Cable pooling: A solution for a shortage of grid connections, and a way to use energy infrastructure more efficiently?
In Poland, public opinion and the private sector agree that faster development of renewables is needed to free the country from dependence on fossil fuel imports, and to reduce domestic coal-fired generation. The private sector has funds to develop renewable energy, for its own use or to sell to the market. And no one needs to be persuaded that the current high energy prices will reduce the competitiveness of the Polish economy over time. So the will and the funds are there. But the barrier is connecting renewable energy sources to the grid, which is simply losing its capacity.
In 2019–2020, field offices of the Energy Regulatory Office received 1,209 notifications of refusal to connect facilities to the electricity grid, for a total capacity of nearly 5,668 MW. In recent years, the number of negative decisions from operators has increased significantly. From 2019 to 2020 there was an increase of 177% and from 2020 to 2021 nearly 135%. In 2021, one in four connection applications was rejected. Distribution system operators explain this by claiming that the connections are not technically feasible due to an outdated and overloaded power infrastructure. Often they cannot indicate when the connection will be possible. Sometimes investors themselves contribute to the deterioration of these statistics, when for various reasons, after obtaining connection terms, they decide not to implement the project, thus blocking the network capacity.
Cable pooling: New sources on current infrastructure
Undoubtedly, the connection barrier is a problem, especially in an era of energy transition and high electricity prices, when investors are looking for ways to optimise power consumption costs. A solution could be “cable pooling,” which has been employed with good results in countries such as the Netherlands and Denmark.
Cable pooling relies on different renewable installations sharing energy infrastructure. Located close to each other, wind farms and solar power plants use a single connection to feed the electricity they generate into the grid. This would solve both the problem of numerous negative decisions on grid connections and the problem of insufficient capacity of the grid, which will intensify as the renewable capacity continues to expand without simultaneous expansion and modernisation of the grid.
What primarily favours the use of this solution is the negatively correlated profile of electricity production from wind and solar power plants. These two technologies rarely operate at full capacity at the same time. Instead, they complement each other perfectly, offering a flatter power generation profile that benefits the distribution and transmission grid itself. Cable pooling allows for optimal use of existing connections and supports the stability of renewable energy operation at each connection point. As a result, it provides a more stable supply of green energy to end users.
Significantly lower connection costs and faster implementation of projects
Another advantage of this solution is that by optimising the use of existing connection points, it will reduce investors’ costs and the investment needs of power grid operators. This will directly contribute to reducing tariffs and the cost of energy transmission and distribution, and ultimately the cost of electricity in the end-user’s bill. With a connection already secured, the development process itself is significantly expedited.
A hypothetical investor scenario
Imagine an investor who owns a wind power plant with a capacity of 40 MW and grid connection for an identical load. Near the wind project there is an attractive plot of land where an investor could build a 25 MW photovoltaic farm.
To implement the photovoltaic project, the investor needs a connection to the grid, but the operator for the area is unable to offer the required connection capacity. The operator estimates that construction of a connection with the required load will be possible in about five years, which could completely derail the plans for the project and the possibility of receiving statutory support for renewable energy sources.
Both the existing wind farm and the planned solar farm with a capacity of 25 MW can be connected to the grid via an existing cable connection. This way, the investor not only saves time and costs associated with the administrative and technical activities necessary for implementation of the new grid connection, but also frees the project from reliance on the decisions of the operator and delays associated with construction of the new grid connection.
Importantly, in this configuration, the connection capacity does not necessarily have to increase unit for unit with the capacity of the installation. For a wind farm with a capacity of 40 MW and a new photovoltaic installation with a capacity of 25 MW, a connection with an original load of 40 MW is sufficient. This is confirmed by the analysis of Prof. Piotr Kacejko of Lublin University of Technology. Using the example of a combination of a wind farm with a rated capacity of 1,000 MW and a combined photovoltaic farm with an analogous capacity of 1,000 MW, he points out that such a solution would require the use of infrastructure associated with power derivation with a capacity that, although greater than 1,000 MW, is significantly smaller than the combined sum of the capacities of the two sources. This translates into the calculation of the economic feasibility of the project.
When operations overlap
Despite the many advantages of this solution, one particular area can be identified that will pose a challenge for investors. In rare circumstances, the cumulative energy production of the combined photovoltaic and wind systems could exceed the capacity of the connection, in which case the output of the individual sources could be temporarily reduced. But it is estimated that such limitations may occur about 50 days per year, when production from both sources overlaps between 15 minutes and 8 hours a day. Such a situation occurs about 150 hours a year, or 1.5% of the time annually (Jakub Jacyszyn, “Hybrid RES installations, or cable pooling the Polish way,” Energy Policy Institute Commentary 3/2022). In such situation, the owner of the farm will have to decide which installation has to reduce its production to match the capacity of the installed connection.
A solution to this problem may be energy storage facilities, introduced by wind and photovoltaic plant owners not only in the West, but also in Poland.
One connection, different installation owners
The situation can become complicated when the wind farm and photovoltaic farm belong to different owners. Looking at the experience of the Dutch renewable energy industry, with a track record of implementing cable pooling solutions, it seems a good idea to develop a standard for agreements entered into by investors, defining the principles of cooperation of the parties and sharing the costs of joint connection and installation. Such a model Cable Pooling Agreement was recently unveiled by Dutch industry organisations. Developing a clear and transparent contractual agreement between investors will be vital for exploiting the full potential of cable pooling also in the Polish legal reality.
Currently, a scenario cannot be ruled out where the relevant contractual provisions may also appear at the level of the connection agreement with the relevant operator. Such a tripartite agreement could be advantageous to investors due to the reduction in the number of binding contractual relationships, so long as contractual freedom is preserved with regard to such provisions as determining which installation must limit its production so that the sum of the electricity produced from both installations does not exceed the load of the installed connection.
A need for appropriate regulations
Currently, the regulations in Poland do not provide for the possibility of combined cooperation between installations for the purpose of efficiently using the distribution capacity at a single point of connection. However, discussion in the industry is intense, and proposals for such solutions are being drafted. In light of the problems mentioned with network capacity, this issue should be addressed as soon as possible, responding to the demands of the economy. In doing so, it is essential that the new law stipulate under what terms and conditions several installations may use the same connection, beyond the current prerequisites indicated in Art. 7 of the Energy Law and in the Electric Power System Regulation of 4 May 2007.
These additional prerequisites include:
- Meeting the technical criteria for connection
- Compliance with the applicable technical requirements for the installation
- Possession by the owner of the installation of valid conditions for connection of at least one of the electricity generating facilities
- Meeting the requirements for adequate metering of electricity injected into the grid in the relevant time intervals from specific generation sources indicated in the terms and conditions for connection
- Fulfilment of the connection requirements set forth in the Network Codes and the instructions for traffic and operation of the distribution network (IRiESD) and the transmission network (IRiESP).
After meeting these conditions, if the generators of power from renewables opt for cable pooling, they will be able to output the electricity using the same connection point with the connection load indicated by the operator of the distribution grid. In doing so, it is not indicated that the entity already connected will to have to reapply for terms and conditions for the connection. The electricity producers with terms and conditions for connection who choose to use hybrid RES installations should be able to output the electricity using the same connection point. However, it will be necessary to amend the connection agreement to take into account the interests of all investors using the same connection point on one hand, and the powers and duties of the distribution network operator on the other.
Cable pooling is a necessary solution that will help quickly and cheaply (including at low cost to the environment) deal with the current problems of electricity grid availability and the lack of full availability of energy from RES throughout the full 24 hours. The ability to use the full potential of the connection capacity should be a key concern for the government and power grid operators. The solutions proven in the Netherlands and Denmark should become a priority for Polish lawmakers and in dealings between producers of electricity.
Igor Hanas, adwokat, Damian Brudzyński, Energy practice, Wardyński & Partners