Network Options Assessment 1
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Network Options Assessment 1 UK electricity transmission MARCH 2016 Network Options Assessment 1 – March 2016 01 Contents Executive summary ................................................02 Chapter four Chapter one Overview of transmission solution options ...........................................21 Aim of the report ..........................................07 4.1 Introduction ..................................................22 1.1 Introduction ..................................................08 4.2 Commercial and non-build options..........24 1.2 How the NOA Report fits in with the FES, 4.3 Boundary descriptions ...............................25 ETYS and SOF .............................................08 4.4 Reinforcement options ...............................49 1.3 The NOA Report methodology ..................09 Scotland and North of England.................49 1.4 Navigating through the document ............09 East ................................................................57 1.5 Stakeholder engagement South .............................................................58 and feedback ...............................................10 West ...............................................................60 4.5 Investment recommendations ..................61 Scotland and the North of England ..........63 Chapter two East England ................................................69 South England .............................................73 Methodology ................................................11 West England and North Wales ................79 2.1 Introduction ..................................................12 2.2 NOA Report methodology .........................12 2.3 How the NOA Report connects to the Chapter five SWW process .............................................. 14 2.4 Operational costs assessment inputs .....15 Stakeholder engagement ......................... 85 5.1 Introduction ..................................................86 5.2 Continuous development ...........................86 Chapter three 5.3 Stakeholder engagement ..........................87 Methodology variations ............................17 3.1 Introduction ..................................................18 Chapter six 3.2 Why there are exclusions ...........................18 3.3 Excluded options ........................................19 Appendices ............................................................... 89 3.4 Included options ..........................................19 Appendices overview ..............................................90 Meet the NOA Report team ....................................91 Appendix A – Operational cost assessment inputs .................................................93 Appendix B – List of options four letter codes ..105 Glossary...................................................................107 Network Options Assessment 1 – March 2016 02 one Chapter Executive summary In this the first Network Options Assessment report, we recommend proceeding with the development of eight projects valued at £2.2bn over their life time. These projects will enhance the capability of the Great Britain electricity transmission system and ensure that it is fit for purpose for the future energy landscape. Identifying the future capability of the Great The new NOA process Britain (GB) electricity transmission system To conduct the NOA, we asked each of is critical to allow us to meet the needs of the Transmission Owners (TOs) in GB (SHE consumers. In March 2015, National Grid, Transmission, SP Transmission and the as System Operator (SO), was asked by TO business within National Grid) to identify the industry regulator, Ofgem, to take on an investment options, timings and costs to enhanced role designed to make sure that the improve the capability of a number of stressed high voltage electricity network in England, system boundaries that we had identified Wales, Scotland, offshore and across our during the ETYS process. These options national borders is planned in an economic, included commercial, operational and asset efficient and coordinated way. solutions (onshore, offshore or a combination of both). Our increased role as SO Our new SO responsibilities include identifying Our role is to maintain an efficient and system needs and coordinating and developing economic balance between investing in options to meet those needs to support further infrastructure and constraining the efficient asset delivery and protect consumers use of the system when necessary – striking against undue costs and risks. This new a balance between the stranding risk of Network Options Assessment (NOA) process assets from investing too early; and the forms part of our new responsibilities. Under potential high costs of constraints from this process we review a range of network investing too late. Getting this balance right investment options through our NOA will deliver the best value for consumers. Methodology1 and recommend the ones we expect will meet future system needs in the We use an operational costs assessment most efficient and economical way. tool – the Electricity Scenario Illustrator (ELSI)2 – to analyse and establish the benefits to the This NOA report is the last document in our system of different options. We’ve continuously 2015 Future of Energy suite and concludes developed and improved the input to – and the annual electricity transmission planning the modelling – of ELSI, which we’ve been cycle. When read together, the suite’s using to help us make investment decisions contents – the NOA report, the Future Energy since 2013. An important aspect of our NOA Scenarios (FES), the Electricity Ten Year recommendation is the application of single- Statement (ETYS) and the System Operability year least-regret criteria to our cost-benefit Framework (SOF) – tell a clear and compelling analysis results. The future energy landscape story of future development of the electricity is uncertain, so the information we use in the transmission system. cost-benefit analysis changes over time – 1 NOA Methodology: http://www2.nationalgrid.com/WorkArea/DownloadAsset.aspx?id=44227 2 ELSI: http://www2.nationalgrid.com/WorkArea/DownloadAsset.aspx?id=39022 Network Options Assessment 1 – March 2016 03 Chapter one we revisit our data, assumptions and analysis For 2016, eight of these projects have a results every year to make sure that the PROCEED decision. This means the TOs preferred strategy is still the optimal solution. will spend £28m on projects that have a total So when it comes to responding to market- value of £2.2bn over their lifetime. Our analysis or policy-driven changes, the criteria allow us considered what is really necessary as the to be flexible in our investment decision-making energy landscape changes and, as a result, while also keeping the cost associated with this what savings are possible from deferring flexibility to the minimum. or cancelling projects. Through utilising the scenario based, single-year least worst Our decisions on preferred options regrets analysis our NOA recommendations In this NOA, we’ve considered more than are to DELAY five projects which would have 70 GB transmission system investment options. committed £33m of spend in 2016. Of those proposed options, we identified 13 projects that required a decision this year. The project options we have recommended A NO DECISION REQUIRED outcome for in this 2016 NOA will make sure that the GB the remaining projects means that the time transmission network can continue supporting needed to deliver the transmission investment the transition to the future energy landscape in is less than the time between now and the time an efficient, economical and coordinated way. that the option is needed, so there is no need to make a decision this year. We welcome your views This is the first edition of the NOA Report. Our For the 13 projects that required a decision customers and stakeholders have contributed this year in order to meet the future to the production of this NOA report from network requirements, we have identified the very beginning, by being involved in recommendations from three further outcomes Ofgem’s Integrated Transmission Planning from our analysis: and Regulation project and shaping our Future n PROCEED. This means TOs should Energy Scenarios. maintain the earliest in service date (EISD) for that investment. For schemes under the We want to evolve this process and report, Strategic Wider Works process, this would year on year, to better serve your interests. involve further optioneering. So we’d welcome your views on the content n DO NOT PROCEED. This means it is not and scope of this year’s document and would economic to start work with this option. like to know what changes you’d like us to n DELAY. This means we recommend that make to future versions. There are five ways there should be a delay to the EISD. to tell us what you think: For individual projects, TOs should, n customer seminars following discussion with the SO, determine n operational forums where work needs to continue for an EISD n responses to our email transmission.etys@ +1 year to be maintained. nationalgrid.com n feedback form at https://www. It is important to recognise that these surveymonkey.com/r/2015NOA recommendations represent the best view at n bilateral stakeholder meetings. a snap-shot in time, and therefore investment decisions taken by any business should always The Stakeholder Engagement chapter sets consider these recommendations in the light out further