Network Development Plan 2023

Initial situation

Austria's security and reliability of supply - with an electricity grid availability of over 99.99% - is among the best in the world. Secure and efficient electricity supply is the basis of our modern society - now and in the future.

For this, in addition to the availability of sufficient generation capacity at all times to cover the demand for electricity, corresponding grid capacities must also be available for the transmission and distribution of electricity. The availability of primary energy sources is also of enormous importance for a secure and affordable energy supply. The gas price increases triggered by the Ukraine war and reduced import availability have led to serious cost in- creases in the electricity sector. An important building block to reduce energy import dependency is the expansion of renewable energy sources (RE) and the substitution of fossil energy sources. This is also reflected in the efforts of energy-intensive industrial companies with plans to switch to electricity-based processes.

The last few years have been marked by global crises that have had both a direct and indirect impact on the transmission grid expansion and the grid development plan projects. On the one hand, the Covid 19 pandemic and the ongoing Russian war of aggression in Ukraine led to massive price distortions on the gas and electricity markets and supply difficulties or, in some cases, material shortages. Despite intensive efforts by APG, these are partly reflected in delayed project schedules and increased costs of the expansion projects. On the other hand, the Corona crisis has once again shown how important digitalisation and networking are for today's society, thus confirming the importance of a secure and reliable power supply.

For the gas economy, the demand for methane will decrease, and the requirements of a hydrogen economy will grow across all sectors. Besides that, raising the biogas potentials is also available in Austria. As a result, electrolysis, green hydrogen and further coupling of the gas grid with the electricity grid will gain in importance (e.g. power-to-gas, contributions to the storage issue, etc.).

An efficient electricity grid infrastructure forms the basis for the high security and reliability of the electrical energy supply. It is the backbone of Austria as a business location and the essential prerequisite for the further expansion of renewable energy, reducing energy import dependency and achieving the Austrian and European energy and climate protection goals. The targeted climate neutrality of the Austrian energy supply is only possible with massive efforts as well as a high level of commitment, cooperation, and further networking across the sectors of the energy system. For the success of all these efforts, the expansion and creation of an efficient grid infrastructure will ultimately be decisive, both in the transmission and distribution grids.

However, the existing grid infrastructure is not sufficiently designed for the high transport and distribution requirements that are already occurring today due to the current RE expansions and peak load demand. In the course of the energy transition to a climate- neutral Austria, the transport demand for electricity will continue to increase and additional structural bottlenecks will arise, which can only be countered in the long term by expanding the transmission grid. For the congestion management in Austria, the short-term availability of thermal power plants as well as flexible power plant capacity and loads is necessary - these flexible services must be contractually secured by APG as a "grid re- serve" in coordination with E-Control. The availability of the grid reserve is currently indispensable for maintaining a secure grid and system operation and security of supply in the Austrian transmission grid.

In the past years (2017 to 2022), the use of redispatch or grid reserve power was necessary on up to 300 days per year (!). The associated costs have risen massively in recent years (between 92 and 149 MEUR per year) and are to be borne by the customers as part of the APG grid costs via the grid tariffs.

Structural bottlenecks in the APG transmission grid can only be solved in the long term through grid expansion and with the NEP projects. The investment projects of APG envisaged in the grid development plan are therefore a prerequisite for a secure electricity supply in Austria. Furthermore, the NEP projects are an essential building block in the transformation of the energy system and for Austria's climate protection and energy targets. As a transmission system operator, APG has the operational responsibility for secure grid and system operation in accordance with the legal mandate in the ElWOG and supports the ambitious political and social goals of the energy transition with all its might.

Energy and national framework

To achieve the climate protection goals, it is necessary to massively push the expansion of renewable energy sources (RES). This is stipulated in the Austrian government program, which also includes targets for a climate-neutral Austria and is currently regulated in the Renewable Energy Sources Act. This should result in a massive expansion of an additional 18 GW of RE generation capacity in Austria by 2030 (cf. the current installed power plant capacity in Austria: approx. 28 GW). These capacities and the RE generators must be integrated into the electricity grids - i.e. into the transmission grid and the distribution grids - as well as into the electricity system. These more volatile forms of generation and outputs in the high GW range increase the volatilities in grid operation and especially the transport demand. There is an increasing need for temporal and spatial balancing of regional RE surplus power and the storage of "green power" both nationally and in Europe.

To identify future transport needs, the Federal Ministry for Climate Protection, Environment, Energy, Mobility, Innovation and Technology (BMK) is preparing an integrated Austrian Network Infrastructure Plan (ÖNIP) for the realisation of the target dimensions of the Energy Union (according to § 94 of the Austrian Renewable Energy Expansion Act), which is to be subjected to a strategic environmental assessment. The ÖNIP is an overarching strategic instrument that shows the fundamental requirements and objectives of the grid infrastructure in the electricity and gas sectors for a holistic energy transition. The ÖNIP was published as a draft for comment on 7th July 2023 and was in consultation until 15^th September 2023. The environmental report accompanying the ÖNIP was published by the BMK on the 28^th of August 2023 and will be finished and released together with the ÖNIP.

The present APG Network Development Plan 2023 is subject to the contents of the final version of the integrated Austrian Network Infrastructure Plan (ÖNIP), as it will have to be published by the Federal Minister for Climate Protection (BMK) pursuant to section 95 (5) EAG.

Once the final ÖNIP is available, APG will therefore evaluate whether the grid development plan will have to be adapted (amended or extended) accordingly based on the measures envisaged for the transmission grid in the ÖNIP (section 94(3) last sentence EAG).

European influencing factors

Further influences result from European regulatory and legal requirements, among other things through the European Commission's Green Deal, as well as changes in the European electricity market. A major initiative to implement the Green Deal is the "Fit for 55" package, a European package of measures to ensure the achievement of European climate targets and to reduce CO₂ emissions by 55% - compared to 1990 emissions - by 2030.

In May 2022, "Repower EU" was also presented by the European Commission (EC). The Repower EU plan is based on a strategy to make the EU independent of fossil fuels (oil, coal, and gas), especially from Russia, by 2030. The focal points for action are diversification and securing an affordable energy supply, energy conservation and investments in renewable energies. Repower EU again led to an increase in energy efficiency targets and expansion targets for renewable energy sources, including faster approval procedures (compared to the "Fit for 55" package). In addition, a reform of the EU internal energy market was initiated within this framework.

APG network expansion planning and Europe-wide coordination

As a transmission system operator and control area manager, APG is obliged to operate the transmission system safely, reliably, efficiently and with due regard to environmental protection, as well as to expand and maintain it (§ 40 par. 1 line 1 ElWOG 2010). Further- more, in the TYNDP of ENTSO-E - based on coordinated energy industry scenarios - a coordinated grid expansion planning of the European transmission system operators is carried out. The underlying TYNDP scenarios and the projects derived from them are far-reaching and robust at both European and Austrian level, so that no significant effects on APG's long-term planning result from short- to medium-term economic changes (e.g. as a result of Covid-19 or economic cycles).

The present Network Development Plan (NEP 2023) is a legal obligation (pursuant to §37 ElWOG 2010) and is based on the long-term plans of the TYNDP 2022 and represents the further development of the NEP 2021. APG hereby informs all relevant market participants about the planned grid expansion and grid development in the ten-year time horizon. All relevant stakeholders had the opportunity to take part in the public consultation between 1^st and 25^th of August 2023. The six comments received were reviewed by APG and considered accordingly in the Network Development Plan 2023, whereby this did not result in any significant changes to the content. The NDP 2023 was submitted to E-Control Austria (ECA) for approval at the beginning of October 2023 and approved by decision in on the 18th of December 2023.

Expansion projects in the transmission grid of the APG of the NDP 2023:

New lines in the transmission grid of at least approx. 430 km route-km
Conversion of approx. 110 km of existing lines to higher voltage levels
General renewal of transmission lines with approx. 340 km
25 new substations ("green field" substations) by 2033 to strengthen the connections of the distribution grids as well as expansions of existing substations with additional transformers.
Approx. 70 additional transformers with a total capacity of approx. 27,000 MVA for the coupling of the grid levels.Extensive measures as well as age-related general renewals and upgrades of switch- gear as operating investments
Further grid measures, storage and flexibility options, sector coupling and innovative technological solutions are necessary

If the grid expansion in Austria or the NDP projects are not implemented on time - and thus the necessary increases in transport capacities and the performance of the electricity grids are only delayed or not achieved - negative consequences will arise in the long term:

Further increase and use of cost-intensive congestion management as well as grid re- serve incl. resulting costs for grid customers.
Feed-in reductions of RE and power plants in the event of insufficient grid capacities and bottlenecks as well as power restrictions at transfer points to the distribution grids (or refusal of new grid connections in the future).
Adverse effects on supraregional electricity transports
Threats to grid and system security as well as security of supply
Far-reaching negative effects for Austria as a business location

Prerequisites for grid expansion and conclusion

For the transformation of the energy system to succeed in terms of security of supply and affordability, the preconditions for the implementation of grid infrastructure projects in particular must be accelerated and simplified. The energy transition can only succeed if the expansion and conversion of electricity infrastructure is given the same importance as, among other things, the expansion of RE feed-in:

Coordinated overall system planning
Faster approval procedures for grid projects
Securing and keeping routes free
Secured funding through a modern regulatory system
Equipping the authorities with sufficient resources

Only if these conditions can be fundamentally improved can the energy generated from renewables be integrated into the system and made usable. If this does not succeed, Austria will become even more dependent on imports and gas-fired power plants will continue to be needed due to the threat of grid overloads in Austria (grid reserve). If the electricity grids are not sufficiently efficient, renewable energy feed-in will have to be increasingly limited or throttled during windy and sunny hours in the future. This leads to an overall "loss" of RE generation, increased economic costs and a loss of CO₂ savings and security of supply.

In addition to the digital networking of the actors in the electricity system, the immediate and rapid expansion of the grid remains the most effective measure to ensure that the energy transition succeeds while maintaining system and supply security. Only with rapid capacity increases in the electricity grid, but also in all other parts of the energy system, can the energy transition succeed. Overall, economic losses must be minimized - for this, there is no alternative to grid expansion and the digital integration of the players in the energy system. The success of the energy transition will be decided by the expansion of the electricity grids - the transmission and distribution grids (!).

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