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Page 1: Powering Sydney’s Future - TransGrid · inform, consult and collaborate with interested parties. We recognise that two-way communication is the key to building long-term relationships

Powering Sydney’s Future

Early Engagement and Feedback ReportDecember 2014

Page 2: Powering Sydney’s Future - TransGrid · inform, consult and collaborate with interested parties. We recognise that two-way communication is the key to building long-term relationships

Sydney is the largest city in Australia and the inner Sydney area comprises of over 500,000 households and businesses consuming around 7,000 GWh of electrical energy each year.

TransGrid and Ausgrid are responsible for the supply of electricity to the inner Sydney area and maintaining the intricate network of underground cables and overhead lines throughout the city.

As the city grows and changes, the electricity network that was predominately built in the 1950s faces increased challenges to maintain a safe, reliable and efficient supply of electricity while meeting the needs of the changing market and consumers.

Through the Powering Sydney’s Future Project, TransGrid have responded to the changing environment of the electricity industry and adopted an adaptive planning approach that invited stakeholders and the community to engage in an open and transparent process.

Through this early planning and engagement we have deferred capital investment to further explore non-network alternatives.

1. Overview

Powering Sydney’s Future – Early Engagement and Feedback Report

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Five key initiatives have been identified that may contribute to a solution for inner Sydney’s electricity network: energy efficiency, network planning, local generation, reliability standards, and demand response. The early engagement focused on these initiatives, working with stakeholders and the community to gather feedback to better inform planning.

Between April and October 2014, a range of engagement activities took place including workshops, information sessions, surveys and briefings. Through this engagement we have received feedback from over 350 people through 10 different engagement activities.

Some of the key themes from the feedback were to:

> ensure responsiveness in a network solution

> continue to advocate for non-network initiatives

> drive innovation to develop the most efficient solution for a changing environment

> continue to engage and collaborate with stakeholders and the community

> advocate to improve regulatory incentives.

Since these engagement activities we have received updated forecast information for the inner Sydney area which indicates a lower peak demand and a slower rate of growth over the coming decade. This means that demand management is likely to meet the project constraint for several years. This will defer the need to commit to capital investment until 2019 and possibly beyond.

We are responding to this new forecast and focusing on the development of demand management initiatives. In the next 12 months we will also address key feedback from stakeholders through innovation research, planning for alternatives, advocacy for reliability at an efficient cost and continued engagement.

There is no doubt that the electricity industry is changing, not only with new innovations but also the expectations and involvement from a wider range of stakeholders. We are committed to moving with this change, finding innovative solutions to use more of what we have, so we can build less. We want to bring our stakeholders and communities with us on this journey to enable users to shape their own energy future.

Through the Powering Sydney’s Future Project, TransGrid have responded to the changing environment of the electricity industry and adopted an adaptive planning approach.

1Overview

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The Powering Sydney’s Future Project is about securing a reliable, safe and economical electricity supply to inner Sydney for the next 20 years and beyond. The precise solution and timing depends on a number of variables including demand forecasts and reviews of asset conditions.

2. Introduction and engagement

2 Powering Sydney’s Future – Early Engagement and Feedback Report

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The five initiativesPlanning inner Sydney’s future electricity network has provided the opportunity to consider a range of alternatives and a move to a new way of thinking and planning. The following five key initiatives have been investigated as part of a possible solution:

> Energy efficiency – technology changes or social trends to use less energy and achieve the same outcome

> Demand response – working with customers to monitor and reduce energy use during times of peak demand

> Reliability standards – agreeing to a different level of reliability (e.g. requires fewer electricity network assets at the risk of more outages)

> Local generation – installing local generation can help supply local energy and reduce the demand on the network

> Network planning – reinforcing the network by renewing the existing underground cables or installing a new underground cable into Sydney.

TransGrid is committed to an effective stakeholder engagement process that is proactive, transparent and represents a genuine desire to inform, consult and collaborate with interested parties. We recognise that two-way communication is the key to building long-term relationships with communities directly and indirectly affected by our current and future operations.

The engagement approach for the Powering Sydney’s Future Project has been based on TransGrid’s four-staged engagement process (see Table 1).Throughout the early engagement, TransGrid raised awareness about the project and proactively sought stakeholder and community feedback to assist with project planning. The early engagement aimed to:

> introduce the project drivers to stakeholders and the community

> investigate the possible network and non-network initiatives being considered as part of the solution

> raise awareness of TransGrid’s planning processes and its revised engagement approach.

NetworkPlanning

EnergyEfficiency

DemandResponse

ReliabilityStandards

LocalGeneration

Table 1: Planning cycle

IDENTIFY NEED

STAGE 1 STAGE 2 REVIEW OPTIONS

STAGE 4 IMPLEMENT SOLUTION

STAGE 3 PLAN IN DETAIL

3Introduction and engagement

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A range of engagement activities were designed to educate, inform and seek feedback about the expected network constraint in the inner Sydney area and the need to start looking at possible solutions.

The target audience for this project included those who live, work or govern the inner Sydney area as they face the supply constraint. Inner western Sydney communities were also targeted as they may be impacted by a possible network solution.

Industry, research and consumer advocacy stakeholders were also targeted to capture their technical knowledge and experience for the project.

By targeting a wide range of stakeholders during the early planning phase, we aimed to raise general awareness of the project need and gather a range of feedback to better inform project planning and decision making.

3. Engagement activities

4 Powering Sydney’s Future – Early Engagement and Feedback Report

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Table 2: Stakeholder and engagement activities matrix

Ear

ly

brie

fings

Pro

ject

w

ebsi

te

Intr

oduc

tory

fo

rum

Onl

ine

surv

ey

Pro

ject

ne

wsl

ette

r

Initi

ativ

e w

orks

hops

Com

mun

ity

info

ses

sion

s

Med

ia a

nd

adve

rtis

ing

Soc

ial

med

ia

General public/ all stakeholders

MPs (state and federal)

State departments

Local council

Affected residents

Local businesses

Industry

Academic and research

Consumer advocacy groups

5Engagement activities

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“ This is a fabulous opportunity; something that could be showcased globally, and that Australians could be proud of and want to emulate elsewhere – be brave and please make an investment in a sustainable future for all of us!”

3.1 Early briefings

During the first quarter of 2014, TransGrid representatives met with local councils throughout the inner Sydney and inner western Sydney areas to introduce the Powering Sydney’s Future Project and to seek input on the most effective ways to reach communities and stakeholders.

The feedback collected through these discussions informed the development of the stakeholder and community engagement strategy and also guided the messaging, material and activities. TransGrid met with the following councils and relevant organisations:

> Ashfield Council > City of Bankstown > City of Canterbury > City of Sydney > Marrickville Council > Municipality of Burwood > Randwick City Council > Strathfield Council > Southern Sydney Regional

Organisation of Council (SSROC) > Waverley Municipal City Council > Woollahra Municipal Council.

3.2 Introductory forum

An introductory forum was held on Thursday 19 June 2014. The forum brought together almost 100 representatives including consumer advocacy groups, academics, government representatives, regulators, large energy users, consultants, solution technology proponents and infrastructure and energy providers.

The forum included the following presentations and presenters:

> The situation – Neil Gordon, Ausgrid > Network planning – Bruce Howard,

TransGrid > Energy efficiency – Dr Luke Reedman,

CSIRO > Demand response – Mal Coble,

TransGrid > Local generation – Peter Coombes,

City of Sydney > Reliability standards – Tim George,

DigSILENT Pacific.

The event was designed to officially launch the project and start the process of collecting feedback from stakeholders. The interactive forum included table discussions, question time and a workbook for each participant to provide written feedback. Results from the introductory forum were presented in the Interim Engagement and Feedback Report – August 2014.

Attendee of introductory forum

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Powering Sydney’s Future website page views

3.3 Project website

A project specific website was developed to provide project information and facilitate online engagement, www.yoursaytransgrid.com.au/psf. Throughout the early engagement, the website became an online hub and centralised repository for the information and feedback collected. It also included an online survey and access to register for project updates/newsletters.

The website now includes presentations from events and workshops, summaries of key activity, photos, background information and extensive Q&As.

Between June and October 2014, the website received almost 2,000 unique page views. The site has been a successful portal for all information and updates on the project and will continue to be used in this way.

Table 3: Website statistics

3.4 Project newsletter

An e-newsletter was established as a way of continuing to update stakeholders throughout the project. The e-newsletter provides a short update on the project, links to more information and any opportunities to get involved. The e-newsletter is currently distributed to 308 recipients as well as being published on the project website.

3.5 Community information sessions

Community information sessions were held at key locations to raise awareness of the project and provide an opportunity for face to face discussions with the public.

The sessions were advertised in local newspapers and through local council communications. Two project team members were present at each session, and information displays and brochures were available.

iPads were used for visitors to complete the online survey and to refer to the project information on the website.

Community Information Sessions:

Waverley Library 3 September 2014, 3-7pm

Marrickville Library 8 September 2014, 3-7pm

Bankstown Library 10 September 2014, 3-7pm

Energy Efficiency Expo Bankstown 8 October 2014, 1-6pm

Total number of visitors across all sessions – 39

PAGESTOTAL PAGE

VIEWSUNIQUE PAGE

VIEWS

Powering Sydney’s Future (homepage)

3,382 1,272

The situation 363 122

Network planning 292 99

Energy efficiency 292 112

Demand response 287 103

Reliability standards 162 64

Local generation 321 130

Stakeholder and community engagement

140 51

3,382

7Engagement activities

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Table 4: Summary of online survey responses

Community member/ general public

Business

Interest/advocacy group

Electricity industry

Unknown

3.6 Online survey

An online survey was established to seek feedback about the project and each of the initiatives being investigated. The survey provided an opportunity for participants to record their suggestions and advice to TransGrid regarding the project. It was also a systematic way to collect both quantitative and qualitative data throughout the engagement process. The survey questions were based on the participant workbook from the introductory forum, this enabled results to be combined and key trends to be identified.

The survey was accessible from the project website from 27 June to 26 September 2014. It was also available for visitors to complete at community information sessions.

The online survey was promoted through the project website and at the community information sessions. Advertising in local newspapers and online media was also used to encourage the community to take the survey.

The survey was completed by 25 participants, mainly consisting of community members, as well as representatives from advocacy groups, businesses and the electricity industry.

3.7 Initiative workshops

In response to feedback from key stakeholders at the introductory forum, a series of workshops were coordinated to explore each of the initiatives in more detail. Separate workshops were held on network planning, energy efficiency, local generation and demand response.

The aim of these workshops was to:

> provide more context and detailed information on each initiative and how it could form part of the solution for the inner Sydney area

> further understand stakeholder perspectives and priorities

> assist TransGrid to further evaluate each initiative.

Workshops were well attended by a range of stakeholders, including:

> regulatory organisations and government

> academics > large energy users > industry and interest groups > network businesses > businesses with interest in the

various project initiatives.

Network planning workshop16 September 2014

Attendance – 18

> presentations from TransGrid on the network planning process and specifically how it has been applied for the Powering Sydney’s Future Project

> sessions to seek feedback on possible advantages of a network option, concerns of a network only solution and factors that should be considered to evaluate a network solution.

Energy efficiency workshop25 September 2014

Attendance – 50

> presentations from TransGrid, Ausgrid and the NSW Office of Environment and Heritage

> a proposed framework for assessing energy efficiency opportunities for demand management developed by the Institute of Sustainable Futures

> sessions seeking feedback on the framework proposed for assessing energy efficiency opportunities for demand management.

171

1 1

5

8 Powering Sydney’s Future – Early Engagement and Feedback Report

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Local generation workshop25 September 2014

Attendance – 57

> presentations from TransGrid, Ausgrid, Australian Energy Regulatory (AER), Australian Energy Market Operator (AEMO) and Better Buildings Partnership

> sessions seeking feedback on barriers and opportunities of local generation for the Powering Sydney’s Future Project relating to the areas of cost, technical, regulatory and social/environment.

Demand response workshop25 September 2014

Attendance – 57

> presentations from TransGrid and Ausgrid

> an outline of the proposed approach for developing the demand response market for the Powering Sydney’s Future Project, including pre-emptive procurement

> sessions seeking feedback on TransGrid’s proposed approach for procuring pre-emptive network support.

3.8 Local print media

Advertising

Local newspapers were utilised as part of the community awareness campaign. These newspapers were recommended by local councils as the best avenue to reach members of the community.

A four week advertising campaign ran in local newspapers. An advertorial was published in the first week which provided introductory information about the project. A series of advertisements running over consecutive weeks focused on promoting community information sessions and driving people to the website.

Media Releases

To complement the advertising campaign and to further expand interest levels, two media releases were produced to target a wider audience.

Thursday 19 June 2014: Expert think-tank powers ahead with ideas for Sydney’s future electricity supply

This media release was published on TransGrid’s corporate website and distributed to local media the day of the introductory forum in June. The story aimed to raise the profile of the project and launch the early engagement campaign.

Thursday 28 August, 2014: TransGrid seeks community feedback on the future of electricity for inner Sydney

This media release was published on TransGrid’s corporate website and distributed to local media to raise awareness of the project and encourage attendance to community information sessions.

Table 5: : Local newspaper readership

NEWSPAPERS USED READERSHIP

News Corp Australia

Central Sydney 12,000

Inner West Courier 87,000

Canterbury Bankstown Express 71,000

Wentworth Courier 69,000

Southern Courier 64,000

Local News Plus

The Bankstown/Canterbury Torch 140,000

Alternative Media Group

City Hub 58,000

9Engagement activities

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Editorial coverage

As a result of the project publicity, editorial featured in the following major media and major trade publications:

> Sunday Herald, 15 June 2014, ‘Costly cable needed to avert city blackouts’

> Power in News, 19 June 2014, ‘TransGrid consults on CBD renewal’

> Sunday Herald, 22 June 2014, ‘Left in the dark’

> Utility Magazine, 24 June 2014, ‘Sydney energy forum’s ideas power into the future’

> Wentworth Courier, 27 August 2014, ‘Call for power supply views’

> Bankstown Canterbury Torch, 27 August 2014, ‘A say on power’

3.9 Social media

Social media was used throughout the early engagement to raise awareness of the project and drive people to the project website. TransGrid’s established Facebook and Twitter accounts allowed key messages to be delivered to a wider online audience. Additional Facebook posts were sponsored by paid placement and linked to community groups to achieve a greater reach to the inner Sydney community.

Facebook posts 15

Facebook likes 278

Facebook reach 14,322

Twitter posts 28

Twitter posts from external accounts

6

LinkedIn posts 2

3.10 Online advertising

Online advertisements were booked with News Corp Australia, and banner adverts were placed in local pages through The Daily Telegraph targeting inner Sydney, Sydney East and the inner West. These advertisements were viewed on the news site over 90,000 times, with 40 clicks recorded through to the project website.

Between 11 August and 24 August 2014, data recorded showed:

> total impressions delivered across all units was 90,667

> total clicks received for the campaign were 40

> average Click Through Rate (CTR) was 0.04% against an industry standard of 0.03%

> the highest performing placement was the Inner West Region Leader Board which received 35% of the total clicks received for this campaign and a CTR twice that of the industry standard

> the placement for the City East Region achieved a CTR of 0.05%.

“ Enhance Sydney’s appeal as a place to visit and do business, by embracing a truly green and creative power plan.”Community member

10 Powering Sydney’s Future – Early Engagement and Feedback Report

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This section provides a summary of the key feedback identified through the early engagement. The feedback is outlined according to each of the initiatives and in the final section more general project feedback has been included.

4. Feedback overview

Feedback was collated and recorded using a range of methods including face to face discussions, group workshops and surveys. The feedback received is a combination of stakeholder and community perspectives including both qualitative and quantitative data.

Key themes were drawn from this feedback by grouping common messages and comments.

11Feedback overview

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4.1 Network planning

Through joint planning, TransGrid and Ausgrid have worked to identify the most appropriate and cost-effective network solutions to meet current and future electricity demand for the inner Sydney area. We asked stakeholders for feedback on the preferred network options as well as the approach for early planning. We wanted to find out if stakeholders would support a network option and explored key concerns and opportunities that should be considered as part of the early planning.

Most participants thought that there was quite a bit of potential (36%) for the network infrastructure option to contribute to the overall solution. However, there was a diverse range of perspectives as shown in Table 6.

Table 6: Feedback on network infrastructure potential

A great deal of potential

Quite a bit of potential

A fair bit of potential

A little bit of potential

No potential at all

How much potential do you believe there is for network infrastructure to contribute to the overall solution?

36%

12%

28%

16%8%

Source: online survey respondents (n=25)

of participants thought that there was quite a bit of potential for the network infrastructure option to contribute to the overall solution

36%

“ Have you looked at how other countries manage these issues without community disruption?”Community member

12 Powering Sydney’s Future – Early Engagement and Feedback Report

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NETWORK PLANNING KEY THEMES EXPLANATION

Preference for single cable network solution

Based on the information provided, the majority of participants preferred installing a single high capacity underground cable compared to individually replacing the existing cables. Key advantages identified included:

> easier to build, maintain and operate > most cost effective based on current forecast and data presented > possibility of shared easements with other utilities or infrastructure > additional capacity or security in the event of increased demand.

Ensure flexibility in a network solution If a network solution was required, it should allow for flexibility to respond to changes in demand and advancement in technology.

Overinvestment in infrastructure It was clear that stakeholders wanted TransGrid to avoid overinvestment and carefully consider:

> how will it impact on electricity prices for consumers? > would a cable provide too much capacity than what is really needed? > what is the risk of stranded assets?

A single cable option may create more risk of outages

Single cable option offers less security and reliability compared to multiple lower capacity cables.

Other network infrastructure alternatives should be considered

> distributed storage to manage peaks and better utilise existing capacity > decentralised energy generation, but this requires incentives and improvements

in regulatory framework > deliver a mixed solution of network and non network approaches.

Clarifications sought on the need for the project

Overall, there was general uncertainty from some stakeholders about the need for the project. They questioned:

> forecast methodology and assumptions > cable retirements – can the cables be maintained for longer as has been

done in other countries? > project timing and urgency.

13Feedback overview

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4.2 Demand response

Demand response involves a deliberate short-term decision to reduce energy consumption in response to a specific event. We sought feedback on how much potential stakeholders thought demand response had as part of the solution, and if TransGrid should invest more into this area. We wanted to learn more about what stakeholders thought the potential barriers were for demand response and how these could be overcome. The feedback collected helped us understand how TransGrid could facilitate the uptake and roll-out of demand response.

Seventy eight percent of participants believed demand response had quite a bit or great potential to contribute to the overall solution for the project and that both TransGrid and Ausgrid should have an active long-term role and invest resources in this area.

Table 7: Feedback on demand response potential

A great deal of potential

Quite a bit of potential

A fair bit of potential

A little bit of potential

No potential at all (0%)

How much potential do you believe there is for demand response to contribute to the overall solution?

47%

17%

31%

5%

Source: introductory forum and online survey respondents (n=60)

DEMAND RESPONSE KEY THEMES EXPLANATION

Demand response encourages a smarter and greener network

Stakeholders felt demand response encouraged the uptake of energy efficiency measures, on-site generation, energy storage and other innovative approaches while also making the most of existing infrastructure.

It was also seen to enable a more adaptive, collaborative and competitive solution while improving the end-user’s energy literacy and engagement. TransGrid was encouraged to harnesses technologies to solve infrastructure/capacity issues while opening up a new ‘market’.

Demand response can be a cost effective approach

Based on what stakeholders told us, they understood that demand response options could be more cost effective and provide an opportunity to defer capital expenditure, ultimately resulting in lower costs to consumers.

Concerns that demand response won’t meet the required capacity

Concerns were raised about whether enough demand response capacity is available in the right place and at the right time to reliably meet the required capacity.

Lack of incentives for market It was clear from testimonials and feedback that there is a lack of regulatory incentives and policy support for transmission network service providers and distribution network service providers to pursue demand response initiatives.

There were also contractual concerns regarding the (unpaid) time and resources required to prepare tenders and the disadvantages of having a monopoly sourcing/aggregating demand response.

14 Powering Sydney’s Future – Early Engagement and Feedback Report

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of participants thought that there was quite a bit or great potential for the demand response option to contribute to the overall solution

78%

15Feedback overview

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4.3 Energy efficiency

Energy efficiency refers to the use of less energy for the same activity or level of output. While it is an area that is not usually targeted by transmission networks, we sought feedback on energy efficiency to find out how much potential stakeholders thought it had, and if TransGrid should invest in energy efficiency. We particularly wanted to understand views on the potential benefits and concerns of energy efficiency, and also to gain feedback on a proposed framework presented to assess energy efficiency opportunities.

Most participants believed that energy efficiency has a great deal or great potential to contribute to the overall solution and that both TransGrid and Ausgrid should have an active long-term role and invest resources in this area.

Table 8: Feedback on energy efficiency potential

A great deal of potential

Quite a bit of potential

A fair bit of potential

A little bit of potential

No potential at all (0%)

How much potential do you believe there is for energy efficiency to contribute to the overall solution?

76%

7%

10%

7%

Source: introductory forum and online survey respondents (n=59)

ENERGY EFFICIENCY KEY THEMES EXPLANATION

Energy efficiency could deliver a long lasting reduction in demand

It was considered that the real benefit of energy efficiency is the long term contribution to reducing electricity demand.

Low cost initiatives exist that could directly benefit the customer through reduced electricity bills as well as environmental benefits, such as reduced carbon footprint.

Energy efficiency is not able to effectively or directly address the electricity constraint in the inner Sydney area

It was recognised that energy efficiency initiatives were likely to have a limited impact on reducing peak demand and therefore address the specific Powering Sydney’s Future constraint. On its own, energy efficiency may not provide enough demand reduction to address the issue, however it should be included as part of the solution.

There is a lack of regulatory incentives There is a need for policy stability to facilitate long term support and uptake. The lack of policy enforcement has resulted in varied compliance and therefore the benefits and gains cannot accurately be measured.

“ Don’t assume that its only greenies who care about the environment. It’s economists as well, and many others. The long term environmental impact has implications across many sectors.”Community member

16 Powering Sydney’s Future – Early Engagement and Feedback Report

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4.4 Local generation

We sought feedback to find out how much stakeholders thought local generation may contribute to the solution, and if TransGrid should invest more into this area.

We wanted to collect feedback on the barriers and opportunities for local generation relating to cost, technical, regulatory and social/environment.

Approximately 85% of participants at the introductory forum believed that local generation has a great deal of potential or quite a bit of potential

to contribute to the overall solution and that both TransGrid and Ausgrid should have an active long-term role and invest resources in this area. Solar and cogeneration/trigeneration were identified as having the most potential to contribute to the solution. Local storage was identified as another form of local generation with strong potential.

Table 9: Feedback on local generation potential

A great deal of potential

Quite a bit of potential

A fair bit of potential

A little bit of potential

No potential at all (0%)

64%

11%

18%

7%

Source: introductory forum and online survey respondents (n=61)

LOCAL GENERATION KEY THEMES EXPLANATION

Effective use of existing infrastructure There are many cogeneration plants and back-up/emergency generators in the CBD however they are rarely used. Local generation could utilise these existing assets.

There are advantages of generating energy where it is needed

> lower emission intensity and resilience in electricity supply > direct consumer involvement in the program can help grow awareness

and adoption > social benefits for self sufficient communities.

Local storage could greatly improve demand response capability

Local storage such as large scale batteries or electric cars was recognised as a contributor to local generation as they can store energy and potentially supply back to the grid at times of peak demand.

There are a number of regulatory and technical constraints

> regulations aren’t set up to facilitate small scale generation > maintaining adequate reliability throughout the network to cope with fault

levels and two way flows > other technical challenges include cyber security and high standards enforced

for the installation and operation of local generators.

There is a risk of increased pollution Concerns were raised that increased pollution could occur in the inner Sydney area with a greater use of gas or diesel powered generators in the area.

of participants thought local generation had great potential to contribute to the overall solution

64%How much potential do you believe there is for local generation to contribute to the overall solution?

17Feedback overview

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4.5 Reliability standards

Transmission networks are required to meet a set level of service reliability. These requirements known as reliability standards, guide the way in which the network is designed. The NSW reliability standards are set by the NSW Government. We sought feedback on how much reliability standards could contribute to the project solution and what benefits or concerns stakeholders and the community had for a possible change in reliability standards.

Feedback was sought at the introductory forum in June and through the online survey. An initiative workshop was not held for reliability standards as it was recognised that there is limited flexibility with what can be discussed for this area.

Approximately 70% of participants believed that changing the reliability standard only had a little bit or a fair bit of potential to contribute to the overall solution. However the majority of participants believed that TransGrid and Ausgrid should have an active long term role and invest resources in this area.

Table 10: Feedback on reliability standards potential

A great deal of potential

Quite a bit of potential

A fair bit of potential

A little bit of potential

No potential at all

How much potential do you believe there is for a different reliability standard to contribute to the overall solution?

35%

26% 17%

9%

Source: introductory forum and online survey respondents (n=54)

RELIABILITY STANDARDS KEY THEMES EXPLANATION

Changing reliability standards could provide some benefits

> reducing cost to consumers though lower reliability standard would imply less infrastructure

> allowing non-network options to be considered in the assessment of reliability > different customers have different reliability needs and the standard could be

adjusted accordingly.

Concerns about changes to reliability standards

Concerns were raised about the significant economic impact of supply interruptions in Sydney, and that cost-benefit analysis would be required when considering a change.

13%

“ Work towards enabling State/Federal Government, consumers, regulators and networks to work cooperatively in recognising and addressing the issues.”Community member

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4.6 General feedback

Throughout the early engagement, in workshops and from the online survey, we received a range of feedback about the project, the engagement process and additional things to consider.

We looked for opportunities to find out what stakeholders and the community thought about the project and how we had engaged. We wanted to know if they supported the approach or had suggestions for how we can better communicate and develop the project.

Table 11: Ranking of priorities

Priorities that should be considered when developing the overall solution for this project (ranked in order of priority).

*Note: rankings calculated by cumulating respondent’s survey results (n=58).

RANK

1 Being open to innovative solutions

2 Reducing costs to electricity consumers

3 Ensuring a high level of reliability

4 Reducing environmental impact from ageing cables

5 Minimising construction impacts

GENERAL FEEDBACK KEY THEMES EXPLANATION

Continue to engage and collaborate > stakeholders appreciated being engaged early in the project planning process > there was positive feedback about the range of stakeholders involved > TransGrid is encouraged to continue with communications and to take

a leadership role in promoting non-network opportunities.

Stakeholders and the commuity would like to see more engagement through:

> improving community education and clarifying consumer impacts > collaborating more with industry, research partners, and National Electricity

Market participants > establishing a common action group to continue to drive demand management.

Drive innovation > stakeholders and the community wanted TransGrid to continue to research and investigate the best solution including reviewing international case studies

> be prepared for technological change (e.g. smart grid and distributed storage) > develop flexibility and resilience in a changing environment > forecasts need to be more responsive to change.

Prioritise clean green solutions > TransGrid should focus on reducing green house gas emissions > environmentally sustainable solutions should be promoted > there was a strong desire for electricity to be sourced from renewable

energy sources.

Continue to advocate for non-network initiatives

> work with regulatory bodies and government to promote and incentivise non-network initiatives

> continue to work to overcome existing regulatory barriers for alternative smart solutions.

Promote smarter pricing > focus on keeping the cost of electricity down for consumers > stakeholders and the community want to see more cost reflective pricing

(e.g. increase the price during times of peak electricity demand) > a greater ability for consumers to influence their electricity costs

(e.g. introduce smart meters).

Put planning into action > stakeholders and the community would like more detailed and focussed discussion and collaboration on the technical solutions and actual proposals for the project

> show action with non-network initiatives as a result of this engagement.

19Feedback overview

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5. Response to feedback

Our early engagement aimed to use the feedback collected to better engage with and inform stakeholders and the community as well as enabling us to better plan the next steps for the project.

We adapted our engagement activities and responded to feedback throughout the process to ensure stakeholders and the community were well informed allowing them to effectively participate and contribute. We have received a broad range of feedback in this early stage and we were able to respond to some suggestions and implement actions.

This section highlights the key actions we have undertaken as result of the feedback received to date.

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Additional website information

The project website has become the hub of information for the project, including a clear record of the engagement activities undertaken to date. The website has been progressively updated since its inception in June to incorporate new project information, as well as provide access to the workshop presentations and the feedback received.

Frequently asked questions have also been developed on each project initiative webpage to address feedback and questions received throughout the engagement activities.

Initiative workshops

Stakeholders told us early on that they wanted the opportunity to specifically focus on each of the initiatives. In response, separate workshops were held to provide further information about each key initiative, to answer questions and better understand stakeholder perceptions.

Following is a brief outline of each of the workshops:

Network planning – the workshop presented more detail about TransGrid’s network planning process and specifically how it was applied to the Powering Sydney’s Future Project. More information was provided on the various network strategies and options considered through the joint planning process with Ausgrid.

Energy efficiency – the workshop provided context on existing trends and state policy direction regarding energy efficiency. It also included a proposed framework for assessing potential energy efficiency opportunities and specific examples of possible energy efficiency projects that could help address peak demand.

Local generation – the workshop provided area-specific context regarding the challenges and opportunities of local generation projects into Sydney as well as case studies of successful projects and information about the regulatory context.

Demand response – the workshop provided detail and sought feedback on TransGrid’s proposed approach for developing the demand response market in the inner Sydney area and how this initiative could be procured.

21Response to feedback

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End of year briefing

A key message we understood from stakeholders was their preference to maintain the flow of information and the level of engagement. To respond to this, an end of year briefing provided an update on the project status and outlined the next steps. This was an opportunity to touch base with our stakeholders and ensure clear messaging and transparency.

Involvement from regulatory bodies and government

Stakeholders told us that government and regulatory bodies should be involved. Regulatory organisations and relevant federal, state and local government representatives were invited and participated in the introductory forum and initiative workshops.

Representatives from the Australian Energy Regulatory (AER) and Australian Energy Market Operator (AEMO) presented at the local generation workshop while a representative from the NSW Office of Environment and Heritage presented at the energy efficiency workshop.

TransGrid will continue to engage with regulatory bodies and government for this project as has been encouraged by our stakeholders.

Advocacy and regulatory reform

TransGrid has a regulatory team dedicated to identifying and responding to issues around the way in which transmission networks are regulated, including the impact of government policies and energy market reforms. This team has been involved in the Powering Sydney’s Future Project, including participation in the introductory forum and initiative workshops.

Through this participation, the team has heard stakeholder feedback which has helped support ongoing policy and regulatory work. Stakeholders expressed concern that there is a need to strengthen the incentives for network businesses to undertake demand response and other non-network initiatives.

TransGrid’s network support and regulatory teams are working together to identify and investigate potential barriers to transmission networks undertaking demand response and pursuing non-network initiatives. We have committed to identifying ways to improve the policy and regulatory environment through our participation in Grid Australia and the Energy Networks Association.

Enhanced project awareness and collaboration

A broader project awareness campaign was implemented to inform the wider community about the Powering Sydney’s Future Project. The approach was informed by feedback and suggestions received from local councils on how to best reach out to their communities. This involved advertising in local newspapers, council newsletters and information sessions.

A number of suggestions were made regarding other organisations or sectors to include in the engagement. We acted on this advice and invited others to be involved. The collaboration achieved through this project has proved to be a great opportunity for stakeholders to work together on key energy issues.

“ I think we have seen some real progress, the range of options outlined is better and the way TransGrid is engaging with the community is also a much better process.”Chris Dunstan Research Director, University of Technology Sydney Utility Magazine, 24 June 2014

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23Response to feedback

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The latest forecast information provided for the Powering Sydney’s Future Project indicates a lower peak demand for the summer of 2014/15 than the previous forecast and also a slower rate of growth in the inner Sydney area over the coming decade. This forecast has changed the timeframes of when the Powering Sydney’s Future Project is likely to be needed.

6. Project planning update

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Table 12: Inner Sydney electricity supply vs demand

Given the volatility of electricity demand, TransGrid is preparing preparing for a range of possible futures and has produced high and low load growth scenarios based on a number of inputs including forecasts from Ausgrid. For the Powering Sydney’s Future Project, these scenarios indicate that a short fall in capacity could vary from 2019 to 2023. While this is the same range as indicated by the previous forecasts, the likelihood of having to take action early in that period has significantly reduced.

This means that if we continue to see moderate subdued growth, demand management initiatives are likely to address the constraint between 2019 and 2023. This would defer the need to commit to capital investment until at least 2019. TransGrid has successfully procured 40 MW of demand response in the inner Sydney area and we believe through market development there is significant potential for demand response to address the constraint for the inner Sydney area to at least 2023 and possibly beyond.

As well as reviewing the annual electricity demand information and related forecasts, there are a number of other factors that will contribute to the planning and decision making to ensure inner Sydney continues to have a safe and reliable supply of electricity.

This includes:

> Asset conditions and planning As part of operating the network there are continuous reviews of all assets in service to ensure they operate reliably, safely and efficiently. Cost benefit analysis will be undertaken to evaluate the most appropriate strategies for maintaining and utilising these assets to ensure they operate for as long as possible without posing any risks to reliability, the environment or community.

> Changes in technology There have been a number of advancements in technology and there are ongoing developments in this area, both in relation to the electricity supply and electricity consumption. TransGrid is considering the impact of new technologies such as energy storage and effective demand participation platforms to be able to use more of what we have, so we can build less. By working with industry experts to stay attuned to new trends and technologies we can help prepare for the future.

> Demographics It is critical that we understand what has happened through accurate demand data but also that we look to what may happen in the future. TransGrid will continue to monitor changes in demographics for inner Sydney as part of the early planning. This information allows us to develop better forecasts and support the future needs of inner Sydney.

Network capacity

Expected range for electricity demand

Upper and lower range for electricity demand (outside of TransGrid planning requirements)

Recorded maximum demand

New major asset built

Electricity asset retired0

250

500

750

1000

1250

1500

1750

2000

2250

2500

2014 2015 2016 2017 2018

# * * * *2019 2020 2021 2022 2023 2024 2025

Ele

ctri

city

(MW

)

Year

Inner Sydney Electricity Supply vs Demand

Network capacity

New major asset built

Electricity asset retired

Expected range for electricity demand

Upper and lower range for electricity demand (Outside of TransGrid planning requirements)

Recorded maximum demand

#

*

0

250

500

750

1000

1250

1500

1750

2000

2250

2500

2014 2015 2016 2017 2018

# * * * *2019 2020 2021 2022 2023 2024 2025

Ele

ctri

city

(MW

)

Year

Inner Sydney Electricity Supply vs Demand

Network capacity

New major asset built

Electricity asset retired

Expected range for electricity demand

Upper and lower range for electricity demand (Outside of TransGrid planning requirements)

Recorded maximum demand

#

*

25Project planning update

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It is early days for the Powering Sydney’s Future Project and ongoing planning and engagement will occur before any investment decision can be made. The early engagement has identified a number of key themes that will inform options assessment, determine priorities and guide further engagement. This feedback will also be used to inform our business operation and direction over the coming years.

7. Next steps

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The latest forecast tells us that demand management initiatives are likely to be effective in addressing a potential shortfall in capacity between 2019 and 2022 and may even defer capital investment further. This is supported by feedback from stakeholders who have told us that we should look for innovative, responsive solutions that defer capital investment.

While the current forecast has reduced the likelihood of any capacity shortfall before 2023, TransGrid is committed to taking steps to ensure the security of inner Sydney’s electricity supply. We are developing demand management and continuing our robust planning processes so that we have the right solution when needed. The following next steps respond to the change in forecast as well as stakeholder feedback.

Develop responsive network options

Through joint planning, TransGrid and Ausgrid will review and refine a range of network options. This will include approaches to meet any supply shortfall by installing low capacity (132 kV) supply cables as well as considering a hybrid alternative of installing a new high capacity (330 kV) cable, but initially operating at a lower capacity until upgraded to the full capacity when needed in the future.

Grow demand management

TransGrid is seeking to build on its foundation of demand management innovation and as part of the 2015-2019 Revenue Proposal has sought funding to support this ambition. We intend to undertake a range of projects to develop demand management including:

> improve consumer understanding of demand management to capture synergies across different industry participants’ demand management activities, and to reduce regulatory barriers to demand management uptake

> help develop the market for demand response by bringing together potential demand management providers and corresponding network constraints over the planning horizon

> work with larger consumers and grid-scale solutions to capture latent demand response capability and support overcoming barriers to application of demand management.

Advocate for the development of reliability standards

TransGrid will continue to play an active role in the industry advocacy for development of reliability standards that will ensure we meet consumer and community expectations for a reliable supply at an efficient cost.

Continue to engage and collaborate

We will continue to engage and collaborate with stakeholders to find the best long term solution. The project e-newsletter will continue to be distributed and any significant project updates will be communicated through this channel. We will work closely with Ausgrid to continue a joint planning approach, as well as working with industry on demand management research.

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Disclaimer

The Powering Sydney’s Future Project Early Engagement and Feedback Report (this document) has been prepared and made available solely for information purposes. This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification.

The information in this document reflects the forecasts, information, feedback and opinions adopted and collected by TransGrid as at 30 November 2014. The forecasts, information, feedback and opinions may change at any time without notice. Anyone considering this document at any date should independently seek the latest information regarding the project.

TransGrid makes no representation or warranty as to the currency, accuracy, reliability, completeness or suitability for particular purposes of the information in this document. Persons reading this document acknowledge and accept that TransGrid and/or its employees, agents and consultants shall have no liability (including liability to any person by reasons of negligence or negligent misstatement) for any statements, options, information or matter (expressed or implied) arising out of, contained in or derived from, or for any omissions from the information in this document, except insofar as liability under any New South Wales and Commonwealth statute cannot be excluded.

© State of New South Wales through TransGrid

All rights reserved

ABN 19 622 755 774

www.transgrid.com.au

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www.yoursaytransgrid.com.au/[email protected] 222 537