Friday, April 1, 2011

New Super Mega Projects - HVDC Submarine Cable

I recently learned of a project our company (AECOM) is doing in Hawaii.  Submarine cable.  The wind power will be generated on one of the smaller islands, and transmitted to the Big Island.  My discussion included the recent news of a rather Herculean task of stringing fiber optic cable from Tokyo to London >>> via the Northwest Passage (Arctic Cable Company LLC).  And I also recently posted on a new initiative to bring geothermal power from Iceland to Europe (Iceland Considers Giant Cable to Europe).  So this morning's story seems quite topical.  These are massive undertakings, with multiple jurisdictions, and complex environment-project interactions and aspects.  The thought of an opportunity to work on (any portion) of a project like ArcticLink is very exciting.

One of my more enjoyable experiences in my career was as an expert witness role for a dispute in the Eastern Arctic over lost opportunity to develop vast potential oil and gas reserves. The project was entirely hypothetical, but it meant going through the entire planning process to determine the 'feasibility' of undertaking such an initiative - develop and produce 1B BOE on the sea floor of Davis Strait - the Origins of Woe for Iceberg Alley.  Some of the most fascinating engineering I have ever been exposed to.

What does it take to plan one of these projects?  In my case noted above, the time from completing exploration to production I believe was 14 years.  Today's story highlights the process somewhat for the UK to Netherlands cable - the switch was thrown on this morning for full commercial operation.  From the effort required 11 yrs.  And I expect that doesn't include the early conceptualizing and the assessment of various alternatives.  Bloomberg describes the cable as a 1000MW link as an important step in the development of the envisioned single European power market.  Reuters posed the question last year about whether or not this new interconnection might also create market pricing challenges based on differentials in supply and demand, but at the wrong time.  

Regardless of what 'other' challenges might be forthcoming, the fact that the project is up and running is a testament to someone's, some team's ingenuity and dedication towards seeing this day.  The bringing together of technical, economic, and social aspects, and finding a balance the works.

From Reuters:
Britned -- a 600 million euro (493 million pound) joint venture between UK and Dutch grid operators National Grid and TenneT -- is a small part in a larger European super grid ambition, which would link the major power markets across northwest Europe.
Another aspect of Britned would be the capacity auction, which analysts believe could improve liquidity and bring new players to the over-the-counter (OTC) UK wholesale power market.
"By bringing the auction model to the UK market it could lend weight for calls for greater transparency and increased volumes on the wholesale markets," Inenco's Parrett said.
"More volume means greater liquidity which means more participants and should lead to more competitive pricing."
The OTC UK power market is dominated by six big players and has been beset by low levels of trading for a number of years, with energy regulator Ofgem considering an intervention to try and fix this problem.
Energy sector - fragmentation

UK-Netherlands electricity cable starts commercial operations

Author: Ned Molloy
Source: Energy Risk | 31 Mar 2011
Categories: Electricity

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