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Development of Connection Policy for Distributed Generation in the Uk

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Development of connection policy for distributed generation in the UK

Gareth Evans
Technical Directorate, Ofgem
The British Electricity & Gas Regulator
1

gareth.evans@ofgem.gov.uk

ERRA DG Working Group - July 2007

Tnegra Design

Development of connection policy for distributed generation in the UK
• Introducing Ofgem
• The challenge of DG
• Connection incentives
• The Electricity Networks Strategy Group
• The Energy White Paper
• Conclusions

2

ERRA DG Working Group - July 2007

Tnegra Design

Development of connection policy for distributed generation in the UK
• Introducing Ofgem
• The challenge of DG
• Connection incentives
• The Electricity Networks Strategy Group
• The Energy White Paper
• Conclusions

3

ERRA DG Working Group - July 2007

Tnegra Design

About
• Total staff currently
~300
• Principal disciplines:
– Economists
50%
– Finance/Admin
15%
– Legal
6%
– Social/Environmental 6%
– Technical
6%
• Overall Budget
~£30m

per year

4

Ofgem’s main office near
Houses of Parliament

+ small office in Glasgow
ERRA DG Working Group - July 2007

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Principal objective
• Our first priority is to protect the interests of consumers now and for the future. We do this by:
– promoting markets/competition wherever appropriate, and
– regulating effectively the monopoly companies which run the gas and electricity networks

5

ERRA DG Working Group - July 2007

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Other duties
• We have other priorities too. We:
– help secure Britain’s energy supplies
– help energy markets and industry achieve environmental improvements, and
– take account of the needs of vulnerable customers

6

ERRA DG Working Group - July 2007

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Today’s GB Electricity Sector

Private
Companies

7 ly 1 es 3 sx e r x pp x c o su en rs) tor ra t ers ic s s) e ic e ra t l n p e es ee yer
Ow
r/O ion play
Op
m c t e do icen pla i on era big i on wn 0 l n ss ig iss
>3
nO ge 7 (bu ran ran ibu (bu
T
r
T
is t
D
Competition

Generation

7

Monopoly

Monopoly

Competition

Transmission

Distribution

Supply

ERRA DG Working Group - July 2007

Tnegra Design

Development of connection policy for distributed generation in the UK
• Introducing Ofgem
• The challenge of DG
• Connection incentives
• The Electricity Networks Strategy Group
• The Energy White Paper
• Conclusions

8

ERRA DG Working Group - July 2007

Tnegra Design

Networks .

Critical role in facilitating low carbon system this is now being widely understood
9

ERRA DG Working Group - July 2007

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and the challenges ahead
G
G
G
G
G
G

Maintain existing assets renew assets efficiently facilitate new generation & DSM
10

ERRA DG Working Group - July 2007

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Which generation technologies will grow?
400kV

Conventional large power stations and offshore wind

132kV

Onshore & offshore wind, industrial CHP

11kV

230V

DSM

DSM

Commercial CHP & small renewables

Domestic wind, solar, CHP

Note: this is not intended to be an exhaustive list of generating technologies

11

ERRA DG Working Group - July 2007

Tnegra Design

Which generation technologies will grow?
400kV

GW solutions

132kV

MW solutions

11kV

230V

12

DSM

DSM

MW solutions

kW solutions

ERRA DG Working Group - July 2007

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The Future of the Supply Chain

For the first time, different generation technologies of radically different sizes could all be part of the optimum solution

13

ERRA DG Working Group - July 2007

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Facilitating change

The challenge for the network companies is to facilitate the development of the generation base in an efficient way
Sources: Capstone, Whispergen and Windsave

14

ERRA DG Working Group - July 2007

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Installed DG Capacity
(Up to and including 132kV)
13400
13200

MW

13000
12800
12600
12400
12200
12000
5
-0

05 cDe 05 pSe n
Ju

5
-0
ar
M
04 cDe 4
-0

4
-0
ct
O
04 pSe l
Ju

-0 ar 04 nJu 04 rAp 4

M

04 nJa 03 cDe 03 rAp Source – ENA published data

15

ERRA DG Working Group - July 2007

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Development Scenarios

LV

400kV

More of the same?
16

ERRA DG Working Group - July 2007

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Development Scenarios

LV

400kV

Or could the system turn on its head?
17

ERRA DG Working Group - July 2007

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“Decarbonising the UK”
“the relative dominance of centralised supply is reduced from that of today in all scenarios” “an element of centralised supply emerged, to varying degrees, as an important facet in all of them” 18

ERRA DG Working Group - July 2007

Tnegra Design

Development Scenarios
If the basic system structure does prove to be robust we will need
• Strategies to allow capacity to be increased at the voltage levels that call for it
• Communication options to allow
– efficient control and protection of the system, so that supply safety and reliability is maintained or improved
– markets to operate to meet the needs of all demand and generation customers

19

ERRA DG Working Group - July 2007

Tnegra Design

Development of connection policy for distributed generation in the UK
• Introducing Ofgem
• The challenge of DG
• Connection incentives
• The Electricity Networks Strategy Group
• The Energy White Paper
• Conclusions

20

ERRA DG Working Group - July 2007

Tnegra Design

The main DG incentive mechanism
• Hybrid incentive for DG-related distribution investment
– pass-through 80%
– supplementary incentive £1.5/kW/yr for DG capacity connected
(£2.0/kW/yr for Scottish Hydro)
– cap (2 times cost of capital) and floor (cost of debt) for overall returns
– incremental unit cost above £200/kW paid in DG’s connection charges • £1/kW/yr for O&M
• Further incentive for the provision of ongoing network access – £0.002/kWh default rate (subject to further development)
21

ERRA DG Working Group - July 2007

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Innovation
Why is the Regulator interested?
• investment levels are far beyond recent experience
• diverse new challenges for networks
• the issues are Europe-wide and beyond





22

Ofgem’s primary duty is to customers, both today and in the future we wish to see effective and efficient investment, with innovation where it adds value, and evidence of effective deployment and technology management

ERRA DG Working Group - July 2007

Tnegra Design

New innovation incentives





Two years experience with IFI: Innovation Funding Incentive and
RPZ: Registered Power Zones
Review of these incentives took place in Nov 2006 (see website)
The incentive has been extended to 2015 to provide continuity
IFI is now also available to electricity and gas transmission

IFI – the Innovation Funding Incentive
• A ‘% of turnover’ allowance for engineering innovation [0.5%]
• Equates to £1-2m per company per year, plus 20% from Companies
• Funding is on a ‘use it or lose it’ basis
• No off-set if third party funding is also obtained
• Annual, open, reporting of activities on Ofgem website
23

ERRA DG Working Group - July 2007

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Distribution Company spend on Network R&D since 1990

7000

Privatisation

6000

£000

5000

4000
3000

2000
1000

4
20
0

3
03
/

20
0
20

20

02
/

20
0

2

1
20

01
/

20
0

0
00
/

20
0
20

19

99
/

19
9

9

8
98
/

19
9
19

7
19

97
/

19
9

6
19

96
/

19
9

5
95
/

19
9
19

19

94
/

19
9

4

3
19

93
/

19
9

2
92
/

19
9
19

1
19

91
/

19
9

90
/
19

19

89
/

19
9

0

0

Financial Year

24

ERRA DG Working Group - July 2007

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Distribution Company spend R&D Network R&D
DNO spend on Network on since 1990 since 1990

7000

Privatisation

•187 projects

6000

•No company is yet spending to its cap

£000

5000

4000

Impact of
IFI Incentive

3000

•Max spend is 0.4%

2000

• Forecast benefits total
£50m for a
£6.5m spend

1000

) ar al

ye

th s ci an fin

1s as t

I
(L

(I
F
/2
0

06

05
Ap
r
-

05

20

04 t 0c

)

04 t 20

20

Financial Year

6m

/2
0

03
03

/2
0

02
02

/2
0

01
20

01

/2
0

00
20

00

/2
0

99
99
19

19

98

/1
9

/1
9

98

97
19

97

/1
9

96
96
19

19

95

/1
9

/1
9

94
19

94

/1
9

93
19

93

/1
9

92
19

92

/1
9

91
19

91

/1
9

90
90

/1
9
19

89
19

95

0

* Data from 1989/1990 to 2003/2004 is the c ollaborative spending on R&D amongst the DNOs through a single provider.
* Data from Oc t 2004 - April 2005 and the last financ ial year (2005/2006) shows reported total IFI spend.

25

ERRA DG Working Group - July 2007

IFI projects reported to date

Tnegra Design www.innovationsolutions.co.uk 132kV
PFT cable oil leak location

Alternative Trident line
With fibre optics

Thermal line assessment

Circuit
Breaker
condition

Lidar scanning

Optimising Voltage control /
Var performance of large
Wind Farm

Hi res photography
Lightning
Protection

66 or 33kV

Network Risk

Woodhouse tower Wind Farm
Replacement
Gen AVC
Redox Storage

Broadband
Powerline
Carrier

Synchronising Remote
PMR
FPI

Line Tracker
& Line Sense

Wood pole disposal 11kV

On load tapchanger transformer

Autonomous Regional
Network Management

Fault Level
Monitor

Superconducting
Fault Current Limiter

On-line condition Monitoring
Cables
Lines & switches
Under-grounding
Cable plough
Intelligent
Universal
Transformer

26

Alternative fluid
Transformer

Fibre Optic
Temp Monitor

Distribution
State Estimator

Vista u/g mapping LV
LV Automation

Earthing
Condition

Mobile
Locator
GIS
Scada
Fenix
Customer
Interface module

Storage
1ph
Regulator

LV Incipient
Fault
Programme

Recycling
Excavated
Material

ERRA DG Working Group - July 2007

Tnegra Design

RPZ: Registered Power Zones
Networks where innovation is used to connect Distributed Generation


Ofgem registers, but does not approve projects



Hybrid £/kW incentive with cap of £0.5m per year per licensee



Open reporting of RPZ projects on Ofgem website

RPZ 1 Central Networks – connection of wind generation using dynamic line rating technology
RPZ 2 Scottish & Southern Energy – connection of renewable generation on Orkney using active network management
RPZ 3 EDF Energy – connection of wind generation using novel voltage control technology
RPZ4 EDF Energy – connection of landfill gas generation using novel voltage control technology with proving of simulation tool
27

ERRA DG Working Group - July 2007

Tnegra Design

Development of connection policy for distributed generation in the UK
• Introducing Ofgem
• The challenge of DG
• Connection incentives
• The Electricity Networks Strategy Group
• The Energy White Paper
• Conclusions

28

ERRA DG Working Group - July 2007

Tnegra Design

The Electricity Networks Strategy Group
• The work of the DGCG and the TIWG will now be brought together under the ENSG
• First meeting took place in 2005
• Cross-industry representation
Ofgem
DTI

29

Wales

Scotland

NGT

Defra

DNOs
Developers

Finance

ERRA DG Working Group - July 2007

Tnegra Design

The Electricity Networks Strategy Group
ENSG
(DTI/Ofgem)

Transmission
Working Group

Distribution Working
Group

1.

Horizon scanning

1.

Horizon scanning

2.

Infrastructure standards

2.

3.

Connecting renewable generators Networks for low carbon economy 3.

Enabling active networks

4.

Facilitating small scale gen’

4.

30

Accommodating Variability
& New Technology

ERRA DG Working Group - July 2007

Tnegra Design

Second Annual Report now published
Register for automatic updates
31

ERRA DG Working Group - July 2007

Tnegra Design

Development of connection policy for distributed generation in the UK
• Introducing Ofgem
• The challenge of DG
• Connection incentives
• The Electricity Networks Strategy Group
• The Energy White Paper
• Conclusions

32

ERRA DG Working Group - July 2007

UK Energy White Paper 24 Tnegra2007
May Design














New meters to have real-time display from 2008. Aim for all smart meters within 10 years.
Consultation on energy efficiency of consumer electronics.
A cap and trade 'Carbon Reduction Commitment' for banks, supermarkets etc.
Simplification of energy market and licensing for localised energy by the end of 2008 and clearer export tariffs for microgenerators from all major energy suppliers.
Band the Renewables Obligation to benefit offshore wind, wave, tidal.
Publication of a Biomass Strategy.
Competition to build world's first end-to-end Carbon Capture and Storage plant, at least 300MW capacity, 90% CO2 saving, and be up and running between 2011 and 2014.
Legislation for gas storage under the seabed and unloading of
Liquefied Natural Gas at sea.
Three month deadline for consent decisions on large scale energy projects, pending more radical reforms set out in the
Planning White Paper.
A Low Carbon Transport Innovation Strategy and R&D funding
Consultation on giving private sector companies the option of investing in new nuclear power stations. A 20 week public consultation has started.
Consultation on 'Justification' and 'Strategic Siting Assessment' processes for new nuclear power. A 'pre-licensing' process has been started by the Health and Safety Executive.
New consent regime for nationally significant energy infrastructure. http://www.dti.gov.uk/energy/whitepaper/page39534.html
33

ERRA DG Working Group - July 2007

UK Energy White Paper 24 Tnegra2007
May Design
• Joint DTI/Ofgem report on DG to support the Energy White
Paper
• Addresses the barriers and incentives to affecting the growth of DG in the UK






Markets & licensing
Export reward
Better information
Easier connections
CHP

http://www.dti.gov.uk/files/file39025.pdf

34

ERRA DG Working Group - July 2007

Tnegra Design

Concluding remarks
• It is a very exciting time for the electricity supply industry • The challenge of being cost efficient now has to be achieved within increasingly stringent environmental constraints
• There are real opportunities and uncertainties relating to future generation technologies
• Networks will play a vital role in delivering a lowcarbon electricity supply chain
35

ERRA DG Working Group - July 2007

Tnegra Design

Concluding remarks
• It is a very exciting time for the electricity supply industry • The challenge of being cost efficient now has to be achieved within increasingly stringent environmental constraints
• There are real opportunities and uncertainties relating to future generation technologies
• Networks will play a vital role in delivering a lowcarbon electricity supply chain
36

ERRA DG Working Group - July 2007

Tnegra Design

Thank you for your attention

37

gareth.evans@ofgem.gov.uk

ERRA DG Working Group - July 2007…...

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...to be filled and a body to be clothed. The law relating to damages is concerned with reparation in money terms and this is what is needed for the maintenance of a baby.’ Peter Pain J (II) Introduction ‘Wrongful Birth’ and ‘Wrongful Life’ are issues caught in a ‘legal quagmire’, as they exist between realms of purist legal principles and heated public policy debate. Much like the social taboos of abortion and euthanasia, at their core, they raise questions as to the value placed on human life. Moreover, this ‘value’ is represented by two sides of the coin in addressing the intangible ‘blessing’ of conception and existence, against the real fiscal burdens involved in adequately raising a child. In recent years several major cases have come before English and Australian courts to address issues in this field; however decisions have been far from unanimous, leaving the law in a state of ambiguity. This paper attempts to provide a line of clarity in respect to the developments of legal principles and public policy on these issues, by closely examining relevant case progression and wider academic debate. (III) Development of the ‘Birth Torts’ Unfortunately, the labels of ‘Wrongful Birth’ and ‘Wrongful Life’ are contentious even in their very existence; however it is critical to establish that ‘what is ‘wrongful’ is the negligence, not the birth’. Both issues refer to cases of medical negligence and as such it is necessary to debunk the clear legal principles from the......

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