Powering Europe’s Energy Transition: Financial Viability of a Full-Scale Meshed HVDC Grid and Hybrid Offshore Assets in the North Sea

An HVDC grid in the North Sea is crucial for Europe’s energy transition. High investment costs, lack of operational experience, and regulatory hurdles are the major roadblocks to its realization. This paper demonstrates the financial viability of a full-scale meshed HVDC grid in the North Sea, considering multiple market scenarios and incorporating Offshore Wind Power Plants (OWPP). A method based on the day-ahead market price is adopted to calculate the benefits of inter-zonal links. A stochastic optimization approach is used to determine the lowest-cost grid topology under consideration of different scenarios. Further, the benefits of a strategy considering both OWPP development and HVDC grid expansion in unison, forming so-called Hybrid Offshore Assets (HOAs), is investigated. A plausible test case in the North Sea is investigated for the financial viability of a demonstration grid in the region. It is optimized for different interconnectors and terminal converter capacities. It is found that the demo grid does not incur loss even for 5% interest rate on the capital while making a high profit for a lower interest rate. It is further demonstrated that a planning approach considering HOAs may significantly reduce the cost of developing offshore wind resources in the North Sea while increasing the interconnection of North Sea energy markets.