Connecting two synchronous areas with an HVDC link: The NordLink interconnector

Summary

NordLink is the first HVDC interconnector between Norway and Germany. In this paper we will explain how a dedicated Market & Operations (M&O) project for NordLink was planned and organized in addition to the joint construction project. Rather than working towards a common goal of constructing a new asset, the tasks of the M&O project of NordLink can be viewed as building a bridge between the existing market solutions and operational principles of the two TSOs. Key success factors were the dedicated set-up of the M&O project, its early start and a structured and faithful collaboration. In this way, all planned market solutions and operational procedures were in place when the asset was ready for use. Thus, commercial operation of NordLink could start as planned and has been going successfully to date.

1. The NordLink interconnector

NordLink is a bipole HVDC submarine electricity cable which connects Ertsmyra substation in Tonstad, Norway and Wilster in Schleswig-Holstein, Germany. The 623 km long interconnector has a rated capacity of 1400 MW. The converters are voltage source converters (VSC) with +/- 515 kV rated voltage. The interconnector started operation in December 2020. The owners of NordLink are the Norwegian TSO Statnett (50%), the Dutch and German TSO TenneT (25%), and KfW (25%), an investment bank active in financing energy transition projects, owned by the German government.

NordLink enables the exchange of renewable energy between Germany and Norway. When Germany has surplus of wind and solar power this can be exported to Norway while production from the Norwegian hydro power reservoirs is stopped or reduced. Norwegian hydro and wind power can be exported to Germany when there is surplus in Norway and/or low wind and solar generation in Germany.

Furthermore and independently from each other, the converters have the capability to support the AC network with reactive power. This property is available from the VSC converters independent of the amount of active power transmitted. Alternatively, the converters can operate in the static synchronous compensator (STATCOM) mode at zero active power. In this way, NordLink provides flexible reactive power control at the connection points of the converters.

Due to good planning and cooperation on all levels, the NordLink project was completed on time and within budget in the middle of the Covid-19 pandemic. In this paper, we will not elaborate on the construction of the interconnector but on the market and operation parts of the project. In Section 2 we will explain how the dedicated Market & Operations (M&O) Project for NordLink was planned and organized. In Section 3 we will present the market solutions and operational procedures that are currently implemented for NordLink. In Section 4 we will present operational experiences to date, and finally, in Section 5 we conclude with the main lessons learned and upcoming challenges.

2. Connecting two TSOs in two different synchronous systems

There are already several HVDC interconnectors between the Nordic and the Continental Europe (Core) synchronous systems, but NordLink is the first interconnector between the Norwegian and German power systems. Thus, the project needed to build a bridge between the operational cultures and procedures of the German TSO TenneT and the Norwegian TSO Statnett. Both Germany and Norway are operating within the framework of the European guidelines for the Internal Energy Market (IEM) [1] and of the Nordic/Core rules applicable also to existing interconnectors. Even though the general framework is the same, there are significant differences between Norway and Germany on a system operation level. Furthermore, NordLink connects two different regulatory regimes for the first time. In addition to the main construction project teams, it was therefore necessary to establish in 2016 a dedicated M&O Project responsible for operational agreements, procedures and IT solutions. This project approach with a dedicated M&O project is also new compared to previous interconnectors between Nordic and Continental Europe systems.

2.1.  The Market & Operations Project

Developing common solutions for market design and system operation between two TSOs in two different synchronous systems is fundamentally different from establishing a common project team with the goal of constructing a common asset. Rather than working towards a common goal of constructing a new asset, the tasks of the M&O Project of NordLink can be viewed as building a bridge between the existing market solutions and operational principles of the two TSOs. This implies that all market and operational solutions for NordLink have to fit in seamlessly into the existing landscape of procedures and market parties. Next to that, different regulatory regimes on both sides of the border need to be respected and international codes and guidelines have to be taken into account. The project was structured with multiple phases in a top-down structure, as illustrated in Figure 2:

• The first phase is the Market & Systems Concepts phase where the teams come together for the first time to create a platform of common understanding and joint purpose to agree on a high level concept for WHAT to use the link for. The main deliverable of this phase is the System Operation Agreement (SOA), describing the high-level principles of market solutions and operational procedures including the responsibilities and liabilities of the parties with respect to system operation.
• In the second phase, called Market & Systems Processes, the teams go deeper into the agreed concepts to agree on HOW to implement the various functionalities of the link. There are two sets of deliverables from this phase: The Functional Process Descriptions (FPD) and the Common and Internal Operational Procedures (COPs and IOPs). The COPs and the IOPs are input to the operator's handbooks and the later Operator Training phase. The FPDs are mainly input to the third phase (ICT), but the COPs and the IOPs are also dependent on the technical descriptions in the FPDs.
• In the phase Information and Communication Technology (ICT) Solutions the FPDs are used as a basis to establish detailed ICT specifications and then develop the necessary ICT solutions. Furthermore, extensive testing of communication systems and IT functionality is performed. This is the most resource demanding phase of the M&O project. The comprehensive IT testing ranges from acceptance tests for individual IT solutions over integration tests of interacting systems to end-to-end test along whole process chains between TSOs and other parties. All this takes place without any physical exchange of energy. The high-level IT architecture of NordLink is shown further below in Figure 5.
• While the three phases described above focus on the operation of the link, there is an additional phase/track called Operation & Maintenance which focus on the handling of the asset itself. The main deliverable from this phase is the Operation & Maintenance Agreement (OMA), describing the common procedures and responsibilities for regular maintenance and repair preparedness for the asset.
• Once the operational procedures, the ICT solutions and the asset maintenance procedures are in place, the project organized a phase with extensive operator training, both individually within each TSO and commonly between both TSO's staff. The purpose of the common training was also to give operators the chance to meet before the actual operation started, however, due to the Covid-19 restrictions during 2020 the common training could be done over video link only.

Naturally, there were a number of feedback loops between the phases. E. g. several concepts that were agreed in the SOA had to be changed due to improved understanding of common challenges and needs that were discovered during the development of FPDs and COPs. Similarly, many of the FPDs had to be updated when the ICT development started, both due to improvements discovered in the implementation and due to new challenges that occurred.

The five phases described above are the main content of the M&O project. In the final stages of the NordLink project, the deliverables from the M&O project and the construction project come together in the Commissioning and Trial Operation Phases as illustrated in Figure 3. These phases are defined in the various construction contracts to verify that the assets work as specified. However, these phases are also important for the TSOs to verify that all the market systems, operational procedures and IT solutions work as intended.

2.2. Transmission Test Phase

In the Transmission Test Phase, a comprehensive set of technical tests are performed. The starting point for the joint Transmission Test Plan is all the tests that the contractor(s) need to verify asset functionality. In addition to these, the TSOs have a number of tests they need to perform. Some of the TSO testing can be done as an integrated part of the contractor tests, e. g. using the market system software to schedule the detailed test profiles rather than running the tests manually. Other TSO tests like Link Disturbance, Return to Service and TSO-TSO trading are not fully covered by the contractor tests and need to be planned as additional tests.

During the Transmission Test Phase, the link is operating according to a planned schedule. The TSOs buy and sell the necessary test energy in the energy market, but the market does not influence the volumes that are used. Only during high load testing did the parties consider the price differences in the Norwegian and German market, and test power was transmitted in the optimal direction from low to high price areas when possible.

To manage this phase a dedicated test management plan and a concept for procurement of test energy were established as a harmonized common guideline between the TSOs. This included also detailed descriptions of roles and responsibilities, a communication plan (weekly/daily meeting agenda) and procedures for the actual test execution. A dedicated support team with extra staff for the test energy procurement and a proactive information of stakeholders like neighboring TSOs have greatly contributed to a successful test phase.

In parallel to the link testing, also the connections to external systems are tested in this phase. This includes the Single Day-Ahead Coupling (SDAC), the Single Intraday Coupling (SIDC) market XBID, Nominated Electricity Market Operators (NEMOs), the Nordic Operations Information System (NOIS) and the Joint Allocation Office (JAO), see chapter 3.1.

2.3. The Trial Operation Phase

When all components and functionalities are sufficiently tested and verified the link can "go live", i. e. start commercial operation. In this phase, the contractors or the TSOs do not any longer decide how to operate the link. Instead, the TSOs run their normal capacity calculation processes to decide how much of the 1400 MW capacity can be offered to the market on a daily basis. The market prices on each side of the link will then decide how much, and in which direction, power will flow in each hour.

From the market player perspective there is no difference between the Trial Operation and the Normal Operation phases. The difference is mainly in the contractual structure, as the asset is still the responsibility of the contractors during Trial Operation. The TSOs do not take over full responsibility and ownership until the Trial Operation is successfully completed. The Operation & Maintenance Agreement does not come into force until the TSOs have taken over the asset.

3. Overview of NordLink market and operational solutions

3.1.  NordLink market solutions

The European electricity market includes of a number of sequential markets and products as illustrated in Figure 4. At present, NordLink participates in the European day-ahead and intraday markets in line with current European and national regulatory and legal requirements.

• Day-ahead market - NordLink participates in the European Single Day-Ahead Coupling (SDAC) [2]
  • Available day-ahead cross-border capacity offered to the market is the outcome of TenneT´s and Statnett´s daily capacity calculation process. TenneT and Statnett currently use an NTC based approach. Flowbased capacity calculation is being developed and will be introduced in the future.
  • In case of a decoupling situation in the day-ahead market, cross-zonal capacities will be allocated in shadow auctions, which are performed by the Joint Allocation Office (JAO) on behalf of European TSOs [3].
  • The embedded functionality for implicit loss handling in the day-ahead auction is applied on NordLink [4]. This means that flow will only be allocated on the interconnector if the value of trading power exceeds the cost of the losses when transmitting the power. The traded power in the sending end of the interconnector includes a linear approximation (market coupling algorithm is currently only capable of processing a constant loss factor) of the total amount of losses in cable and converters.
     
• Intraday - NordLink participates in the Cross-border Intraday (XBID) market in the European Single Intraday Coupling (SIDC) [5]
  • XBID offers continuous matching of trades across Europe, subject to available cross-border capacity.
  • Un-allocated capacity from the day-ahead market will be made available to the intraday market in accordance with intraday capacity calculations.
  • Cross-border intraday auctions (IDA) are planned to be introduced in Europe in 2023.

• Balancing services are currently not implemented on NordLink. The link shall join the European platforms for manual and automatic balancing reserves (MARI and PICASSO) when these become available between the Nordic and Core synchronous systems [6], [7].

• Countertrade / Redispatch is currently not implemented on NordLink.  Congestions in the surrounding AC grids are currently handled by other actions. A future solution will as far as possible be harmonized with a common Nordic methodology for countertrading and redispatch that is still in early development phase.

• Long-term transmissions rights are currently not implemented on NordLink. A formal decision from the Norwegian and German National Regulatory Authorities (NRAs) is needed before LTRs can be offered.

3.2. Deliverables of the NordLink M&O project

In this section, we briefly outline the main scope and deliverables of the NordLink M&O project, i.e. all the deliverables that were necessary in addition to the direct construction of the link.

3.2.1.  Agreements

The M&O project delivered two main agreements:

• The System Operation Agreement (SOA) that regulates all aspects of the use of the link, including system operation governance, liabilities and responsibilities between the parties. The SOA also takes into account the European regulations and agreements that are applicable for the operations of the link both technically and commercially. An important example for this framework is the ramping limitations defined for the two relevant synchronous systems Nordic and CE, which NordLink must always comply with. The lowest value of the ramping limitation given by the two systems will prevail.
• The Operation and Maintenance Agreement (OMA) that regulates the operation and maintenance of the asset itself, including maintenance, repairs, governance, liabilities, insurance and general responsibilities between the parties.

3.2.2.  Operational procedures and process descriptions

The day-to-day operation of the link is set out in 11 Common Operational Procedures (COP) and further individual procedures at Statnett and TenneT. The operational procedures are based on 8 Functional Process Descriptions (FPD) that go deeper into the technical processes that are needed to support the operations, and thus serve also as major input for ICT specifications and development. Altogether the COP and FPD describe the operational phases from outage planning over real-time operations of the HVDC system and disturbance management to reporting and transparency:

• Data Exchange of real-time measurements – FPD describes technical processes to share information of each TSO’s SCADA system to the other to provide relevant measurements within the respective observability areas.
• Outage Planning – COP describes coordination of all planned outages that are affecting the Net Transfer Capacity (NTC) of the link, including test activities and work that causes an increased risk of tripping NordLink.
• Switching procedure – COP describes procedures and responsibilities for bringing NordLink into and out of operation.
• Alternation of roles – COP and FPD describe operational and technical processes of changing Leading and Following roles in TenneT's and Statnett's Planning System, and Master and Slave for the HVDC control stations in the respective Supervisory Control and Data Acquisition / Energy Management System (SCADA/EMS).
• Exchange of Capacity Data – COP and FPD describe operational and technical procedures for determining and matching of NordLink capacity that is made available to the Day-ahead and Intraday markets.
• Energy Plan & Set Point Schedule – COP and FPD describe operational and technical processes related to establishing and matching of the hourly Total Energy Plan and the resulting Set Point Schedule, including error and deviation handling.
• Mutual AC-grid Assistance – COP describes operational procedures related to TSO-TSO Exchange in different system states. This direct trade can be arranged by phone on an hourly basis if required by operational situations emerging after market closure.
• Disturbance Management – COP describes operational procedure related to the handling of unplanned events on the link.
• Emergency Power Control (EPC) – COP describes the procedures for enabling and disabling the EPC functions that are implemented on the link, manual EPC activation and return to service after an EPC triggering. Triggering of EPC will rapidly reduce the flow on the link, but not necessarily down to zero. The triggering of EPC by either Statnett or TenneT takes place independently of operational roles. FPD describes settings for the EPC functions that are implemented on the link, and which events will lead to triggering of an EPC.
• Reporting and Transparency – FPD describes technical processes regarding the fulfilment of European publication duties, limited to processes in which both parties should participate actively or harmonize their practices. COP describes how TenneT and Statnett coordinate and publish NordLink information to fulfill the common transparency obligations, e. g. who is responsible for which publication depending on the triggering event.
• Exchange of Metered Values – FPD describes technical processes regarding metering and exchange of meter values between the parties. These meter values are used in the TSO-TSO settlement as well as in the balance settlement in each country
• Exchange of Calculated Values – COP and FPD describe procedure and technical process for establishing the Daily Exchange Report (DER) containing e. g. values of planned flow and imbalances on NordLink for a full day (24 hours). After reconciliation and final confirmation, the data is input to the TSO-TSO settlement between Statnett and TenneT.
• Operations Report – COP describes the structure of the Operations Report that is used to inform the NordLink Steering Committee on the status and events related to the operation of NordLink.

As the reactive power capabilities of both converters are independent from each other and cause negligible losses in the converters, there is no need for common procedures or processes on reactive power management. Both TSOs can use the reactive power in control modes like reactive power control, QU-control and AC voltage (droop) control. This is an important added value for AC grid operations in the vicinity of the converter connection points.

3.2.3.  IT solutions

 

A number of IT systems needed to be updated or expanded to operate the link, mainly within the TSO environment but also external systems, see Figure 5:

• Market & Scheduling systems (green)
• SCADA/EMS systems (amber)
• Settlement & Reporting systems (white)
• External connections: Day-ahead/SDAC, intraday/SIDC, JAO, transparency etc.

Naturally, the established IT architectures within TenneT and Statnett look different. But within the parts relevant for NordLink the same hierarchy levels are visible:

• The Market & Scheduling systems, which facilitate all market activities, communicate with the external connections and give the required input to the SCADA/EMS and Settlement & Reporting systems.
• The SCADA/EMS systems, which control the operation of the link and give further input to Settlement & Reporting. A crucial step here is to transfer the Set Point Schedule matched between both parties to the power order sent to the HVDC controller.
• The Settlement & Reporting systems, which facilitate reporting and transparency requirements and in the end also the financial settlement of energy exchanged via the link.

For the external systems, the required communication formats needed to be implemented in the TSO systems. At the same time, necessary adaptations in each of the external systems to incorporate NordLink needed to be ensured and agreed with the responsible steering groups through formal change requests. In this way, a two-TSO endeavor like NordLink is also dependent on projects and initiatives, which involve many stakeholders and require multilateral agreements.

The particular challenge for the IT implementation was not to build one new stand-alone solution but to adapt in parallel the existing IT systems embedded in the established process landscape. This entailed an extensive coordination effort with respect to specifications of the interfaces, different IT providers involved, simultaneous non-NordLink adaptions affecting the same systems, management of test cases and timing of end-to-end tests. Nonetheless the whole IT landscape could be tested successfully prior to the beginning of the transmission test phase.

4. Evaluation of operational experiences to date

Commercial operations of NordLink started with the beginning of the Trial Operation Phase on December 9th 2020. To allow for a secure start-up, several measures were taken: First operations started at 9 am and not at the beginning of the business day at midnight, so that control center shifts did have the support of both normal staff and the project team. Furthermore, in a first step only half the capacity was made available to the market in order to check that all process run smoothly without risk of a 1400 MW failure. For similar reasons the maximum ramping rates were reduced to 300 MW per hour.

These measures proved to be very valuable for a smooth transition into the commercial operations and to gain first operational experience. As a result, the full link capacity could be released from January 5th, 2021. However, the capacity that is offered on the German-Norwegian bidding zone border to the Day-ahead and Intraday markets is always the lowest of three values: The technical capacity of the link itself, the maximum export/import capacity in the German AC grid and the maximum import/export capacity in the Norwegian AC grid. Events like planned and unplanned outages in the connected AC grids may reduce a system's ability to both import and export power in periods. Similarly, high levels of wind and solar generation may also limit available capacity in the connected systems. These capacities are calculated for all bidding zone borders in the common European market each day and may result in an available market capacity that is lower than the technical capacity of the link itself.

There may also be periods where the price difference between the Norwegian and German bidding zones is too small to transmit energy profitably (i. e. the value of the price difference is less than the cost of losses on the link). Thus, the resulting flow pattern as shown in Figure 6 features a high degree of volatility.

The ramping limitations for the Nordic HVDC interconnectors are based on common Nordic stability criteria and agreed in the Nordic Synchronous Area Operational Agreement. The purpose of these limitations is to reduce the deterministic frequency deviations when several interconnectors need to change setpoint from one market time unit to another. Up to now, a total Nordic limit has been shared equally between all HVDC interconnectors with 600 MW per hour each, but with the introduction of flowbased market clearing this will become a dynamic limit to be allocated to the border(s) with the highest social welfare gain.

It is worth noting there was a longer planned outage with further tests in March 2021 due to final construction works at the end of the Trial Operation period. Apart from some shorter outages, successful operation has continued to date.

5. Conclusion and outlook

In summary, the intensive and close collaboration within the NordLink Market & Operations project has paid off well: All planned market solutions and operational procedures were in place when the asset was ready for use. Thus, market operation could start as planned and has been ongoing successfully to date.

Key factors for this success were the set-up of a dedicated M&O project, its early start and a structured and faithful collaboration. In this way, it was possible in a timely fashion to overcome the challenges of connecting different synchronous systems and for TSO operations to act on eye-level to the construction work. Furthermore, it has been of great value to involve the best process, ICT and HVDC-specialists of both TSOs. Some resources where fully allocated to the project, while other key experts were involved when needed. In particular, the involvement of these experienced experts has ensured that NordLink solutions are not stand-alone but fit into the existing process landscape as good as possible. In this way, it was ensured that adding new assets compatible to market and regulatory requirements was done within a manageable effort for TSO control centers.

It cannot be overestimated that an M&O project approach for new “special” challenges is of growing importance as the European energy system becomes more complex, in terms of a dynamically expanding grid, new technologies being used, many affected stakeholders and intricate ICT-tools involved. In addition to this, the solutions need to be fully compliant with a complex set of common regulatory and legal requirements governing the European Internal Energy Market. These aspects shouldn’t be overlooked when addressing the bigger and costlier asset construction tasks. At the end of the day, both parts are needed to develop the grids and markets while ensuring security of supply.

Some further lessons learned include the importance of clarifying the roles and responsibilities between the M&O project and the construction project. For future projects it could also be helpful to improve the coordination between the project phases developing the agreements and the FPDs/COPs to avoid some of the above-mentioned feedback loops and enable an earlier start of the ICT phase.

Looking ahead, the further development of the NordLink processes is already ongoing. A joint working group has been established to develop a common Countertrade/Redispatch solution over the link.

There is also a common working group together with the Danish and Dutch TSOs looking to implement new ramping rules for all HVDC interconnectors from Southern Norway. Currently, there is an individual limit to how fast each interconnector can ramp from one hour to the next, independent from what other interconnectors may need to do. A more efficient solution will be to implement an aggregated area limit where one interconnector may ramp faster if the others do not need to ramp, dependent on the price difference between the different bidding zones.

Furthermore, the implementation project of 15-minute products in the Nordics will entail adjustments also on NordLink. Thus, the Statnett-TenneT collaboration on NordLink will be a continuing exciting journey in order to exploit the full potential of the interconnector within the dynamically changing European electricity grids and markets.

References

1. https://www.europarl.europa.eu/factsheets/en/sheet/45/internal-energy-market, https://www.entsoe.eu/network_codes/
2. https://www.entsoe.eu/network_codes/cacm/implementation/sdac/
3. https://www.jao.eu/
4. https://www.nordpoolgroup.com/trading/Day-ahead-trading/loss-functionality/
5. https://www.entsoe.eu/network_codes/cacm/implementation/sidc/
6. https://www.entsoe.eu/network_codes/eb/mari/
7. https://www.entsoe.eu/network_codes/eb/picasso/

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• Contact Author: M. THIELE