Gas Future Operability Planning 2016
GB gas transmission
NOVEMBER 2016 Gas Future Operability Planning November 2016
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We are in the midst of an energy revolution. The economic landscape, developments in technology and consumer behaviour are changing at an unprecedented rate, creating more opportunities than ever for our industry.
Our Gas Future Operability There are some important choices Planning (GFOP) publication, to make about our priorities for along with our other System investment and focus for innovation Operator publications, aims to in order to provide long-term value encourage and inform debate, for UK gas consumers and to ensure leading to changes that ensure we continue to meet your needs. We a secure, sustainable and must focus on the energy system as affordable energy future. a whole rather than on its component parts to develop robust and adaptable This is a first draft to demonstrate solutions for the future. what this document could look like. We will use this as a building block I hope that you find this document, to develop a more collaborative along with our other System Operator publication going forward. We want publications, useful as a catalyst for your views, knowledge and insight wider debate. For more information to shape future editions of this about all our publications, please see publication and to help us to better section 1.2. understand the future of energy impact on gas transmission. We look Please share your views forward to engaging with you over with us by getting in touch: the next year. [email protected]
The current and future direction of Andy Malins energy policy and the shape, size Head of Network Capability and mix of the energy network in the and Operations, Gas UK is increasingly uncertain. Therefore we must consider the different and changing roles gas can play in both the short and long term to understand how our role might change; how the use of our asset base may evolve to meet changing customer needs and how market developments may impact the commercial regime. Gas Future Operability Planning November 2016 02
Contents
Executive summary...... 04 Next steps...... 42 1.1 Executive summary...... 04 4.1 Next steps...... 42 1.2 How does the Gas Future Operability Planning publication fit in?...... 06 1.3 Key messages...... 08 1.4 Future Gas Future Operability Planning editions...... 10 1.5 Next steps for the Gas Future Operability Planning...... 11 Appendix 1 – Analysis assumptions and methodology...... 46 5.1 Analysis assumptions...... 46 5.1.1 Power Market assumptions...... 46 5.1.2 Demand assumptions...... 47 5.1.3 Supply assumptions...... 47 5.2 Analysis methodology...... 48 Changing energy landscape...... 14 5.2.1 Analysis setup...... 48 2.1 Changing energy landscape...... 14 5.2.2 Analysis focus...... 49 2.1.1 EU referendum...... 15 5.3 Analysis results...... 50 2.1.2 Government perspective on future 5.3.1 Power Market Model outputs...... 50 power generation...... 15 5.3.2 Gas Market Model outputs – demand...... 51 2.2 National transmission system overview...... 17 5.3.3 Gas Market Model outputs – supply...... 52 2.3 What challenges are we currently seeing 5.3.4 CCGT swing...... 53 on the National Transmission System?...... 18 5.3.5 2017 analysis results summary...... 54 2.3.1 System imbalances...... 18 5.3.6 2023 analysis results summary...... 55 2.3.2 Gas system stock levels and 5.3.7 2030 analysis results summary...... 56 system pressures...... 19 5.3.8 Regional sensitivities...... 56 2.3.3 Short-notice changes in customer Appendix 2 – Glossary...... 57 requirements at peak times of system maintenance...... 26 2.4 What are our Future Energy Scenarios showing us?...... 29 2.5 System flexibility...... 32
Gas and electricity interactions – Future energy generation...... 36 3.1 Gas and electricity interactions – Future energy generation...... 36 3.2 Analysis results summary...... 37 3.3 What next for our analysis?...... 40 Chapter one 03 04
Executive summaryExecutive
one Chapter Chapter 2016 November Planning Operability Future Gas Chapter one Executive summary of Energy suite of documents of suite Energy of Future other our and (GTYS) Year Statement Ten 1.1) Gas the Figure (see complement and uncertainties. The GFOP needs, future operational challenges and and quantify future gas transmission network which all market can discuss participants in vehicle aclear have not do we Currently, safe and secure NTS now into secure safe and and the future. to we ensure continue aresilient, toprocesses maintain operational and to making modifications in our decision way we to you respond leading other market and signals, GFOP The our processes. and operation may that these to pose the challenges NTS and out to 2050 of Transmission the National capability future (NTS) System the how maydescribes your affect requirements changing The Executive summary 1.1 1 Gas Future OperabilityPlanningNovember2016 across the NTS. physical investments (assets) are considered (rules), operational arrangements (tools) and make sure that the right commercial options to parties interested all with to work We want http://www2.nationalgrid.com/uk/industry-information/future-of-energy/ quantify theeffect onthefuture NTS highlight changeswhichwillrequire usto collaborative soallinterested partiescan editions ofthisdocumenttobemore review andcomment.Ouraimisforfuture This isafirstdraftofthisdocumentforyour
Gas Future Operability Planning (GFOP) Planning FutureGas Operability publication will fill that gap gap that fill will 1 (see section 1.2). section (see
elements ofthefuture energy landscape. stakeholders, believeare themostimportant and focusonwhatyou,ourcustomers hear yourviewssothisdocumentcanevolve capability andoperability. We are keento current and future changes. to both adapt and respond quickly more us to allow to flexible more to be needs NTS the operate and plan we way The changing at an unprecedented rate. is operate all we which in landscape securing our energy future. The energy Operator and Transmission Owner in System gas as role akey We have will change the the will change
04 Chapter one
05
UK gas transmission Gas Ten Year Year Gas Ten Statement 2016 NOVEMBER 2016 GTYS how we are toresponding these impacts what options takingwe are forward what changes makingwe are to our decision- making processes what changes makingwe are to our operational processes and what the consequences couldbe on service.our In outline: will we Actions What action we need take to now in our investments or processes etc.
will GFOP what the the what consequences couldbe on service.our what capabilitywhat potential what options we are aware of when they are are they when occur to likely required is their extent – or localised national issues we have identified operability what The allow us to clearly more articulate: Network Impact Network then assess We and impact the document what this could mean network our for and our customers. problemsWhat we may encounter and what possible there solutions may be. Anything decidewe take to on further action in will detailed be the GTYS.
will will GFOP provide a forstarting point and innovation collaboration. discuss potential discuss (rules, options tools and assets) quantify capability requirements identify and quantify risk operability understand impact the Analysis thenWe complete network our basedanalysis scenarios the on assumptionsand we have made. The then help us to:
on first e.g. areas of greatest uncertainty or impact on the future of gas, network our Assumptions needWe make to assumptions the about uncertainmore the of elements and which future areas focus to customers. and will allow you to: you allow will
GFOP explore options/opportunities for for options/opportunities explore working. collaborative we should look at challenge our assumptions our challenge provide evidence for other areas might change might tell us what you think might happen tell us how your use of the NTS Scenarios useWe our Energy Future Scenarios as the starting point for all our network future planning. The Figure 1.1 Operability Planning document The role of the Gas Future 2016 November Planning Operability Future Gas Chapter one Executive summary our customers. planning, which will benefit are we investment the about network analysis and industry energy the to inform scenarios these We use 2050. to out projections demand and provide supply and and affordability) sustainability (security of supply, on the energy trilemma are scenarios These based industry. energy the across from stakeholders from input involves and year every (FES). Scenarios Energy Future the is publications flagship The point starting for our for change. debate, and making decision intended to yearthat we are every beacatalyst produce enabler, an as facilitator. and informer SO publications The (SO), placed Operator System future. As we perfectly are to energy make that together sure we our shared secure working with you and our industry debate across energy to role play in leading the important an has Grid National publication fit in? How the does Gas Future Operability Planning 1.2 Gas Future OperabilityPlanningNovember2016 JULY 2015 Scenarios Future Energy UK gasandelectricitytransmission
The FES The is published is published
Reports Summer operability inoperability our and transmission capability of the gas and electricity view long-term our We build consultations and reports. summer and winter by complemented are and business planning activities and informsupport your publications are designed to winter. These or summer coming the for demand and supply electricity and gas of aview to provide season each of ahead them We publish transmission, we produce the around gas and electricity For short-term challenges Report Outlook Winter 2 015/16 every six months. months. six every and Winter Outlook 7 April2016 Report Outlook Summer 2 016
Future Energy Future Energy
(GTYS) (GTYS) The thatindustry can inform debate. information across the energy your views and share these publications, we seek publications. To help shape FrameworkOperability (SOF) and (GFOP) Planning (NOA), Gas Future Operability Network Options Assessment Statements and (ETYS Scenarios (FES), Ten Year also It on. working currently are we projects on update GTYS The (NTS). National Transmission System capacity is available on the gas exit and entry where and what NOVEMBER 2015 Statement 2015 Gas Ten Year UK gastransmission Gas Ten Year Statement Ten Year Statement Gas describes in detail describes provides an
System System GTYS), GTYS),
06 Chapter one 07
and
uses the publications. publications. Future EnergyFuture EnergyFuture
publications. System Operability System System Operability System UK electricity transmission System Operability Framework 2015 NOVEMBER 2015 Framework (SOF) Future Energy Scenarios Scenarios Energy Future requirements future examine to for the operability of GB describes It networks. electricity operational in developments information provides and needs that can help towards technology, new developing that solutions and codes operability. system improve If you are interested in finding consider please more, out our reading Network Options Assessment Assessment Options Network (NOA) GB electricity transmission transmission electricity GB network. If you are interested in finding out more about and capability electricity consider please operability, our reading The Scenarios (FES), Electricity Electricity (FES), Scenarios (ETYS) Statement Year Ten and Framework (SOF) Ten Electricity (FES), Scenarios (ETYS) Statement Year
System builds applies . You can. You and Future EnergyFuture
Network Options Options Network publications. publications. and presents the Network Options Options Network Electricity Ten Year Year Electricity Ten UK electricity transmission UK gas electricity transmission Network Options Assessment 2015 Electricity Ten Year Year Electricity Ten Statement 2015 FEBRUARY 2016 FEBRUARY NOVEMBER 2015 Assessment (NOA) Statement (ETYS)Statement to Scenarios Energy Future highlights and models network shortfalls capacity on the Electricity National GB the (NETS) System Transmission over the next ten years. If you are interested in finding out investment network the about recommendations that we these meet will believe the across requirements transmission electricity GB consider please network, reading Assessment (NOA) find out more about the electricity of view longer-term capability operability and by our reading The The Operability Framework (SOF) upon the future capacity future the upon described inrequirements ETYS network investment recommendations that we believe will meet these the across requirements Scenarios (FES) (FES) Scenarios
may publications. publications. publication publication publications. publications. Gas Ten Year Year Ten Gas and Gas Future Operability Future Energy Scenarios Scenarios Energy Future Gas Future Operability Operability Future Gas UK gas transmission Future Operability Future Planning 2016 NOVEMBER 2016 (FES) Our Planning (GFOP) Future Energy Scenarios (FES), (FES), Scenarios Energy Future and (GFOP) Planning ten years. If you are interested in finding out more about provides our viewof the andcapability requirements development network required be will decisions that for the NTS over the next the longer-term view of gas of view longer-term the capability operability, and our reading consider please 2016 November Planning Operability Future Gas describes how changing describes how requirements affect the future capability of the NTS out to 2050. It also considers how affect may requirements these our and operation NTS processes. The GFOP highlight a need change to the way we respond you to or This, signals. market other in turn, may lead us modify to processes operational our and decision making. This making. decision and publication helps make to sure we continue maintain to a resilient, safe and secure NTS now and into the future. If you are interested in finding out reading consider please more, our Statement (GTYS) Chapter one Executive summary project level,of higher The the NTS. of strategic,future gas more operability and the capability may affect requirements of how yourquantitative understanding changing of will the future provide adetailed assessment Our Key messages 1.3 Gas Future OperabilityPlanningNovember2016 changing future. changing how and we work together can forward to adapt to this Changing energylandscape requirements. meet theirowncustomers’ they takegasinorder to flexibility inhowandwhen customers wantadditional Our distributionnetwork electricity market. to changesinthe shorter noticetorespond gas onmore quicklyat to takegasoff andbring terminals) wanttobeable storage sitesandentry interconnectors, industrials, customers (power stations, Our direct connect
will focus on the role the gas NTSwill will focus the have gas the on role going the network. the network. in advancetobalance to investortakeactions certainty ontheneed We nowhave less changes were required. from themarketthat to giveusclearsignals flow. Theseauctionsused a shipper’s intentionto auctions nolongerindicate Longer-term capacity within theNTS). (volume ofgasstored gas systemstocks customers whichdepletes commercially responsive balancing byourmore reconciliations ofdaily trend towards later There isanotable
flexibility to manage. flexibility tomanage. greater operational of flowsand requires reduces thepredictability day tothenext.This variation offlowfrom one supplies canmeanagreat Diversity andextentof demand levels. distribution ofsupplyand change in the geographical seeing more rapidratesof Operationally weare February 2015. of 38.5 ago withthelargest swing treble thesizeofadecade and theyare, onaverage, gas systemstockswings magnitude ofwithin-day There isanincreasing mcm occurring in mcm occurringin
08 Chapter one
09 4
(customer low 3 Gas will be required out Gas will be required to 2050 and beyond for domestic heating, industrial customers, power generation. continue to will We innovate and evolve the NTS as the UK progresses the 2050 targets. towards forefront at the are We gasof developing green solutions that aim to deliver value for money using the existing assets – for example project CLoCC the end of the gas day, coinciding with the in totalreduction generation demand after the daily peak. risk if fluctuationsGrowing generationin renewable in magnitude andgrow coincide with the start or systemgas daily the of end stock swing. CCGT swing alone is unlikely to cause system operability challenges. The highest levels of CCGT likely to occurswing are when wind generation rapidly atincreases cost connections).
We are committed to committed are We adapting our existing NTS operationalinfrastructure, and commercial processes they to ensure agreements the most efficientremain means ofand reliable transporting gas from supply terminal to offtake. Gas will be crucial to acontinuing to provide at supply energy secure best value for consumers while we transition to a low carbon future. operate is The way CCGTs expected to become more as theirunpredictable generate to requirement with more will correlate variable renewable generation (wind, solar etc.). will be used CCGTs in combinationmore with other electricity system balancing tools storage,(interconnectors, other generators and demand-side response). The volume of gas system stock swing attributable to CCGT operation has the considerablyscope to grow into the future.
2 GW). GW of new combined cycle gas turbine (CCGT) capacity is expected to connect to the NTS 28 (currently By 2040, between 15–38 Gas plays a vital role todayGas plays a vital role energy secure in providing to our homes, supplies businesses and industry. On an annual basis, gas 2.5 times asprovides (TWhs) as much energy electricity which includes ~70% of heat. Gas and electricity interactions – Future energy generation – Future Gas and electricity interactions Future of gas Future http://futureofgas.uk/ http://projectclocc.com/ website: CLoCC Project http://nationalgrid.com/fes 2016, FES 2 3 4 2016 November Planning Operability Future Gas Chapter one Executive summary your perspective. elements of the future energy landscape from important most the on focusing are we ensure to editions future into input your We want variables in combination. within-day the of more at to look required is work Further capability. and operability NTS within-day variables to assess the impact on in isolation and in combination with other demand within-day CCGT at looked We have made. have we assumptions analysis the on GFOP first our in upon focused have we topic the on feedback your to get keen We are document could look like. GFOP future for block abuilding is document This Future 1.4 Gas Future OperabilityPlanningNovember2016 s and provides an outline for what this this what for outline an provides s and Gas Future Operability Planning and and
of the following topics: more or one of impacts the assessing on focus could we editions future For [email protected] Let us know what you think, contact us: Commercially responsive supplies. of long-term obligated capacity. ahead/within-day bookings instead Exit day on reliant more becoming Customers Charging regime changes. Capacity and connection changes. of supply. security to boost NTS the on quality gas of range awider to accept pressure Growing and electricity interactions on operability. Clearer understanding of impacts of gas editions
10 Chapter one 11
GTYS if you published Nov GFOP & and we will be Q2/Q3 Run analysis
. Get in touch with us via
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Jul FES [email protected] would like get to involved. will We be asking you would like us engage to with you going of our 2017 GFOP of our 2017 you for opinions on the most appropriate way forward at this event. in early 2017 wherein early we will 2017 be seeking your views GFOP on the 2016 development the with help your for asking Mar Follow up GFOP to consultation event
.
2017
Q1 GFOP consultation event will be published be will . The next key step is Dec Start our process feedback
GTYS published GFOP & Nov 2016 Figure 1.2 Road map for the GFOP 2016 November Planning Operability Future Gas We haveWe already started talking some to of you at the Gas Futures Group, our Gas Customer Working Transmission Gas the and Seminar Group. will We be holding a consultation event to getto as much feedback from you as possible on this first draft. The GFOP Statement Year Gas our alongside Ten The timeline below outlines what we plan on plan we what outlines below timeline The doing next with the GFOP 1.5 Planning Operability Future Gas the for Next steps Chapter one Gas Future OperabilityPlanningNovember2016 12 Chapter two
13 14
Changing energy landscape two Chapter Chapter 2016 November Planning Operability Future Gas Chapter two Changing energy landscape energy Changing ensure weensure continue to your meet needs. to to and provide long-term value consumers for gas UK for investmentpriorities focus and for innovation in order to choices make our about important some are There may base evolve. ofthe use our asset how how and might change our role toterm understand long and play can in both gas the short roles different we the therefore consider must uncertain; increasingly in the is UK network sizeshape, mix of and the energy policy the and of energy direction future and current The landscape energy Changing 2.1 Gas Future OperabilityPlanningNovember2016 Key insights
(volume of gas stored within the NTS). (volume ofgasstored withintheNTS). which depletesgassystemstocks more commercially responsive customers reconciliations ofdailybalancingbyour There isanotabletrend towards later their owncustomers’requirements. when theytakegasinorder tomeet want additionalflexibilityinhowand Our distributionnetworkcustomers to changesintheelectricitymarket. more quicklyatshorternoticetorespond be abletotakegasoff andbringgason storage sitesandentryterminals)wantto stations, interconnectors, industrials, Our direct connectcustomers(power
advance to balance the network. advance tobalancethenetwork. on theneedtoinvestortakeactionsin were required. We nowhavelesscertainty signals from themarketthatchanges These auctionsusedtogiveusclear indicate ashipper’s intentiontoflow. Longer-term capacityauctionsnolonger flexibility to manage. flexibility tomanage. of flowsand requires greater operational the next.Thisreduces thepredictability a great variationofflowfrom onedayto Diversity andextentofsuppliescanmean distribution ofsupplyanddemand levels. rates ofchangeinthegeographical Operationally weare seeingmore rapid 38.5 a decadeagowiththelargest swingof they are, onaverage,treble thesizeof within-day gassystemstockswings and There isanincreasing magnitudeof mcm occurringin February2015.
14 Chapter two 15 between now and where 2025, they are likely connectto and what system constraints, if any, we might face. This may allow us identify to more favourable areas on thenetwork for future make can we ensure will which connections, use of and continue adapt to the transmission network avoid to any unnecessary investment, making the make best use of our current infrastructure assets. partners and stakeholders. believe We our provide (FES) Scenarios Energy Future current a range of credible futures cover to a majority of the potential impacts that exit the UK’s from the EU may have on the energy sector.
mcm within the next ten years 1 The largest within-day gas system stock change seen in February 2015.The largest within-day gas system stock change and increasing a day is The average change in gas system stocks across the magnitude of large within-day changes is increasing. 38.5 Secretary of State for Energy and Climate Change speech, November 18 https://www.gov.uk/government/speeches/ 2015: amber-rudds-speech-on-a-new-direction-for-uk-energy-policy to replaceto coal-fired power stationsexpected closeto It is 2025. by important for us to number increasing an impact what understand of CCGT connections may have on the gas transmission network. need We understand to how many connections there are likely be to 1 The Government stated in November that 2015 “gas is central our to energy secure future” and that imperative “it’s that we get new gas-fired built” stations power 2.1.2 generation perspective on future power Government The recent European Union (EU) referendum decision does not change how we operate 2.1.1 referendum EU the UK energy system or security of supply. areWe fully committed our to ongoing European our with projects investment 2016 November Planning Operability Future Gas Chapter two Changing energy landscape energy Changing November 2015 in also Statement, Autumn annual the In key to decarbonising electricity generation. CCS, nuclear and renewable technologies are target To by 2050. this 1990 meet levels from 80% least by at emissions reducing of target binding legally to the committed has UK The 3 2 5 4 Gas Future OperabilityPlanningNovember2016 policy changes have yet to be developed” detailed design and implementation of CCS decarbonisation of the UK” although “the CCS has a potential role in the long-term “that is view Government’s The UK. the in development CCS to delay expected is This removed. was (CCS) Storage and competition funding for Carbon Capture Amber Rudd, Carbon Capture and Storage letter to Angus MacNeil, January 2015, http://www.parliament.uk/documents/ commons-committees/energy-and-climate-change/DECC-CCS-announcement-SOS-TO-CHAIR.pdf January MacNeil, toAngus letter Storage and Capture Carbon Rudd, Amber market-news-detail/other/12597443.html DECC Annual Autumn Statement 25 November 2015: http://www.londonstockexchange.com/exchange/news/market-news/ Amended.pdf Energy Technology Institute (2014), http://www.eti.co.uk/wp-content/uploads/2014/03/3427-CCS-Brochure-Lores-AW------uk.html UKERC (2016), The future role of natural gas in the UK: http://www.ukerc.ac.uk/publications/the-future-role-of-natural-gas-in-the- in 2015/16).InMay2016,theUK’s electricity electricity transmissionconnectedcapacity reductions incapacity(~5 closures, powerstationmothballingor have resulted inearlierthananticipatedplant economic conditionsforthermalgenerators energy policyinNovember2015,thecurrent statementon Despite theGovernment mix generation on Economic impact Spotlight: 2 , the £1 billion ring-fenced ring-fenced £1 billion , the GW reduction in GW reduction in
3 .
solution as although it emits less CO power generation is not a viable long-term viable alternative with a reliable track record. only the currently is gas renewables; of reliability uncertainties associated with the long-term also are There uncertain. more fuel alternative carbon alower as gas of future the made has funding this to remove decision Government’s possible by2022ratherthan2025. than previously thoughtwithclosures plant maycloseatamore acceleratedrate This couldmeanthatcoal-fired generation a costadvantage. gas-fired generationisstillexpectedtohave competition betweenthetwofuels,although winter 2016/17.Thismayincrease price coal andgasispredicted tonarrow over power stations.Thepricedifference between increasingly uneconomicaltoruncoal-fired first time.Fallingpowerpriceshavemadeit anycoalforthe was suppliedwithoutburning (2016) Centre Research Energy UK by the A study by between 50 and 100 per cent 100 per and 50 by between to increase estimated are costs but met be can target 2050 the CCS Without option. carbon low not a is it generation coal-fired 4 concluded that without CCS, gas-fired gas-fired CCS, without that concluded 5 . The . The 2 than than
16 Chapter two 17
. As part of the GFOP 6 eight Distribution Networks (DNs) for onward onward for (DNs) Networks Distribution eight industrial and domestic to transportation customers, or directly to connected customers including storage sites, power stations, large interconnectors and consumers industrial (pipelines other to countries). As GB gas transmission System Operator gas transport to responsibility our is it (SO) from supplypoints exit to offtake points safely, efficiently and reliably.We manage the including network the of operation day-to-day maintaining demand, and supply balancing system pressures and ensuring gas quality standards are met. your of understanding current our outline We requirements in Chapter 2 of our Gas Ten StatementYear (GTYS) we want get to a better understanding of your future requirements of the NTS. Please stakeholder upcoming our in involved get engagement events (see Chapter let to 4) us know what your future requirements are. This will ensure the assumptions we are using as part of our future network planning process are appropriate and reflect your needs. to to t a t e ra he eth rpe ra ra tr t re tr p t ter a ter e t r a t ee e km of pipelines, operated at t er t