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TO Incentives Stakeholder Workshop Andy Hiorns, 7th December 2009 Outline of Presentation

 ENSG Study  Scenarios  Construction this Price Review Period (includes 2010/11 & 2011/12)  Anglo-Scottish Upgrade  North-Central Wales  North Wales  East Coast  East Anglia  Humber to Walpole HVDC link  London  Additional Pre-construction this Price Review Period  Central Wales  Humber to Walpole HVDC link  South West Peninsula  Conclusion 2 Overview of Reinforcements ENSG Report

TRANSMISSION SYSTEM REINFORCEMENTS

Dounreay • ENSG report identified series of REINFORCED NETWORK Mybster

Stornoway Cassley Dunbeath 400kV Substations Lairg 275kV Substations THE SHETLAND ISLANDS reinforcement required to meet EU 400kV CIRCUITS Brora Shin 275kV CIRCUITS

Mossford Grudie Bridge Major Generating Sites Including Pumped Storage Alness Conon Orrin Elgin Fraserburgh Luichart Ardmore Macduff St. Fergus Connected at 400kV Dingwall Targets Deanie Culligran Keith Strichen Connected at 275kV Inverness Nairn Aigas Blackhillock Dunvegan Kilmorack Peterhead Hydro Generation Beauly Fasnakyle Dyce

Glen Kintore Persley Broadford Morrison Woodhill Willowdale Foyers Ceannacroc Boat of Fort Augustus Garten Clayhills Under Construction or ready to start •Reinforcement identified for 2020 Tarland Craigiebuckler Redmoss Invergarry Construction subject to consents Quoich

Fiddes

Fort William Errochty Errochty Power Station Rannoch Clunie Bridge of Dun Very strong need case Tummel Lunanhead Bridge Tealing which were robust against Scenario Cashlie Dudhope Arbroath Lochay Lyndhurst Milton of Craigie

Killin Charleston Taynuilt Finlarig Cruachan Dalmally Burghmuir Dudhope Glenagnes Strong need case St. Fillans Nant Clachan SCOTTISH HYDRO-ELECTRIC Cupar TRANSMISSION Inveraray Glenrothes Sloy Leven Devonside Westfield considered for 2030 Redhouse Whistlefield Stirling Kincardine Glenniston Port Future requirement, but no strong Dunfermline Ann Longannet Bonnybridge Iverkeithing Dunoon Helensburgh Grangemouth Shrubhill Cockenzie need case to commence Dunbar Spango Devol Strathleven Telford Rd. Portobello Valley Moor Broxburn Gorgie Torness Erskine Cumbernauld Bathgate Whitehouse Inverkip Lambhill at present Easterhouse Livingston Kaimes Currie Newarthill Clydes Neilston Mill Hunterston Berwick Farm Wishaw Hunterston Busby Strathaven Blacklaw Kilwinning Whitelee East Series Capacitors Kilmarnock Kilbride •Concluded that network can be Saltcoats Town South Linmill Eccles Carradale Meadowhead Galashiels Kilmarnock Coalburn South Ayr SP TRANSMISSION LTD. Coylton Elvanfoot Hawick

Maybole

developed to facilitate timely NGC

Blyth Gretna Auchencrosh Dumfries Ecclefechan Fourstones Newton Tynemouth Stewart Chapelcross Harker South Shields Stella West West Boldon Glenluce Tongland Offerton Hawthorne Pit connection of renewables Hart Moor Spennymoor Hartlepool Saltholme Tod Point Grangetown Norton Greystones generation to meet EU target . Lackenby

Hutton

Heysham Quernmore Poppleton Osbaldwick

Thornton Bradford West Kirkstall Stanah Skelton Creyke Beck Padiham Grange Monk Fryston Saltend North Saltend South Penwortham Elland Drax Killingholme Eggborough Humber Refinery Rochdale Ferrybridge Keadby Washway South Templeborough Thorpe Humber Farm Kearsley Whitegate West Kirkby Marsh Bank Grimsby South Melton Lister Stalybridge West Wylfa Manchester Pitsmoor Drive Rainhill Stocksbridge Aldwarke West Winco Bank Burton Birkenhead Carrington Bredbury Neepsend Thurcroft Fiddlers Daines Sheffield City • Schemes under consideration at this Ferry Brinsworth Cottam Frodsham Jordanthorpe Norton Lees Pentir Macclesfield Chesterfield Deeside High Dinorwig Marnham

Staythorpe Legacy Cellarhead Ffestiniog Bicker Fenn Willington stage Trawsfynydd Ratcliffe

Drakelow Walpole Rugeley Spalding North Norwich Ironbridge Bushbury Main Willenhall Bustleholm Shrewsbury Penn Hams Enderby Nechells Hall Ocker Hill Coventry Oldbury •Anglo-Scottish Upgrades Berkswell Kitwell

Sizewell Burwell Feckenham Main Bishops Grendon Eaton Wood Socon

Patford Bramford Bridge East Sundon Claydon Pelham •Central & North Wales Wymondley Leighton Braintree Buzzard Rassau Walham Rye House Waltham Imperial Brimsdown Cross Park Swansea Cowley Hackney Pembroke Watford Elstree North Amersham Main Rayleigh Main Baglan Cilfynydd Whitson Culham Mill Hill Tottenham Redbridge Warley Minety Didcot Bay Upper Boat Uskmouth Iron Acton Willesden West Thurrock Margam Barking Coryton Alpha Steel Iver Ealing Northfleet East Pyle N.Hyde Singlewell Seabank City Rd W.Ham Tilbury Grain St Johns Cowbridge Laleham New Hurst •East Coast Tremorfa Wood Kingsnorth Cross Aberthaw Cardiff Kemsley East West Littlebrook Melksham Bramley Weybridge Chessington Rowdown Beddington Fleet Canterbury Wimbledon North

Hinkley Point Sellindge Bridgwater

Alverdiscott •East Anglia Bolney Nursling Taunton Ninfield E de F Dungeness Marchwood Lovedean Axminster Mannington Fawley Botley Wood Exeter

• Humber to Walpole HVDC link Chickerell Langage Abham Landulph Indian Queens 3 •London ISSUE B 12-02-09 41/177619 C Collins Bartholomew Ltd 1999 •South West Peninsula The 2020 Gone Green Electricity Scenario 2020

 Plant closures 5.5, 6% 3.3, 3%  12GW Coal & oil LCPD  7.5GW nuclear 34.1, 34%  Some gas & additional coal

 Significant new renewable 29.1, 30%  30 GW wind (19GW offshore & 11GW onshore)  Some tidal, wave, biomass & solar PV  Significant new non renewable build  3GW of new nuclear  3GW of new supercritical coal (some with CCS) 6.9, 7% 19.8, 20%  11GW of new gas  Renewable share of generation grows from 5% to 36% Gas Coal Nuclear Wind Other Renew Other  Electricity demand remains flat  Reductions from energy efficiency measures Progress  Increases from heat pumps & cars 2020 Target Description EU Renewable Energy Target; 15%  Scenarios of final energy demand  Scenario 1: 20.9GW E&W 11.4GW 2050 CO2 Target on correct ‘flight  Scenario 2: 24.3GW E&W 8GW Scotland path’  Scenario 3: 25.7GW E&W 6.6GW Scotland Scottish Renewables Target

4 Anglo-Scottish Upgrades

Range of B6 Boundary Required Transfers at Peak Demand for Central, 8 GW and 6.6 GW Wind Scenarios

8000

7000

6000

5000

4000

Power Flow Power (MW) 3000

Post TIRG B6 Capability (3.3 GW)

2000 Incremental Reinforcements to B6 (4.4 GW)

Single HVDC Link to Support B6 (5.7 GW)

1000 Two HVDC Links to Support B6 (7.0 GW)

0 2015 2016 2017 2018 2019 2020 Year

5 Anglo-Scottish Upgrades - Cost benefit Analysis

15 Year Life 40 Year Life

Closure of Hunterston, Heysham & Hartlepool assumed by 2016-18

280 260 Hunterston, 240 220 Heysham and 200 180 Hartlepool life 160 140 £154/MWh extended. 120 £114/MWh 100 Constraints Base Price = £85/MWh

80 Constraint price Constraint (£/MWh) 60 £46/MWh

40 £40/MWh 20 £24/MWh £14/MWh £6/MWh 0 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 Scottish wind (GW)

a. - 0. a. + b. - a. a. + b. +c. - a. + b.

6 ‘a’ = Incremental works; ‘a.+b’ = ‘a’ + Western HVDC Link; ‘a+b+c’ = ‘a.+b’ + Eastern HVDC Link Anglo-Scottish Upgrades, Scheme Costs

 Incremental

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.8 5 4.5 1 11.3 Construction 47 73 43 8 171

 Western HVDC Link (including Deeside)

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 3.1 5.8 4.4 13.3 Construction 20.4 47.4 73.3 106.7 94.9 36.9 379.6

 Eastern HVDC Link*

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.2 0.8 1.6 1 2 2 7.6 Construction 84 129 129 79 421

Note 1 - Cost profile assumes completion in 2018, emerging need to accelerate 7 Anglo-Scottish Upgrades - Conclusion

 Projects set out in ENSG report remain robust  Programme of works validated by sensitivity studies and cost-benefit analysis  Delivery dates are challenging and full commitment required to maintain programme.  Significant risk of increased cost to consumer if projects delayed.

8 North Wales & Central Wales Upgrades

9 North Wales Upgrades, Scheme Costs

 Initial works on 2nd Pentir to Trawsfynydd circuit

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.2 3.4 2.6 3 1 10.2 Construction 5 27 50 41 15 138

 Reconductor Trawsfynydd to Treuddyn

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.2 1.6 1.8 Construction 12 23 5 40

 Remaining Pre-Construction costs

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.9 2 4.6 1.4 2 10.9

10 East Coast - East Anglia Upgrades

11 East Anglia upgrades, Scheme Costs

 Reconductor Bramford-Norwich-Walpole

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.7 0.8 1.5 Construction 10 48.3 30 10 98.3

 Extend and Reconfigure Bramford Substation

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 1.8 2 1.2 1 6 Construction 2 25 25 23 15 12 9 9 120

 Remaining Pre-Construction Costs

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Total Pre -Construction 0.5 3.1 2 2 7.6

12 London – Drivers for Upgrades

20 Calm weather over the North Sea 15 25 10 30 5 0

Conventional power flows into London

Small amounts of wind power coming onshore

13 London – Drivers for Upgrades

20 Windy weather over the North Sea 15 25 10 30 5 0

Flows heavy from east due to wind

Large amounts of wind power coming onshore

14 Variable power flow issues exacerbated for large exports to continent London Upgrades, Scheme Costs

Hackney to Waltham Cross Upgrade

2009/10 2010/11 2011/12 2012/13 2013/14 2015/16 2016/17 Total

Pre construction 0.1 3.0 2.0 5.1

Construction 4.0 52.3 69.0 43.0 9.4 183.7

Complex Scheme, requires:-

 3 Substation rebuilding from 275KV to 400KV

 Existing lines restrung for 400kV operation

15 Remaining Works – Pre Construction

 Remaining Works – Pre Construction  Central Wales  Humber to Walpole HVDC Link (and associated substations)  South West Peninsula

Pre construction 2009/10 2010/11 2011/12 2012/13 2013/14 2015/16 2016/17 Total Central Wales 0.5 1.2 2.0 1.0 4.7 Humber to Walpole HVDC 0.3 1.5 3.4 5.8 5.0 2.0 18.0 South West Peninsula 0.7 3.2 2.1 2.0 1.0

Need to progress to retain ability to meet to meet target dates – but need to keep completion date under review

16 Conclusions

 Proposed reinforcements represent  A robust solution to meet EU targets based on developed scenario  Need to continue developing delivering to timescales indicated  There are uncertainties, but the proposed reinforcements  Provide the optimum solution to minimise total costs for consumer

17