MVDC technology study: market opportunities and economic impact

Medium voltage direct current (MVDC) technology has been identified as a potential solution to a variety of challenges associated with integrating renewable generation into the electricity network. This report explores the feasibility of using MVDC technology to integrate renewables and to reinforce the UK electricity network. The report investigates the market demand for MVDC technology and assesses the case for the establishing a MVDC test and demonstration facility in Scotland to support the commercialisation and adoption of the technology.

The study consisted of three parts: 1. An engagement exercise with key stakeholders whose businesses would be directly affected by the deployment of MVDC technology. 2. A detailed cost benefit analysis for two case study applications: offshore renewable energy and network reinforcement. This analysis formed the basis of a scoping exercise for a potential test and demonstration facility that could meet the needs of the industry in terms of improving MVDC technology maturity and market readiness. 3. A socio-economic impact assessment for three configurations of test and demonstration facility to determine the impacts and benefits of such a facility for Scotland and the industry.

There is a generally positive opinion of MVDC and its potential for use in a number of power system applications. The offshore wind case study demonstrated that direct MVDC connections would be a cost effective way to connect offshore wind farms over a range of distances. However, costs relating to electrical losses and unavailability are very significant therefore such connections would only become attractive if the cost of electricity from offshore wind were to fall to around £100 – £120/MWh. The onshore distribution network case study showed that a DC link can be an efficient way to reinforce a network in which there are several issues which need to be addressed. Over the asset’s lifetime, the reduction in losses proves to be a significant benefit of the MVDC link, compared to the conventional reinforcement scheme. While the technology has applicability for both offshore renewables and onshore reinforcement, the study did not find evidence of an industry appetite to adopt MVDC over “business as usual” technology. The capital cost of developing a MVDC test and demonstration facility was estimated at between £13 million and £25 million dependant on the level of functionality. Net GVA from the construction of the test and demonstration facility option was calculated at between £0.5 million and £0.8 million, based on total installed costs. GVA from the operation of the test and demonstration facility was estimated at between £1 million and £1.2 million and direct jobs were estimated at between 14 and 17. Key non-quantifiable benefits of the MVDC test & demonstration facility included the attraction of a DC research cluster in Scotland, the facilitation of further renewable energy development and potential reductions in consumer energy bills.

Based on the results of this report, TNEI recommend that Scottish Enterprise should consider the development of a multi-terminal test facility incorporating two different voltage levels and DC boost technology. It was recommended that a suitable location for the proposed MVDC test and demonstration facility would be around Glasgow or around Edinburgh, as the facility is likely to benefit from strong relationships with academia and from clustering with other stakeholders. SE will maintain a watching brief on the MVDC market as there is not presently a clear industry demand for a dedicated MVDC test and demonstration centre.