Today, Statnett has announced its updated investment plan for 2022, with the status of planned, ongoing and completed power grid projects. In the years to up 2030, Statnett plans to invest NOK 60–100 billion in the power grid. Over the next five years, we expect rapid growth in investment levels, partly due to additional electrical substation projects and the planning of larger cable projects. The higher demand for power, along with the announced development of offshore wind power, will increase the need for grid reinforcements towards the end of the decade and beyond the 2030s.
In recent years, Statnett and the regional grid companies have experienced a dramatic growth in requests for connections to the power grid, primarily from consumer entities. Available capacity for consumption in the current transmission network, as well as from ongoing projects currently being planned and executed, has largely been reserved, and in many places the grid is full.
“This has been a demanding year for the Norwegian power supply. High power prices and a tight power supply in the south, major price differences and limited grid capacity for new connections have all highlighted the need for accelerated grid development, as well as the expansion of power production,” says Executive Vice President Gunnar Løvås at Statnett.
“Norway is running out of time if we are to ensure a good power supply, reach our climate goals and also facilitate new business activities based on renewable energy. The power system must be put in a position to deliver greater capacity much faster than we anticipated just a few years ago. We will therefore be investing heavily in the power grid in the years ahead,” says Løvås.
The pace must be accelerated
Statnett's strategy, the Green change of pace, underpins a large-scale restructuring of the power system over the next few years. Norway is running out of time if we are to reach our climate goals while also facilitating new business activities. The power system must be put in a position to deliver greater capacity much faster pace than we anticipated just a few years ago.
In 2021, Statnett invested approximately NOK 4.4 billion in new capacity and reinvestments. During the same year, we put several major projects into operation. This includes the Nordlink interconnector to Germany, which was put into regular operation while the NSL cable to the UK was put into trial operation.
The development of the power grid will facilitate increased value creation along the coast and in areas with high power consumption, as well as reduced price disparities and a strengthened supply around the major cities. In addition to enabling new connections across the country, Statnett is upgrading all major transmission channels to 420 kV voltage levels. This will facilitate increased capacity between different regions.
Increased power production is also needed to meet consumption growth in Norway and to maintain competitive power prices. Apart from offshore wind power, there are few specific plans for increased power production, and Norway is likely to experience a power deficit by the time sufficient new production is in place. The government has put forward ambitious plans for the construction of offshore wind farms, and Statnett expects increased levels of activity to facilitate connections for offshore wind power generation and the development of offshore power transmission networks. Costs for the development of the offshore network are not included in the investment sums discussed in the updated investment plan.
Changes in progress and costs since 2021
Statnett now has more projects than ever. Many of the projects are currently at the planning stage, and the number of realised projects will increase over the next three years. Most of the activity is in Northern Norway, the Bergen area and Haugalandet, as well as Oslo, Akershus and Østfold. These are also the areas where we see most deviations in cost and time compared to the 2021 Grid Development Plan. Deviations arise as a result of the public authorities’ lengthy administrative processing time and challenges in the supply chain due to the war in Ukraine and the aftermath of the pandemic. This drives up both time and costs. Administrative processing time can also be an obstacle for progress.
“In addition to the steady lengthening of the time taken by the authorities to process planning applications, we have had a backlog of cases waiting to be allocated a case manager at the Norwegian Water Resources and Energy Directorate (NVE) in the past year. Some cases have been lying dormant for close to ten months. We now expect NVE to take action, particularly after the recommendations from the Norwegian Electricity Grid Commission, which will resolve this situation both in the short and long term,” says Løvås.
The way forward
Statnett is now preparing area plans for ten regions and is conducting regional dialogue meetings as a further development of current plans and processes. Each plan defines a strategic goal from a 20-year perspective, with necessary initiatives divided into different phases, to meet the needs of the area.
“We now systematically cover the entire country with more third-party involvement. This includes regional dialogue meetings, where customers, power grid companies and government authorities participate. These plans will help ensure greater predictability for customers who want higher capacity, and will facilitate a more efficient realisation of the project portfolio. The area plans will be an important foundation when licence applications are processed and submitted for consultation,” says Gunnar Løvås.
In 2022, we will conduct dialogue meetings in the different regions, and invite government authorities, politicians, industry representatives and stakeholders. During the first quarter of 2023, the first version of all ten area plans will be ready.
Statnett has previously published both a Grid Development Plan and a System and Marketing Development Plan, most recently in 2021. Much of the content of these plans will now be compiled in a joint planning document which we have named the System Development Plan. The goal is a more comprehensive presentation of Statnett’s plans for the development of the power system. The area plans are a key part of this.
The System Development Plan will be published on 1 November 2023. The public process will begin with a national power system meeting on 8 December 2022. (in norwegian only)