SMART GRID FORUM KEY NOTE SEMINAR · SMART GRID FORUM KEY NOTE SEMINAR Assessing the Impact of low...

SMART GRID FORUM KEY NOTE SEMINAR

Assessing the Impact of low carbon technologies on Great Britain Distribution Networks

AGENDA

10.30-10.40 Welcome and Opening Remarks –Sandy Sheard

10.40-10.50 Introduction to the Smart Grid Forum – Steve Johnson

10.50-11.30 Smart Grid Forum – The Regulatory Drivers - Gareth Evans

11.30-11.50 Key Messages from the WS3 Phase 1 Report - John Scott

11.50-13.00 WS3 Model – Development and considerations - Dave A Roberts

13:00-13:15 Q&A

13.15 LUNCH

14.00-15.00 WS3 Model – Main findings and conclusions - Dave A Roberts

15.00-1530 Development of Model , Uses and Future WS3 Programme - Mike Kay

15.30 Q&A & Closing Remarks - Steve Johnson

Sandy Sheard Deputy Director, Future Electricity Networks, Department of Energy and Climate Change

The Smart Grid Forum Steve Johnson

Smart Grid Forum

5

• Set up by DECC and Ofgem in 2011 • Forum for initiating cross sector discussion and changes

associated with the move to smart grids as a response to the 2030/2050 energy challenges

• A successful first two years; future of the Forum will be reviewed at its January 2013 meeting.

insert file location/author/filename/version

Workstreams

6

• 1 – Assumptions and Scenarios – led by DECC – Suite of scenarios for heat pumps, electric vehicles, solar PV and wind

generation delivered December 2011. Currently being revised

• 2 – Evaluation Framework – led by Ofgem – Economic model developed and published June 2012. Economic

model also incorporated in WS3 model.

• 3 – Developing Networks for low carbon – led by DNOs – Phase 1 report published October 2012; Phase 2 – the Transform

model and report published July 2013.

• 4 – Closing Doors – Watching brief on policy developments – particularly active in smart

metering development


Workstreams - continued

7

• 5 – Ways of Working – Concerned with overall dissemination and retention of smart grid

knowledge

• 6 – Commercial and Regulatory – Just about to publish first formal report. WS6 very influential in the

development of Ofgem’s RIIO ED1 strategy and much of the WS’s thinking can be seen in Ofgem’s September ED1 strategy consultation.


Assessing the impact of low carbon technologies on Great Britain’s distribution networks

Smart Grid Forum The Regulatory Drivers

Gareth Evans Head of Profession – Engineering

Ofgem

12 November 2012

Smart Grid Forum The Regulatory Drivers

Overview

1.Smart Grids – why is Ofgem interested? 2.RIIO – ED1 3.Quantifying the value – WS2 4.Commercial and regulatory issues – WS6 5.Summary

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Ofgem – our objectives • Our principal objective is to protect the interests of existing and

future customers in relation to gas conveyed through pipelines and electricity conveyed by distribution and transmission systems.

• Our Corporate Strategy (2010-2015) identified four themes: Contribute to the achievement of a low carbon energy sector Help to maintain the security of Britain’s energy supplies Promote consumer choice and value and protect vulnerable

customers Via Ofgem E-Serve, ensure the timely and efficient delivery of

government programmes for a sustainable energy sector

Ofgem is governed by the Gas and Electricity Markets Authority – its responsibilities are set out in statute (such as the Gas Act 1986, the Electricity Act 1989, the Competition Act 1989,

the Utilities Act 200 and the Energy Act 2004, 2008 and 2010)

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Smarter networks (aka smart grids)

our primary role • We regulate the monopoly network companies – we need to

ensure that they deliver value to their customers • Our interest in smart grids is driven by the potential benefits they

can bring to customers • We are technology neutral, but positive about innovation • Smart grids are a means to an end – not an end in themselves

Our role – to ensure that customers benefit from the opportunities that

smart grids can bring

RIIO ED1 – the next price control for electricity distribution networks

13

RIIO framework seeks to address these challenges

Constraint set up front to ensure:

Revenue

Deliver outputs efficiently over time with: Incentives

Technical and commercial innovation encouraged through:

Innovation

Outputs set out in clear ‘compact’, reflecting expectations of current and future consumers Outputs

=

+

+

Timely and efficient delivery

Network companies are

financeable

Transparency and

predictability

Balance between costs faced by current and future consumers

8 yr control Rewards/penalties for delivery Upfront efficiency rate

Core price control incentives

Option to give third parties a greater role in delivery

Innovation stimulus package

14

RIIO-ED1 Key Challenge

standard asset life

2020 targets

ED1 ED2

Driving factors • Feed-in tariffs • RHI • Other incentive mechanisms • Local planning rules • Technological developments & reductions in cost

Facilitating factors

• Investment to expand and reinforce the distribution network

• Greater use of smart grid technology & DSR to maximise network flexibility at minimum cost

uncertainty around the characteristics, rate and

location of take-up of these technologies

Issues to consider for ED1 • DNO approach to developing business plans – scenarios and investment justification • Outputs DNOs are required to deliver – longer term? • Barriers to DNOs adopting commercial arrangements to manage demand and generation output • Incentives and uncertainty mechanisms

Ensure low carbon technologies can connect in appropriate time at appropriate cost

http://sharepoint/Networks/RG/RIIOED1_Lib/Forms/AllItems.aspx

15

RIIO ED1

Open letter consultation – 6 February

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Flexibility & Capacity

Environment

Innovation

Reliability & Safety

Connections

Customer & Social

Financial

Cost Assessment

September Strategy

Consultation

ED1 Working Groups

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RIIO-ED1 challenge How best to prepare for the low carbon future

• How will networks need to change to allow widespread

deployment of low carbon technologies? • How will customers adopt and use the new technologies? • How to design a strategy for RIIO-ED1 such that networks can

efficiently accommodate any of the DECC scenarios? • How to compare a variety of network solutions using whole

life/long term costs and benefits? • Whether solutions need to provide flexibility – for example using

DSR to delay an investment until the understanding of future demand is clearer?

• Whether there are benefits from upfront investment – ie in RIIO-ED1?

18

RIIO-ED1: milestones

2012 2013 2014

Launch consultation: Feb 2012

Strategy Consultation: Sept

Strategy Decision: Feb

Business plans submitted: July

Fast track Consultation: Oct

Fast track Decision: Feb

Draft Decision: July

Final Decision: Nov

policy development

Process building on learning from RIIO-T1 & GD1 Policies building on DPCR5 and outputs from Smart Grids Forum

http://sharepoint/Networks/RG/RIIOED1_Lib/Forms/AllItems.aspx

Smart Grids Quantifying the value

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The Smart Grids Forum Key Aims*

• Bring together key opinion formers, experts and stakeholders in the development of GB smart grids

• Provide strategic input to help shape Ofgem’s and DECC’s thinking and leadership in this area

• Help provide the network companies with a common focus in addressing future networks challenges

• The Forum will focus on the role that the electricity network will play, both technically and commercially, in the low carbon transition

*Paraphrased from full Terms of Reference

Key Task – Quantify Value

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Year 1, Task 1 – to establish the benefits of smart grid solutions using an agreed view of the future and the

likely network solutions

WS1 Data &

Assumptions WS2 Evaluation

WS3 Network Solutions

Carbon Plan

WS3 Further

Evaluation

RIIO-ED1

DECC

Ofgem DNOs

22

To develop a set of credible assumptions and scenarios to build consensus on demand

networks are likely to meet to 2030...

• The Forum agreed that demand assumptions and scenarios

should be centred on DECC pathways to meet the Fourth Carbon Budget (2023-27).

• WS1 worked with policy teams in DECC and OLEV to agree data/analysis from the Carbon Plan work that can be used as inputs.

• This allowed us to provide rich data, including projections from now to 2030 of the uptake of technologies that can impact significantly on electricity distribution networks (electric vehicles, heat pumps, solar PV).

• These provided input to other Forum workstreams.

Source - DECC

WS1

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• DECC provided 3 scenarios for each technology: Base – no market intervention Medium and high differ in terms of

the level of ambition and accompanying regulatory, technical and behavioural changes needed.

Technology trajectories combine to make Carbon Plan scenarios (“pathways”), all of which meet CB4.

• These trajectories have helped to define the boundaries of expectation, and gives DNOs a shared context to develop an investment strategy

• Also used in Smart Meters Programme and Electricity System Programme

Example of one of the technologies DECC provided data

on: projection of EV take-up

Source - OLEV

WS1

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

Nu

mb

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f e

lect

ric

veh

icle

s Low (4CBscenario 4)-fast andrapid charge

Medium(4CBscenario 1) -fast andrapid charge

High (4CBscenarios2&3) - fastand rapidcharge

SGF Work Stream 2

http://www.ofgem.gov.uk/Networks/SGF/Pages/SGF.aspx

25

Smart Grids Evaluation Framework

• This is a VERY concise summary of a detailed piece of work • The evaluation framework allows different ‘smart’ network

investment strategies to be compared to a ‘conventional’ base case

• It incorporates a decision point at 2023 where the strategy can be changed so that the option value of decisions at 2012 can be taken account of

• It incorporates three background scenarios • It brings together work by DECC, Ofgem and the DNOs • This work has been taken forward and refined by SGF WS3 • The results produced DO NOT provide robust answers at this

stage but the evaluation framework is in place and, based on the current data, it provided an initial indication of the benefits of smart grids, now updated by WS3.

26

Three scenarios for supply and demand of electricity to 2050

Scenario 1: Domestic decarbonisation to meet carbon budgets

Scenario 2: Domestic decarbonisation to meet carbon budgets, with less DSR

Scenario 3: Less domestic decarbonisation (purchase of credits)

● Medium transport electrification (WS1)

● High heat electrification (WS1)

● “Gone Green” generation mix (National Grid )

● Medium levels of customer engagement with DSR




● Low levels of customer engagement with DSR

● Low transport electrification (WS1)

● Low heat electrification (WS1)

● “Slow Progression” generation mix (National Grid )


Three scenarios representing alternative paths to 2050

Source: Frontier Economics

27

Net benefits by scenario, under default assumptions

All net benefits are relative to

undertaking the conventional strategy from 2012-2050


Based on the initial assumptions made, smart strategies show material benefits for all scenarios

Published March 2012 – results now superseded by WS3 work

28

The small differences in the first period is not surprising, given our assumptions suggest that peak demand falls slightly until 2020

Net benefits of smart strategies compared to conventional in 2012, assuming you can change strategy in 2023

Under all scenarios, conventional strategy is marginally preferred in 2012. However, these differences are too small to be conclusive and are within the range of model uncertainty

Smart scenarios are still strongly preferred from 2023 (from when peak demand begins to rise sharply)


More analysis is needed to better understand when to commence a smart investment strategy

Published March 2012 – results now superseded by WS3 work

29

Smart Grids Evaluation Framework

• These INITIAL results suggested that:

Smart grid solutions are likely to benefit customers as we develop our distribution networks toward 2050

More analysis is required to establish when it would be most cost effective to commence the widespread deployment of smart solutions

• The framework is valuable in helping us to better understand what drives the value of smart grids and which planning assumptions we should focus on to improve the outputs

• The goal is to get a common understanding between all key stakeholders before the DNOs submit their RIIO-ED1 business plans

Commercial and Regulatory Issues

Work Stream 6



31

WS6 Objectives

• Clarify the type of smart grid solutions which may be

implemented in RIIO-ED12 (as identified by work streams two and three of the SGF);

• Identify any potential regulatory and commercial barriers to implementing these smart solutions; and

• Propose options for removing these barriers including regulatory options, commercial arrangements and customer engagement.

32

WS6 – Challenges addressed

• Demand side response • Impacts on connection and use of system charging methodologies • Arrangements for storage • Electricity demand reduction • Evolution of DNOs to DSOs • Integrated energy systems

33

WS6 – Initial Conclusions

• Not a huge number of regulatory barriers to DNOs implementing smart grid solutions

• The main ones centre on engineering recommendations and charging methodologies, which DNOs have within their power to propose changes to.

• There may be a lack of commercial enablers to support smart grid solutions

• The trialling of such arrangements can provide an invaluable insight into what these enablers need to look like

• The work stream has gleaned some important lessons from ongoing LCN Fund trials and considers that there is more to be learnt as these projects mature and run to conclusion

http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=11&refer=Networks/SGF/work-stream-6






Summary

35

Summary

• The SGF has successfully brought together Ofgem, DECC and the DNOs to address the smart grid challenges in a coherent way

• WS1 has provided foundation data consistent with the Carbon Budgets

• WS2 has catalysed a work programme to assess the benefits of smart grid solutions

• WS3 is taking this forward to provide valuable inputs to RIIO ED1 (more later today!)

• WS6 is addressing the commercial and regulatory issues arising from the outputs from WS3

37

Smart Grid Forum Seminar 12 November 2012

John Scott

[email protected]

Key Messages from the WS3 Phase 1 report “Developing Networks for Low Carbon: The Building Blocks for Britain’s Smart Grids”

38

Agenda

① Approach to the Phase 1 project

② The Headline findings

③ In Hindsight: any changes a year on?

A Summary & Perspective…..

39

Approach to Phase 1

Steered by a Smart Grid Forum WS3 stakeholder group

Funded and supported by the GB Electricity Network companies

Wider views taken from academia, industry and other interest groups

40

The Workstream 3 Phase 1 report

Workstream 3 Phase 1 – qualitative report, issued November 2011 Phase 2 – detailed cost/benefit model, issued July 2012 Phase 3 - currently in hand

www.ofgem.gov.uk/Networks/SGF/Documents1/Smart%20Grid%20Forum%20Workstream%203%20Report%20071011%20MASTER.pdf

41

The Smart Grid ‘Products’

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Agenda





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Company Innovation Engagement

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The Scenarios drive the need case

• Traditional ‘economic scenarios’ are not adequate for networks. • Typical scenarios have energy forecasts (GWh), but it is peak power

demands (MW) that drive network reinforcement • Also, national forecasts tend to look for trends and so smooth out

local effects, such as clustering of electric vehicle charging activity, that will have significant impact on network capability.

• Regional analysis, rather than national, is a necessary minimum to identify the need for network reinforcement and/or for mechanisms to limit the impact of clustering on local peak demands

• In simple terms, ‘beware vanilla analysis’ of scenarios when considering power distribution networks.

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Examples of the ‘Solution Sets’

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Achieving Practical Delivery

• Solution Sets are introduced to provide a practical way forward

• They offer a systematic approach to network Business planning

• They are high level Functional Specifications

• They are adaptable to each company’s context

• They provide a basis for progressing the greater detail now needed • The Solution Set proposals are ambitious but credible • They are enablers for exports and new skilled new jobs, nationally.

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Opp

ortu

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s 12. Electricity storage devices of

several types and differing applications

13. Potential for hydrogen production and storage

14. Micro-grid control systems for intentional islanding utilising DERs

15. Phasor Management Units (PMUs)Wide Area Monitoring, Control and protection (WAMPACs)

16. Forecasting, modelling and visualisation for planning /operational timescales

17. State Estimation for network observability, including MV/LV

18. Distributed generation interfaces 19. Custom Private Networks 20. Microgrids & self-islanding 21. Hybrid technologies, inc elec,

gas, biogas, heat, Hydrogen

1. D-FACTS, STATCOMS, power electronic controllers

2. Solid State tap changers 3. Interconnection of D-STATCOMs

to create a controllable DC network overlay

4. DC networks at domestic, LV and MV including multi-terminal systems

5. Superconducting and other designs of fault current limiters

6. Soft Open Point power electronics

7. Intelligent switching logic and adaptive protection and control

8. Power electronics for synthetic inertia of generation & DC links

9. Solid State transformers 10. Inductive EV charging 11. Cyber-secure communications

and interfaces

55

Initial Thoughts – Strategic Investment Ahead of Need

• Discontinue tapering of LV networks • Make provision for rich communications links (e.g. optic fibre) • Revise LV planning assumptions for ‘average household demand’ • Enlarge the footprint of new LV substations for future additional

equipment, including storage, intelligent controls, and sensors • Reconsider the specification of package substations • Full review of network security policy standards (DG, DR and Storage) • Standardisation actions: for procurement efficiency, regulatory even

handedness, & user consistency. • However, the above must not disadvantage network companies in

regulatory benchmarking

56

Strategic and Elemental Development

• Elemental development provides the building blocks needed for investment planning.

• Strategic development is essential for combining the component parts into an effective whole.

• A Systems Approach to integrate both is needed to achieve the full benefits and to send coherent signals to markets and stakeholders.

57

Agenda





58

Reflections One Year on

Each Solution requires validation and an investment case: LCNF projects are key for providing data and for managing risk

The ‘Systems Engineering’ requires further analysis (see the Tipping Points approach identified in Phase 2)

Scale ‘roll out’ is essential for delivering the benefits to consumers, but may be challenging for network companies

There are no simple projects! Stakeholders and Partners are key to success. Innovation opportunities expand continually.

59

and now for Phase 2...

John Scott, Director, Chiltern Power Ltd. www.chilternpower.com

+44 7771 975 623

Worksteam 3 Phase 1 report

http://www.chilternpower.com

Work Stream 3 – Phase 2

Assessing the Impact of Low Carbon

Technologies on Great Britain’s

Power Distribution Network

1. Development and Considerations

12th November 2012

WS3-Ph2: A consortium-led approach on behalf of the GB Smart Grid Forum (Work Stream 3)

61

Project Partners..

Working with..

Why WS3 initiated Phase 2

• GB network uncertainties

• The case for using innovative solutions to address the new challenges

• Irregular country-wide spread

• Different technologies pose different challenges to different networks

• Significant increase in number of potential solutions

62

What best to use, and When to use it… ? WS3 - Phase 1 report

Two Smart Grid Forum workstreams focus on the evaluation of smart grids

63

WS1: Assumptions and scenarios

Aims to establish the assumptions and scenarios necessary for the network companies to produce business plans that are consistent with DECC’s low carbon transition. Led by DECC.

WS1

WS2: Evaluation Framework

WS3: Developing Networks for Low Carbon

WS4: Closing Doors

WS5: Ways of Working

WS6: Commercial and Regulatory

Aims to develop an evaluation framework that can assess, at high level, alternative network development options. Led by Ofgem.

Aims to assess the network impacts of the assumptions and scenarios from WS1. Led by the DNOs.

Aims to identify credible risks to the development of smart grids as a consequence of forthcoming policy decisions which might fail to take full account of the necessary enablers for smart grid development.

Looks at how the Forum can best pursue its objectives and communicate effectively with stakeholders.

Brings together stakeholders to investigate the commercial and regulatory challenges of implementing the smart grid solutions.

WS3 builds on the framework developed in WS2

64

WS2: Evaluation Framework

WS3: Developing Networks for Low Carbon

• Real options-based evaluation framework.

• Flexible and transparent model, available from Ofgem

• More network types and network technologies.

• DNO-specific modelling

• Real-options elements not included

65

WS3 - Schematic Overview of Modelling

1. Networks (today)

66

Not all networks are equal: The headroom of the networks differ throughout GB

Factors include:

Build specification

Customer type and customer density

Local geography

67

http://en.wikipedia.org/wiki/File:Red_Road_flats_at_Balornock_-_geograph.org.uk_-_119968.jpg

There is no such thing as an ‘average’ network

• 6 x EHV • 7 x HV • 19 x LV

Network Geographical Area

Customer Density

Network Construction

Topology

EHV 1 Urban High Underground Radial

EHV 2 Urban High Underground Meshed

EHV 3 Suburban Medium Mixed Radial

EHV 4 Suburban Medium Mixed Meshed

EHV 5 Rural Low Overhead Radial

EHV 6 Rural Low Mixed Radial

Network Geographical Area

Customer Density

Network Construction

Topology

HV 1 Urban High Underground Radial

HV 2 Urban High Underground Meshed

HV 3 Suburban Medium Underground Radial

HV 4 Suburban Medium Underground Meshed

HV 5 Suburban Medium Mixed Radial

HV 6 Rural Low Overhead Radial

HV 7 Rural Low Mixed Radial

68

There is no such thing as an ‘average’ customer

CONSUMPTION PROFILE

ENVIRONMENT •Temperature •Solar Flux

BUILDING •Size •Heat loss •Glazing

APPLIANCES/EQUIPMENT •Power Rating

• On/Standby •Efficiency •Programme/Cycle

USERS •Number •Activity Profile •Energy Efficiency Attitude

69

Domestic Heat Pump

Point load demand profiles differ according to in-home technology and geography

• Winter Peak, Winter & Summer Average • Weekday • Temperature Sensitivity • Appliance Type & Efficiency • Validation

Standard Tariff Domestic Domestic E7 Storage Heaters

Temperature Sensitivity

70

Hence, the mix of customers along a feeder has a significant impact on its overall demand profile

LV feeder demand profile

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2. Scenarios

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An uncertain world: Different mixes of large-scale generation will place different challenges on the conventional network design and operation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

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2050

GW o

f ins

talle

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paci

ty

CCGT Coal CCGT CCSCoal CCS Nuclear Onshore windOffshore wind Other renewable

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012

2014

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CCGT Coal CCGT CCSCoal CCS Nuclear Other renewableOnshore wind Offshore wind

Installed capacity: medium decarbonisation scenario

Installed capacity: low decarbonisation scenario

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Source: Redpoint analysis for the ENA based on National Grid ‘Slow Progress’ scenario to 2030 and extrapolated to 2050

Source: Redpoint analysis for the ENA, based on National Grid ‘Gone Green’ scenario

With disruptive technologies having scope to create significant challenge to LV networks

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Heat Pumps

Photovoltaic

Electric Vehicles Source: SGF, WS1, DECC, Dec 2011

A

B

C

A B

C

PV uptake example

0

100

200

300

400

500

600

700

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

MicroCHP pilot

Wind

Photovoltaics

Hydro

Anaerobicdigestion

2002

PV = 0MW

2012

PV = 600+ MW

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There are clear differences between the technologies adopted in different parts of the UK

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Regional breakdown of installed capacity by

technology (MW)

Source: FiTs Annual Review 2010-11, Ofgem E-Serve, 2012

Regional breakdown of current wind projects

Regionalisation within the model

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• Regional variation in terms of housing stock and temperature allowances for different building loads

• “Attractiveness” of various LCTs differs across regions – PV can be selected to be more attractive in South and East

England than Scotland if desired, for example

Region 1 Scotland

Region 2

North West North East Yorkshire and the Humber West Midlands East Midlands

Region 3 Wales (incl Merseyside and Cheshire)

Region 4 South West South East East of England

Region 5 London

From GB to regional uptakes - examples

From national to regional uptakes

• Regionalisation performed for all technologies;

• Distinction between rural / suburban and urban areas

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The ‘new’ low carbon technologies produce very different demand profiles

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PV installations have clustered in different parts of GB

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Percentage of network

Percentage of low-carbon technology installations

1% 9%

4% 17%

25% 48%

30% 22%

40% 5%

Number of domestic PV installations per 10,000 households by Local Authority, end of December 2011

Source: www.azure.eco.co.uk

Source: DECC

Clustering Levels

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% of Network

3. Solutions

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Fixing the problem: Selecting solutions with an increasing solution set

84

Conventional Solutions Conventional

Solutions

‘Business-As-Usual’ Investment

‘Smart’ Investment

Smart Solutions

Solution Enablers

“Lumpy” - high upfront costs, minimal running costs, long lives, produce step change in headroom

“Flexible” - lower upfront costs, some running costs, shorter lifetimes, smaller impact on headroom

0

20

40

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Two methods to release headroom

0102030405060708090

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22:30

Demand constant Increase capacity

Increase headroom e.g. RTTR

Reduce demand Capacity constant

Increase headroom e.g. DSR

85

Outlining the solution options, and making the link to LCN Fund projects

• Refined ‘conventional’ solution set • Expanded ‘smart’ solution set • Agreed a common language • Populated an initial digest of

solutions

Solution Category Count Representative 21 Variants 74 Enablers 108

Total: 203

86

4. The Model

87

Can consider up to four scenarios (present day to 2050)

88

Scenario 1: Domestic decarbonisation to meet carbon budgets

Scenario 2: Domestic decarbonisation to meet carbon budgets, with less DSR

Scenario 3: Less domestic decarbonisation (purchase of credits)








● Low levels of customer engagement with DSR

● Low transport electrification (WS1)

● Low heat electrification (WS1)

● “Slow Progression” generation mix (National Grid )


As used for WS2

Scenario 0: High domestic decarbonisation

● High transport electrification (WS1)




New for WS3

Three distribution network investment strategies

● Roll out of smart and conventional technologies, and associated control and communications architecture when required

Incremental smart grid investment

strategy

● Upfront investment in control and communications architecture

● Investment in smart and conventional technologies when required

Top-down smart grid investment

strategy

Key attributes

● High early investment ● Shorter asset lives

● Investments occur only when required ● Shorter asset lives

Description

The strategies determine the set of technologies available for deployment in each scenario

Under each scenario, technologies from each strategy will be deployed to fully accommodate supply and demand

Slide extracted from the SGF WS2 model 89

● Roll out of conventional technologies only, when required

Conventional investment

strategy

● Solutions tend to be more ‘lumpy’ (capital-intense and release more headroom)

● Longer asset lives

Solutions deployed on the basis of…

..headroom breaches:

90

Low Volts Lower Statutory limits

High Volts Upper Statutory limits

High Thermal limits Thermal limits of plant and circuits

High Fault Level Design fault level limits

Power quality issues The model could be expanded to include PQ against EU standards

Two Models: Two different purposes

91

Two models have been developed under this project, to reflect the different levels of granularity between GB and a DNO licence

*Transform™ is the supported framework developed by EA Technology to quantify the results described in the WS3-Ph2 report. It is available from EA Technology on a commercial basis; all funding Network Operators, DECC and Ofgem have a licence to use the software for future analysis

92

WS3 - Schematic Overview of Modelling

Further Questions

93

Dave A Roberts Future Networks Director EA Technology Ltd

e. [email protected] t. 0151 347 2318

mailto:[email protected]

Appendix

95

Building on the foundations laid in WS2

96

Network Element WS2 WS3

Network Topologies 3 (1x EHV, 1x HV, 3x LV) 100 most likely combinations

Clustering Groups 5 10

Daily load profiles 3 (summer mean, winter mean, winter peak) 3 (as per WS2 model)

Headroom spread 1 (average only) 3 (symmetrical : low/average/high)

LCT Technology Types 17 17 No. of solutions and variants c20 c200

CBA Wrapper WS2 WS3

Processed scenarios 3 (Low, Medium 1, Medium 2)

4* (Low, Medium 1, Medium 2,

High)

Investment strategies 3

(Incremental, Top-down, Counterfactual)

3 (Incremental, Top-down,

Counterfactual)

Real options analysis Yes No

*Model will be configured to calculate one scenario and three investment strategies at a time

Scope of model

WS 2 established a framework for the evaluation of smart grids

Networks Generation Demand

Real options CBA 2012-2050

1 Value drivers and scenarios 2

EVs

HPs

PV

Wind

Efficiency

Scenario 1 Scenario 2 Scenario 3

Investment strategies 4 Assessment of option value 5

Top-down smart grid

Incremental smart grid

Business as usual

Different lifetimes, lead

times and levels of sunk

costs

Decision 1: Before state of world is

known

Decision 2: Options

constrained by previous

decision Information

Time

Representative smart grid technologies 3

Electric Energy Storage

Dynamic Thermal Ratings

Enhanced Automatic Voltage Control

DSR Dynamic network reconfig.

Placeholders

WS2 found a significant net benefit associated with smart investments

• The net benefits in the smart strategies are almost entirely driven by distribution network investment savings

• The roll out of low-carbon technologies from the 2020s is the most important driver of net benefits

• The results are sensitive to assumptions on clustering

• Differences between strategies between up to 2023 are very small – the net benefits of smart strategies are delivered in the 2020s and beyond

98

Detailed Network Model Schematic

99

Questions

Work Stream 3 – Phase 2

Assessing the Impact of Low Carbon

Technologies on Great Britain’s

Power Distribution Network

2. Main Findings and Conclusions

12th November 2012

Key Conclusions from WS3 Ph1 1. The potential impact of future GB energy scenarios on

power networks is material 2. The challenge ahead is technically demanding and of a

scale not seen in 50 years 3. Innovative products and architectures (smart grids) offer

cost-effective solutions 4. Innovation will need to be adopted in conjunction with

traditional network investment 5. Technology alone will not deliver the required outcomes:

Commercial and Regulatory frameworks, and consumer engagement will be key enablers

6. Enabling actions for the short term will accelerate advanced functionality in later years

7. Customers can expect attractive new services and products, including helpful energy automation to obtain the best deals and services

103

104

The developed model.. • uses scenarios taken from

WS1 and National Grid • is based on best available data

on GB’s electricity distribution network

• considers a range of (extensible) solutions

Input quality drives output validity

1. The potential impact of future GB energy scenarios on power networks is material

This is a parameter based model, considering the relationship between new loads and generation types (driven by scenarios) and available network headroom (voltage, thermal and fault level). The modelled inputs scale from 2012-2050.

105

The spread of (network related) investment from the model is significant

Spread of GB network related investment (non-discounted cumulative totex showing the two most extreme scenarios) to accommodate projections in Low Carbon Technologies connecting to the electricity distribution network


Changes to GB demand

106

Peak electricity demand for Scenario 1 showing the contribution of EV and HP load, together with the demand reduction effects of PV. The base load factors in both load growth and demand reduction



Scenarios help address uncertainty, but they are not a forecast

107

2. The challenge ahead is technically demanding and of a scale not seen in 50 years

108

Gross GB network related investment for the next four RIIO periods

Load related expenditure (LRE) – investment driven by changes in demand, i.e. that in response to new loads or generation being connected to parts of the network (connections expenditure) and investment associated with general reinforcement. Non-load related expenditure (NLRE) – other network investment that is disassociated with load. LNRE and LRE have simply been assumed to be 8/5th of the DPCR5 values for the extended RIIO periods

2. The challenge ahead is technically demanding and of a scale not seen in 50 years

Investment will require step changes

109

Gross GB network related investment for the next four RIIO periods

Load related expenditure (LRE) – investment driven by changes in demand, i.e. that in response to new loads or generation being connected to parts of the network (connections expenditure) and investment associated with general reinforcement. Non-load related expenditure (NLRE) – other network investment that is disassociated with load. LNRE and LRE have simply been assumed to be 8/5th of the DPCR5 values for the extended RIIO periods

3. Innovative products and architectures (smart grids) offer cost-effective solutions

We consider two smart strategies

110

Incremental (Smart) Top-Down (Smart) The smart grid case of conventional and smart solutions, where investment only occurs as and when networks reach their headroom limits. Enablers are deployed alongside the solution variants on an incremental basis.

The smart grid case of conventional and smart solutions, where an upfront investment of enabler technologies is deployed in advance of need, followed by investment as and when networks reach their headroom limits.


Smarter strategies appear most cost effective

111

Summary of present value of gross totex of distribution network investment (2012-2050)


Further detail showing the increase in investment levels between RIIO-ED1 and ED2

112

Scenario 1 (Mid) Scenario 3 (Low)

Several sensitivities have been analysed

113


Dominant factors #1: Impact of clustering

114


Conventional investment strategy only (Business-As-Usual approach)

Smart investment strategies Incremental

Top-Down

• Model assumes FiT style clustering as default

• FiT is already highly clustered • Different cluster patterns give rise

to different investment profiles

Note the change of scale between the three charts

Dominant factors #2: EV charging profiles

115


• TSB data suggests a ~1kWe increase in residential ADMD

• Doubling the profile has a substantial impact on the output

TSB Ultra-Low Carbon Vehicles Demonstrator Programme, Initial Findings, 2011 • 8 consortia running projects • Including 19 vehicle manufacturers • 340 vehicles (electric, pure hybrid and fuel cell vehicles). • 110,389 individual journeys (from December 2009 to June 2011) • 677,209 miles travelled (1,089,862 km) • 19,782 charging events • 143.2 MWh of electricity consumed

diversified EV charging profiles

EV charging profiles (by charging capacity, per vehicle)

EV usage and statistics taken from TSB ULCVD programme

4. Innovation will need to be adopted in conjunction with traditional network investment The smart solutions sit alongside conventional reinforcement options

116

Conventional solutions only (the ‘Business-As-Usual’ approach)

Overview of solutions selected (cumulative, undiscounted totex): For the three investment strategies (Scenario 1)

Smart Incremental

Smart Top-Down

4. Innovation will need to be adopted in conjunction with traditional network investment

Many more solutions are considered in the smart grid future

117

Note: • The modelling shown should be regarded

as indicative-only for the selection of specific solutions.

• Solutions will move in their merit order as they mature and as network conditions develop.

• In practice, technology solutions should be adopted on their individual and local merits with individual business cases for technology investment remaining as key to decision-making and selection.

Summary of investment in all solutions selected within the ED1 and ED2 periods for each investment strategy

End ED1 End ED2 End ED1 End ED2 End ED1 End ED22022 2030 2022 2030 2022 2030

Active Network Management - Dynamic Network Reconfiguration -£ -£ 103.2£ 174.1£ 103.2£ 174.1£ D-FACTS -£ -£ 110.0£ 391.6£ 110.0£ 449.0£ DSR -£ -£ 1.8£ 231.1£ 1.8£ 231.1£ Electrical Energy Storage -£ -£ -£ -£ -£ -£ Embedded DC Networks -£ -£ -£ -£ -£ -£ EAVC -£ -£ 0.2£ 1.4£ 0.2£ 1.4£ Fault Current Limiters -£ -£ 4.7£ 63.2£ 4.7£ 63.2£ Generator Constraint Management -£ -£ -£ -£ -£ -£ Generator Providing Network Support e.g. Operating in PV Mode -£ -£ -£ -£ -£ -£ Local smart EV charging infrastructure -£ -£ 3.4£ 155.4£ 3.4£ 155.4£ New Types Of Circuit Infrastructure -£ -£ -£ -£ -£ -£ Permanent Meshing of Networks -£ -£ 5.6£ 2,650.8£ 5.6£ 2,650.8£ RTTR -£ -£ 16.6£ 145.6£ 16.6£ 435.1£ Switched capacitors -£ -£ -£ -£ -£ -£ Temporary Meshing -£ -£ 3.6£ 42.2£ 3.6£ 42.2£ Split Feeder 82.5£ 6,535.1£ 42.1£ 800.4£ 42.1£ 885.7£ New Split Feeder -£ 10.2£ -£ -£ -£ -£ New Transformer 450.0£ 2,465.6£ 64.7£ 1,615.5£ 64.7£ 1,615.5£ Minor Works 186.0£ 3,557.4£ 79.0£ 512.6£ 79.0£ 377.3£ Major Works 92.4£ 232.8£ -£ -£ -£ -£ Comms & Control Platforms between variant solutions -£ -£ 3.3£ 195.3£ 5.0£ 5.0£ DNO to DSR aggregator enablers -£ -£ 0.9£ 103.9£ 3.3£ 3.3£ Network Measurement Devices -£ -£ 11.8£ 390.9£ 303.4£ 303.4£ DCC to DNO communications and platforms -£ -£ -£ -£ 132.8£ 132.8£ Phase imbalance measurement -£ -£ -£ -£ 43.2£ 43.2£ Weather / ambient temp data -£ -£ 29.1£ 917.2£ 0.8£ 0.8£ Design tools -£ -£ -£ -£ 0.5£ 0.5£ Protection and remote control -£ -£ -£ -£ 31.5£ 31.5£ TOTAL (£m) 811£ 12,801£ 480£ 8,391£ 955£ 7,602£

Conventional SolutionSmart SolutionSmart Enabler

Cumulative Gross totex costs (£m)Business-As-Usual Smart Incremental Smart Top-Down

Key

4. Innovation will need to be adopted in conjunction with traditional network investment

Other benefits to society, such as reduced wirescape or disruption, are likely

118

Summary showing the differences in the amount of underground cable and overhead line selected for deployment between the three investment strategies (all based on Scenario 1)

By 2022

By 2030

By 2050

5. Technology alone will not deliver the required outcomes: Commercial and Regulatory frameworks, and consumer engagement will be key enablers Solutions need to be developed with a range of stakeholders

119

*Under the modelled ‘default’ assumptions **Not drawn out in the averaged GB model – as generation per HV / EHV feeder is low (also a LRE solution) ***EES not selected by the WS3 model based on default assumptions owing to its high initial costs, compounded by a 66% optimism bias (driving a high cost function and low position in the merit order)

Output from WS3

model*

Customer engagement

Regulatory frameworks

Commercial frameworks

Demand Side Response £230m Yes Possible Yes

Generation Side Response £0m** Yes

Electrical Energy Storage £0m*** Possible Yes

Key solutions in the WS3 model that require dialogue with non-DNO stakeholders

6. Enabling actions for the short term will accelerate advanced functionality in later years

Investment is likely to be needed in RIIO-ED1, in readiness for later years • Networks can cope with

small penetrations of LCT • Rapid increase in

investment in ED2 • A challenge to DNOs to

gear up and deliver solutions on the ground

120

Totex investment (gross cumulative) of all scenarios until the end of RIIO-ED2 period associated with facilitating the Low Carbon Technology update

6. Enabling actions for the short term will accelerate advanced functionality in later years The top-down smart strategy appears optimal, and should be investigated further

121

Top-down investment currently assumes all enablers are invested in over five years (2015-2020) with reinvestment after 20 years (assumed to be 50% of the original cost)

Enabler Name Top Down Cost (initial1)

Advanced control systems £ 2,000,000

Communications to and from devices £ 1,000,000

Design tools £ 300,000

DSR - Products to remotely control loads at consumer premises £ 500,000

DSR - Products to remotely control EV charging £ 1,000,000

EHV Circuit Monitoring £ 600,000

HV Circuit Monitoring (along feeder) £ 400,000

HV Circuit Monitoring (along feeder) w/ State Estimation £ 300,000

HV/LV Tx Monitoring £ 20,000,000

Link boxes fitted with remote control £ 10,000,000

LV Circuit Monitoring (along feeder) £ 50,000,000

LV Circuit monitoring (along feeder) w/ state estimation £ 20,000,000

LV feeder monitoring at distribution substation £ 30,000,000

LV feeder monitoring at distribution substation w/ state estimation £ 20,000,000

RMUs Fitted with Actuators £ 6,000,000

Communications to DSR aggregator £ 500,000

Dynamic Network Protection, 11kV £ 3,000,000

Weather monitoring £ 500,000

Monitoring waveform quality (EHV/HV Tx) £ 4,000,000

Monitoring waveform quality (HV/LV Tx) £ 8,000,000

Monitoring waveform quality (HV feeder) £ 4,000,000

Monitoring waveform quality (LV Feeder) £ 10,000,000

Smart Metering infrastructure - DCC to DNO 1 way £ 10,000,000

Smart Metering infrastructure -DNO to DCC 2 way A+D £ 20,000,000

Smart Metering infrastructure -DNO to DCC 2 way control £ 50,000,000

Phase imbalance - LV dist s/s £ 10,000,000

Phase imbalance - LV circuit £ 20,000,000

Phase imbalance -smart meter phase identification £ 10,000,000

Phase imbalance - LV connect customer, 3 phase £ 1,000,000

Phase imbalance -HV circuit £ 500,000

TOTAL £ 313,600,000

*Initial estimates made in the default case of the model. The above figures do not factor in optimism bias (taken as 66%)

Summary of present value of gross totex of distribution network investment (2012-2050)

(a) 2012 to end RIIO-ED1 (2022)

(b) 2012 to end RIIO-ED2 (2030)

Top-down is shown to be more economic overall, but requires greater investment in the early years

7. Customers can expect attractive new services and products, including helpful energy automation to obtain the best deals and services

Demand Side Response (in particular) has the potential to play a significant role, but is sensitive to cost assumptions

122

Winter peak load in 2030, before and after DSR, cost set at 2p/kWh

Winter peak load in 2030, before and after DSR, cost set at 20p/kWh

National DSR: impact of different price points

The more you have to pay customers for DSR, the less the national benefit (i.e. it becomes more economic to build new power stations)

Tipping points have been identified and ‘learning curve’ benefits indicate further overall cost improvement here

123

2050 - CENTRAL CASE (SCENARIO 1) BAU Incremental Top-DownScenario 1 - Central Case 18,745,682,978£ 12,558,619,924£ 11,539,923,735£ With Tipping Points Applied 18,745,682,978£ 12,443,377,906£ 11,164,349,119£

Benefit (£) -£ 115,242,018£ 375,574,616£ Benefit (%) 0% 1% 3%

Network Name Year Reached1 Active Network Management - Dynamic Network Reconfiguration - HV 20172 Distribution Flexible AC Transmission Systems (D-FACTS) - HV 20203 Permanent Meshing of Networks - LV Urban 20234 Permanent Meshing of Networks - LV Sub-Urban 20235 DSR - DNO to residential 20246 Permanent Meshing of Networks - HV 20247 Fault Current Limiters_HV reactors - mid circuit 20268 Local smart EV charging infrastructure_Intelligent control devices 20269 Temporary Meshing (soft open point) - HV 2026

10 RTTR for HV Overhead Lines 202911 RTTR for HV/LV transformers 202912 D-FACTS - HV connected STATCOM 203013 RTTR for HV Underground Cables 203614 RTTR for EHV/HV transformers 203715 EAVC - LV PoC voltage regulators 203816 D-FACTS - LV connected STATCOM 203917 Distribution Flexible AC Transmission Systems (D-FACTS) - EHV 203918 Active Network Management - Dynamic Network Reconfiguration - EHV 204219 Temporary Meshing (soft open point) - LV 204220 D-FACTS - EHV connected STATCOM 204521 RTTR for EHV Overhead Lines 204922 RTTR for EHV Underground Cables 2050

8. Other observations

Financial triggers for GB model in default case: • EHV - £50m • HV - £30m • LV - £20m

..But further work is required

Present value of gross totex of distribution network investment (2012-2050)

Year the smart solutions reach their ‘tipping point’

User definable threshold

An assumption of a further 10% reduction in cost after the tipping point threshold is reached


DNO licence-specific modelling is available

124

Two models have been developed under this project, to reflect the different levels of granularity between GB and a DNO licence

The models outputs are only as good as the models inputs

125

Feeder

Parameters

Scenarios

Solutions

National scenario dataset(s) - WS1 (DECC) GB regionalisation

- WS1 (DECC) - WS3 (Ph3.2) - DNOs - Other datasets (FiT, RHI, DfT, etc)

Feeder loads - DNOs (specific analysis /

LCN Fund projects) Smart Solutions - DNOs (LCN Fund projects) - OEMs

Smart Enablers - WS3 (Ph 3.4) - OEMs - Other (Smart Metering / DCC

contract / LCN Fund projects)

Point loads - OEMs - Specific analysis (e.g. HP, EV

operating regime) - DNOs (LCN Fund projects)

Where refinements in the input datasets are likely to come from:


Further Questions

126

Dave A Roberts Future Networks Director EA Technology Ltd

e. [email protected] t. 0151 347 2318

mailto:[email protected]

Appendix

128


WS2 Results WS3 Results

129

NB. ‘BAU’ (Business-As-Usual) is used as shorthand for the conventional solutions

Comparison shown on the next slide

Note the change of scale


Comparison to WS2 • The headline numbers

are different • A result of:

– more variables – different datasets – Improved

assumptions

130

Illustrative waterfall diagram drawing out the dominant changes between the WS2 and WS3 model outputs

Using the model – and its developments Mike Kay

Two Principle Uses

132

A focus for theoretical developments for smart grids Means of informing the next Distribution Price Control (RIIO ED1)


Three key developments underway

133

All relatively short term – ie complete early in the new year – driven by the RIIO ED1 timetable • Identify and assess enabling investments • Develop tipping point analysis • Identify any early investment in ED1


Two administrative developments

134

Split the model out from 5 regions into 14 DNO licence areas Create a governance framework


Enabling Investments

135

Essentially a review of the existing smart solutions Update with learning from LCNF projects Update with current thinking Incorporate any updates into the Transform model Work being led by Smarter Grid Solutions


Tipping Points

136

Again a review of how this is currently modelled - is this implemented in the most effective way? Linked to the development of Enabling Investments Update the model to reflect current understanding Work being led by GridScientific


ED1 Early Investment

137

NPV and/or qualitative analysis of longer term implications from the modelling of the post ED1 period. This task comes later and will build on both the existing Transform model and the developments in thinking for the previous two tasks, Work to be led by EATL.


Governance of the WS3 model and datasets

138

The models outputs are only as good as the models inputs


2. Feeder

Parameters

Where refinements in the input datasets are likely to come from:

Feeder loads - DNOs (specific analysis /

LCN Fund projects)

Point loads - OEMs - Specific analysis (e.g. HP, EV

operating regime) - DNOs (LCN Fund projects)

1. Scenarios

3. Solutions

GB regionalisation - WS1 (DECC) - WS3 (Ph3.2) - DNOs - Other datasets (FiT, RHI, DfT, etc)

Smart Solutions - DNOs (LCN Fund projects) - OEMs

Smart Enablers - WS3 (Ph 3.4) - OEMs - Other (Smart Metering / DCC

contract / LCN Fund projects)

2. Feeder

Parameters

National scenario dataset(s) - WS1 (DECC)

WS3 Model Ownership & Responsibilities

139


The Model

GB dataset GB DNO licence specific datasets

What Transform™ (the modelling platform used for WS3-Ph2)

All ‘vanilla’ datasets contained in the model specific for the GB

The DNO tailored datasets (e.g. network data, company specific adjustments, etc)

Who EA Technology SGF (described below)

Individual DNO licence holders

Responsible for.. Maintenance and mechanics of the modelling platform and software coding. Version control of model(s)

Agreement of the input datasets, through a formal process

Tweaking the DNO models to suit individual licence requirements

Duration In perpetuity For as long as required For as long as required

Transform™ is the registered trademark of the modelling platform developed by EA Technology that underpins the ‘WS3 model’

Governance Overview

140

A cycle of… An open period

• Whereby any party can submit a recommendation for a change

A review panel (WS3) • To agree the changes in input

parameters

A rerun of the model • To understand the implications • The population of an agreed report

template

Issue of results • Release of the report via SGF* • Release of the updated model to all

licensed users


• A three year task • Three review cycles in year 1, reducing

thereafter • Costed for the first 12 months • Governed by WS3 Review Panel

WS3 – Work Plan

141

Principle component of Plan is the development and maintenance of the Transform model. There are a number of other smart grid development issues that probably need to be taken forward. January Smart Grid Forum will review all work streams’ future plans.


Q&A & Closing Remarks Steve Johnson, Chief Executive, Electricity North West

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