Strategic Network Investment Options South 6th June 2018 1 AGENDA

09.30 Arrival and registration 10.00 Welcome by chair and objectives Merlin Hyman, Director, Regen

10.05 Investment Strategy overview Ben Godfrey, Network Strategy Team Manager, WPD

10.20 Future domestic and commercial developments study

Poppy Maltby, Senior Project Manager, Regen

10.40 Generation, storage and demand technology scenarios

Frankie Mayo, analyst, Regen

11.00 Break

11.15 Roundtable sessions – 1. Generation, 2. New developments, 3.Storage & flexibility

12.10 Feedback from roundtables facilitated by Chair

12.30 Summary, next steps – followed by lunch & networking WELCOME

3 Renewable ambition in Wales

• 43% electricity consumed in Wales in 2016 was from renewables. • 2030 target of 70% of Welsh electricity consumption being generated by renewables. • 1 GW of renewable electricity capacity to be locally owned by 2030. • New renewable energy projects to have at least an element of local ownership by 2020.

4 Progress by local authority

Source: Energy Generation in Wales 2016 5 Objectives

• Explain the process of strategic network investment • Consult with local stakeholders about how areas will develop • Check initial findings in key areas – new developments and generation technologies • Opportunity to feedback directly to WDP

6 STRATEGIC NETWORK INVESTMENT

7 Strategic Network Investment Options South Wales 6th June 2018 8 STRATEGIC NETWORK INVESTMENT

• Western Power Distribution – Who are we?

• Drivers for the project

• Aim and approach of the study

• Timetable

• What else are we doing to help enable growth?

9 WPD – OUR AREA

Western Power Distribution is responsible for distributing electricity to over 25% of the UK. We own, operate and maintain assets between 132kV and 400V.

• 4 of 14 Distribution UK Licence Areas • 7.8 Million Customers • Covers 55,500 Sq Km • 220,000km of Network 10 • 185,000 Substations

NETWORK STRATEGY

WPD’s Network Strategy team is responsible for a number of key outputs, contributing to the efficient and economic development of the network from five years out and beyond.

Our main focus topics are:

• Developing advanced modelling techniques to inform strategic studies. • Alignment of our strategic studies with National Grid’s FES work. • Progression of a joint WPD/NGET Regional Development Plan for the network in the South West. • national work on developing the technical interface between NGET and DNOs through ENA’s Open Networks programme. • Delivery of WPD’s Distribution System Operability Framework documents. • Development of WPD’s strategy to enable transition to a DSO. • Co-ordination of the responses to Government, regulator and external stakeholder consultations on DSO vision and strategy.

11 THE NEED FOR DEVELOPING OPTIONS

. Uncertainty in the future path of demand & DG growth . Variability and volatility in network flows increasing; usage patterns changing; new technologies . 14GW Winter Peak; 21GW DG, 12% of Energy . Significant changes in energy system operation: need for coordination if growth is to be achieved economically . Ofgem wanting to understand the value to the wider customer base if they were to fund strategic reinforcement . Need to understand whether there are ‘no/low regret’ investment options . What does Brexit mean for renewables, LCTs and electrical self sufficiency?

12 CHALLENGES OF PASSIVE NETWORKS

Infrastructure Commission Smart Power Report March 2016

13 DER GROWTH IS HARD TO PREDICT

PVPV MWMW InstalledInstalled 1400014000 Based on 2011 DECC 1200012000 Scenarios

1000010000

ACTUALACTUAL

80008000

LOWLOW

MW MW 60006000 CENTRALCENTRAL HIGHHIGH 40004000

20002000

00 20112011 20122012 20132013 20142014 20152015 20162016 20172017 20182018 20192019 20202020

14 REGIONALLY SPECIFIC PLANNING

Our growth scenarios out to 2030 show that both +12% demand and +53% generation are +5% expected to grow significantly in all +42% regions. +62% +33%

+86% +14%

Demand & Generation increases to 2030 15 VISION FOR ENERGY

In September 2017 the Cabinet Secretary for Environment and Rural Affairs announced new, ambitious targets for energy generation in Wales: . Wales to generate 70 per cent of its electricity consumption from renewable energy by 2030 (43% in 2016) . 1 gigawatt (GW) of renewable electricity capacity in Wales to be locally owned by 2030 – (575MW in 2016) . Renewable energy projects to have at least an element of local ownership by 2020 – (17% in 2016)

16 CURRENT SOUTH WALES DG DATA

Connected Accepted Offered Total Enquired Generator type [MVA] [MVA] [MVA] [MVA] [MVA]

Photovoltaic 625 258 34 917 15

Wind 465 292 40 798 180 Landfill Gas, Sewage Gas, Biogas and Waste Incineration 20 42 - 62 -

CHP 2 19 1 22 5

Biomass and Energy Crops 3 81 - 84 7 Hydro, Tidal and Wave Power 11 2 2 14 0

Storage 0 20 1 21 1 All Other Generation (inc Mixed) 1,043 189 115 1,346 13 Total 2,170 902 192 3,265 222

17 AIM OF THE STUDY

. Assessing the potential growth of customer demand and LCT uptake by type, general location and year

. Identifying thermal, voltage and fault level constraints that result

. Assessing options for conventional reinforcement

. Providing recommendations for ‘low regret’ investment and identifying the cost and timescale of these

. Use this to understand the economic potential for demand side response and/or generation constraint to avoid reinforcement

. Begin to attach ‘Energy’ figures to future flexibility required

18 OUTPUTS OF THE STUDY

19 TIMETABLE FOR STRATEGIC STUDIES

Stakeholder workshop to get stakeholder input to approach and scenarios to June 2018 be considered.

Q3 2018 Undertake network studies and identify solutions with costs

Sensitivity work to analyse how much ‘headroom’ do the potential solutions Q4 2018 give.

Assess potential for demand response/generation to alleviate constraints Q4 2018

January 2019 Complete report and publish on our website

February 2019 Dissemination event by webinar – 26th Feb

20 IMPROVING DATA TRANSPARENCY

21 DSO TRANSITION Distribution Distribution Network System Operator Operator

Passive networks managing Active networks managing maximum power flows real-time energy flows

. Develop and maintain an efficient, co-ordinated and economical system Existing of electricity distribution . Facilitate competition in electricity supply, electricity generation

. Facilitate flexibility services . Improve the resilience and security of the electricity system at a New local level Roles . Facilitate neutral markets for more efficient whole system outcomes . Drive competition and efficiency across all aspects of the system . Promote innovation, flexibility and non-network solutions 22 WHAT THIS MEANS FOR CUSTOMERS

“If we take advantage of the opportunities, we can create new businesses and jobs, empower consumers and help people save up to £40bn off their energy bills in the coming decades”

23 WHAT THIS MEANS FOR OUR CUSTOMERS

Traditional DNO operations would require very substantial investments in passive grid infrastructure, which would be underutilised much of the time

Alternative EV A smarter, more DSR Connections Readiness flexible energy system will enable customers to be able Low to actively participate TSO Whole Enhanced Carbon in new flexibility markets Security System markets through a Energy variety of pathways. Supporting DSO Community Economic markets markets Growth WHAT THIS MEANS FOR OUR CUSTOMERS

We are already beginning to more actively manage our networks and transition to DSO operations. We will continue to invest in our capability to deliver smarter, more flexible networks.

ANM Flexibility Electric Our DSO Strategy and Tenders by Nation innovation projects 2021 are already building our capability Enhanced 9.6GW ENA Open RDP Security connected Networks

Regional Cornwall Future Local Signposting Energy Energy Scenarios Market WHAT THIS MEANS FOR CUSTOMERS

. WPD is becoming more active in its approach to network operation: – Active Network Management - rolling out across all network – Extending ANM to demand and storage customers – Transparency with our data

. Revenue streams for DSR/flexibility services – DSO requirements will be predictable and forecast in advance. – Revenue from demand ‘turn up’/’turn down’ services – Revenue from generation ‘turn up’/’turn down’ services – Revenue from storage energy shifting services – Revenue from demand shifting/influencing – Revenue from reactive power support

. Quicker, more efficient connections for customers willing to become active energy system participants

26 WHAT THIS MEANS FOR OUR CUSTOMERS

In June we will begin to signpost our DSO flexibility requirements for all licence areas. Our service products are designed to align with the ESO’s Reserve products, increasing the potential value for DSR providers

2030 Two Degrees

2025 Steady State WPD’s signposting information will direct flexibility providers to the different distribution system needs required under a range of scenarios and timings.

27 FURTHER COLLABORATION

All our reports, webinars and presentations are published online at: http://www.westernpower.co.uk/netstrat

If you have any questions in relation to WPD’s Network Strategy work, please contact WPD on the details below:

Email: [email protected]

By post: Network Strategy Team Western Power Distribution Feeder Road Bristol BS2 0TB

28 FUTURE ENERGY SCENARIOS

Distributed generation and demand study

Technology growth scenarios to 2032

Cardiff - 6 June 2018 First step in a process

Understanding the need for strategic network investment to 2032

Step 1 Step 2 Step 3 Step 4 • DG and • Network • Identify and • Present demand constraint assess business case technologies modelling to investment and options growth 2032 options scenarios • Assess assessment alternative options

This study Technologies being assessed

Supply Demand Distributed generation technologies Key areas with potential for disruption Electric vehicles Solar PV Heat pumps (hybrid and single systems) - rooftop and ground-mounted Air conditioning - domestic Onshore wind New build developments (residential) New build developments Hydropower (non-residential) Energy from waste Storage Anaerobic digestion Energy storage at distribution level Response services Fossil fuel (diesel and gas) Reserve services High energy user behind meter Other techs e.g. marine, goethermal Own use and community Co-location Process of assessment

1. Baseline 2. Pipeline 3. Scenarios

4,000

3,000

2,000

1,000 Cumulative capacity (MW) capacity Cumulative

- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Current baseline Pipeline projection Growth scenarios (to 2032) WPD connection data, Regen national Analysis of current projects in Growth scenarios based on renewables the planning system and with National Grid’s FES- applied at a project database, grid connection agreements local level FiT data, ROC data, for large scale technologies. Two degrees plus other publicly Dependent on technology Consumer power available data when projection goes out to. Slow progression Steady state Sources of data

Baseline includes: • WPD connection data, • AddressBase (Ordnance Survey) data • Plug-in electric vehicle grants and anonymised DVLA EV registered keeper data • FiT data, ROC data etc..

Pipeline includes: • Projects in planning system • Grid connection agreements for large scale technologies. • Local plans for residential and non-residential projections with data validation • Data validation with local authorities

Electricity Supply Areas National Grid Future Energy Scenarios Past and emerging trends

Correlation between the number of off gas houses and the thermal capacity of heat pumps Off gas correlation All houses correlation

3,000 60,000

2,500 50,000

40,000 2,000 30,000

1,500

gas gas households - 20,000 1,000 10,000

500 Totalnumber households of Number off 0 0 0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1 Thermal capacity Thermal capacity Resource assessments

Image courtesy of: http://www.marineenergypembrokeshire.co.uk/wp-content/uploads/2010/04/Tidal-resource-for- Wales-MRESF-1024x718.jpg EXAMPLES Electric vehicles

• Around 2,100 electric vehicles in licence area – c. 1.2m in total • Improvements expected to charging infrastructure • Two Degrees (exponential growth) could have nearly 0.5m by 2032 • Currently 75% behind national levels of electric vehicles • Remains 15-30% lower than UK in 2032 due to rural areas Onshore wind Onshore wind

• Currently 577 MW of wind connected to the distribution network in the South Wales licence area • Calls for changes to the subsidy available to onshore wind • A small number of large projects with accepted connection agreements • Two Degrees scenario could have 1450 MW by 2032

1,600

1,400

1,200 Baseline

1,000 Two degrees

800 Consumer Power 600 Slow Progression 400

Onshore wind capacity (MW) capacity wind Onshore Steady State 200

0

Preliminary results Ground mounted solar PV Ground mounted solar PV

• Currently 530 MW of ground mounted solar PV connected to the distribution network in the South Wales licence area • A few very large projects with accepted connection agreements • Two Degrees scenario could have almost 1800 MW by 2032

2000

1800

1600

1400

1200 Baseline Two degrees 1000 Consumer Power 800 Slow Progression

600 Steady State

400

200 Groundmounted solar PV capacity instaleld (MW)

0

Preliminary results Energy from Waste

• Energy Recovery Facility first connected in 2014 • 2 Advanced Thermal Treatment sites with connection agreements • Ambitious Welsh targets for zero waste by 2050 – all sectors to recycling at least 70% of their waste by 2025

120

)

100 MWe Baseline 80 Two Degrees

60 Consumer Power

40 Slow Progression

20

Installed energy from waste Installed from capacitywaste energy ( Steady State

0

Preliminary results NEW DEVELOPMENT STUDY Data – Local Development Plans • Annual monitoring reports • Joint housing land availability assessments (JHLAAs) • Housing trajectories • Employment and Housing Land Availabilities Methodology

Refer to latest version of the local development plan 1 • Key documents – Core Strategy Paper, Policy maps

Identify latest supporting documents • Local Development Plans often not the most up to date source 2 • Annual monitoring reports, JHLAAs,

Gather detail on strategic sites (housing, employment) • Sites with significant growth potential, specific policy ref in the LDP 3 • Number of homes to be built • Site area of non-residential property • Any indication of phasing to be built over year Methodology

General allocation for housing and non-residential sites • Housing trajectory for annual build out rates • Additional developments to be built outside of strategic sites

Non-residential phasing and usage type • Very limited information on annual build out rates and site areas • Developments over 50,000m2 split across plan period

Unallocated • Figures for homes to be built across the LA that are yet to be allocated or windfall allowance – no specific site details

Assign to ESA • Using policy maps or site development name

Scenario 1 High High growth rates with build out economic rate matches targets given in local Data check: plan contact all growth local authorities Apply scenario growth factors to Strategic sites: likely to go ahead in licence data but with delays • Based on the development area to stage of local plan confirm Scenario 2 figures Low economic growth General allocation and unallocated: total number of dwellings reduced • Based on previous trends - total annual completed build figures in the UK Final dataset INITIAL FINDINGS Housing developments

Two Degrees and Consumer Slow Progression and Steady Local authority Power State (Total number of Figure 4-1: Annual totals for new houses in the South Wales licence [1] (Total number of houses) houses) area, 2010-2016 10000 9625 Blaenau Gwent 2,981 2,321 Bridgend 7,339 6,375 9000 Caerphilly 6,352 4,759 8000

Cardiff 22,544 19,380 7000 6665 6623

Carmarthenshire 12,925 9,392 6000 5671 = average since 2010 Ceredigion 3,379 2,325 5000 4811 4914 4732 Forest of Dean 250 250 4000 Gwynedd 156 153 Herefordshire 46 32 houses of Number 3000 2329 Merthyr Tydfil 3,386 2,558 2000 Monmouthshire 4,828 3,798 1000 Neath Port Talbot 9,027 6,637 0 Newport 8,617 6,298 2010 2011 2012 2013 2014 2015 2016 Pembrokeshire 7,570 5,614 [1] Source: BEIS sub-national electricity consumption data, ‘LSOA Powys 3,174 2,032 domestic electricity 2016’, based on number of new MPANS annually. Rhondda Cynon Taf 11,110 8,591 Swansea 13,708 11,340 The Vale of Glamorgan 7,266 6,732 Torfaen 4,473 3,720 Total 129,131 102,307 Strategic sites

Development name Local authority Allocation type Homes

Coed Darcy Urban Village Neath Port Talbot Strategic site 3,490 Plasdwr, North West Cardiff (Redrow Site) Cardiff Strategic site 2,677 Glan Llyn (Remainder) Former Llanwern Steelworks Newport General allocation 2,660 North East Cardiff - West of (Residue) Private Cardiff Strategic site 2,274 Plasdwr, North West Cardiff Cardiff Strategic site 1,791 North of Junction 33 Cardiff Strategic site 1,400 Land West of Dumballs Road (Outline) - CARDIFF CENTRAL ENTERPRIZE ZONE AND REGIONAL TRANSPORT HUB Cardiff Strategic site 1,395 Llanilid Strategic Site (ex enabling) Rhondda Cynon Taf Strategic site 1,375 PORTHCAWL REGENERATION AREA Bridgend Strategic site 1,137 3. SAA6 South Sebastopol Torfaen Strategic site 1,115 Local Authority new housing by 2032

Scenario 1: High economic scenario Commercial developments

Local Authority Two Degrees and Consumer Power total non-domestic developments (ha) School and college, Retail, 3% Other, 3% Blaenau Gwent 56 6% Bridgend 72 Factory and Caerphilly 123 Warehouse, 46% Cardiff 82 Office, 42% Carmarthenshire 107 Ceredigion 41 Merthyr Tydfil 32 Monmouthshire 65 Neath Port Talbot 31 Newport 164 Factory and Warehouse Office School and college Retail Other Pembrokeshire 232 Powys 13 Rhondda Cynon Taf 92 Swansea 37 The Vale of Glamorgan 527 Torfaen 67 Total 1,740 Strategic sites

Allocation Square Development name Local authority type meters Aerospace Business Park, St Athan Rhoose The Vale of GlamorganStrategic site 3,050,000 Land adjacent to and Port Road, Rhoose (part of St Athan - Cardiff Airport Enterprise Zone) The Vale of GlamorganStrategic site 774,000 Land to the South of Junction 34 M4 Hensol The Vale of GlamorganStrategic site 618,000 Withybush North of Business Park Pembrokeshire General allocation 609,000

Land to the North of Junction 33, Cardiff Strategic site 455,000 Solutia Newport Strategic site 404,400 Duffryn Newport Strategic site 385,000 Land South of Hirwaun Rhondda Cynon Taf Strategic site 378,500 Blackbridge, Milford Haven Pembrokeshire Strategic site 334,500 Plateau 1, Oakdale Business Park Caerphilly Strategic site 282,863 New commercial developments 2032

Scenario 2: Low economic scenario BREAK Roundtable sessions

1. Demand – new development and electric vehicles 2. Generation – onshore wind, large solar PV and energy from waste 3. Flexibility and storage – network capacity constraints, new storage assets

- 30 min discussions - 2 out of 3 sessions - Feedback at the end Regen, Innovation Centre, Rennes Drive, Exeter, EX4 4RN T: 01392 494 399 IMPROVING DATA PROVISION

62 IMPROVING DATA PROVISION

Providing Greater Network Visibility

. WPD Web Map – linesearchbeforeyoudig.co.uk . EHV Constraints Map . Estimated Capacity Tool . Connection Surgeries

63

IMPROVING DATA PROVISION

Providing Greater Network Visibility

. Network Capacity map . Costing tool . Apply online

64 IMPROVING DATA PROVISION

Every 6 months we publish a strategic investment study report on one of our four licence areas.

65 FURTHER COLLABORATION

All our reports, webinars and presentations are published online at: http://www.westernpower.co.uk/netstrat

If you have any questions in relation to WPD’s Network Strategy work, please contact WPD on the details below:

Email: [email protected]

By post: Network Strategy Team Western Power Distribution Feeder Road Bristol BS2 0TB

66