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Upper South Island Reliability Stage 2
Non-Transmission Solution RFIAnd Long List of Options
March 2013
3
Purpose of Today• We’re seeking your input• Consultation
– Explain the upcoming need– Introduce and discuss current long list options– Discuss key areas for you to provide input
• Request for Information (RFI) on Non-Transmission Solutions
• Your input will – Ensure our assumptions are robust– Help us benefit from local knowledge and information– Ensure grid meets future needs of stakeholders
4
Agenda• Purpose, investment process overview• The story so far• System overview and need• Demand & generation assumptions• Lines company and other Stakeholder input• Long list Options
– Transmission– Non-transmission
• Input to Consultation• Discussion• Close
5
NZ Electricity and Transpower
• Transpower is responsible for the interconnected power grid between – major power stations, and – where electricity supplies large users direct, or – goes into the local distribution networks (owned by
lines companies) • This grid forms the “backbone” of the power
system
6
NZ Electricity and Transpower
Generation
Transmission
Major IndustriesSubstations
Distribution
Retail
End Users
Transpower
Lines Compaines
8
Overall Investment Process• Transpower identifies investment needs & develops
proposals to resolve need• Submission to regulator for approval (Commerce
Commission)• If approved Transpower can recover investment through
charges on all grid users• Customers can ask Transpower to invest for their benefit
– in which case they meet the cost directly
9
Developing an Investment Proposal
• Confirm need• Non- Transmission Solution RFI and Long list
Consultation with Stakeholders– Need– Demand and generation– Investment test technicalities:
• VoLL, discount rate, calculation period– Long list, especially including request for non-
transmission solutions– other questions
10
Developing an Investment Proposal (2)
• Consider feedback• Do cost-benefit analysis (Investment Test) choice of
proposal• Short list consultation
– Investment test assumptions especially any changes– Investment test results– Proposal– Implications for charges and market effects (construction
outages, etc.)
• Submit for approval to Commerce Commission• Comcom publish intention, consult, approve (hopefully)
11
• Reliability – to reduce chances of outage• Economic – when the benefits of enabling additional
generation are greater than the cost of building new grid• Focus for this investment is reliability • The Waitaki Valley to Islington circuits are part of the
Core Grid– We invest to guard against single failures
• n-1
– Evaluate various options that meet the need– Choose the one with the greatest net market benefit
or least net market cost
Types of Investments
14
History of the Issue• The Upper South Island region does not have enough local generation to
meet demand. • As the load increases, Transpower needs to ensure the capacity of the
transmission system increases to keep ahead of demand• Over recent years, we have improved reliability and capacity to the area
with a range of investments, mostly related to voltage stability:– 2006: a third Islington-Kikiwa 220kV circuit– 2007: an upgrade of the Kikiwa bus security– 2008: duplexing the Islington-Livingstone circuit, and bussing the second circuit at Ashburton– 2009: a fifth bus coupler at Islington, and a STATCOM at Kikiwa– 2005 -2011: Upgrade the transmission system between Inangahua and Dobson, install a
new Kikiwa 220/110kV transformer, install capacitors at Hokitika
15
This Investigation• Our most recent investigation began in 2010, with a proposal
submitted to the Commerce Commission in 2012 • We split the investigation into two stages
– Stage 1, a low-cost but short-term (until 2018) Islington bus coupler– Stage 2, the second (and potentially much larger) investment
• The Commission approved our Stage 1 proposal on 11 February 2013
16
To highlight today’s issue…
Ashburton
Tekapo B
Waitaki Valley generation
Timaru
Upper South Island load
230 km
17
Voltage Stability LimitVoltage stability: the ability of the transmission system to control the voltage after a disturbance, avoiding either an uncontrolled voltage drop (leading to a blackout) or uncontrolled high voltages (damaging equipment).
18
Stage 1 – Islington bus coupler
• 6th Islington 220 kV bus coupler (The worst credible contingency is an outage of an Islington 220 kV bus section)
• Reduces the impact of a bus section outage at Islington
• Due to be commissioned mid-2014
19
Stage 1 - Load monitoring• Monitor 10 sites in the Upper South Island with Power
Quality meters. Measure• System dynamic behaviour during and after a fault• Baseline harmonics, unbalance and flicker• Compliance
• Validate our assumptions of load characteristics.
• More accurate calculation of the voltage stability limit –help to ensure investments are made at the right time
20
Stage 1 - Orari preliminary development
• An allowance was made to progress the Orari bussing option, to ensure this could be commissioned in time if it proved to be the preferred option
• Work includes refining the design of the new switching station, and preliminary processes to obtain consents and easements
21
Orari bussing option
Ashburton
Tekapo B
Waitaki Valley generation
Timaru
Upper South Island load
230 kmOrari
22
Stage 2: 2018
• Again, the need is driven by voltage stability• The need date is 2018 • A number of contingencies cause voltage
problems at about the same peak load (generally related to Christchurch-Waitaki circuit outages)
• We are presently consulting on the long list of options
25
Demand• Reminder: All Grid Exit
Points (GXPs) from Timaru north
• Wide range of uncertainty• Focus on Prudent Peak
ForecastOur best estimate of the value that annual peak should exceed 1 year in 10 = winter weekday extreme cold over entire region
26
Uncertainty• Caution: forecasting is uncertain
– the worst and easiest mistake to make is to close our minds to possibilities
– “We don’t know what we don’t know” applies, especially beyond 10 years out
• Timeframe is difficult– Transmission investments last for 40+ years
• We don’t want to overspend industry and public money• We don’t want to hold back growth or have rolling
blackouts on very cold days
27
Drivers• For each of the drivers on the next few slides:
– Will it happen? When?– How much will it affect peak USI net demand?– Will it still be an issue in 10 years? In 40 years?– Will it give Transpower flexibility to handle sudden
growth?
28
National / International Drivers• Recession / Financial crisis• Structural changes to economy - shift from
manufacturing to services• Efficiency gains – light bulbs, home insulation, energy-
smart buildings• Micro-generation – solar-assisted water heating,
photovoltaic• Elasticity: higher prices lower demand• Demand-side management (DSM)
– USI lines companies’ system – Other ways in which consumers will progressively be able to
respond to price
29
National / International Drivers• Electric vehicles
– How/when/where (home/work/shopping areas)
• Fuel shifting– Coal or gas to electric– electric to wood burners
30
Regional Drivers• Christchurch post-earthquake recovery
– What will population stabilise at?– Energy efficient new housing and commercial buildings?– Early adopter of electric vehicles?
• Irrigation– More dairy– What if dairy boom ends? Will intensive agriculture remain?– Current drought – climate change? – Canterbury water in
general
• Mining– Electricity needs vary greatly between ores, technologies
31
Demand Side Response
• Upper South Island Load Manager – has already given us 3 years’ delay– Transpower helped fund this through the Electricity
Commission and continue to fund it• We are grateful for anything that helps with
active control of winter peaks
32
DSR Security
• Will demand side initiatives give us security against being caught short by high growth?– Meaning we could reduce our prudent level
• Previously held trial and pilot in USI• National market pilot running at the moment
– To facilitate DSR development in general– To help bring in non-traditional electricity industry
players– To help us answer the security question
• More from Quintin later
33
Forecast Uncertainty
+4% p.a.
-1% p.a.
Reasonablypossible
Would take major shift
Would take major shift
35
Generation: Existing and New
• Other side of net demand• Similar to stage 1 assumptions• We want the generation at time of peak demand
for market and larger embedded generation– Smaller embedded generation included as negative
demand at relevant grid exit point• Summer 62 / 152 MW, Winter 94 / 152 MW• RFI has 17 new generation projects• Do we have the status of these correct?
36
Generation Scenarios• During Stage 1 we modified these several times
– Reflecting shrinking intentions for new build
• It’s the overall mix that matters, not which project is included
• Propose to use those from the Stage 1 Proposal– 2016: Stockton Plateau 8 MW, 5/5 scenarios– 2018: Arnold 46 MW, Hurunui 76 MW & Marlborough Wind 300
MW, all 1/5 – Nothing else before 2020
• Is this now about right? Too much? Too little?
38
Growth and relocation
Residential red zone – approx 8000 houses
Central city blueprint
ECAN – Chapter 12A future zoning
41
Peak demand – network total
400
450
500
550
600
650
700
750
1980 1985 1990 1995 2000 2005 2010 2015 2020
Year ending 31st March
Measured system demand
Projection of system demand: using 10yrs of pre-quake history (1.1% p.a.)
Projection of system demand: using 30yrs of pre-quake history (1.1% p.a.)
Forecast system demand (excl electric vehicles)
Forecast system demand: with extreme cold snap
Forecast system demand
42
Load forecasts similar• Consistent forecasts in the short term• Modest separation in the medium term perhaps
indicating a further delay may be possible
TP PrudentOrion Extreme Cold Snap
45
Peak demand - rural
10
30
50
70
90
110
130
150
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Year ending 31st March
M easured to tal rural summer demand
Projected to tal rural summer demand: using 5yrs of history (2.0% p.a.)
Pro jected to tal rural summer demand: using 10yrs of history (3.4% p.a.)
Forecast to tal rural summer demand
M easured Hororata summer demand
Forecast Hororata summer demand
M easured Springston summer demand
Forecast Springston summer demand
49
Resiliency - post earthquake
Orion 33kV Substation
Orion 11kV Substation
Transpower GXP
Substation key
DALLINGTON
RAWHITI
BROMLEY GXP
HEATHCOTE
BARNETT PARK
LANCASTER
MILTON
OXFORD-TUAM
FENDALTON
HOON HAY
ARMAGH
HALSWELL
MIDDLETON
SHANDS
SOCKBURN
MOFFETT
HAWTHORNDEN
McFADDENSPAPANUI HAREWOOD
To Springston
& Rolleston
To Lincoln
ADDINGTON HORNBY
ISLINGTON GXP
630Cu
1000Cu
1600Cu
Proposed 2013‐2020Proposed >2025Existing U/GExisting O/H
Proposed Orion66kV Substation
Orion 66kV SubstationMARSHLAND 23MVA
BELFAST 40MVA
630Cu
1000Cu
630Cu
1000Cu
WAIMAKARIRI 40MVA2015
2013
YALDHURST 23MVA
AWATEA 40MVA
630Cu
1600Cu
Upgrade to2x90MVA
1000Cu
630Cu630Cu
2014
2016
2015
2015
2014
2018
2020
2025
2017
2020
630Cu
630Cu
↓open
2017
PREBBLETON
52
A bit of Jargon• Long List of Options = many possible solutions
to a transmission need• Solutions are divided into
– Transmission solutions (lines, substations, transformers etc., mostly built by Transpower)
– Non-transmission solutions (NTS)• The long list (ideally) leads to perhaps five likely
contenders - the short list - that we analyse in detail
53
Long List of Options• This is the long list from the
Stage 1 Major Capex Proposal
• The preliminary Stage 2 long list and the screening criteria are in Appendix C of theRequest for Information and long list consultation document
• Part of this current consultation process is to capture any further options appropriate for the long list
54
Example from Stage 1 submissionb) Generation Grid Support Contract
Included in short-list: Reason: RFI submitters indicated a willingness to negotiate Grid Support Contracts around future developments. Specifically Mighty River Power highlighted early development plans for a wind farm proposal in the greater Cape Campbell area. However, no generation of sufficient capacity been offered which has not already been accounted for in the power system analysis.
c) Diesel Generation
Included in short-list: Reason: Orion offered installation of distribution network diesel generation as an alternative to transmission. The Belfast and Bromley diesel generation sites are both consented and could be implemented within 12 months. A demand-side response equivalent of up to two years of USI load growth (45 MW) is assumed available. Therefore a diesel generation is considered as a short-list option for stage one.
55
Non-transmission optionsOption Comment
Non-Transmission Solutions
a) New generation
b) Existing generation grid support contract
Would need to be constrained on during peak demand
c) Diesel generation Belfast and Bromley consented
d) Upper SI load controller Already accounted for e) Special Protection Scheme
(SPS) Too slow to meet the voltage criteria
f) Fuel switching No information available
g) Energy efficiency May be difficult for scale required
h) Local network augmentation May be difficult for scale required
i) System Operation improvements Already achieved via RPC
j) Ancillary services See b) above
k) Demand response (pre-contingency load shedding) Economics and availability not clear
56
Transmission optionsTransmission – Existing Assets
a) Tee 220kV circuit near Bromley
Only provides minor improvement
b) Reconductor existing transmission circuits
Expensive for marginal improvement in voltage stability
Transmission – New Assets
a) New bus coupler at Islington USI Stage 1 proposal b) Double breakering at
Islington Similar effect and cost to bus coupler, but
with less option valuec) Islington 220 kV bus tie
circuit Only helps during bus maintenance
d) Pound Rd switching station Only provides minor improvement in voltage stability
e) +/- 80 Mvar STATCOM at Islington (or Bromley)
Effective as increases voltage stability limit
f) +/- 40 Mvar STATCOM on Islington T6 and T7
Smaller STATCOM on 11 kV tertiary may be cost effective
g) SVC at Ashburton Reconfiguration of 220 kV bus required or 66 kV solution less useful
h) SVC at Islington (or Bromley) Effective as increases voltage stability limit
i) Refurbish SVC3 Effective as increases voltage stability limit
j) New synchronous condensers
Effective as provides inertia and modern condensers have fast controllers
k) STATCOMs on the West Coast
Not very effective as worst contingency is at Islington
l) SVCs/STATCOMs north of Christchurch
Not very effective as worst contingency is at Islington
59
Consultation Questions• Payment structure?• Long & short? • Contract start?• Assumptions? • Generation scenarios? • $25,600/MWh• Anything else?
61
Your Input Matters
• Especially about – Non-transmission solutions– Demand forecast– Generation, if you are a proponent
• Welcome to comment on other matters– Transmission solutions– Short-listing process– Economic analysis
• Full details in consultation document – Grid NZ website
62
Submissions
• By 12 April 2013• We will give consideration to all submissions. • We prefer open submissions but will respect
confidentiality– Transparency is important in this process and we may
not be able to rely on confidential information to justify an investment proposal
63
Your Feedback
How you can provide feedback:• Ideally Microsoft Word or PDF format • Email:
• Post:Angela Dalziel, Project Manager, Upper South Island Reliability
Stage 2Grid DevelopmentTranspower NZ Ltd.P O Box 1021Wellington
• Please provide feedback by 12 April 2013
64
TimetableMar2013
Apr May Jun Jul -Aug
Sep Oct -Jan
Feb 2014
Mar
Consultation
RFP on NTS
Economic Analysis
Short List Consultation
MCP to CC
CC
Approval
66
Single failuressingle credible contingency event means an individual credible contingency event comprising any of the following:a) a single transmission circuit interruptionb) the failure or removal from operational service of a single
generating unitc) an HVDC link single pole interruptiond) the failure or removal from service of a single bus sectione) a single inter-connecting transformer interruptionf) the failure or removal from service of a single shunt connected
reactive component