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2011. UK Power Networks. All rights reserved
Consulting on our Business Plan
‘Critical Friends’
Stakeholder Panel
Session 2
15 November 2012
2
Safety and Housekeeping
•
No planned fire alarms
•
Emergency exits
•
Fire assembly points
•
Toilets
•
Mobile phones
•
Disclosure -
we intend to record our findings and publish a report and our actions -
Data Protection Consent
3
AGENDAPanel Session 1 Agenda - CompletedIntroduction: Vision and valuesLow carbon economy –
our path to innovation
Overview of the RIIO regulatory frameworkNetwork reliability and quality of supply
Panel Session 2 AgendaNetwork investment summaryLow carbon challenge: Responding through innovationSocial obligations and the environment
Panel Session 3 AgendaPublic and staff safetyCustomer serviceConnections
4
TODAY’S AGENDA
10.00 – 10.05 INTRODUCTIONS
10.05 – 10.30 LOW CARBON CHALLENGES & OUR INNOVATIVE SOLUTIONS
10.30 – 11.00 OPEN DISCUSSION – INNOVATIVE SOLUTIONS
11.00 – 11.20 FOCUS TOPIC: UNDERSTANDING LONDON’S INVESTMENT PLAN
11.20 – 11.50 OPEN DISCUSSION – NETWORK INVESTMENT PLANNING
11.50 – 12.10 COFFEE BREAK
12.10 – 12.30 FOCUS TOPIC: OUR SOCIAL OBLIGATIONS & ENVIRONMENT
12.30 – 12.50 OPEN DISCUSSION – SOCIAL RESPONSIBILITIES
12.50 – 13.00 OPEN FORUM
13.00 LUNCH
What we ask of you
•
We will introduce the topics which we would like to discuss with
you today•
We will ask you what you need, value and want
•
We would like you to comment on the issues that we have identified •
We would like you to raise any additional issues that are important to you
5
•
Your views will inform and shape our business plan. •
Your views will help us strike the most appropriate balance of short and long term impacts on customers and investors.
How the Stakeholder Panel Engagement Works?
BusinessInvestment
Planning
Panel Session 1
Panel Session 2
PanelSession 3
Issues & operational
plans to test
PreviousEngagement
To determine outputs for our Business Plan
-On line-Expert Panels-Consumer Focus Groups-Work shops & seminars
UKPN Feedback Session 4
Report 1
Report 2
Report 3
Business PlanImpact ?
Next PanelSession
Feed into businessplan project
team
Acted upon as Business As Usual
(BAU)
Yes
No
Update /Feedback on Actions
Stakeholder Issues for
New Agenda
7
Summary of Your Engagement So Far…
•
Interim Report Issued for LPN –
Consolidated to follow
•
DSO Concept –
Low carbon projections
•
Low Carbon London and investment plan
•
Vulnerable Customers / Fuel Poverty
•
Metal Theft
•
Distributed Generation and Connections
•
General Customer Service issues
•
Past engagement information
LOW CARBON CHALLENGE: RESPONDING THROUGH INNOVATION
Ben Wilson,Director of Strategy & Regulation and Chief Financial Officer
8
The goals of the low carbon economyContext: UK Energy Policy and ‘The Carbon Plan’
Reduction of UK’s green house gas emissions
-
34% (2020), 50% (2025), 80% (2050) (against 1990 levels)-
Decarbonisation of electricity production-
Electrification of heat and transport
Security of UK’s energy supply
-
Increasing electricity generation from low carbon and renewable sources-
Reducing reliance on imported fossil fuels-
Ensuring security and stability of energy resources
Strong UK Low Carbon Economy
-
Becoming a low carbon technology world leader-
Generating ‘green’
jobs-
Exportable expertise
Affordability of UK Low Carbon Transition
-
Depends critically on developing an efficient end-to-end electricity supply system-
Optimising investment in new transmission and distribution network capacity-
Minimising need for additional generation capacity (esp. low efficiency peaking plant) 9
10
Challenges
Variable and decentralised low carbon electricity generationElectrification of heat and transport
Variability of wind and solar generation output
Increasing electricity usage to power electric vehicles and heat
pumps
Increased difficulty in real-
time system balancing of
generation and demand
Increased electricity spot price volatility
and commercial imbalance risk
Potential for low carbon technologies to
increase peak demand disproportionately to
(higher) levels of electricity consumption
Will consumers respond to price signals (through smart meters) or permit some external control over
their low carbon appliances in order to control peak demand
and/or balance demand with low carbon generation availability?
We can no longer assume abundance of generation to meet demand spikes in real timeNew paradigm of demand following generation (rather than vice versa)
The challenge for the electricity industry
Challenges
The challenge for electricity networks
11
Evolving role of Distribution Network Operators (DNOs)Facilitating the move to a low carbon energy sector in a cost-effective way
Distribution networks will require significant adaptation to
accommodate local renewable generation, heat pumps and
electric vehicles
DNOs might need to evolve from passive to active network
managers –
embracing new technologies and engaging with consumers while playing a wider
system balancing role
Smart grid technologies can enhance network
performance whilst increasing
capacity headroom
Technological and commercial
innovation is the key to ensuring future
cost-effective network capability
and flexibility
A well developed and focused innovation
strategy is a precursor to being able to
develop and deploy the right solutions at
the right time
DNOs will need to adapt and evolve their current practices in order to be able to respond to a
range of credible low carbon scenarios in ED1 whilst preparing for even greater challenges in ED2
Responding through innovation
12
0
200
400
600
800
1,000
1,200
Scotland
Wales
North East
North W
est
Yorkshire and
Hum
ber
East M
idland
s
West M
idland
s
East
Lond
on
South East
South West
Total h
eat pu
mps in
ope
ration
203
0 ('0
00s)
Low
Medium
High
‐
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00
1,600.00
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
Num
ber o
f heat p
umps con
nected
Heat pumps per 100 feeders: South East / Rural
New build housingestate (M)
Terraced Street (H)
Rural village(overhead)(L)
Rural village(underground) (L)
Rural farmstead /small holdings (VL)
The challenge for electricity networks example –
heat pumps
•
Strong predisposition towards heat electrification across UK Power Network’s licence areas
•
Particularly in the EPN and SPN rural areas
•
Under both DECC ‘high’
and ‘medium’
4th
Carbon Budget scenarios
UK Power Network’s licence areas
•
Potential challenges are peak demand and voltage management
•
Especially on ‘light’
rural networks
Source: Element Energy
Heat Pumps installed in 2030 by region
13
The challenge for electricity networks forecast LCT penetration levels (DECC medium scenario)
14
Totals2011: 5417 MW2015: 5605 MW2023: 6151 MW
SOME EXAMPLES OF RELEVANT UK POWER NETWORKS INNOVATION
15
Dave Openshaw,Head of Future Networks
Low Carbon London (LCNF Tier 2 project) Commercial innovation to facilitate low carbon technologies
5,000 smart metersmeasuring the impact
of low carbon technologiesand time-of-use tariffs
Contractswith commercial
consumers and generatorsto reduce need fornetwork investment
Trial new tariffs to see how effectively they can impact consumers’
energy demand behaviour
Wind Following Tariffs
Distributed Generation
Electric Vehicles and Heat Pumps Smart Meters Demand Side
Response
Supporting The Carbon Plan by improving network utilisation and enabling the economic accommodation of low carbon technologies
Supporting The Carbon Plan by improving network utilisation and enabling the economic accommodation of low carbon technologies
Low Carbon LondonEngaging with consumers to explore
the potential for demand side managementand network support services to control the
peak demand impact of low carbontechnologies and reduce the need
for network investment
Ascertain scope for commercial demand response contracts and distributed generation to provide network support
Use smart metering to determine impact of new low carbon technologies (electric vehicles, micro-generation and heat pumps)
16
Category Current Anticipated
Smart Meters (EDF Energy and British Gas) 6,280 up to 7,500
Responsive Demand Contracts 13.8MW >25MW
Participating Electric Vehicles Residential 30potential for
Participating Electric Vehicles Commercial 70a further 100
Dynamic TOU Tariffs Trial pending up to 1,521
Active Network / Generation Management 17 sites enrolled
8 further sites under
discussion
Low Carbon London Current and Target Volumes
17
Flexible Plug & Play (LCNF Tier 2 project) Integrating commercial scale renewable generation
Leveraging typicalcapacity factors
for renewable generation to optimise network
investment
Applying smart technologyto release additional
network capacity throughactive management
Internet protocol (IEC 61850) telecommunications to enable real-time monitoring and control of generation and network
State-of-art ICT(IEC 61850)
Dynamic Line Ratings
Active Network Management
Active Constraint Management
Quadrature Booster
Supporting The Carbon Plan by radically improving the economic viability of commercial scale renewable and low carbon generation
Supporting The Carbon Plan by radically improving the economic viability of commercial scale renewable and low carbon generation
Flexible Plug & PlayMinimising connection costs
and time to connect for commercialscale renewable / low carbon generationby using smart technologies and export
constraint contracts to maximisenetwork capacity and utilisation
Engagement with developers connecting to a generator-dominated network to agree innovative connection contracts
Increase network capacity and relieve constraints through smart technologies and active network management
18
DeveloperInstalled Capacity
(Connection Voltage)
BAU Connection
Charge
FPP Budget Estimate
Potential Saving (%)
A 5MW (33kV) £1.2m £800k 33%
B 0.5MW (11kV) £1.9m £175k 91%
C 10MW (33kV) £4.8m £500k 90%
D 7.5MW (33kV) £3.5m £700k 80%
E 2.5MW (11kV) £1.5m £170k 89%
F 1MW (11kV) £1.4m £307k 78%
Flexible Plug & Play Indicative connection charge savings
19
Smarter Network Storage (LCNF Tier 2 bid) Leveraging whole-system benefits of electricity storage
Alternative topotentially disruptive networkinvestment (new 33kV circuit
and transformer) at amajor substation
Providingsystem balancing
services to help manage the Impact of variable renewable
generation
6MW / 10MWh Li Ion battery with power electronics based AC/DC/AC
conversion providing ‘instantaneous’
power
Power Factor Control
Lithium Ion Technology
Power Electronics
Voltage Source Converter
Ancillary Services
Supporting The Carbon Plan by exploiting both the local network and wider system benefits of grid-scale electrical energy storage
Supporting The Carbon Plan by exploiting both the local network and wider system benefits of grid-scale electrical energy storage
Smarter Network StorageLeveraging synergies for energy
storage to provide upstream balancingservices (Frequency Response and STOR)as well as local network support to create
revenue streams and hence increasevalue of investment
Exploiting ‘upstream’
opportunities to extract full value from the investment
Innovative solution to address increasing load growth at a major
substation (avoiding need for major network reinforcement)
20
Category Savings
Deferred investment in traditionalnetwork reinforcement £8.6m
Potential annual income from ancillarysystem balancing support (reserve) services £80k+
Potential annual income from ancillarysystem frequency response support services £500k+
Estimated annual emissions savings fromintegrated shared use of 6MW storage 1.7kt CO2
Estimated annual emissions savings fromwider roll out of storage (2,000MW) by 2040 588kt CO
22
Estimated net benefits to customers fromwider roll out of SNS methodology by 2040 £0.7b
Smarter Network Storage Expected Benefits
21
IMPLICATIONS FOR UK POWER NETWORKS STRATEGIC DIRECTION
22
Dave Openshaw,Head of Future Networks
DG Micro DG Electric Vehicles
EE/Green Deal
Heat pumps
Smart Meters
Stakeholders expectations (including Ofgem)
Performance of 11kV and
LV networks
Assetcondition
Release capacityat 11/33/132kV
Development ofcommercial
solutions
- LV automation/visibility (ED1)-
Enhanced Voltage Control (ED1/2)- DSR, LV (ED2)- Smart Metering (ED1) -...
-
Demand Side Response, HV & EHV (ED1)- Storage, HV & EHV (ED1)- Enhanced Voltage Control (ED1)- Fault Current Limiters, HV & EHV (ED1/2)- RTTR, HV & EHV OH lines (ED1)- RTTR, Tx, UG cables & OH lines (ED2)-
Generator Providing Network Support (ED1)- ...
- Demand Side Response (ED1)-
Active Network Management (ED1)- Smart Metering (ED1) ...
- RTTR (ED1/2)-
LV monitoring (ED1/2)-
Smart Metering (ED1)- ...
-LCL (UKPN)-
Smart Urban LV Network (UKPN)- Voltage demonstration (WPD)-
LV net. solutions visibility (ENW)- LV Monitoring (SSE)- LV templates (WPD) -...
- LCL (UKPN)- Low Carbon Hub (WPD)- NINES (SEE) - Customer Led Network Revolution (NPG)- Capacity to Customers (ENW)- ...
- LCL (UKPN)- Low Carbon Hub (WPD)- NINES (SEE) - CLNR (NPG)- Capacity to Customers (ENW)- ...
- LCL (UKPN)- CNLR (NPG)- C2C (ENW)- ...
GB DNOs’ role: “Facilitate the move to a low carbon energy sector in a cost- effective way”
Integrated systems approach / Sm
art Grids
23
- Demand Side Response, HV & EHV
-
Storage, HV & EHV
-
LV automation/visibility- Enhanced Voltage Control -
Fault Current Limiters, HV & EHV
-
Active Network Management-
Real Time Thermal Ratings, HV & EHV OH lines
-
Generator Providing Network Support
-
Smart Metering
- Demand Side Response, LV
-
D-FACTS- RTTR, Tx, UG cables, OH lines
-
DC networks- Temporary/Permanent meshing
-
Switched Capacitors
-
PV impact on suburban networks (WPD)
-
Capacity to Customers (ENW)- LV modelling (SSE)
-
NINES (SP)- LV network solutions Visibility (ENW)
-
CLNR (NPG)
- Blue Sky solution 1- Blue Sky solution 2- Blue Sky solution 3
BaU
ED1 Innovation Tray
ED2 Innovation Tray
Blue Sky Innovation Tray
Other DNO’s Innovation Tray
GB DNOs’ role: “Facilitate the move to a low carbon energy sector in a cost- effective way”
Innovation Trays
Six months review
Level of uptake of Low C
arbon Technologies
Integrated systems approach / Sm
art Netw
orks
SNP
DG Micro DG Electric Vehicles
EE/Green Deal
Heat pumps
Smart Meters
Stakeholders expectations (including Ofgem)
Cost benefit analysis
24
Strategic direction
25
Distribution Network Operator
Non-flexible demand
Non-flexibleDG
Distribution System Operator
EVs
Heat
pumps
Cooling
Flexible Demand
Present (fit and forget) - Passive
Possible Future (fit and flex) - Active
Non-regulated
Ancillary Services
Enabling Infrastructure
Com
mercial
Aggregation
Technical Aggregation
Sm
art appliances
Storage
Dispatchable Resources
Netw
ork Storage
DG
Contracts
Dem
and R
esponse
It is evident from the above that maintaining a traditional passive approach to network
management would result in missed opportunities for exploiting the flexibility of low carbon demand and generation, and result in higher levels of network capacity investment
By using smart technologies to more actively manage the network, whilst engaging with consumers and generators to exploit the
flexibility of electric vehicles, heat pumps and low carbon generation, the need for
investment in traditional network reinforcement could be significantly reduced
Moreover, by exploiting the synergies of flexible demand, generation and energy storage to deliver both local network and
‘upstream’
benefits, the opportunity exists to provide system support services such as
STOR and Frequency Response and hence help control whole-system costs
Through becoming a ‘system’
operator, UK Power Networks could help reduce whole system costs Through becoming a ‘system’
operator, UK Power Networks could help reduce whole system costs
UK Power Networks in the low carbon economy
•To be recognised as a low carbon leader -
facilitating the decarbonisation of electricity production and playing our full part in enabling the electrification of heat and transport
•To deliver for our eight million customers a secure, affordable and environmentally sustainable electricity distribution system
•To evolve as a truly smart distribution business -
applying technological and commercial innovation to deliver a fit-for-purpose electricity network to accommodate low carbon transition at an efficient cost
26
•
To help reduce whole-system costs by exploiting synergies surrounding innovative smart technologies, consumer incentives and commercial contracts to provide both local network and wider system support
Open Forum -
Role of Innovation and the DSOIt is clear that if our national targets for reducing green house gas emissions are to be met, electricity distribution networks, and our management of them, will need to change radically:
1)Do you agree that technologically and commercially innovative solutions should be further developed and incorporated into our ED1 business plan?
2)How realistic do you feel are the forecasts for electric vehicles, heat pumps and micro-
generation –
in particular across our geographic footprint?
3)Given that these forecasts are based on Government (4th
carbon budget) scenarios,
do you agree that we should demonstrate in our ED1 Business Plan how our innovation and investment strategy would be flexed to accommodate each of these
scenarios?
4)To what extent (and how quickly) should we displace proven conventional network solutions with ‘smart’
alternatives?
5)Do you feel that we should engage more directly with consumers and generation developers in order to raise awareness of the network impact of low carbon technologies and seek solutions that involve consumer / generation participation?
27
UNDERSTANDING LONDON’S INVESTMENT PLAN
Chris Winch,Infrastructure Planning Manager
28
Facts and Figures For LPN
We have:•
205 Main Substations
•
18,110 Secondary sub stations •
56,000 Link Boxes
•
1,780km 132kV & EHV cables & lines•
12,080km HV cable
•
22,700km LV cable•
470 132kV & EHV transformers
•
14,878 secondary transformers
Network Asset Management Plan (NAMP)
•
This plan includes all of the proposed works for UK Power Networks
•
This is split into– Capital (CAPEX)– Operational (OPEX)
Capital Expenditure
•
Asset Replacement
•
Reinforcement
•
Q.O.S. (Quality of Supply)
•
Resilience
•
Fault Level
•
Other categories, Flooding, Security
Asset Replacement
Health Indices•
measure of asset condition to help understand their probability of failure
•
calculated at the beginning and end of the Regulatory Period (ED1) based on:–
asset age and type
–
duty cycle–
environment
–
defect and condition data•
Headline HI’s are given a 1 –
5 scale which are converted to a
points score dependent on asset type•
HI’s are dynamic and are continually assessed as part of our business as usual processes.
The Health Index range
•
HI1 -
New or as new
•
HI2
-
Good or serviceable condition
•
HI3
-
Deterioration. Requires assessment and monitoring
•
HI4
-
Material deterioration
•
HI5
-
End of serviceable life.
Asset Replacement
Health Indices
DPCR 5 (2010-15) HI points target: Actual vs Forecast
ED1 (2015 –
2023) start and finish HIs
37
Asset Reinforcement
Load Indices•
Required to supply demand growth
•
Different rates of growth in different areas
•
Past demands levels is starting point for forecasts
•
Must comply with Licence Standard (P2/6) detailed in Grid Code which caters for most onerous single (or double) circuit fault
•
Measure is Load Index (LI) which reflects the utilisation of each substation
What is the Load Index (LI)?
LI Score % of Firm Capacity Energy at Risk (MVAh)
LI1 ≤70% ‐
LI2 >70% & ≤85% ‐
LI3 >85% & ≤100% ‐
LI4 >100% <500 MVAh
LI5 >100% >500 MVAh
LPN LI Status
2012 ‐
All Voltage Level Totals
DPCR5 Start
2010/11 2011/12 2014/15 2014/15 2023/24 * 2023/24 *
Actual Actual ForecastDPCR5
Target
With
Investment
Without
Investment
27 LI1 Totals 32 41 26 37
30 LI2 Totals 30 29 35 37
36 LI3 Totals 35 29 33 30
20 LI4 Totals 16 21 19 1221 60
8 LI5 Totals 8 2 8 9
121 121 122 121 125
* Forecast data from Strategy and Regulation as at October 2012
LPN Load Index 4/5 Showing glide paths and position as at Sept. 2012
LPN –
LRE Demand Profiles
Proposed Schemes for 2015 -
2023
•
Work in progress•
Headline schemes:–
5 new main substations
•
Vauxhall Nine Elms•
White City
•
West End •
City of London
•
Isle of Dogs
–
2 new supergrid exit points•
Islington
•
Brixton
Costs
For LPN, current UCI’s indicate:
Item Average Cost
EHV Transformer scheme £2,483,656
EHV switchboard scheme £155,520
an HV switchboard scheme £111,048
Laying 1km of EHV cable £371,980
Laying 1km of HV cable £223,985
Link box replacement £6,558
Deep Tunnel£8,000 /m, plus consents plus
£1m / shaft
Establishing a New Grid Site (including
procuring land)£23million
1)
Delivery lead times for infrastructure schemes typically exceed Customer
development timescales. What is your experience?
2)
Suitable new sites for substations are increasing difficult to find. What
incentives should UK Power Networks offer stakeholders to help
encourage planning consents?
3)
Given stakeholders concerns around the impact of streetworks, would they
be prepared to pay for deep tunnelling rather than the current method of
‘open cut’?
Open Forum –
Network Investment
CONSULTING ON OUR BUSINESS PLAN – SOCIAL OBLIGATIONS & ENVIRONMENT
Clive Steed,Environment, Sustainability & Public Safety Manager
46
Current UKPN Internal Sustainability Initiatives
•
32 initiatives (and increasing)
•
Evident throughout UK Power Networks in each Directorate
Public Safety
• Preserving Life• Direct (offenders)• Indirect (General Public)
• Reducing Outages• Improving Quality of Supply
• Saving Money•
Proactive in stopping incidents
before they occur
2011. UK Power Networks. All rights reserved
OFGEM BCF 2012 Submission
Business Carbon Footprint
•
Building energy use–
Reduced across all three
licences through property rationalisation and energy saving measures
•
Operational Transport–
Reduced through fleet
rationalisation, GPS scheduling, vehicle procurement and improved contractor reporting
2011. UK Power Networks. All rights reserved
•
Business Transport–
Reduced through better reporting, fleet downsizing, low CO2 car
cash allowance. –
Increase in rail usage
•
Fuel Combustion–
This represents temporary generation and has increased as a
function of increasing quality of supply
•
Fugitive emissions–
Have increased through better reporting of top ups and through
the increase in population of SF6 switchgear
OFGEM BCF 2012 Submission contd
Green Rhino Technology
51
New Bunding Technology
52
Street works recycling
Contaminated Land
Historical •
Risk based approach to assessing existing sites
•
Desk top studies undertaken
•
25 sites targeted for possible remediation
New technology trials
54
2011. UK Power Networks. All rights reserved
Environmental
•
Noise Complaints
-
Working with Salford University on low frequency noise (100Hz)
-
New design of anti-vibration pads installed
-
Cleared & resolved historical case history
2011. UK Power Networks. All rights reserved
Environmental & Sustainability Issues
•
Ban of Creosote
•
FFC
•
Noise & EMF issues
•
Oil as hazardous waste
•
Unknown position in BCF
Corporate Social Responsibility
57
Community Investment Funds
Volunteering
Conservation
Supporting Vulnerable Customers
Charitable Donations
Street Works
Dedicated budget supporting projects in community groups and charities
Employees can volunteer work time to support a charity or the local community
Employees take part in practical conservation activities at Wildlife Trusts
Addressing Fuel Poverty and partnering with British Red Cross
Allows employees to donate tax free through payroll through CAF
Investing in IT & Customer Service systems to minimise disruptions
Current UKPN Internal Sustainability Initiatives
•
32 initiatives (and increasing)
•
Evident throughout UK Power Networks in each Directorate
Open Forum –
Environment and Social Obligations
1)
To what degree do you believe it is the role of UK Power Networks to educate children and the general public to the dangers of our networks?
2)
Are UK Power Networks doing enough to fulfil their role as a responsible corporate citizen?
3)
Are our initiatives to reduce the impact of our business on the environment sufficient? Where should we focus more effort?
59
Next Steps
•
Your views will be consolidated and the report will be published on our website
•
We will write to you to explain what we have done to include your views in our Business Plan
•
We will organise follow-up meetings to discuss with you additional areas of interests that you have raised that are not covered in our three panels
60
Before we finish
•
Please complete your feedback form
•
Please consider sending us an email with:–
Additional thoughts after the event
–
Encourage a colleague to do so
[email protected]: 07875 113061
61
Thank you for your contributions.
Please have a safe journey home.
