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Network Options Assessment 2016/17 UK electricity transmission JANUARY 2017 Network Options Assessment 2016/17 – January 2017 2 How to use this interactive document To help you find the information you need quickly and easily we have published NOA as an interactive document. Home A to Z This will take you to the contents page. You will find a link to the glossary You can click on the titles to navigate on each page. to a section. Hyperlinks Arrows Hyperlinks are highlighted in bold Click on the arrows to move throughout the report. You can click backwards or forwards a page. on them to access further information. Network Options Assessment 2016/17 – January 2017 01 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 Network Options We will achieve this through our Assessment (NOA) publication, Network Options Assessment (NOA). along with our other future The NOA aims to make sure energy System Operator that the transmission system is publications, aims to encourage continuously developed in a timely, and inform debate, leading economic and efficient way, providing to changes that ensure a value for our customers. The results secure, sustainable and from ETYS 2016 have fed into NOA affordable energy future. 2016/17 to provide the required transmission capabilities. Your views, knowledge and insight have shaped the publication, helping To conduct the NOA, we asked each us to better understand the future of of the Transmission Owners in GB energy. Thank you for this valuable (SHE Transmission, SP Transmission input over the past year. and the TO business within National Grid) to identify investment options, Now our 2016 analysis is complete, timings and costs to improve the we have been able to look holistically capability of a number of stressed at the results. They point to some system boundaries that we had important themes and messages. identified during the ETYS process. As highlighted in our Electricity Ten I hope that you find this document, Year Statement (ETYS) 2016 we along with our other System Operator continue to see increasing new low- publications, useful as a catalyst for carbon generation together with fossil wider debate. For more information fuelled plant closures and increasing about all our publications, please see interconnector activity putting page 7– 8. additional stress on the network. Our role is to maintain an efficient Please share your views with us; and economic balance between you can find details of how to investing in further infrastructure and contact us on our website http:// constraining the use of the system www.nationalgrid.com/noa. when necessary – striking a balance between the risk of stranding assets Richard Smith from investing too early; and the Head of Network Capability potential high costs of constraints (Electricity) from investing too late. Getting this balance right will deliver the best value for consumers. Network Options Assessment 2016/17 – January 2017 02 Contents Chapter one Chapter five Aim of the report .....................................................10 Investment recommendations .............................84 1.1 Introduction ................................................10 5.1 Introduction .................................................84 1.2 How the NOA fits in with the FES 5.2 Recommended delivery dates ................87 and ETYS ..................................................... 11 5.3 Critical options’ least regret analysis....93 1.3 What NOA can do .......................................12 5.4 Recommendation for each option .........97 1.4 What NOA cannot do .................................13 5.5 Onshore competition ..............................101 1.5 The NOA Report methodology ................14 1.6 Navigating through the document .........15 1.7 What’s new ..................................................16 Chapter six 1.8 Stakeholder engagement and feedback ..............................................17 Interconnection analysis .....................................104 6.1 Introduction ...............................................104 Chapter two 6.2 Interconnection theory ...........................105 6.3 Current and potential interconnection ........................................106 Methodology ............................................................20 6.4 Methodology .............................................107 2.1 Introduction .................................................20 6.5 Outcome ....................................................109 2.2 NOA process ...............................................21 6.6 Summary ....................................................115 2.3 Economic analysis .....................................24 2.4 How the NOA connects to the SWW process ..............................................30 Chapter seven 2.5 Interaction between NOA results and FES ........................................................32 2.6 Other options ..............................................33 Stakeholder engagement ....................................118 7.1 Introduction ...............................................118 7.2 Continuous development .......................119 Chapter three 7.3 Stakeholder engagement ......................120 Boundary descriptions ..........................................36 Chapter eight 3.1 Introduction .................................................36 3.2 North .............................................................37 3.3 East ...............................................................53 3.4 South .............................................................55 Appendix A – SWW projects ................................122 3.5 West ..............................................................60 8.1 Shetland Link ............................................122 8.2 Orkney Link ...............................................124 8.3 Western Isles Link ....................................126 8.4 Eastern subsea HVDC Link from Chapter four Peterhead to Hawthorn Pit (E4DC).......128 8.5 Eastern Scotland to England Link: Torness to Hawthorn Pit Offshore Proposed options ...................................................66 HVDC (E2DC) .............................................132 4.1 Continuous development .........................66 8.6 North West Coast connections 4.2 Reinforcement options – project ........................................................135 Scotland and North of England ..............67 8.7 Hinkley Point C connection project .....137 4.3 Reinforcement options – Appendix B – Meet the NOA team ......................140 East of England ..........................................76 Appendix C – List of options’ four-letter codes 141 4.4 Reinforcement options – Appendix D – Glossary .........................................145 South of England ........................................78 Disclaimer ..............................................................150 4.5 Reinforcement options – Wales and the West of England ..............81 Network Options Assessment 2016/17 – January 2017 03 Executive summary Using the 2016 Future Energy Scenarios (FES) and ETYS 2016, the System Operator (SO) recommends the options which the GB Transmission Owners should invest in for the upcoming year. Below, we present a summary of the key points from our economic analysis. Key points The SO recommends investment of option earlier than necessary. Where the £83m in 2017/18 across fourteen decision cannot be delayed any further, projects to maintain the option to deliver our economic analysis assesses the cost projects worth almost £3.8bn. This year’s impact of not investing in this financial investment will allow us to manage the year. As a result of this analysis, the SO capability of the GB transmission networks recommends to delay spend of over £2.5m against the uncertainty of the future. on three options for this investment year. This will make sure that the networks can The table below is an overview of the NOA continue supporting the transition to the 2016/17 investment recommendations future energy landscape in an efficient, where the decision must be made this year. economical and coordinated way. Our Interconnection analysis has As the energy landscape is uncertain, the demonstrated that the planned first window SO must make certain that all investment Cap and Floor interconnection will be is truly necessary. We performed analysis beneficial for GB consumers under all FES of over 80 different investment options energy scenarios and will provide benefit proposed by the GB Transmission Owners. to GB and European markets. The SO’s We identified 32 options where no decision analysis suggests a total interconnection was yet required, allowing the SO to delay capacity between 14.8 to 17.3 GW between the recommendation to a later investment GB and European markets by 2030 would year. This ensures that we never make provide optimal benefit. an investment recommendation for an £83m 14 17.3 GW Investing £83 million Through 14 options Up to 17.3 GW interconnection Network Options Assessment 2016/17 – January 2017 04 Executive summary Optimal Delivery Date Last Year’s 2016/17 Reasons for Option EISD Gone Consumer Slow No Local No Local Recommendation Recommendation Change Green Power Progression Progression Contracted Contracted BBNO1 New Beauly Not optimal at to Blackhillock 2025 N/A N/A N/A N/A N/A N/A Delay
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