/>iIn this, the first of a series of two articles, we explore the resurgence of high voltage DC transmission technology and its relevance in a world that is transitioning to renewable power and adopting electric vehicles and heating and reducing its reliance on fossil fuels.
In this article we consider the benefits of the technology and some of the challenges it creates for investors, regulators and policy makers. In the second article we will look at how investments in HVDC transmission projects might be structured, including by examining examples of projects that have been successfully implemented.
Introduction
Anyone who has read a little history or seen the 2017 film The Current War knows that George Westinghouse’s alternating current (AC) won the late nineteenth century battle against Thomas Edison’s purportedly safer direct current (DC) alternative—the evidence is plain to see in our own homes. Ultimately, in 1892 the Edison Electric Light Company merged with its main AC competitor, Thomson-Houston, to form General Electric.[1]
A principal reason for AC’s early success was that transmission of electricity over significant distances is inefficient at low voltages: the energy wasted as heat in a conductor is proportional to the square of the current; and, for any given quantity of power transmission, the current is inversely proportional to voltage. Therefore, the higher the voltage the lower the energy losses become.
High transmission voltages are therefore desirable, with lower voltages at the point of use for safety reasons. A hundred odd years ago there was no efficient solution to convert DC from low to high voltage. AC on the other hand could be easily stepped up in voltage using a simple and cheap transformer, which has no moving parts. The invention of the induction motor also allowed AC to be used to power heavy industrial machinery, although DC still had many advantages over AC, such as being easier to use for railways and to control variable speed, asynchronous motors.
DC’s renaissance
More recently, over the past few decades, DC systems and in particular high voltage DC (HVDC) have enjoyed a renaissance, owing to their offering a number of benefits. HVDC transmission involves purely reactive power with no reactive power component and associated losses, which ultimately limits the length of high voltage AC power lines. HVDC transmission lines are technically the only viable solution for submarine or terrestrial buried electrical cables longer than a few tens of kilometers because of the capacitance of the insulated cables (which have to be charged and discharged each cycle, causing significant energy losses).
DC transmission also allows two asynchronous AC transmission grids (e.g., operating at different frequencies in different territories) to be interconnected. For the same reason, HVDC is typically also used to connect offshore wind farms, with the additional advantage that wind turbine generators can operate asynchronously with the onshore grid and, as such, at an optimum level of efficiency for any given wind condition.
Photovoltaic panels are only capable of directly producing DC output, and an inverter therefore has to be used to generate a three-phase high voltage AC output which is synchronised with the transmission grid. The same is true of storage batteries and other non-traditional power generation sources that do not use spinning generators.
Inverters use high-power, solid-state devices (typically, insulated gate bipolar transistors (IGBTs)) which switch on and off in a modulated configuration, controlled by sophisticated electronics, to produce a sinusoidal output which can be stepped up via a transformer to high voltage AC (HVAC) for transmission. Similar conversion devices can be configured to step-up the lower voltage DC output of a solar panel array or battery energy storage system directly to HVDC suitable for transmission or indeed to convert HVAC to HVDC.
The drive towards increased offshore wind power generation in many countries, including the UK, where generation sources are located far from where energy is required by consumers, provides a good illustration of the advantages and benefits of HVDC solutions. It would be impractical to build new transmission lines linking Scotland with England, such as the Eastern Green Links, without using subsea cables;[2] and, as noted above, HVDC is the only viable way to transmit electricity over long distances via such cables, which will necessarily have to be several hundred kilometers long.[3]
Several planned projects also involve long distance terrestrial buried HVDC cables, as the impact on the landscape is minimal once the work is completed and the land corridor restored—and there may be significant local resistance to new terrestrial overhead cables.
As the proportion of electricity generated by renewables increases, and as battery storage systems become more widespread, the arguments for using HVDC transmission more generally, as opposed to high voltage AC, become more compelling. If we take into account the future expansion of electric vehicle (EV) use and the need for fast battery charging stations, there are additional arguments in favour of HVDC systems. EV batteries require relatively low voltage but high current DC to charge rapidly. As such, a battery charging station array could in principle be supplied locally by DC or AC. There is no inherent technical requirement for AC as opposed to DC (or vice versa) and in principle either could be used with the appropriate conversion equipment; but what HVDC offers is potentially greater efficiencies and economies on a wider scale, which are discussed below.
Why use HVDC systems?
HVDC transmission systems offer a number of advantages over HVAC:
- HVDC requires only two conductors, whereas HVAC needs three to support three phases, reducing costs and potentially requiring narrower land corridors.
- HVDC power transmission losses may be lower than 0.3% per 100 km, which is 30% to 40% lower than losses for HVAC at an equivalent voltage, for a number of reasons:
- AC suffers from a skin effect whereby only the outer part of the cable conducts current, which is avoided in DC transmission—the result is that for a given conductor size and energy losses, HVDC systems can transmit higher current over longer distances;
- HVDC lines operate continuously at peak voltage (which is determined by the design of the transmission line insulators and towers, among other things), whereas HVAC is sinusoidal—and while the crests of the sine wave are naturally at peak voltage, the effective average voltage (and corresponding current) is the root mean square value (RMS), which is only 0.7 times the peak voltage; the net effect is to increase the power transmission capacity of an HVDC system relative to HVAC; and
- DC carries only active power, whereas AC transfers both active and reactive power.
- HVDC transmission lines/interconnectors are asynchronous, enabling connections between unsynchronised power sources, such as two grids operating at different frequencies, phases or voltages.
- As noted above, HVDC is the only practical option for undersea cables longer than around 50 km.
Drawbacks of HVDC
HVDC does have certain drawbacks:
- HVDC systems may be less reliable, have lower availability and be more expensive to maintain than HVAC, owing to their greater complexity;
- additional complexity also increases the relative cost for shorter-distance transmission as compared with HVAC;
- converter stations are required at each end of HVDC cables to convert from AC to DC and back again (assuming the source and load are AC)—these are expensive and may introduce relatively higher energy losses for shorter distance lines—but as noted above in the case of DC generation sources (such as solar) and DC loads (such as battery chargers), conversion equipment is also required if an HVAC transmission line is used; and
- HVDC switching and breaker systems are more difficult to design and implement because, unlike AC which has zero current twice every cycle (at which point the circuit can be broken safely), HVDC current is continuous and a simple mechanical breaker cannot therefore be used because it would suffer potentially destructive arcing.
Weighing up the pros and cons, it is generally considered that for overhead transmission lines, HVDC transmission becomes cost effective above a minimum critical distance.
Bringing increased future reliance on renewable power generation, electrical vehicles, battery storage and heat pumps into the equation suggests that there are potential benefits in developing wide area HVDC super grids. These might help to mitigate the intermittency of renewable power sources by averaging and smoothing the outputs of geographically dispersed generation facilities.
It also seems likely that substantial investment in upgrading of transmission systems will be required to support any move towards the widespread use of electric vehicles and the adoption of heat pumps for heating in place of natural gas. Existing transmission systems are entirely inadequate and would create severe bottlenecks. The United Kingdom is already seeing the impact of planning for such changes in its “Great Grid Upgrade” through the procurement of the Eastern Green Links (EGL 1 to EGL 4) between Scotland and England, in the case of EGL3 and EGL4 reaching as far as East Anglia.
Implications for investors, regulators and policymakers[4]
Given the potential attractiveness of HVDC solutions, those responsible for investing in grid infrastructure (such as integrated utilities or unbundled network companies) may need to keep their investment programmes under review. Changes in the nature of the grid and the technologies connected to it may mean that HVDC becomes a contender to traditional AC network investments where the conditions are right, such as where power generated by non-synchronous generators (e.g., wind and solar farms) is being moved over long distances and in particular where it is impractical to build new conventional terrestrial transmission lines.
As noted above, this is already happening today in the UK. While many early links to offshore windfarms relied on AC technology, ENTSO-E’s Offshore Network Development Plan (ONDP) has adopted HVDC as a standard transmission technology, with 525 kV VSC converter technology. Following the precedent of the Eastern Green Link projects, it looks likely that 525 kV HVDC may become the standard for the significant GB offshore network investment planned in the North Sea, as well as interconnectors (for example, Neuconnect).
The EGL projects were signed off after formal reviews of their costs and benefits, conducted separately from the normal regulatory regime for the GB transmission network. This underlines that considering the full range of technologies and making optimum choices with the right long-term strategic benefits may require extraordinary action by policymakers and regulators.
Traditionally, network regulation typically aims to incentivise grid companies to do what is cheapest, but regulatory incentives are typically less effective than those from competitive markets. For example, if new technologies carry more of an operational risk than the traditional options, and grid operators believe that regulators may penalise them for investments which fail to perform, they may act in an unduly risk-averse manner and just carry on doing what they have always done, particularly if new technologies are not as well understood as traditional ones; and, at least in the short term, choice of technologies may be affected by limitations in the supply chain for HVDC equipment, and in particular cables, while traditional HVAC infrastructure is more readily available.
Everyone would agree that regulators should protect customers’ interests. However, they also need to realise that, in a world of technical change, this sometimes means innovation and taking greater risks. While penalising failure (e.g., lower asset availability) or failing to allow companies to pay to reserve supply chain capacity may feel like the right strategy in the short term, this could act to stall innovation, which in turn might be against customers’ long-term interests. Striking the right balance is therefore critical.
The NeuConnect project (which we discuss in part 2 of this article) provides a good illustration of how regulators such as Ofgem have taken a flexible approach in adapting regulatory regimes to unlock private investment in HVDC infrastructure through revenue support arrangements.
Endnotes
[1] Today, General Electric’s successor GE Vernova is once again championing DC in the form of high voltage conversion systems to support HVDC cables that can transfer electricity point-to-point or from offshore wind farms to shore—more about this below.
[2] The environmental impact of using terrestrial overhead transmission lines for the entire length of one of the Eastern Green Links would likely be prohibitive. Terrestrial underground cables are estimated by Scottish Power to cost between five and ten times as much as overhead transmission lines; however, submarine cables are also significantly more expensive than overhead transmission lines.
[3] For example, Eastern Green Link 1 (EGL1) is almost 200 km long (including 176 km of subsea cable) and when completed will link East Lothian with County Durham, allowing the transfer of 2GW of electrical power. The UK is planning a series of such links, including four Eastern Green Links, and the Western HVDC Link between Scotland and North Wales (with a capacity of 2.25 GW) was completed in 2019.
[4] Comments on regulatory aspects were kindly provided by Dan Roberts of Frontier Economics.
