SP Manweb

Network Capacity Headroom Report August 2021

Contents

EXECUTIVE SUMMARY ...... 2 WHO WE ARE ...... 4 1. INTRODUCTION ...... 5 1.1 Purpose of the report ...... 5 1.2 Scope of the report ...... 5 1.3 Your views ...... 6 1.4 Information and contact ...... 6 2. FORECASTING OUR CUSTOMERS’ NEEDS ...... 7 2.1 Scenarios background ...... 8 2.1.1 Range of compliant pathways ...... 8 3. THE DISTRIBUTION SYSTEM ...... 10 3.1 Technical characteristics of the distribution system ...... 10 3.2 Typical distribution networks and configurations ...... 10 4. HEADROOM CALCULATION METHODOLOGY ...... 12 4.1 Summary of Network Assessments ...... 12 4.2 Forecast load and generation ...... 13 4.3 Network Constraints ...... 13 4.4 Network Interventions ...... 14 4.5 Flexibility Services ...... 17 4.6 Demand headroom ...... 18 4.7 Generation headroom ...... 18 4.8 Capacity Headroom results ...... 18 5. REFERENCES ...... 19

EXECUTIVE SUMMARY

The energy landscape is changing. To help our customers decarbonise, we must develop a network that is ready for Net Zero. This means creating additional capacity for our customers’ low carbon technologies (LCTs), enhancing our distribution system operator (DSO) activities and enablers, delivering a new approach to managing the low voltage (LV) network, and taking on a greater whole system role. As society decarbonises to Net Zero, our customers are increasingly turning to EVs and heat pumps for their transport and heating. We also expect a further leap in renewable generation to power these new LCTs, more customers actively participating in the energy system, and the electricity system operator (ESO) increasingly needing to use distribution-connected service providers. Network utilisation is forecast to be stressed beyond the original design capacity of the network. Complexity of network operation is increasing significantly as we rely on flexibility, DSO constraint management and innovation for real-time advanced network management. The criticality of our assets is rising as customers increasingly rely on a reliable electricity supply for electrified heat and transport in response to the climate emergency. This change is set against the unavoidable and contemporaneous deterioration of our asset base. Over RIIO- ED1 we have managed unforeseen levels of asset risk with dramatically increased faults rates on our 33kV cable network and low voltage link box assets requiring targeted and responsive asset investment. These risks exemplify the changing nature of the demands on our assets and the growing role they play in society. Despite these emerging risks we fully expect to meet our RIIO-ED1 asset risk targets. We plan our distribution networks to facilitate the decarbonisation objectives and choices of our customers, we need to forecast and understand our customers’ changing electricity requirements. Our Distribution Future Energy Scenarios1 (DFES) forecast customer demand and generation up to 2050. By comparing our DFES to other industry forecasts, we developed our RIIO-ED2 low, baseline, and high scenarios. Our RIIO-ED2 investment is developed to deliver the baseline scenario, but have the flexibility to deliver anywhere within the low and high scenario range (aligned with the range of credible Net Zero decarbonisation pathways). In the next 10 years we forecast up to 1.5 million domestic electric vehicles (EVs) will connect in our areas, 0.9 million heat pumps and three times the level of generation across our distribution networks. These customer- led changes are far beyond what the network was originally designed for and will result in higher network utilisation, more dynamic and volatile power flows, more complex network planning and operation, and increasing whole system interactivity. To address this, we need to deliver a step-change in network capacity, operability, and whole system coordination. To assess the ability of the network to accommodate this growth, we used our advanced Engineering Net Zero models. This completes power flow analysis for the next 10 years (at 30-minute intervals) for the entire network for our low, baseline, and high scenarios to identify where, when, and how much additional capacity is needed. This analysis found that three network components require a significant increase in activity compared to RIIO-ED1: 1. LV looped service cables2 and their cut-out units. These are the network assets which connect customers to the network. Net Zero and the resulting electrification of heat and transport means a typical household’s peak demand will triple, exceeding the rating of these assets.

2. The LV network. This is the section of network that runs from local substations to just outside customers’ homes. As households are supplied from the LV network, the tripling of household demand that affects LV services and cut out units also impacts the LV network.

3. Switchgear. These are the network assets which safely isolate the network in the event of a fault. They are rated to cope with a certain level of fault current (‘fault level’). As generators are a source of fault current, increasing volumes of renewable generation will lead to an increase in fault level.

To address these constraints we consider flexible, smart, innovative, and conventional reinforcement solutions. These include new solutions, such as worlds-first fault level monitoring and active fault level management, supported by new enablers, such as extending LV monitoring from 8% to 52% of our large substations and

1 https://www.spenergynetworks.co.uk/dfes 2 Most customers have their own service cable. Sometimes these are shared across multiple properties – this is called a looped service cable. We have 561,130 customers supplied from looped service cables.

delivering our new Engineering Net Zero analytical platform. We also use the precise knowledge of the location, magnitude, and timing of additional capacity needs from our modelling to tender for every forecast RIIO-ED2 constraint – over 1,500 sites in total across all network voltage levels. Our linear optimisation engine assesses different combinations and sequences of flexible, smart, innovation, and conventional solutions for every constraint out to 2050. This identifies the optimum approach for providing the capacity that our customers need. It also means our load related investment plan isn’t built using old world statistical estimates – we’re addressing individually identified constraints using market tested solutions. This is a step change in how investment plans are developed; and sets a standard for others to follow. The objective of our Network Capacity Headroom Report (NCHR) is to inform stakeholders of future possible headroom (demand and generation) across our licence areas. It is intended as a one-off publication, acting as a precursor to the Network Development Plan (NDP). This NCHR provides the future network capacity headroom for demand and generation up to 2050 down to primary substations. It should be read in conjunction with our Long Term Development Statement3 (LTDS) which provides information on our network designs and detailed ratings of network components, and our DFES. To evaluate the available headroom for demand and generation at each grid substation group (132/33kV) and primary substation/substation group (33kV/HV), we used the forecast loadings from our DFES and considered network constraints (thermal, fault level and voltage where practical). We also considered the planned network interventions as part of the current RIIO-ED1 investment programme and the future RIIO-ED2 investment programme as well as planned customer connections. The full suite of capacity headroom results for SP Manweb grid substation groups and primary substations/substation groups is available on our website4. Network capacity headroom may be limited or change due to various reasons:  The SP Manweb distribution network is configured as a mesh network with interconnection at all voltage levels. Headroom results provide the calculated headroom of the substation/substation group. The actual headroom at a particular location is subject to further assessments, as the changing distribution of demand and generation across the mesh could limit the available headroom.  Headroom at a substation/substation group may be limited by constraints at the higher voltage level. Generation headroom results do not include any additional restriction in available capacity due to upstream fault level constraints. Any new generation connections where there are upstream fault level constraints will be subject to detailed network assessments to determine the actual generation capacity headroom.  Headroom results do not take account of the additional capacity provided through the rollout of Constraint Management Zones (CMZs).  Demand and generation forecasts are subject to factors which can change over time and influence pre- determined plans.  The timing and type of network interventions may vary, depending on the rate of change in stakeholder requirements influenced by regional and national policies. From 2022, SP Manweb will publish an NDP every two years to provide stakeholders with transparency on network constraints and needs for flexibility. The NDP is to present the 'best view' of planned asset based and flexible network developments over the five to ten-year period. We would welcome any feedback on any aspect of this document, or suggestions for improvements and considerations for the future NDP publication. Please send your feedback to [email protected]. SP Manweb plc have taken all reasonable endeavors to ensure the accuracy of the results using information available at the time of publishing. SP Manweb plc is not responsible for any loss that may be attributed to the use of the information presented in this report and the capacity headroom results.

3 https://www.spenergynetworks.co.uk/pages/long_term_development_statement.aspx 4 https://www.spenergynetworks.co.uk/NCHR

WHO WE ARE

SP Energy Networks (SPEN) owns and operates two distribution network businesses: • SP Distribution plc (SPD) and, • SP Manweb plc (SPM). These businesses are monopoly utilities which are regulated by Ofgem. Our distribution networks serve over 6 million people across 3.5 million homes and businesses, 24 hours a day, 365 days a year. Our distribution networks comprise over 100,000 kilometres of overhead lines and underground cables and over 30,000 substations. SP Energy Networks is part of the Iberdrola Group. Iberdrola is a global energy leader, the number one producer of wind power and one of the world’s biggest utilities by market capitalisation. Iberdrola will have invested 34 billion euros across their global business between 2018 and 2022, laying the foundations for sustainable growth over the next decade. Our network is crucial to the delivery of the UK’s Net Zero targets, and we are committed to making this happen at pace. Our customers, communities and stakeholders are at the heart of everything we do, and we always strive to deliver a first class service to all. Our business is essential in mitigating the impacts of climate change, as the UK transitions to a greener, more sustainable future.

1. INTRODUCTION

1.1 Purpose of the report

Evaluation of network capacity is an essential part of a robust process for developing efficient and economic network interventions. The objective of the Network Capacity Headroom Report (NCHR) is to inform stakeholders of future possible headroom (demand and generation) across our distribution network. This will enable connections to locate in the most advantageous areas, identify when and where issues might occur and develop targeted mitigations. The NCHR would be useful to the following stakeholders: • Demand and generation customers connecting beyond the short-term future. • Regional stakeholders including Local Authorities looking to understand infrastructure needs to support long term decarbonisation. • Innovators wanting to understand network issues to be resolved. The NCHR is intended as a one-off publication, acting as a precursor to the Network Development Plan (NDP) required as part of the Clean Energy Package. The NDP will be published every two years from 2022 and will provide stakeholders with transparency on network constraints and needs for flexibility. The NDP is to present the 'best view' of planned asset based and flexible network developments over the five to ten-year period. The NCHR uses data and methodology from the Long Term Development Statement (LTDS) alongside the data and methods from our Distribution Future Energy Scenarios (DFES) to determine network capacity headroom. Our LTDS provides information on our network designs and detailed ratings of network components. Our DFES provides forecasts up to 2050, which are considered in this document, although it focuses more on the next ten years. DNOs will publish an NDP from 2022 which will likely include some similar information to this report to highlight where there is network capacity and when network constraints may occur.

1.2 Scope of the report

The Energy Networks Association (ENA) Open Networks Workstream 1B, Product 5 sets out the requirements and proposed content for the Network Capacity Headroom Report5 to be shared with stakeholders to articulate network needs. This NCHR covers the future network capacity headroom, for demand and generation, for the SP Manweb network. Changes to demand and generation levels are accounted for in the future headroom calculation. Know future network interventions are also included in the calculation. The data and parameters used in this NCHR are defined in Table 1.

5 https://www.energynetworks.org/industry-hub/resource-library/open-networks-2020-ws1b-p5-proposed-dno-standard- network-capacity-report.pdf

Table 1: Summary scope of NCHR

Parameter Detail Date Range Up to 2050. Consideration to 2050 matches the DFES date range and so can reflect the uncertainty on long term network impacts. Reporting granularity Every year for the first ten years. Every five years beyond that to the end of 2050. Forecast scenarios Load scenarios based on DFES for all years up to 2050. Reported headroom Demand and generation. Network coverage Grid substation groups (132/33 kV) Primary substations/substation groups (33/11 kV). Network parameters underlying Thermal headroom calculations Fault level Voltage (where practical) Evaluation methodology Detailed analysis for the short-term where practical. Simple tabular comparisons for the longer-term to 2050 (loading versus firm capacity).

1.3 Your views

We welcome your views to help shape the NDP Form of Statement6, developed as part of the ENA Open Network’s Workstream1B, Product 5 this year.

Views on the following areas would be welcomed by the end of September 2021 and can be emailed to [email protected]

1. Do you find our NCHR informative? 2. How could/will our NCHR be used by your community or business? 3. Are there any other parameters that you would like us to present in our NCHR to increase your utility? 4. Could we interpret our network capacity data in a different way to help you better understand the ability to accommodate future connections and use of flexibility services in our region? 5. Do you find the presentation of headroom for the Low, Baseline, High scenarios helpful? 6. Do you have any other comments on our NCHR?

1.4 Information and contact

The information used to compile this report is derived from SP Manweb plc’s own data. Whilst all reasonable care has been taken in the preparation of this data, SP Manweb plc is not responsible for any loss that may be attributed to the use of this information. This document may not be reproduced, in whole or in part, for any purpose, without the written permission of SP Energy Networks. Should you wish clarification on any aspect of this document, or to provide feedback on the content and format please contact: [email protected] Opportunities exist for the connection of new load or generation throughout the SP Manweb system. System conditions and connection parameters are site specific and therefore the economics of a development may vary across the system. Developers are encouraged to discuss their development opportunities and SP Manweb will be pleased to advise on connection issues.

6 https://www.energynetworks.org/assets/images/Resource%20library/ON21-WS1B- P5%20Network%20Development%20Plan%20Form%20of%20Statement%20(19%20Aug%202021).pdf

To discuss a specific enquiry about a new connection to the distribution network, or an enhancement to an existing connection, please contact: [email protected]

2. FORECASTING OUR CUSTOMERS’ NEEDS To efficiently plan and operate our network to accommodate our customers’ requirements, we fist need to understand what these requirements are. We develop DFES7 forecasts to do this. These are forecasts for a range of customer demand and generation metrics up until 2050. We develop these considering a range of sources, including UK and devolved government targets such as: Net Zero targets of 2045 for Scotland and 2050 for England and Wales; interim legislative 2030 greenhouse gas emission reduction targets; Scottish and UK government bans on new petrol and diesel cars and vans; the UK Government Ten Point Plan and Energy White Paper; and the Scottish Government Heat in Buildings Strategy. Our stakeholders review our forecasts, and we make changes based on their well-justified feedback, to create regionally reflective, granular forecasts. Given the uncertainties out to 2050, we create forecasts for multiple energy scenarios. These scenarios represent differing levels of customer ambition, government and policy support, economic growth, and technology development. While the RIIO-ED2 price control period covers 2023-28, we forecast customer needs out to 2050. This is because some of the solutions to provide network capacity within RIIO-ED2 will last for decades. We therefore need to understand long-term customer needs to ensure that we know when it’s most efficient to use shorter-term interventions or longer-term interventions. This approach avoids short-sighted investment decisions which end up costing customers more. Our DFES is updated annually and published in an open digital format including heat maps where necessary to inform our customers and stakeholders of expected changes.

All forecast scenarios show a significant increase in the volume of customer demand and generation that we will need to serve on our distribution network. There are three areas that will change the most as shown in Figure 1.

Figure 1: Credible scenario range for SPEN by 2030

The electrification of transport: by 2030, the number of customers’ EVs on our distribution network could increase from around 10,000 now to up to 1.5 million domestic EVs. An EV can double the demand of a customer property, and materially increase peak network demand. The electrification of heating: how heat is decarbonised is a key variable, but one area of greater certainty is that off-gas grid customers will use heat pumps. The widespread use of heat pumps will have a very different network impact to other heat decarbonisation options. In some of the high roll-out scenarios, heat pump impact on our network peak demand could be over five times greater than EVs.

7 https://www.spenergynetworks.co.uk/dfes

More generation: by 2030, the volume of customer generation we connect to our SP Manweb network could double. By 2050, we could have connected over five times more customer generation than we have to date. Storage is defined as a type of generation, so is included within the generation forecasts. The magnitude of these changes is significant and unprecedented – customer needs have not changed at this scale or rate before.

2.1 Scenarios background

In developing our DFES forecasts we have undertaken the following steps. Step 1) Scenario Definition • We developed our DFES in line with the agreed approach in the Energy Networks Association’s (ENA) Open Networks Project. Our DFES uses the same scenario framework as in the National Grid Electricity System Operator’s (ESO) Future Energy Scenarios (FES). Step 2) Baseline data • We use a combination of our network data and other sources of data to determine the starting position for our forecasts. This includes historical demand trends, measured demand, connections data, EV and heat pump notifications, and other external sources of data to validate the accuracy of our information (for example Department for Transport EV registrations, Ofgem Feed-in-Tariff data etc.). Step 3) Analysis of regional factors • We use the ESO’s FES as a starting point for our DFES forecasts. However, the FES is not detailed enough for our requirements, so we significantly augment it to capture regional requirements and provide a much more granular view. This is done using a combination of top-down and bottom-up assessments, stakeholder feedback, devolved government policy and plans, regional development plans, accepted connection requests and other regional data. • In addition to the ESO FES, the Climate Change Committee (CCC) published The Sixth Carbon Budget report in December 2020, setting recommendations for the UK’s path to Net Zero. The Sixth Carbon Budget is the first carbon budget publication after the UK introduced a legally binding target to achieve Net Zero by 2050. The CCC developed five scenarios to explore different pathways of achieving Net Zero. Step 4) Forecast outputs • We produce forecasts for individual demand and generation metrics, for example EV uptake and solar photovoltaic (PV) capacity. These key metrics are forecast for each scenario at a GSP and primary substation geographic level, and for each year out to 2050. The forecasts are published in our DFES. Step 5) DFES draft publication • We created a suite of documents to explain our forecasts, given that different stakeholders require differing levels of detail. Step 6 & 7) Incorporate stakeholder feedback • As explained in our DFES document, we test our forecasts through engagement with informed stakeholders. We look at the underlying assumptions of each key DFES metric (e.g. EV, HP) and adjust them based on stakeholder feedback where we had sufficient evidence to do so. • Our continual cycle of engagement with our stakeholders gives us tangible insights into their requirements which is reflect in forecasts to ensure our network investment is targeted at the right areas at the right time. Step 8) Our updated DFES documents and data tables are published, including the feedback we received and how we have updated our forecasts.

2.1.1 Range of compliant pathways Different forecast scenarios will have different network impacts, requiring different levels of investment. So how do we know which one to plan for? In addition to the four DFES scenarios, we create a low scenario, a baseline scenario, and a high scenario. Our RIIO-ED2 investment plan is developed to deliver the baseline scenario but must have the capability to deliver anywhere within the low and high range (which mark the lower and upper credible range).

To develop a credible range of Net Zero compliant scenarios we considered all DFES, FES and CCC forecast scenarios. We then discounted two DFES and FES scenarios: a) Steady Progression (SP): this scenario does not meet Net Zero and so it has been excluded. b) System Transformation (ST): this scenario is significantly lower than the rest of the scenarios. We consider it unable to meet UK interim emission reduction targets, and so it has been excluded. The remaining DFES / FES scenarios (Consumer Transformation and Leading the Way) and the five CCC Sixth Carbon Budget scenarios collectively form our view of the Net Zero compliant scenario range. This range of scenarios meets UK Net Zero legislation, and the requirements of the UK Government’s Ten-Point Plan and Energy White Paper. Our approach means even a business plan based on the low scenario would contain sufficient investment to deliver Net Zero and interim targets (although it wouldn't contain enough investment to meet customer needs within RIIO-ED2 where these are above the low scenario). Table 2 shows our low, baseline, and high scenarios for EVs, heat pumps, and distributed generation uptake to the year 2028 and Figure 2, Figure 3 and Figure 4 show a range of uptake forecasts. The capacity headroom calculations in this report consider all three scenarios. Table 2: Low, Baseline and High scenarios

Investment scenario Total uptake by 2028

EVs Heat pumps Generation

High scenario 0.47m 0.31m +2.2GW

Baseline scenario 0.30m 0.16m +1.7GW

Credible Scenario Range Scenario Credible Low scenario 0.30m 0.16m +1.7GW

The baseline represents the best approach for our customers assuming the appropriate regulatory mechanisms are in place. Figure 2, Figure 3, Figure 4 and Table 2 show that our baseline scenario tracks the bottom of the credible range in SP Manweb. This is intentional. By basing our investment plan on EV and heat pump uptake at the lower end of Net Zero compliant forecasts, we’re confident that we are only using the minimum investment needed to enable Net Zero, as actual EV and heat pump levels are unlikely to be lower than this baseline scenario. Where actual levels are higher than this baseline scenario, we will use uncertainty mechanisms to address the difference.

Figure 2: Range of EV uptake forecast

Figure 3: Range of HP uptake forecasts

Figure 4: Range of DG uptake forecast 3. THE DISTRIBUTION SYSTEM

3.1 Technical characteristics of the distribution system

The technical and design criteria and procedures applied in the planning and development of the distribution system are detailed within the Distribution Code of Licensed Distribution Network Operators of Great Britain (DCODE). Under Condition 15 of the Electricity Distribution Licence, the SP Manweb system must also comply with the provisions of the GB Grid Code. A summary of the fundamental principles and standards applied in the design and planning of the distribution system can be found in the SP Manweb LTDS8.

3.2 Typical distribution networks and configurations

The SP Manweb distribution system is configured as a mesh network with interconnection at all voltage levels.

8 https://www.spenergynetworks.co.uk/pages/long_term_development_statement.aspx

The ‘mesh’ design methodology varies significantly from the traditional industry network design which relies upon duplicate radial networks, emanating from bulk-power transformations. The SP Manweb design philosophy is based on high transformer utilisation, where smaller single transformer substations supply power into an interconnected mesh where standard cable sizes are used throughout. Each voltage layer provides support to the voltage layer immediately above (LV, HV, EHV and 132 kV) offering a fully integrated and interconnected network. The mesh network is planned and operated to withstand the sudden loss or withdrawal from service of any primary circuit without any loss of supply to customers or an unacceptable deviation in voltage or frequency. The SP Manweb network delivers the following benefits:  better levels of system performance and reliability (reducing the average customer interruptions per fault to 15% of that expected by a typical radial design);  higher levels of asset utilisation as compared to conventional network designs; and  very flexible in accommodating new customer requirements. The unique nature of the SP Manweb network offers the best network reliability in the UK. However, the downside to this is that it is more expensive to run. We are at present considering the benefits of moving towards a hybrid network design at the 'fringes' of the network where the benefits of a fully interconnected network are not as great, to allow network performance and costs to move towards national averages over the long term. We aim to reduce the gap with industry average costs, whilst maintaining and enhancing the benefits of interconnection where appropriate. This will enable us to develop a network that will facilitate Net Zero. Figure 2 shows a typical 33kV network group. The number of transformers that can be operated in parallel is restricted by the short circuit design level of the network.

132/33kV BSP 33kV Underground Cable Transformers

Two Sections of 33kV 33kv/HV Primary Busbar with a section Transformer circuit breaker

Indication of HV Circuit Breaker connection Interconnection

Indication of Zones of Unit Ring Main Unit Protection

Figure 5: Typical 33kV network in the SP Manweb area

To establish the firm capacity of a substation group, network analysis is used to determine the impact of various circuit or transformer outages on the interconnected group. Considering a single outage event, the maximum load supplied by each substation group is determined whilst ensuring thermal constraints are not exceeded and no unacceptable deviation in voltage or frequency.

4. HEADROOM CALCULATION METHODOLOGY

4.1 Summary of Network Assessments

Modelling across the range of forecast scenarios to identify network capacity headroom: • We use our range of forecast scenarios to systematically assess the network to identify where, when, and how much additional capacity is available. • We assessed against the range of Net Zero compliant scenarios, using advanced automated studies, assessing power-flows in each half-hour period to beyond 2030. • We have considered network interventions which are planned to occur over the coming years.

Our forecasts show that customer demand and generation needs are increasing significantly. This section sets out how we assessed the capacity headroom of the existing network and consequently its ability to accommodate these changes, and some of the key results from those assessments.

4.2 Forecast load and generation

Using the outputs from the DFES, the low, baseline and high scenarios and forecasting tools, an analysis of the network was undertaken. Given the significance of future EV and HP demand at LV, we have built a full connectivity model of our LV network. We’ve combined it with our existing HV and EHV network connectivity models, so we now have a complete model of our entire network, from customers’ cut outs up to the transmission network. We call this our ENZ (Engineering Net Zero) Model. The ENZ Model enables us to trace the network and aggregate demand, including the effects of demand diversity at any point in the network. The following are the key steps: i. Present maximum loading was assessed for each asset. At Primary substation (EHV/HV) and above, the historical SCADA network data was fully available. At lower voltages, the present loading was assessed using the full connectivity data including the number, type, and size of customers supplied by each asset. This assessment made use of utilisation data where this was available, for example using Maximum Demand Indication (MDI) data.

ii. Forecast change in load/generation for each asset. The model (ENZ) uses the forecasts, including the individual property level data across the entire network. The modelling combines the forecast information with detailed network data on each of the assets – their electrical characteristics, ratings etc. iii. Establish forecast load/generation. The model (ENZ) established what the resulting load and generation would be for each scenario.

4.3 Network Constraints

We have considered two main types of network constraint when assessing network capacity headroom, these are: i. Thermal Constraints - where network power flows would exceed equipment thermal ratings and/or the network assets operate at voltages outside the safety limits.. Thermal constraints can affect any type of asset at any voltage level. High loadings on certain assets may simply reduce their life, however significant overloading introduces safety risk. For example, an overhead line conductor will sag more if it is overloaded – this may risk the statutory minimum safety clearance distances outlined in the Electricity Safety, Quality and Continuity Regulations (ESQCR). The thermal loading on each asset is considered against its capability under normal and fault/outage conditions. Equipment thermal ratings are considered to vary seasonally with temperature through the year. Cyclic thermal ratings of assets are used when assessing the network under fault/outage conditions. The cumulative time exposure to overloads, and whether equipment has sufficient cool back periods are considered. We show negative capacity headroom when the network assets are forecast to exceed 100% of their thermal rating. ii. Fault Level Constraints - where the network fault current would exceed the fault current rating of switchgear, or design limit of the network. If this happened, it would represent a serious safety risk as the network could not be safely isolated in the event of a fault. Fault current constraints can affect equipment at any voltage level. Circuit breakers may be called upon to disconnect faulting equipment from the network; or energise onto faulty or earthed equipment. A range of types of fault (including 3-phase and single-phase faults) are assessed under make and break fault duties. The prospective fault current for each distribution busbar are calculated in accordance with Engineering Recommendation G74 Issue 2, together with the corresponding X/R ratios.

Where substations are approaching switchgear capability or operationally managed, detailed assessments of the maximum fault flows through each individual breaker are undertaken. Substation infrastructure such as busbars, supporting structures, flexible connections, current transformers, and terminations must be capable of withstanding the mechanical forces associated with the passage of high magnitude fault current i.e. through-current withstand duty. Where switchgear is in excess of 95% of equipment or design rating, we consider the substation to be constrained. These constraints can occur together or independently. In all cases, these network constraints are a result of there being insufficient network capacity to accommodate customer power flows. Headroom at a primary may also be limited by a constraint on higher voltage level supply substation.

4.4 Network Interventions

As well as the forecasting load and generation (see 4.2) for our headroom calculation, we have also considered changes to the network which are planned to occur over the coming years. i. Network interventions Network reinforcements committed during RIIO-ED1 price control. Network reinforcements planned for RIIO-ED2 (shown in Table 4). ii. New connections Confirmed connections, as detailed in Appendix 6 of LTDS. When we assess the network for interventions, we consider potential solutions against several factors:

We consider a wide range of possible solutions to manage each individual network constraint. These include flexibility services alongside smart and conventional solutions. They also included new innovative solutions we’ve developed in RIIO-ED1, such as world-first real-time fault level monitoring and active fault level management, combining flexibility services with network automation, and using enhanced forecasting tools. Building on RIIO-ED1 innovation has saved our customers over £80m across our whole business plan. There are six main types of interventions to add or manage capacity as shown in Table 3. They are not mutually exclusive, so can be combined. When considering how to best provide capacity for customers, we assess all interventions on an equal and impartial basis. We consider the ability to deliver customer’s needs alongside whole life cost, safety, environmental impact, and compliance with standards.

Table 3: Summary of intervention types

Intervention Type Advantages Disadvantages

Can help defer or avoid Not always available as an Flexibility Services reinforcement. option. Where customers agree to actively manage their demand/generation to Encourages competition and the help avoid constraints. See our case democratisation of the energy Doesn’t help fault level study example on the next page. system (participation by a wider (switchgear) constraints. pool of service providers).

Intervention Type Advantages Disadvantages

Cost effectiveness (MW Directly benefits customers reduction per £) is lower than Energy Efficiency through lower bills. other interventions. Where customers have agreed to manage their demand to help avoid Helps reduce whole system constraints. Doesn’t help fault level peak, network losses, and the (switchgear) constraints. need for generation capacity.

Often lower cost than network reinforcement. Smart Network Interventions Can increase network Where we look to get more out of Have secondary benefits, such complexity. existing network capacity. as enhancing effectiveness of other interventions.

Network Reconfiguration Limited to where there is a low Where we temporarily or permanently A low-cost intervention. coincidence of customer usage adjust the topography of the network to between neighbouring sections of better match existing network capacity Quick to implement. network. with customer power flows. Capacity uplift might only be for Typically a low-cost intervention. Using Enhanced Network Asset short periods. Ratings Where we seek to increase the thermal Quick to implement. Can increase asset deterioration. capacity of individual existing network assets without having to replace them. Doesn’t help switchgear

constraints.

Allows significant customer Can take a long time to deliver, demand and generation growth especially where planning by providing substantial permission is needed. Network Reinforcement additional capacity. Where we permanently increase Enables customer participation in network capacity by replacing existing assets or adding more assets – for wider market opportunities by Potentially higher environmental providing unconstrained access impact than other interventions. example, a new substation. on an enduring basis.

Can improve asset health and

reliability.

Table 4 provides a disaggregation of RIIO-ED2 planned interventions for SP Distribution. The capacity release from these schemes has been considered in the calculation for network capacity headroom.

Table 4: RIIO-ED2 planned interventions

Delivered Type of Network Group Scheme Description by Intervention DEESIDE PK GRID GT1 / -Additional Grid infeed at Deeside and 33kV Network SIXTH AVE GRID GT1 circuit re-configuration at Sixth Avenue Grid Reinforcement 2027/28 substations. & Flexible -Flexible services during the scheme delivery services ABERYSTWYTH GT2 / - Reactive compensation at Aberdyfi and Innovation & RHYDLYDAN GT1 Harlech primary substations 2027/28 Network Reinforcement FOUR CROSSES GT2 / -New 33kV circuit between Maentwrog Grid and Network MAENTWROG GT1 / Porthmadog primary substations Reinforcement 2026/27 MAENTWROG GT2 -Flexibility services during the scheme delivery & Flexible services

Delivered Type of Network Group Scheme Description by Intervention ACER AVENUE T1 -Additional primary infeed at Acer Avenue Network primary substation and reconfiguration of 2026/27 reinforcement existing 33kV circuits. SANDBACH T1; -Additional primary infeed at Fodens primary Network FODENS T1 substation and 11kV interconnector to Sandbach 2024/25 reinforcement primary substation. LEGACY LOCAL GT2 / - Reactive compensation at Newtown Grid and Innovation & NEWTOWN GT2 / Morda primary substations 2027/28 Network OSWESTRY GT8 / Reinforcement WELSHPOOL GT1 FORMBY GT2B / -New 33kV interconnections between Formby SOUTHPORT GT1 / and Southport Grid substations Network 2025/26 SOUTHPORT GT2 Reinforcement

COPPENHALL GT1 / -Replant Grid Transformer at Radway Grid CREWE GT1 / CREWE substation Network 2026/27 GT2A / CREWE GT4A / Reinforcement RADWAY GREEN GT1 / RADWAY GREEN GT2 / - Underground OHL and overlay cable sections WHITCHURCH GT2 Network between Weston - Basford 2027/28 Reinforcement ELWORTH GT1 / -Additional primary infeed at Middlewich primary ELWORTH GT2 / substation Network 2025/26 KNUTSFORD GT1 / -Transfer Morrison’s primary substation and Reinforcement KNUTSFORD GT2 33kV circuit reconfiguration WALLASEY GT1 / -Replacement of 33kV switchboard at Woodside Fault Level WALLASEY GT2 / Grid. 2025/26 Reinforcement WOODSIDE GT2 KELCO T1 / NEWS - New primary infeed at Ainsworth Lane INTERNATIONAL T1 / -Split the 5 primary 11kV group into two 3 Network NEWS INTERNATIONAL primary groups. reinforcement T2 / PALCO T1 / and Group split SOUTHDENE T1 BENTINCK ST T1 / -Voltage uprating of 6.6kV network group to BENTINCK ST T2 / 11kV. CHESTER ST (BIRKENHEAD) T1; 2027/28 MDHB EGERTON DOCK T1 / MDHB EGERTON DOCK T2 Voltage BRITISH SIDAC T1 / Uprating SHERDLEY RD T1 / ST 2025/26 HELENS LINKWAY T1 / WATERY LA T1 GILBROOK DOCK T1 / HILL RD T1 / MOBIL OIL 2025/26 (WALLASEY) T1 GATEACRE GT1 / -Installation of current limiting reactor in series Fault Level HUYTON GT1 / KIRKBY with 60MVA transformer at Prescot Grid. 2027/28 Reinforcement GT3 / PRESCOT GT1A PRIMARY -Replacement of 33kV RMUs at 15 primary Fault Level 2027/28 SUBSTATIONS substations. Reinforcement

It should be kept in mind that although we are quite certain of the future need for capacity and the network development options determined, there is some latitude on when network capacity interventions may be required. The timing of triggers for investments may vary, depending on the rate of change in stakeholder requirements influenced by regional and national policies. Intervention at a specific site may be required in a

different year depending on the rate at which customers’ needs change. As with any forecast there are many factors which can change over time and influence pre-determined plans. Beyond RIIO-ED2 timescales (end of 2028), the flexibility tender process and intervention optioneering will continue to be reviewed on a regular basis as described in Section 4.5.

4.5 Flexibility Services

Flexibility will play a key part in helping to manage the pace of the Net Zero transition. Flexibility services is where we pay a third party to operate assets in a way that’s beneficial to our network. Those third parties will be owners of generation assets or low carbon technologies (LCTs) such as wind turbines, battery storage, solar or electric vehicles, and we may ask them to “turn down” or up depending on the needs of our network. In other words, we might ask them to lower the power consumption of their assets for an agreed period to allow us to free up that capacity for use elsewhere, or we might ask them to use more power in areas where we have excess generation. Flexibility services can help us defer or avoid new network capacity, can be deployed more quickly than traditional network interventions, and can help democratise and bring competition to the energy sector. The details of the network assessments are used to specify both the design requirements for smart/conventional options and also to detail the requirements included in flexibility tenders. The tenders include the location, service type (e.g. scheduled in advance as a ‘Sustain’ product), service window and time (e.g. 4-6pm weeknights between October and March) and detail the requirement (MW/MVArs). Regular flexibility tenders will allow us to understand the scope for alternative solutions to network constraints – it is planned to repeat the flexibility tender process on a twice annual basis as shown in Figure 5. This will have several beneficial effects including improving service provider confidence, challenging market costs, and increasing certainty on the level of flexibility we can procure in the coming years. Details of our flexibility service requirements, including an overview of the products can be found on our website9.

Figure 6: Annual Flexibility Tender process timeline

Subject to requirements, we run two competitive tender rounds per year (Spring and Autumn). This timetable, along with documents detailing our flexibility processes are published at the following website: https://www.flexiblepower.co.uk/.

9 https://www.spenergynetworks.co.uk/pages/flexibility.aspx

The capacity headroom data presented in this report considers flexibility services where contracts are awarded to a service provider.

4.6 Demand headroom

To calculate the demand headroom, we consider the expected increase in demand from the baseline, low and high scenarios, up to 2050, and compare these with the firm capacity of the group. Typically, the firm capacity of a primary substation is calculated as the maximum load it can serve under N-1 contingency conditions. The firm capacity of substations in the SP Manweb area must be calculated from network analysis owing to the interconnected nature of the system.

4.7 Generation headroom

To calculate the generation headroom, we consider the expected increase in generation from the baseline, low and high scenarios, up to 2050, and compare these against the reverse power flow capability of the group and the fault level limits. The increase in generation connected to the network has also created the relatively new phenomenon of widespread reverse power flows. This occurs when generation exceeds local demand, for example during the night when demand is low. Short circuit studies are a key factor in our assessments of our network’s ability to accommodate forecast generation. In determining the generation headroom capacity, the following considerations are relevant:  The fault levels are calculated under the most onerous network conditions to yield the maximum anticipated fault currents. The most onerous network condition is considered to be when the following conditions occur concurrently: o All generating apparatus is in service; o All transformers are set to nominal tap position; o The system is intact (N); and o Fault level contributions are included from all independent generators.  Fault contributions from synchronous generators and converter connected generators are treated differently. Typical fault current contributions from synchronous generators and converter connected generators are used to determine the available fault level headroom.

4.8 Capacity Headroom results

The full suite of capacity headroom results for SP Manweb grid substation groups (132/33kV) and primary substations/substation groups (33/11 kV) is available on our website10. In reviewing the capacity headroom results, it is worth noting:  The SP Manweb distribution network is configured as a mesh network with interconnection at all voltage levels. Headroom results provide the calculated headroom of the substation/substation group. The actual headroom at a particular location is subject to further assessments, as the changing distribution of demand and generation across the mesh could limit the available headroom.  Headroom at a substation/substation group may be limited by constraints at the higher voltage level. Generation headroom results do not include any additional restriction in available capacity due to upstream fault level constraints. Any new generation connections where there are upstream fault level constraints will be subject to detailed network assessments to determine the actual generation capacity headroom.  Headroom results do not take account of the additional capacity provided through the rollout of Constraint Management Zones (CMZs).  Demand and generation forecasts are subject to factors which can change over time and influence pre- determined plans.

10 https://www.spenergynetworks.co.uk/NCHR

 The timing and type of network intervention may vary, depending on the rate of change in stakeholder requirements influenced by regional and national policies, and requirements for emerging new connections.  SP Manweb plc have taken all reasonable endeavors to ensure the accuracy of the results using information available at the time of publishing. SP Manweb plc is not responsible for any loss that may be attributed to the use of the information presented in this report and the capacity headroom results.

5. REFERENCES

This NCHR is part of a suite of documents published by SPEN to provide information and data to support our customers and stakeholders with their development plans.  RIIO-ED2 Business Plan Our draft RIIO-ED2 business plan sets out our proposals for the regulatory period from 2023 to 2028. Our draft business plan is available on: https://www.spenergynetworks.co.uk/pages/our_riio_ed2_business_plan.aspx  Long Term Development Statement (LTDS) The LTDS provides detailed ratings of network components and forecast loadings for the following five years. It also provides information on: o Appendix 3: System Loads o Appendix 4: Fault Levels o Appendix 5: Embedded Generation (details of the generation connected to the distribution system, or contracted to connect to the distribution system) o Appendix 6: Connection Activity o Appendix 8: Predicted Changes to the distribution system e.g. transformer replacement The LTDS document is published annually and is available free of charge via download (registration required) by visiting the following website: https://www.spenergynetworks.co.uk/pages/long_term_development_statement.aspx  Distribution Future Energy Scenarios (DFES) To ensure we plan our distribution networks to facilitate the decarbonisation objectives and choices of our customers and communities, we need to forecast and understand our customers’ changing electricity requirements – this is the purpose of our DFES. Our DFES forecast customer demand and generation up to 2050. Given the uncertainty and ever- changing policy landscape we operate in, we've created forecasts for a range of scenarios, which reflect differing levels of consumer ambition, government and policy support, economic growth and technology development. Our DFES forecasts are published annually, and are available on our website: https://www.spenergynetworks.co.uk/pages/distribution_future_energy_scenarios.aspx  Flexibility services In 2020 we began tendering for all Constraint Management Zones (CMZs) identified with forecast load growth that would require an intervention during the RIIO-ED2 period (2023 to 2028). Flexibility Services are a key type of intervention, which can be used on their own or in combination with other solutions to efficiently provide the necessary capacity on the network, helping to defer or avoid traditional reinforcement. As the Flexibility market is still developing, more customers connected to our network are beginning to understand what they can offer, and new participants are entering the market. We will therefore continue to tender for our requirements until works on the alternative solution commence, taking account of the planning timescales. https://www.spenergynetworks.co.uk/pages/flexibility.aspx  Heat maps

Our heat maps are an interactive web-based tool to provide an indication of potential opportunities to connect generation to our distribution networks. https://www.spenergynetworks.co.uk/pages/connection_opportunities.aspx  Embedded Capacity Register (ECR) The ECR (formerly the System Wide Resource Register) has been developed to provide better information to electricity network stakeholders on connected resources and network services. It provides information on distributed generation and storage resources (≥1MW) that are connected, or accepted to connect, to SP Energy Network's distribution networks, and is updated each month. https://www.spenergynetworks.co.uk/pages/embedded_capacity_register.aspx