Optimal Utilisation of Grid Capacity for Connection of New Renewable Power Plants in Norway

The Variable Renewable Energy Sources (VRES) play a crucial role in decarbonising global energy production. However, the proliferation of VRES poses new challenges to the electricity grid operation. In this paper, the impact of the grid regulation (NEM) introduced in 2019 in Norway has been quantified. In NEM, the legislative conditions of newly connected VRES are regulated. This reference legislation is used as an anchor point for the presented work. We conduct a techno-economic analysis of the grid regulation in action, considering bilateral power agreements between the participating power producers, the Norwegian power market and system conditions. Here, the optimal utilisation of grid capacity in the presence of high wind energy penetration in a hydropower dominated system is investigated. A hybrid energy system, comprising hydro and wind power, is analysed with an energy loss minimisation model and a simulation model to explore the influence of a bilateral power agreement and NEM respectively. The results demonstrate that NEM, together with a bilateral power agreement, can facilitate an increase in grid utilisation and provide a higher social surplus to the system. Furthermore, we show that with coordinated operation there is potential to achieve a higher renewable penetration without expensive grid expansions.