These materials are the copyright of John Wiley & Sons, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. GB Electricity Industry Chris Beard, CGI These materials are the copyright of John Wiley & Sons, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. GB Electricity Industry For Dummies® Published by: John Wiley & Sons, Ltd The Atrium Southern Gate Chichester West Sussex PO19 8SQ England www.wiley.com © 2013 John Wiley & Sons, Ltd, Chichester, West Sussex. For details on how to create a custom For Dummies book for your business or organisaiton, contact [email protected]. For information about licensing the For Dummies brand for products or services, contact BrandedRights&[email protected]. Visit our homepage at www.customdummies.com. All rights reserved. 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Contents at a Glance Introduction ............................................................................................... 1 Chapter 1: Getting to Grips with the Basics........................................... 5 Chapter 2: Generation ............................................................................. 13 Chapter 3: Transmission ........................................................................ 25 Chapter 4: Distribution ........................................................................... 37 Chapter 5: The Retail Market ................................................................. 47 Chapter 6: The Wholesale Market ......................................................... 59 Chapter 7: Settlement ............................................................................. 71 Chapter 8: Regulation ............................................................................. 87 Chapter 9: The Smart Metering Implementation Programme ........... 99 Chapter 10: Ten Take-Away Points to Remember ............................. 115 Appendix: Timeline ............................................................................... 117 These materials are the copyright of John Wiley & Sons, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. These materials are the copyright of John Wiley & Sons, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. Table of Contents Introduction ..................................... .1 About This Book ........................................................................ 1 Foolish Assumptions ................................................................. 1 How This Book Is Organised .................................................... 2 Icons Used in This Book ............................................................ 2 Where to Go from Here ............................................................. 3 Chapter 1: Getting to Grips with the Basics .......... 5 Coming Full Circle ...................................................................... 5 Understanding the Electricity Industry Structure ................. 7 Reviewing How We Got Here .................................................... 8 Nationalisation ................................................................. 9 Privatisation ..................................................................... 9 Vertical integration ........................................................ 10 Outlining the Key Industry-Wide Challenges ........................ 11 Chapter 2: Generation ............................ 13 What’s Generation All About? ................................................ 14 Looking at fuel types ..................................................... 14 Sizing up scale ................................................................ 16 Considering flexibility ................................................... 17 Assessing the Generation Mix ................................................ 17 Who Are the Major Players? ................................................... 18 What Are the Big Issues? ......................................................... 20 New nuclear .................................................................... 20 Carbon Capture and Storage ....................................... 20 Renewable Obligation ................................................... 20 Feed-In Tariff Scheme ................................................... 21 Electricity Market Reform ............................................ 21 Project TransmiT ........................................................... 22 European Target Model ............................................... 22 Large Combustion Plant Directive .............................. 22 Industrial Emissions Directive .................................... 23 Chapter 3: Transmission .......................... 25 What’s Transmission All About? ............................................ 26 The transmission network ............................................ 26 Balancing the transmission network .......................... 28 Planning investment ..................................................... 28 Charging for transmission ........................................... 29 These materials are the copyright of John Wiley & Sons, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. viii GB Electricity Industry For Dummies How Has Transmission Changed? .......................................... 29 Who Are the Major Players? ................................................... 31 How Is Transmission Regulated? ........................................... 32 What Are the Big Issues? ......................................................... 32 Growth in renewables ................................................... 32 Deep or shallow connections? ..................................... 32 ‘Invest and connect’ or ‘connect and manage’? ......... 33 Greater European integration ...................................... 33 RIIO – TD1 ....................................................................... 33 Project TransmiT ........................................................... 33 Offshore wind farms ...................................................... 34 Chapter 4: Distribution ........................... .37 What’s Distribution All About?............................................... 38 The distribution network .............................................. 38 Charging for distribution