The Potential of Cable Pooling in the Dutch Context

Abstract

Grid congestion, which results from a larger demand for electricity transport than the available transport capacity, is a challenge in the Dutch energy transition. The growing pace of decentralized renewable energy development in less densely populated areas and the electrification of demand leads to congestion, which potentially hinders the connection of new renewable projects to the grid and slows down the energy transition.

Due to the intermittent behaviour of renewable resources, the grid connection capacity is not used to its full capacity at all times. Cable pooling is introduced as a possible solution to congestion, allowing an existing and a new renewable resource to share a grid connection and improving the utlilisation of the current grid infrastructure.

This thesis’ main objective is to develop a calculation framework to assist developers to evaluate the economic potential of a cable pooling location by optimizing the Net Present Value (”NPV”) of a shared grid connection, considering technical, regulatory, legal, and financial aspects. It aims to provide developers with a tool for making a preliminary decision on whether to continue development for a potential cable pooling location.

The Dutch context is used to identify different grid connecting possibilities, different combinations of wind and solar to form a hybrid farm and different revenue streams. These are used in a methodology to find the optimal installed capacity of the added resource and the impact of on-site storage to one of the hybrid farms. The approach considers the influence of market prices on the technology specific cable pooling business case at an hourly level and accounts for long-term market developments. Other factors accounted for in the tool are the hourly export capacity, defined as the residual space after the export of the existing farm, land size and costs of installation.

A case study of a solar farm oriented to the east-west is used to test the tool and draw conclusions on the potential of cable pooling for this case study. The additions of a wind and solar resource with either south or east-west generation all yield positive NPV values with the highest values seen for the wind addition.

Sensitivity tests for technical and economic inputs show that the results are sensitive to weather data and various economic inputs, but the results of this case study are robust. The case study however considers a relatively large grid connection. Generalizing the results by considering a smaller grid connection shows the value of complementary production patterns.

The impact on the cost-benefit framework by adding a battery is considered. The addition of a battery adds value by peak-shifting the produced energy, but not enough to cover the costs of the battery without any subsidy or alternative revenue streams.

In conclusion, cable pooling shows potential for this case study, for different revenue streams and additions. The tool used to obtain the results can be tailored to different case studies and input scenarios and shows the economical attractiveness of a cable pooling location, based on the Dutch context. The Dutch context shows a promising potential for cable pooling as a method to deal with congestion, but not many projects are present yet. Considering different parties sharing one grid connection, coming to an agreement on the terms can form a hurdle. Therefore, the introduction of more transparent cable capacity calculations by DSOs and a separate subsidy for cable pooling projects could help incentivize the development of more cable pooling projects. The impact of developments such as the ”Use-itor-lose-it” on the cable pooling potential should be monitored closely. Other solutions to dealing with congestion, such as using the fault reserves, should not be disregarded.