New requirements for the connection of distribution- and demand facilities under way

On 7 September 2018, Energinet, an independent public enterprise owned by the Danish Ministry of Climate and Energy, submitted a proposal for requirements for demand connection to the Danish Utility Regulator pursuant to Commission Regulation EU 2016/1388 establishing a Network Code on Demand Connection ("DCC"). The requirements are now to be reviewed, go out for consultation and be approved by the Utility Regulator. They will enter into force on 18 August 2019.

In recent years the European Commission has adopted a number of regulations setting out various network codes and requirements aimed at improving the security of energy supply within the EU (so-called Network Codes). The regulations set out both market rules and technical connection and operational rules, and are directly applicable in Denmark.

The implementation of the various Network Codes takes place in a collaboration between Energinet and stakeholders in the electricity sector, and on that background Energinet sets out a number of requirements and directions that may have significant importance for the stakeholders concerned. Most recently, Energinet submitted its proposal for requirements under the DCC Regulation; see the requirements here (in Danish)

The DCC Regulation is applicable to both distribution and demand facilities directly connected to the transmission network. However, in order to be subject to the DCC Regulation it is an additional requirement that the facilities are characterised as "new", and thus not as "existing". If a distribution or demand facility was connected to the transmission network before September 2016, such a facility will as a starting point be existing, and thus not subject to the DCC Regulation. The same applies if the facility has concluded a final and binding contract for the purchase of at least one of the following types of main demand equipment: motors, transformers, high voltage equipment at the connection point and at the process production plant. Thus, if a facility can be characterised as "existing", there is a possibility that it is exempt from the new DCC requirements.

In the proposed DCC requirements, Energinet contemplates dividing the stakeholders into six categories (distribution facilities in categories 1 and 2, and demand facilities in categories 3-6). The division into categories is, among other things, made in view of the possibility of setting out clear requirements and reduce costs, create transparency and reduce the number of requirements set out on a discretionary basis.

Moreover, the DCC provisions include requirements concerning frequency and voltage, short-circuit measures, reactive power control, system and facility protection, simulation models and exchange of information between Energinet and transmission-connection distribution and demand facilities.

As an important innovation, the DCC requirements include directions about automatic low frequency demand disconnection ("LFFD") on the transmission network.

LFDD constitutes the last element of system defence in situations where the frequency on the electricity grid falls to critically low values, i.e. below 48 Hz in Western Denmark (synchronous area for Continental Europe) and 48.7-48.8 Hz in Eastern Denmark (Nordic synchronous area) respectively.

Automatic LFDD was previously only a possibility at distribution level but has now via the DCC requirements also been extended to apply at transmission level as well. The possibility of LFDD on the transmission network is particularly important to transmission-connected demand facilities, including e.g. large data centres, which are currently being established around Denmark.

The demand for automatic LFDD is authorised by the DCC Regulation but the specific values relating to functionality are determined on the basis of Regulation EU 2018/2196 establishing a network code on electricity emergency and restoration (also "NC ER").

Plesner is advising stakeholders in the electricity sector about the new Network Codes and their consequences on a regular basis. As part of this Plesner has, among other things, attended various working group meetings with Energinet.

For further information, see also the Plesner Insight on new requirements for the connection of demand facilities.

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