‘critical friends’ stakeholder panel session 2 · - electrification of heat and ... on...
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2011. UK Power Networks. All rights reserved
Consulting on our Business Plan
‘Critical Friends’ Stakeholder Panel
Session 2
29 November 2012
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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
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AGENDA
Panel Session 1 Agenda - CompletedIntroduction: Vision and valuesLow carbon economy – our path to innovationOverview 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
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TODAY’S AGENDA09.30 – 09.40 INTRODUCTIONS
09.40 – 10.00 LOW CARBON CHALLENGES & OUR INNOVATIVE SOLUTIONS
10.00 – 10.40 OPEN DISCUSSION – OUR INNOVATIVE SOLUTIONS
10.40 – 10.55 COFFEE BREAK
10.55 – 11.15 UNDERSTANDING THE SOUTH EAST’S INVESTMENT PLAN
11.15 – 11.55 OPEN DISCUSSION – NETWORK INVESTMENT PLANNING
11.55 – 12.15 OUR SOCIAL OBLIGATIONS & ENVIRONMENT
12.15 – 12.55 OPEN DISCUSSION – SOCIAL RESPONSIBILITIES
12.55 – 13.00 OPEN FORUM
13.00 LUNCH
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
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6
Summary of Your Engagement So Far…
• Interim Report Issued for SPN – 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
Martin WilcoxTechnology Innovation & Standards Manager
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The goals of the low carbon economyContext: UK Energy Policy and ‘The Carbon Plan’
Reduction of UK’s green house gas emissions
- 30% energy from renewable resources by 2020- Decarbonisation of electricity production (longer term)- 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)
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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 disproportionally 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
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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
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‐
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 UKPN’s licence areas
• Particularly in the EPN and SPN rural areas
• Under both DECC current ‘high’ and ‘medium’ 4th Carbon Budget scenarios
• Potential challenges are peak demand and voltage management
• Especially on ‘light’ rural networks
Source: Element Energy
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The challenge for electricity networks forecast PV and EV penetration levels
EVs in Service 000
s
EVs in Service 000
s
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)
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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
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Smarter Network Storage (LCNF Tier 2 project) 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)
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Strategic direction
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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
Open Forum - Role of Innovation and the DSOIt seems 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; however:
1)Given that our forecasts are based on Government (4th carbon budget) scenarios do you agree that we should incorporate them into our network load forecasts and ultimately our ED1 business plan?
2)Do you agree that technologically and commercially innovative solutions (such as the examples you have seen today) should be further developed and incorporated into our ED1 business plan?
3)To what extent (and how quickly) should we displace proven conventional network solutions with ‘smart’ alternatives which have yet to reach full maturity but promise in the longer term to be more cost-effective?
4)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?
5)Do you regard the transition from ‘network’ to ‘system’ operator as a likely / inevitable consequence of our need to respond to the low carbon challenge (if so how soon should that transition occur)?
6)Do you believe it is the role of individual DNOs to provide innovative solutions for their network or would you prefer a centralised laboratory performing this role? 19
Facts and Figures For SPN
Within the SPN area we have:
• 83 Grid Sites, 379 Primary Sites & 20,786 Secondary substations
• 52,069 Link Boxes• Underground Cable Network consists of:
– 384km at 132kV
– 1,341km at EHV
– 12,031km at HV
– 26,056km at LV
Facts and Figures For SPN (Cont.)
• Overhead Distribution Network consists of:
– 1,161km of 132kV conductor supported by 2,656 Towers and Poles
– 1,218km of EHV conductor supported by 12,400 Towers and Poles
– 5,587km of HV conductor supported by 68,229 Poles
– 4,543km of LV conductor supported by 126,819 Poles
Costs
For SPN, current UCI’s indicate:• Average cost of an EHV Transformer scheme is
£1,580,694
• Average cost of an EHV switchboard scheme is £146,355 and an HV switchboard scheme is £102,500
• Average cost of laying 1km of EHV cable is £338,164 and 1km of HV cable is £128,357
• Average cost of a Link box replacement is £4,704
• Average cost of establishing a New Grid Site (which includes procuring land) is £15M
NAMP Network Asset Management Plan
• 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, A.O.N.B (Areas of Outstanding Natural Beauty)
Asset Replacement
HI Health Indices• measure the condition of assets to understand their probability of
failure
• calculated at the beginning of ED1 based on asset age, duty, environment, defect and condition data
• The Health Indices are also calculated at the end of ED1, based on a deterioration model. Rate of deterioration is influenced by many factors, a couple of examples are:– proximity to coast (coastal assets are more likely to deteriorate
quicker than inland assets), – the expected life of particular makes and models of assets
• HI’s are dynamic and are continually assessed as part of our business as usual processes.
• Planning Load Estimates (PLEs), an annual process taking actual load used by the Primary & Grid Substations.
• Regional Development plans – Local authorities – Distributed Generation acceptance
• This results in Load Indices (LI’s)• Engineering Recommendations – P2/6 is a national
standard.• If substations cannot meet the P2/6 Standard then
derogations from Ofgem need to be agreed.
Asset ReinforcementLI Load Indices
SPN LI Status
2012 - All Voltage Level Totals
DPCR5 Start
2010/11 2011/12 2014/15 2014/15 2023/24 * 2023/24 *
Actual Actual Forecast DPCR5 Target
With Investment
Without Investment
91 LI1 Totals 115 131 116 107
79 LI2 Totals 67 87 85 84
56 LI3 Totals 66 42 60 54
44 LI4 Totals 31 29 21 3340 90
14 LI5 Totals 10 3 10 7
284 289 292 292 285
* Forecast data from Strategy and Regulation as at October 2012
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?
Open Forum – Network Investment
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Current UKPN Internal Sustainability Initiatives
• 32 initiatives (and increasing)
• Evident throughout UK Power Networks in each Directorate
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Public Safety
• Preserving Life• Direct (offenders)• Indirect (General Public)
• Reducing Outages• Improving Quality of Supply
• Saving Money• Proactive in stopping incidents before they occur
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2011. UK Power Networks. All rights reserved
OFGEM BCF 2012 Submission
Business Carbon Footprint
• Building energy useReduced across all three licences through property rationalisation and energy saving measures
• Operational TransportReduced through fleet rationalisation, GPS scheduling, vehicle procurement and improved contractor reporting
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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
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Contaminated Land
Historical • Risk based approach to
assessing existing sites
• Desk top studies undertaken
• 25 sites targeted for possible remediation
New technology trials
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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
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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
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Corporate Social Responsibility
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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
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?
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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
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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
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