No Competition Without Transmission: Why TSOs Play a Vital Role to Ensure European Competitiveness and Decarbonization

The Clean Industrial Deal (CID) is a crucial step for maintaining the competitiveness of the European industry as it transitions to climate neutrality. As part of the CID, the Action Plan for Affordable Energy is particularly relevant from the perspective of a transmission system operator (TSO). It forms the basis for the Grid Package, expected from the European Commission by the end of the year. 

A fundamental transformation of the European energy system is needed to meet climate protection targets and climate neutrality in the EU by 2050. TSOs want to actively shape the process of planning the climate neutral grid of the future and provide their longstanding expertise in grid planning and system integration. As the transmission grid is the key enabler for further integration of renewable energies, TSOs play an important role in the entire energy transition – hence there is no competition without transmission as the industry heavily relies on functioning and strong infrastructure. 

Regarding the challenges we are facing: One key prerequisite for a strong infrastructure is a regulatory framework that ensures solid financing for grid operators. Even though this must be stated for once at the beginning, financing or regulatory issues are not the focus of my following thoughts.

As an electrical engineer, I would rather like to stress two other highly important success factors. These factors contribute to Europe being an attractive site for industrial allocation in global competition and for the conversion of the electricity system. More so, they are essential for the transformation of the electricity system and for the adherence to climate protection targets: Efficient grid planning and ensuring system stability by maintaining expertise among responsible stakeholders.

Efficient grid planning

Our grid operation area includes strong industrial sites and – still – a correspondingly large number of conventional power plants. The latter have secured the industrial power supply for decades and are gradually being replaced by renewables. On top, as electrifying is the most efficient way to decarbonize, the electricity demand will increase during the energy transition. This is due to the fact that the most densely populated German federal state of North Rhine-Westphalia with its numerous industrial sites is located in our grid area. For the grid, achieving climate neutrality necessitates the increased integration of renewables in the future. However, the sun does not always shine and the wind does not always blow, yet the frequency in the grid must be 50Hz at all times to maintain the stability of the grid. In Germany and in Amprion’s grid control area, renewables to be integrated are primarily wind (onshore and offshore) and photovoltaic. Renewable electricity must be transported to industrial consumption centres in Germany to ensure their transition, see Figure 1. 

Figure 1: Transporting electricity, for example from offshore windfarms to consumption centres

Amprion considers a demand-oriented climate neutral grid a necessity so that electricity can be transported to the consumption centres in the future. Current developments, including battery storage, electrolysers or the hydrogen grid, must be optimally integrated into electricity grid planning to ensure the efficient design and construction of the grid.

An Amprion study regarding the intersectoral system planning shows that gas-fired power plants are essential for the security of supply in the electricity system and when powered by hydrogen in the future for the dimensioning of the hydrogen grid. Hence, the study demonstrates how the different energy systems of electricity, natural gas or hydrogen directly impact each other. Thus, the planning of electricity grids must consider developments in other sectors and vice versa. The processes surrounding the planning of the climate neutral grid of the future are therefore not only of particular importance for Amprion, but also for the German and European industry and economy. 

Speeding up planning and approval procedures in grid planning

Efficient grid planning is of crucial importance. We can respond more effectively to current developments if we do not have to schedule projects too far in advance because of lengthy permission periods. Therefore, measures to speed up grid expansion are essential. In Germany, numerous steps have been taken in recent years to speed up planning and approval procedures. This includes innovative planning steps and exemptions from complex approval requirements for certain project types which strengthen the grid. For example, the step of spatial planning for new national DC projects was synchronized with the national development planning process. This ensured a faster realization of the Rhein-Main-Link Project, one of our central grid expansion projects for the energy transition. Another example is that replacing conductor ropes at existing power lines by others with a higher capacity requires no major approval, allowing TSOs to strengthen their grid significantly and more rapidly. 

To be able to realise efficient grid planning by reacting to current developments, we must ensure that the accelerations in the approval process are maintained in the future.

The possibilities outlined in Council Regulation (EU) 2022/2577 of 22 December 2022 (“EU Emergency Regulation”) establishing a framework to accelerate the deployment of renewable energy demonstrated how this could work. Therefore, it is important for us in Germany to effectively implement the successor regulation, namely the Renewable Energy Directive III. By amending this regulation, further improvements could be achieved. Specific exemptions from required expert reports demanded by the Water Framework Directive or the Marine Strategy Framework Directive could, for example, streamline processes. 

 Ensuring system stability by maintaining expertise among responsible stakeholders

The conversion of the electricity system of the future must prioritize system stability. It is vital that the availability of electricity can be ensured at all times. However, the maintenance of system stability varies due to regional and national circumstances such as environmental or geographic differences, interconnections between EU member states or the respective production landscape of electricity. We are fundamentally rebuilding the energy system. Hence, it is crucial to continuously set new and develop requirements for connected customers, generators and operating resources which focus on system stability. Within the future energy system, it is vital that all actors, such as loads, storages or electricity producers, need to ensure the stability of the system. This is why all actors must contribute to the grid (Netzdienlichkeit). The responsibility for system stability and the corresponding challenges remains with the TSOs. 

Considering all sectors of the energy system, it is crucial to develop specific expertise in relevant infrastructure, allowing each TSO to effectively assess and respond to circumstances within its transmission grid. For example, the TSO’s analysis can provide the most specific information on whether a project is cost efficient or where an interconnector should best be planned and built. Specific knowledge is indispensable considering that grid structures vary considerably across EU member states and regions. The TSO, typically being responsible for reliable and secure development, operation and maintenance of its grid, has all relevant information from a system engineering perspective. It is therefore essential that the planning competence for the future electricity grid remains with the TSOs to achieve the energy and climate policy targets. 

Amprion collaborates with European TSOs and the European Network of Transmission System Operators for Electricity (ENTSO-E) for cross-border system development. This cooperation, established over decades, ensures a reliable and secure European grid. Decades of grid planning have led to exceptional experience in transmission system development, with recent expansions into offshore transmission infrastructure development. Amprion recommends maintaining and further developing the successful governance that has been established by the legal mandates of ENTSO-E building on the TSOs’ system engineering expertise.  

Summary

To ensure the goal of climate neutrality and the expansion of the electricity grids on which industry depends, the upcoming Grid Package must focus on more efficient grid planning and ensure, among other things, system stability. Tomorrow’s energy system must be planned together with all relevant stakeholders. Nevertheless, for reasons of efficiency and time, responsible stakeholders shall realise the planning, construction and operation within the scope of their responsibilities. As a proactive TSO, Amprion helps to create the energy-related conditions necessary for an innovative and modern industrial transition in Germany and the EU. We are convinced that the transformation of European industry can only be achieved together.