Network Investment Plan

8/2/2019 Network Investment Plan

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Network Investment Plan2010-2015


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Contents

1. Welcome Page 3

2. The Electricity Supply Industry Page 4

3. Our Assets and Key Facts Page 5

4. Our Investment Programme and its Structure Page 6

4.1 Load Related Programme

4.1.1 Customer Connections

4.1.2 General Reinforcement

4.1.3 Distributed Generation

4.2 Non Load Related Programme

4.2.1 Asset Replacement

4.2.2 Losses

4.2.3 Flooding

4.2.4 Quality of Supply

4.2.5 Visual Amenity

4.2.6 Diversions

4.2.7 Environment

4.2.8 Safety

4.2.9 Operational IT

4.3 Network Maintenance

4.3.1 Inspections & Maintenance

4.3.2 Faults

4.4 Trees

4.5 Non Operational Programme

4.6 R&D

4.7 Programme Deliverables

5. Contact Us Page 15

2 Electricity North West Network Investment Plan 2010 to 2015


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We are entering an interesting and exciting period in the

industry with climate change and green energy playing a

greater part in our plans together with the application of new

technology. Over the next ve years, we intend to efciently

invest over 1.4 billion in the region to meet the challenges

posed by the move to a low carbon economy, changes in the

pattern of demand for electricity and the needs of servicing an

ageing network.

Longer-term, we foresee a number of signicant future

challenges for the industry which could radically change both

the networks we own and the way they are operated. We plan

to produce a longer-term outlook report later this year which

will set out our views to 2050.

1. Welcome

Our plans are based on delivering against the recently

concluded price control negotiated with Ofgem for the 2010-

2015 period and incorporating initiatives based on feedback

gained at previous stakeholder workshops.

Our plans are based on achieving several simultaneous targets

in terms of the performance of the network, its condition

and utilisation, as well as meeting all our legal and statutory

responsibilities. This document sets out our plan in terms of

the planned investment by driver, detailing the rationale for

each and the resulting plans.

We would be delighted to hear your views. If you wish to

contact us, a number of different ways are listed at the back

of this document.

Steve Johnson

Chie Executive Ofcer

Welcome to Electricity North WestsInvestment Plan Statement for 2010 2015.

The aim of this document is to explain our

role in the energy industry and detail what

assets we own. It will then outline how we

manage our assets and our resulting network

investment plan for the 2010 2015 period.

3Electricity North West Network Investment Plan 2010 to 2015


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2. The Electricity Supply Industry

The electricity industry in Great Britain is structuredinto four main groups;

The generators, who own the major power stations and

produce electricity from a variety of fuel sources.

The National Grid, who own and operate the 400kV and

275kV transmission network that links the major power

stations and transports electricity in bulk across the UK.

The 14 Distribution Network Operators (DNOs), who own

and operate the remaining electricity network, connectingthe remaining generators and the national grid to every

electricity customer in the UK.

The suppliers, who buy the electricity produced by the

generators, sell that electricity to their customers and

pay the network operators for the transportation of that

electricity across their networks.

The electricity market is regulated by the Gas and Electricity

Markets Authority (the Authority), which governs and acts

through the Ofce of Gas and Electricity Markets (Ofgem).

In the electricity market, suppliers contract with generators

(for wholesale power) and with transmission and distribution

network businesses (for delivery services), in order that they

can provide energy to nal consumers. Distribution operators

are directly regulated by Ofgem and their charges for use

of their networks are subject to a ve-year price control

mechanism.

We are one of the fourteen DNOs and a private limited

company. We are owned by a consortium of funds controlledby the Commonwealth Bank of Australia and IIF International

Holding GP Ltd which is a constituent of JP Morgan

Infrastructure Investments Fund.

We have an indirect nancial relationship with customers

as we charge suppliers for the use of our network and the

suppliers in turn charge their customers the total cost for all

elements in the supply chain. We account for approximately

15% of the nal bill for electricity for domestic consumers.

We use these revenues to operate and maintain the network,

together with delivering an investment programme of renewal

and expansion as detailed in this document.



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Our network comprises of the following key assets:

Over 13 000km of overhead lines

Almost 44 000km of underground cables

Almost 84 000 items of switchgear

Over 34 000 transformers

Through this network we deliver over 25 TWh of electricityeach year to over 2.4 million customers across 12 500 square

kilometres of North West England.

Our network covers a diverse range of terrain and customer

mix from isolated farms in Cumbria, to areas of heavy industry,

urban populations and city centres as shown in the map.

Our network assets range from large transformers to

individual services. All these assets are held in a register so

that we can manage ongoing maintenance through their lives

and up until they are programmed for replacement.

The investment programme is therefore managed through

different types of projects from bulk programmes for thereplacement of high volume low value assets through to

bespoke large projects for work at single sites.

In delivering the investment programme we manage

thousands of individual projects ranging in value up to

tens of millions of pounds.

On average, the network performs such that a customer

experiences a power cut every two years and is without

electricity for less than one hour every year (99.99% reliability)

Blackpool

Preston

Blackburn

Burnley

Manchester

Macclesfield

Wigan

Bolton RochdaleOldham

Ashton

Barrow

Lancaster

Kendal

Workington

Whitehaven

Carlisle

Stockport

3. Our Assets and Key Facts

We operate a distribution network built of overhead lines,underground cables, transformers, switchgear and ancillary

equipment.



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4.1.1 CUSTOMER CONNECTIONS

New buildings require new electricity connections and, where

appropriate, enhancements to the existing network. Customer

connections are a competitive market area with a number of

different organisations providing alternative quotations for

new connections to our network.

Most connections however are

ultimately adopted as part of our

network. The size of this

investment programme is

dependent upon requests from

customers for supply and therefore

subject to economic conditions.

When work is undertaken to

provide new supplies most of

this is paid for by the customer

requesting the supply.

The chart opposite shows the number of new connections to

our network over a ten year period. The rst ve years of this

chart are actual gures and the remaining ve years are

based on forecasts. This highlights the effect of the recenteconomic recession and our forecast for a slow recovery.

We undertake investment forthree key reasons;

Expanding and replacing the network (4.1 and 4.2)

Maintaining and repairing it, and (4.3 and 4.4)

Supporting activities (4.5)

Our capital programme aims to expand the network to cater

for changes in demand for electricity and to provide new

connections. We term this load-related capital expenditure.

We are also investing signicant funds in replacing the

existing assets as they reach the end of their useful life,termed non-load related capital expenditure.

In addition to these dened programmes we invest in the

network by undertaking routine maintenance, the repair of

faults, non operational investment to purchase equipment

to help us undertake the work and undertake research and

development activities.

For the ve year period we are planning to invest around 1.4

billion across these areas as shown in the chart below. This

represents a 36% increase over the previous ve year period.

4. Our Investment Programme

ENW Investment Plan 2010-2015

Load Related Plan 2010-2015

During 2010 2015 we plan to invest over

400 million on load related projects as shown inthe chart above. This represents a 12% increase

over the previous 5 years.

4.1 LOAD RELATED PROGRAMMELoad related investment is undertaken to allow growth of the

network. This can take a number of forms but is mostly due to

the connection of new supplies to the network.

30%

47%

4%

14%

2%

2%

KEY

Load related

Non-load related

Non-operational

Network Maintenance

Trees

R&D

KEY

New Connections

DG Connections

General Reinforcement

51%

18%

31%



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We will continue to forecast future investment requirements

based upon general economic and market information and

conditions. As part of this we will liaise with housebuilders

and other stakeholders to better understand market trends.

We will continue to improve response times to connectors

requests and continue discussions with our regulator

regarding pre investment in known development areas.

During 2010 2015 we plan to invest over 200

million to connect around 84 000 new supplies.

4.1.2 GENERAL REINFORCEMENT

Existing customers change their usage of electricity over time

with reductions caused by using more efcient equipment, or

increases caused by doing more or using larger equipment.

The combined effect of all these individual changes results in

changing demand patterns on our network. Where increasing

demand causes our network to approach its capacity limits,

we will invest to increase the networks capacity.

Where we provide an electricity supply to customers it has to

be within a specied voltage range. On the infrequent

occasions where customers experience voltage outside these

limits, we will investigate and, where necessary, correct the

problem within a guaranteed period.

When we build the investment programme for general

reinforcement we go through a process of prioritisation.

This ensures that our investment targets those sites that have

the greatest need for some form of intervention.

This prioritisation takes account of a number of factors that

cover a comparison of demand against rm capacity, the

amount of time per year the demand is above rm capacity

and the number of customers.

New Connections

During 2010 2015 we plan to invest over 100

million to reinforce our network.

0

5000

10000

15000

20000

25000

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Within the general reinforcement programme the largest

single project is the Wigan 132kV Reinforcement project

(which is expected to cost around 20 million).

There is a need to reinforce the network in the Wigan area.This will be achieved by building a new large substation in

the Upholland/Orrell area of Wigan which will be supplied

by a new circuit to be installed to connect to the national

grid at Kirkby.

This scheme is part of a strategy to uprate the capacity of

the Lancashire area as a whole. Another scheme for a new

Bulk Supply Point (BSP) at Preston to support the northern

end of the group was constructed in 2008. In combination,

the two schemes will relieve Wigan, Wrightington, Leyland

and Ribble BSPs (serving a total of 247 000 customers)

which are all currently loaded at the limit of their capacity.



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Our Investment Programme continued

4.1.3 DISTRIBUTED GENERATION (DG)Climate change and an increase in environmental awareness

have led to a change in the mix of fuel sources for electricity

generation and also a change in the scale of generation

plant. Many new generators are much smaller than traditional

power stations and therefore connect to the lower voltage

distribution networks, such as that owned by ourselves, rather

than the higher voltage transmission network owned by

National Grid.

Electricity generators connected to the distribution networks

are called distributed generation (DG). Most new DG produce

renewable energy and/or low carbon combined heat and

power.

We recognise the importance of the roll out of DG in meeting

renewables targets and will continue to provide suitable

network connections to meet the needs of the connectors

of DG. We will also continue to work with the regulator and

the rest of the industry on innovative solutions for network

development to provide a more exible network that can

accommodate the wide range of connections envisaged in

some of the future scenarios.

DG installation capacity (MW) by type 2010-2015

0

50

100

150

200

250

300

350

Micro

CHP

(dom

estic)

Othe

r(notCHP)

Waste

incineration

Photovoltaic

Landfillg

asand

biogas

Biomass(not

CHP)

SmallCHP

(1MW)

Onsho

rew

ind

Offsho

rew

ind

The size of this investment programme is dependent upon

requests from customers for supply and therefore subject to

economic conditions. When work is undertaken to provide new

supplies most of this is paid for by the customer requesting

the supply.

During 2010 2015 we plan to invest around

80 million to enable the connection of 1GW of

generation sites to our network.

The chart below gives a breakdown of DG capacity by

technology type. This shows the capacity of DG that we expect

to connect to our network based on proposals by the developers

of DG sites and our own assessment of the market drivers.



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4.2 NON-LOAD RELATED PROGRAMMEThe non-load related programme is undertaken for a variety of

different reasons. A large component of the programme is for

the replacement of old assets in poor condition. Other parts

of the non-load programme are for specic improvement

initiatives.

There are some programmes that are currently at an

embryonic stage and as such are not listed separately in

detail because the spend forecast for the ve years is so low.

During 2010 2015 we plan to invest about

680 million on non-load related projects as

shown in the chart above. This represents a

52% increase over the previous ve years.

9%

70%

5%

1%

2%

1%1%

0%

12%

KEY

Asset ReplacementLossesFloodingQoS

DiversionsEnvironmentVisual AmenitySafetyOperational IT

Non-Load Related Plan 2010-2015

0

200

400

600

800

1000

1200

1920

1923

1927

1931

1935

1939

1943

1947

1951

1955

1959

1963

1967

1971

1975

1979

1983

1987

1991

1995

1999

2003

2007

Age prole for high voltage ground mounted circuit breakers

4.2.1 ASSET REPLACEMENTAll physical network assets have a nite lifespan before they

become unt for purpose. Our asset replacement investment

is designed to replace those assets at the end of their life and

replace them with their modern equivalent in order to maintain

the networks capacity and performance levels.

Through good asset management practices, we have

been able to extend the life of many of our network asset

components, however we are now in a period where we

need to replace an increasing number of assets. This reects

previous historic investment linked to UK economic cycles,

including the post-war prosperity boom and electrication

programmes of the 1960s. This can be seen in the chartbelow which shows the age prole of ground mounted high

voltage circuit breakers.

We will continue to invest in our network to maintain its

overall health, continuing our historically good performance

and safety standards. We will also continue to invest in our

asset management systems to ensure we improve the timing

and efciency of any investment we make.

We continue to review our asset replacement policies,

particularly with regard to the rebuilding of overhead lines

to ensure they are resilient to storm conditions and climatic

change.



10/16


4.2.3 FLOODINGAn increased environmental risk with climate change is that

of ooding from river or coastal sources. A number of our

major sites are located near to water sources as they were

installed at power stations that required water for cooling

purposes. Our smaller sites are located close to customers,

many of whom live in homes built on ood plains.

We have identied those major sites at risk of ooding and are

delivering an ongoing programme to improve ood defences

at those sites. We are working locally and nationally with a

number of environmental agencies to ensure our modelling is

up to date with the latest available information and that our

plans are prioritised accordingly.


7 million to protect those sites most at risk of

ooding.

When we dene the investment programme for asset

replacement we go through a process of prioritisation.

This ensures that our investment targets those parts of

the network that have the greatest need for some form of

intervention. This prioritisation takes account of a number

of factors that cover safety to the public and our personnel,

condition of the assets, environment, operating history,

previous faults on the same type of asset, availability

of spare parts and local knowledge.


470 million on the replacement of poor

condition assets.

4.2.2 LOSSES

Electricity owing through a conductor generates heat, whilst

a transformer can generate both heat and noise. This results

in approximately 5% of the electricity entering our network

being lost. Although these losses cannot be totally eliminated,

they can be reduced by installing more expensive plant and

equipment that is designed to operate with lower losses.


2 million to install equipment as a trial that will

reduce losses at two key substations.



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4.2.4 QUALITY OF SUPPLYQuality of supply investment is undertaken with the aim

of improving the overall quality of service experienced by

customers.

This will be achieved by investing in projects that can reduce

the number of customers affected by faults, reduce the length

of time customers are off supply in the event of a fault and

also reducing the likelihood of faults on the network.

In addition we are planning to undertake specic investment

to improve the service received by those customers who

experience the worst reliability on the network. These are

generally located in very rural locations and at the end of long

overhead line networks.

The quality of supply experienced by customers is measured

based on the number of interruptions (CI) to supply and the

length of time customers are without supply, or customer

minutes lost (CML).

It should be noted that the programme of planned asset

replacement will impact this performance due to the required

network outages when replacing assets. These forecasts

exclude for the effect of planned outages, which for the

ve years to 2015 reect the increased programme we are

planning for the replacement of overhead lines. With the effect

of planned work excluded, the underlying change to CI and

CML performance is a 6% improvement.


4 million on projects that will improve the service

experienced by customers, particularly to speed up

supply restoration following a fault.

0

10

20

30

40

50

60

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

4.2.5 VISUAL AMENITYIn 2005, a specic limited programme of undergrounding

overhead lines, identied by regional stakeholders, within

statutory National Parks and Areas of Outstanding Natural

Beauty commenced.

Funding for this programme was allowed by Ofgem up to a

value of 5 million following their customer willingness to pay

survey and a review of the various environmental obligations

placed upon the industry.

The two photographs below show an example of such a

project before and after investment.

15 year CI CML performanceWe support this initiative as a model of public-

private partnership and have planned for its

continuance at a level equivalent to the current

programme in 2010 2015. This is around

7 million during the ve years.

4.2.6 DIVERSIONS

Sometimes when development work is planned for either

building or new road developments, our network assets

may be in the path of these developments. Assets therefore

need to be diverted to an alternative location to allow these

developments to proceed. We plan for this type of work based

on historical trends and any known large projects.

Diversions projects mostly involve diverting underground

cables and occasionally overhead lines and substations.

During 2010 2015 we plan to invest around30 million on diversions activities.

4.2.7 ENVIRONMENT

Environmentally-driven investment takes place to ensure

compliance with environmental legislation. We plan to invest

to guard against oil leakage from our sites and to mitigate

noise where appropriate.


12 million on environmental projects.



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4.2.9 OPERATIONAL ITThe operational IT programme is aimed at the replacement

and improvement of those IT systems that are used for

the real time control of the network. The ability to operate

the network remotely offers benets in terms of the security

of supplies and is used to minimise disruptions experienced

by customers.

BT Group PLC are migrating their existing network toa system known as 21st Century Network. This new

network will be unable to offer guaranteed times for

the transfer of data signals. Our control and protective

systems require a level of certainty in the time taken for a

signal to transfer from our control centre to a substation

on the network so that we can continue to safely and

securely operate our networks.

In order to maintain these signal transmission times we

will construct our own data network over which we have

total control. This will be done by providing a new bre

system where signal transmission times are well within

the specication of the protective systems.

4.2.8 SAFETYWe operate a safe and efcient network. We have a strong

safety record and we will continue to invest appropriately

to maintain that record.

Most of our safety related investment over the next ve years

is to ensure our overhead lines maintain safe horizontal and

vertical clearances in line with the Electricity Safety Quality

and Continuity Regulations (ESQCR) 2002.

We operate within a modern social environment. Unfortunately,

there is an increasing trend of vandalism and other anti social

behaviour in and around our substations. With the recent rapid

increase in world metal prices we, like all other utility

companies, have seen a signicant increase in the theft of

metalwork from our substations. Our major sites may also be

considered a suitable target for some terrorist organisations.

We will continue to invest in an ongoing programme of security

strengthening at identied sites. We will also continue to work

with community partners to reduce anti social behaviour

around our installations and reduce the value of our

equipment to thieves.


80 million on projects to improve safety.

During 2010 2015 we plan to invest almost

60 million on operational IT projects.



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4.4 TREESOne of the main external impacts

on our overhead lines is trees.

We have a routine programme of

vegetation management where

we cut and prune trees growing

in the vicinity of the overhead lines

to maintain public safety and to

reduce the risk of trees causing

faults on the lines. We believe we

may be beginning to see early

climate change effects, in that the

growing season is extending and that the number and severityof storms may be on the increase.

We are working with the rest of the industry to update historic

practices and develop enhancements such as resilience,

where more trees are managed to reduce the risk posed by

falling trees in heavy storm conditions.


26 million on projects to maintain clearances

from trees.

4.5 NON OPERATIONAL PROGRAMME

The non-operational programme aims to deliver projects in

areas that will support delivery of the operational investment

and management of the business.

During 2010-2015 we are planning to invest in the following:

Accommodation and maintenance of our buildings

Improvement of existing IT and the introduction of new

systems

Tools to maintain existing stocks and introduce new tools

and instruments to improve working practices, customer

service and safety

The replacement of 500 vehicles out of a eet of around

750 ranging from cars and small vans to large trucks and

specialist vehicles

By having the right balance of these resources in place

we will optimise the way we are set up and operate to be

able to efciently deliver the investment programme during

2010 2015.

During 2010 2015 we plan to invest almost

60 million on non-operational projects.

4.3 NETWORK MAINTENANCE4.3.1 INSPECTIONS & MAINTENANCE

We routinely inspect and maintain the assets that make up our

network to ensure they remain safe and continue to provide a

high level of service.

Occasionally some assets need to be turned off to do this

safely which may result in an interruption to supply. Where

this is necessary, we give customers at least two days notice

of the interruption and its length to allow them to make any

alternative arrangements they feel are necessary.

We will also continue to invest in training and systems to

ensure inspection information is efciently collected and used

to continually improve the management of the network.


110 million on inspecting and maintaining

the existing network assets.

4.3.2 FAULTS

Occasionally faults occur on parts of our network caused

either by deterioration or by a number of outside inuences.

Fortunately loss of supply is an infrequent occurrence. We

have a network availability of over 99.99% with, on average,

a customer experiencing one power cut every two yearsand being without electricity for about two hours for each

occurrence. As these are averages, most customers receive

a better service but some customers do unfortunately

receive worse.

Dedicated teams respond to faults when notied either by

customer calls or by alarms generated by the network itself.

These teams attempt to identify the source of the problem,

restore supplies to customers as quickly as possible and then

repair the network back to normal.

In an average twelve month period we respond to around

14 000 faults, averaging forty to fty faults per day.

During 2010 2015 we expect to invest about

95 million on work to rectify faults across the

range of network assets.



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4.6 R&DWe are investing signicant amounts of time and money in

a variety of research and development programmes funded

under Ofgems Innovation Funding Initiative. Since 2004 we

have invested over 6 million in a range of projects that are

designed to enhance the performance of our network in

a variety of ways. We are planning to increase our R&D

investment during 2010-2015 under Ofgems new Low

Carbon Networks Fund scheme as we prepare the way for

electricity distribution networks to help deliver the low carbon

electricity system that is required to meet national climate

change objectives.

There are two Tiers to the Low Carbon Network Fund:

the First Tier of the Fund allows us to manage the small scale

deployment of new technologies and the Second Tier is for

large agship Smart Grid Projects.

Our research and development projects cover three primary

activities. Asset Management, Quality of Supply and Smart

Grids.

Under Asset Management we have a number of projects that

are, for example, researching new ways to manage our asset

base from investing in biodegradable alternatives to mineral

insulating oil, developing new techniques to better understand

the condition and ageing of network assets and investigatinghow we may be able to deliver more capacity from our network

by understanding and quantifying the cooling effects of wind

and weather on our assets to avoid upgrading where possible.

We have a number of projects under Quality of Supply. We are

developing a range of instruments that can detect and locate

defects on our underground cable network before the defect

turns into a fault and customers are disconnected. We are

also developing a device for intermittent cable faults, the Fuse

Restorer, that can automatically replace a standard fuse into

a faulted circuit to restore supplies and then send a text

message to an engineer to tell them the location of the fault

and the type of fault event.

For Smart Grids we are developing a number of projects,

funded by the First Tier of the Low Carbon Networks Fund,

delivering new technologies including the UKs rst super-

conducting fault current limiter installed on our network at

Bamber Bridge near Preston. This can assist with the

connection of large amounts of local renewable energy

generation to allow us to reduce our reliance on fossil fuels

for electricity generation. In addition we will develop proposals

and seek funding from the Second Tier of the Low Carbon

Networks Fund to manage Smart Grid Projects in the NW.

During 2010 2015 we plan to invest up to

30 million on R&D projects


4.7 PROGRAMME DELIVERABLESOur programme aims to replace and refurbish a range of

existing network assets, install new assets, restore assets

back to service following faults and continue maintaining

assets in order to manage network capacity and maintain

the condition, performance and safety of the network.

Additional network assets will result from the DG and

Customer Connections programmes but these cannot be

accurately quantied in advance as these depend on exactly

what supplies are requested, but more importantly where and

also on what network capacity may already be available there.

During the ve years, excluding Connections and DistributedGeneration, we are planning to undertake some form of

intervention (replace/refurbish/install new) on:

Over 5 300 items of switchgear

Over 1 400 transformers

Almost 5 500km of overhead lines

Almost 1 000km of underground cables

Additionally as part of the ongoing maintenance programme

we will:

Respond to around 14 000 faults annually on the network

Inspect 176 000 spans of overhead line and undertake

tree cutting to maintain safe clearances for 75 000 spans

Continue to undertake routine scheduled maintenance

of the network assets in accordance with our Codes of

Practice

We forecast that this investment will allow us to manage

the condition and utilisation of our network. Over the next

ve years, we will be measuring this through a range of

indicators comprising Health Indices (HIs) and Fault rates for

specied asset types, and Load Indices (LIs) for the loading of

network elements. This is in accordance with Ofgems newly

introduced Network Outputs regime for 2010-2015.



15/16

5. Contact Us

We are interested in views onthis document and our future

plans, including whether there

are any areas you feel we have

missed, or other priorities and

factors we should consider.

YOU CAN:

Write to us at the following address:

Head of External Communications

Electricity North West

304 Bridgewater Place

Birchwood Park

Warrington

WA3 6XG

E-mail us at the following address:

[email protected]

Or via the link on our website which also includes details

of previous stakeholder events:

www.enwl.co.uk

We look forward to hearing your views!



16/16

Electricity North West

304 Bridgewater Place

Birchwood Park

Warrington

WA3 6XG

[email protected]

www.enwl.co.uk

Documents

Network Investment Plan