Draft Tnuos Tariffs for 2018-19 Report
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Forecast TNUoS Draft Tariffs for 2018/19 December 2017 NGET: Forecast TNUoS Tariffs for 2018/19 June 2017 1 Draft TNUoS Tariffs for 2018/19 This information paper provides National Grid’s Draft Forecast Transmission Network Use of System (TNUoS) Tariffs for 2018/19, applicable to transmission connected Generators and Suppliers, effective from 1 April 2018. December 2017 December 2017 Contents Contact Us 4 Executive Summary 5 Demand Tariffs 8 Changes since the previous demand tariffs forecast 9 Gross half hourly demand tariffs 9 Embedded export tariff 11 NHH demand tariffs 12 Generation tariffs 15 Generation wider tariffs 15 Changes since the last generation tariffs forecast 16 Generation wider zonal tariffs 16 Onshore local tariffs for generation 19 Onshore local substation tariffs 19 Onshore local circuit tariffs 19 Offshore local tariffs for generation 22 Offshore local generation tariffs 22 Background to TNUoS charging 23 Generation charging principles 23 Demand charging principles 27 HH gross demand tariffs 27 Embedded export tariffs 27 NHH demand tariffs 28 Updates to revenue & the charging model since the last forecast 29 Changes affecting the locational element of tariffs 29 Adjustments for interconnectors 29 RPI 30 Expansion Constant 30 Local substation and offshore substation tariffs 30 Allowed revenues 30 Generation / Demand (G/D) Split 31 Exchange Rate 31 Generation Output 31 Error Margin 32 Charging bases for 2018/19 32 Generation 32 NGET: Draft TNUoS Tariffs for 2018/19 December 2017 3 Demand 32 Annual Load Factors 33 Generation and Demand Residuals 33 Small generators’ discount 35 Changes to the small generators’ discount recovery following CMP264 and CMP265 35 Tools and Supporting Information 36 Appendices 37 Appendix A: Changes and possible changes to the charging methodology affecting 2018/19 TNUoS Tariffs 38 Notes on specific methodology changes 39 Appendix B: Locational demand tariff charges 41 Appendix C: Locational demand profiles 42 Appendix D: Annual Load Factors 43 ALFs 43 Appendix E: Contracted generation changes since the October forecast 49 Appendix F: Transmission company revenues 50 National Grid revenue forecast 50 Scottish Power Transmission revenue forecast 52 SHE Transmission revenue forecast 52 Offshore Transmission Owner revenues 52 Appendix G: Generation zones map 54 Appendix H: Demand zones map 55 55 Contact Us If you have any comments or questions on the contents or format of this report, please don’t hesitate to get in touch with us. Team Email & Phone [email protected] 01926 654633 NGET: Draft TNUoS Tariffs for 2018/19 December 2017 4 Executive Summary This document contains the latest Demand Tariffs draft of the Transmission Network Demand tariffs have been set to Use of System (TNUoS) Tariffs for recover £2,240.1m of revenue, an 2018/19, which will become increase of £8.9m from the October effective on 1 April 2018. TNUoS forecast. This reflects the increase in charges are paid by transmission overall revenue for GB TOs. The connected generators and average gross demand Half Hourly suppliers for use of the GB (HH) tariff is £46.17/kW; the average Transmission networks. Embedded Export Tariff (EET) is £26.91/kW; and the average Non Half Total Revenues to be recovered Hourly (NHH) demand tariff is Total Transmission Owner (TO) 6.21p/kWh. allowed revenue to be recovered from TNUoS charges is forecast to be Changes to the Methodology £2,670.2m in 2018/19, an increase of affecting 2018/19 tariffs £8.9m from the forecast published in There are several CUSC October 2017. modifications which affect the charging methodology for 2018/19. Generation Tariffs There are also a number of Generation tariffs have been set to modifications pending an Ofgem recover £430.1m to ensure average decision which may change the annual generation tariffs remain methodology before final tariffs are below the €2.5/MWh limit set by set. European Commission Regulation (EU) No 838/2010. There is no Approved Modifications: CMP282 change to total generation revenue & CMP283 compared to the October forecast. CMP282 changes the way that The chargeable TEC has decreased demand at exporting network nodes by 3.1GW, resulting in an overall is calculated, particularly reducing increase of £0.24/kW to the average demand tariffs in zone 1 compared to generation tariff of £5.98/kW. The the previous methodology. This Error Margin element of the tariff modification was approved in forecast which is used to calculate November 2017. the split of revenue to be recovered from generation and demand (the Other Modifications G/D split) remains fixed at 21%. This tariff forecast has been undertaken in accordance with the CUSC charging methodology based NGET: Draft TNUoS Tariffs for 2018/19 December 2017 5 only on modifications that have been demand of 24.2TWh. The values of approved. gross demand, embedded exports and NHH demand are consistent with Modification CMP251 is waiting for an the declining trend over previous Ofgem decision. This is discussed in years. Appendix A. Drivers of changes to the Tariff Modification CMP261 was rejected by forecast Ofgem. It is subject to a review by the Changes to these Draft tariffs in CMA and is also discussed in relation to our October tariff forecast Appendix A. 1 have predominantly been influenced by: Demand Forecast A reduction in Conventional Following the methodology change Carbon generation in Scotland CMP264/265, we have revised our in the transport model has demand forecasting “Monte Carlo” reduced Peak tariffs in model. We now forecast separate Scotland, and the extreme gross demand and embedded south west of the network. exports for each zone. Generation tariffs in England remain relatively stable. Our modelling approach takes into A decrease in chargeable account historical trends of metered generation, and TEC reductions triad demand and export volumes in the transport model that (2014/15 – 2016/17) provided by affect system flows, particularly Elexon as part of the BSC P348/349 in Scotland. modifications. The model also The increase of 480MW in includes other factors such as modelled demand through the weather patterns, future demand Week 24 DNO update in our shifts on the transmission system and transport model. This will affect expected levels of renewable the locational tariffs across generation. zones dependant on the change in nodal demand. For 2018/19 our demand charging base remains the same as the Next forecast October forecast. We are forecasting Our next publication of 2018/19 average system gross triad demand TNUoS tariffs will be our final tariffs in of 52.5GW, average HH gross triad January 2018. demand of 19.8GW, embedded export generation of 6.5GW and NHH These tariffs will be set in accordance with the charging methodology to 1 https://www.gov.uk/cma-cases/edf-sse-code- modification-appeal prevail from 1 April 2018 and will NGET: Draft TNUoS Tariffs for 2018/19 December 2017 6 include any changes which have suggestions as to how we can better been approved by Ofgem. work with you to improve the tariff forecasting process, if you have any Significant updates expected in the questions on this document or Final tariffs will include our latest view whether you still welcome webinar of TEC volumes, which will affect the sessions following each forecast. locational tariffs for generation and demand, and also the final TO revenues, which will mostly affect the demand residual. You should also be aware that Ofgem has been served with a claim for judicial review concerning its decision to approve WACM4 of CUSC modifications CMP264 and CMP265. As stated on their website: “Ofgem’s decision to approve WACM4 of CUSC modifications CMP264 and CMP265 stands unless quashed by the court”.2 The latest tariff forecast timetable can be found on our website.3 Feedback This tariff forecast is the fourth in our new report format, which has been redesigned in order to be easier to navigate and read for all interested parties. We welcome feedback on any aspect of this document and the tariff setting processes. Do let us know if you have any further 2 https://www.ofgem.gov.uk/publications-and- updates/embedded-benefits-impact-assessment-and- decision-industry-proposals-cmp264-and-cmp265- change-electricity-transmission-charging- arrangements-embedded-generators 3 Our revised forecast publication timetable is available on our website: http://www.nationalgrid.com/tnuos NGET: Draft TNUoS Tariffs for 2018/19 December 2017 7 Demand Tariffs Tables 1, 2 and 3 show demand tariffs for Half-Hourly, Embedded Export and Non-Half- Hour metered demand. The HH and NHH tariffs include the effect of the small generator discount for 2018/19 only. PLEASE NOTE: these demand tariffs are compared to those published in Appendix A of the October Tariffs forecast document, not those in the main body of the report. The tariffs in Appendix A were calculated using the same inputs as the tariffs published in the main body of the report, but with the CMP282 methodology switched on. The changes to the inputs made between October and now are better highlighted and their impact better understood by comparing these Draft tariffs with the version from October calculated under the CMP282 methodology. The breakdown of the HH tariff into the peak and year round components can be found in Appendix B. Table 1: Summary of Demand tariffs 2018/19 - 2018/19 - HH Tariffs October Draft Change Average Tariff (£/kW) 45.814430 46.167323 0.352893 Residual (£/kW) 46.900294 46.937840 0.037546 2018/19 - 2018/19 - Change