20131127 Presentation - TransGrid Deliberative Forums

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This TransGrid event brought together a range of community members to provide feedback our five year business plan and revenue proposal.

Transcript of 20131127 Presentation - TransGrid Deliberative Forums

Presentation - White

TransGrid and the changing energy marketDeliberative forums with consumers Sydney CBD, Wagga and Parramatta November 2013

This TransGrid event brought together a range of community members to provide feedback our five year business plan and revenue proposal.

Some small changes have been made to the following presentation as details will continue to change as we take feedback from our consultation process. All details were correct at the time of publication, E&OE.

# November 2013 TransGrid Deliberative Forums

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Overview of TransGrid

TransGrid promotional videoThis video is current unavailable

# November 2013 TransGrid Deliberative Forums

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Total residentialbill

The electricity supply chain

38%wholesale plus carbon

8%

34%

13% retail7% green schemes

# November 2013 TransGrid Deliberative Forums

3

Generating and transporting electricity

Generating capacity in the National Electricity Market 2013

The transmission network is like the freeways for electricity

# November 2013 TransGrid Deliberative Forums

4

TransGrids key statistics

12,609 kms high voltage transmission lines47 kms underground cables94 substations63 generator connections362 distributor and direct customer connections1,083 employees, with more than 70% based outside Sydney

# November 2013 TransGrid Deliberative Forums

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TransGrids revenue

TransGrid is a government-owned natural monopoly . It is for-profit, to encourage efficiency.

# November 2013 TransGrid Deliberative Forums

What TransGrid does

Design, maintain and operate the network to:Keep the lights on Get the cheapest generation to market

# November 2013 TransGrid Deliberative Forums

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The market has changed

1951/52

70,000 GWh

2012/13

Total electricity demand in NSW

# November 2013 TransGrid Deliberative Forums

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Significant electricity price rises

NSW residential electricity price

CPI

Index movement

2013

# November 2013 TransGrid Deliberative Forums

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TransGrids new approach

Adaptive planning

Sydney CBD 2012/13 Summer demand management (like taking 50,000 air conditioners off the grid)

Effectiveengagement

Have your say websitePublicreview of consultation practices

Smarterregulation

A new wayof thinking about the reliability / cost trade-off

# November 2013 TransGrid Deliberative Forums

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Engaging with stakeholders

TransGrids 5-year plan, and broad engagement to understand needs and behaviour

Particular network needs

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The energy conversation

Cost

Reliability

# November 2013 TransGrid Deliberative Forums

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Draft five year plan

# November 2013 TransGrid Deliberative Forums

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Business plan overview

Typical annual electricity cost

TransGrids Draft Business Plan

$2,100

$168

TransGrid part of bill

# November 2013 TransGrid Deliberative Forums

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Business plan overview

Breakdown of typical residential annual transmission charges

Tax & depreciation

Operating expense

Return on proposed capital investment

Return on capital already invested

TransGrids Draft Business Plan

Consult today on operating expense proposal

Consult today on new capital proposal

# November 2013 TransGrid Deliberative Forums

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How TransGrids prices compare

Prescribed revenue per energy transmitted (c/kWh nominal)

TransGrids Draft Business Plan

ElectraNet (SA)

# November 2013 TransGrid Deliberative Forums

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Proposed capital investment(building the network)

# November 2013 TransGrid Deliberative Forums

How much network do we need?

Capital non build focus

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Replacement dominates proposedcapital investment

Others

Replacement

Augmentation

Market benefits

Updating infrastructure which is wearing out

New or upgraded infrastructure to cater for growing demand

New or upgraded infrastructure to expand generator access and competition

Description

Category

Non network infrastructure, including commercial property and IT systems, and security compliance

Capital Overview

Proposed capital investment for 2014 to 2019

# November 2013 TransGrid Deliberative Forums

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Peak demand has slowed and is less certain

Capital - Augmentation

# November 2013 TransGrid Deliberative Forums

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History of network development is driving replacement needs

Capital - Replacement

# November 2013 TransGrid Deliberative Forums

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Comparison with othermature networks

Capital - Replacement

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Proposed replacementproject portfolio

Forecast replacement projects for 2014 to 2019

Substation renewal

Individual equipment replacement

Transmission line renewal

Powering Sydneys Future (contingent)

Category

Controlsystem renewal

Capital - Replacement

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Market benefits projects to dispatch cheapest generation

Queensland to New South Wales interconnector upgrade

Snowy to Yass / Canberra upgrade

Capital Market benefits

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Operating expense

# November 2013 TransGrid Deliberative Forums

TransGrid performs well against international peers

Operating expense Overview

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Breakdown of draftoperating expense proposal

Proposed annual operating expense for 2014 to 2019

Plan and manage assets

Supporting the business

Operate the network

IT, health and safety, property and insurance

Inspections, preventative, condition-based and corrective maintenance

Description

Category

Planning the development of the transmission network and capital portfolio management

Maintenance

24 hour control room operations, outage planning and technical studies

Operating expense Overview

# November 2013 TransGrid Deliberative Forums

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Increased planning and engagement costs

Planning cost increases to date: More responsive capital expenditure decisionsMore transparent investment decision making Proposed increasesConsumer engagementDemand management innovation

Operating expense Planning

# November 2013 TransGrid Deliberative Forums

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Efficiencies in maintenance, operations and business activities

Automation of condition monitoring and control systems to reduce maintenance costs Innovation in operations (virtual control room and automation of functions) to reduce costsEfficiencies achieved in procurement, accommodation and payroll

Operating expense Maintenance

Video of transformer failure

# November 2013 TransGrid Deliberative Forums

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Discussion

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Non-build options

# November 2013 TransGrid Deliberative Forums

Minimising our build program: past success

Responding to changing demand forecasts

Advocating smarter reliability standards or grid innovation

Demand-driven capital approved by the regulator for 2009 to 2014

Approx $700 million deferred

Capital Non build focus

Responding to changing demand forecasts

Advocating smarter reliability standards or grid innovation

Approx $1.2 billion completed or underway

Continuing to procure non-build options such as demand management

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Increasing focus on innovative non-build options

Energy efficiency

Demand management

Local generation

Peak load management through time of use tariffs, interruptible loads and load shifting etc.

Local generation (biomass, solar, cogeneration) to reduce loading on network

Increasing customers use of efficient appliances, lighting, motors etc.

Capital Non build focus

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Works underway to defer / avoid the need: advocacy for changed reliability standardseeking network supportenergy efficiency uptake studyelectric vehicles studyplanning and demographics studylow build options (eg cable backfill remediation)

Consulting on requirements for Powering Sydneys Future

Capital - Replacement

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Potential non-build options

Consumer education on saving electricityResearch understanding consumers behaviourDemand management to postpone network investmentLarge co