Figure 4: System model for the grid connection of offshore wind farms in the North Sea and
grouping of the submarine cables in the coastal area

23