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Submarine HVDC Interconnections, examples and proposed for Romania – Turkey

Black Sea Energy Conference

Bucharest April 3-5

Bo Normark

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Romania-Turkey “Black Sea HVDC Interconnection”

EU Plans for interconnections

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Romania-Turkey “Black Sea HVDC Interconnection”

EU Common Energy Policy

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Romania-Turkey “Black Sea HVDC Interconnection”Cross Sound, USA

Financial set-up Private Limited Recourse

Financing, private banks and investors

Tariff set by auction

Project specifics In commercial service since 2002 ±150 kV, 330 MW HVDC Light®

40 km long subsea cable between Connecticut and Long Island

Domestic market coupling (New York – New England)

The client is TransÉnergie U.S. a subsidiary of Hydro Québec

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Romania-Turkey “Black Sea HVDC Interconnection”Cross Sound Cable, market value

Cost 2002 120 MUS$Value 2005 210 MUS$

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Romania-Turkey “Black Sea HVDC Interconnection”

Estlink, Nordic Energy Link AS.

Project specific Improved security of the electricity supply in

the Baltic States Integration of electricity markets

Turnkey 350 MW ±150 kV HVDC Light cable transmission system.

70 km subsea cable, 30 km land cable Improvement of the voltage stability in both

grids Short implementation time 19 month

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Romania-Turkey “Black Sea HVDC Interconnection”

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Romania-Turkey “Black Sea HVDC Interconnection”

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Romania-Turkey “Black Sea HVDC Interconnection”NorNed, Norway - Netherlands

Financial set-up Public limited recourse financing

Tariff set by auction

Project specifics Commissioning year 2007

±450 kV, 700 MW Classic HVDC

580 km long subsea cable between Feda – Eemshaven a world record of subsea cable

Bilateral market coupling

The clients are the TSO’s of respective country, i.e. Statnett and TenneT

Feda

Eemshaven

580 km

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-Romania-Turkey “Black Sea HVDC Interconnection”

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-Romania-Turkey “Black Sea HVDC Interconnection”

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-Romania-Turkey “Black Sea HVDC Interconnection”

Romania – Turkey, Project summary

Countries:

Romania and Turkey

Customers:

Transelectrica and TEİAŞ

Scope of Works:

Turn key cost approximately

290 MEUR excluding AC

connections and strengthening

of respective grids

Rated power: 600-700 MW

Submarine cable: >300 km

Water depth <1000m

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-Romania-Turkey “Black Sea HVDC Interconnection”Why HVDC? Classic or Light®

HVDC is a well proven, straight forward, state of the art technology and in case of the “Black Sea Interconnection”, the only viable alternative. The distance in excess of 300 km preclude the use of a AC-

subsea cable interconnection

The distance (+ 300 km) and anticipated capacity (600-700 MW) makes it possible to use either Classic or Light® technology

Investment cost versus technical features and loss evaluation of the different technologies will be the decisive factor for choosing between the two

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-Romania-Turkey “Black Sea HVDC Interconnection”Project prerequisites

The macro-political drivers is very good, Romania expect to be a EU member 2007 and Turkey just commenced the accession negotiations.

The political drivers seem to be very good, i.a. Bilateral Ministerial protocol and MoU between Transelectrica and TEİAŞ. Additionally Romania is already a full member of UCTE and Turkey is applying to become one

The technical drivers are evident, in particular Security of Supply and sharing of Spinning Reserve

Market Coupling is a clear Commercial driver and the pre-feasibility study conducted by Transelectrica and TEİAŞ looks promising.

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-Romania-Turkey “Black Sea HVDC Interconnection”Stakeholders interests in the Project

EU EU will most likely promote the project since it will interconnect two of

its potential member countries. It could even be part of the respective countries Energy Chapter in the accession negotiations

UCTE UCTE is a very strong promoter of bilateral interconnections and this

project fits very well into their strategy of increasing the number of bilateral interconnections in Europe

The Romanian Government Consider it a very important infrastructure project.

Have realised that the project is an Energy export opportunity for Romania

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-Romania-Turkey “Black Sea HVDC Interconnection”Stakeholders interests in the Project, cont

The Turkish Government Agree with its Romanian counterparts that it is a very important

infrastructure project Has recently launched a new regulation for bilateral Energy trading,

Market Coupling, allowing private initiatives. This has resulted in Turkish Energy traders being interested in the privatisation of Romanian Power Plants (Thermal and Hydro). The link can facilitate the possibility to “bring home their power”.

Can establish Turkey as an Electric Energy Hub (like it already is for Gas), trading energy with all it neighbouring countries

Transelectrica and TEİAŞ Consider the link important for System adequacy, Sharing of Spinning Reserve

and Security of Supply Will most likely the ultimate owner of the link due to EU regulations and the link

being an infrastructure project that must be available to all eligible traders of energy

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-Romania-Turkey “Black Sea HVDC Interconnection”Possible financing models

1. Traditional Buyer’s credits

a) Medium term loans based on Export Credit Agency Guaranteed Financing

b) Long term loans from Multilateral Development Banks such as WB, EBRD, EIB, NIB, BSTDB

c) Combination of a) and b)

2. Private financial solutions

a) Limited Recourse Project Financing with loans (from 1 above) + equity from investors

b) Private Insurance company ”off balance sheet”-solutions

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