Archive for the ‘Ofgem’ Category

Smart Grid – A Vision of the future

Wednesday, April 28th, 2010

Smart grid is the term applied to tomorrow’s electricity system. It encompasses a variety of changes that will transform the way electricity is used, delivered and produced, and result in a cleaner more efficient and more interactive electricity system. It represents a paradigm shift for electricity much in the way that mobile phones transformed communications. The concept is broad; it stretches beyond modernization of the transmission and distribution grid to include devices that allow consumers to better manage their electricity use, new ways of creating and storing electricity, and the widespread adoption of electric vehicles.

The power grid shift to move to a culture of conservation and its substantial commitment to renewable energy will also be supported by the smart grid. Smart meters, a major smart grid component, can give consumers timely information on price and consumption. Emerging devices will empower consumers to act on this information automatically while at the same time improving their energy efficiency, comfort and convenience. New sensing, monitoring, protection and control technologies will enhance the ability of the grid to incorporate renewable generation.The institutional structure of the electricity industry makes it easy to look at how the smart grid will impact each piece of the system in isolation, but the most profound impact of a smart grid may be its ability to link these pieces more closely together.

With the regulator OFGEM, we could have a system of applying structured market operator requirements with corporation responsibilities, encouraging longer-term system network planning, and procuring electricity supply and demand resources connected to the network. Both by the electrical shippers, National Grid and and the the regional Distribution Network Operators (DNO’s). but also the Feed in tariff (FIT’s) small generation customers and CHP and renewable end customer/suppliers. While the smart grid will affect each of these segments in different ways, it will affect all of them by increasing their ability to work together to better serve consumers.

Smart Grid Definition
A smart grid is a modern electric system. It uses communications, sensors, automation and computers to improve the flexibility, security, reliability, efficiency, and safety of the electricity system. It offers consumers increased choice by facilitating opportunities to control their electricity use and respond to electricity price changes by adjusting their consumption. A smart grid includes diverse and dispersed energy resources and accommodates electric vehicle charging. It facilitates connection and integrated operation. In short, it brings all elements of the electricity system – production, delivery and consumption closer together to improve overall system operation for the benefit of consumers and the environment. A smart grid is not only information rich, but also has the analytic infrastructure, processes and trained individuals necessary to integrate and act on information in the very short time frames required by the electricity system. It is characterized by clear standards, security protection and open architecture that allow for continued innovation through the development and deployment of new technologies and applications by multiple suppliers. So OFGEM must get it right, undertaking discussions with both the customer and the electrical supply and distribution network industry community.


Driver’s for a smart Grid

The Goverment’s commitment to establishing a culture of conservation and the desire to reduce the environmental footprint of the electricity sector are major drivers for creating a modern grid. The culture of conservation requires the continual search for new ways to encourage all customers to use energy more efficiently and lower consumption during peak periods. The comprehensive provision of smart meters creates the opportunity for all customers to better understand and manage their electricity usage and, for those who wish, to become active providers of demand response, and be rewarded in doing so.

The prominence of renewable energy in the Governments white papers an increased ability to accommodate variable renewable generation from off shore tidal, wind farms, solar, biomass and micro generation. Where today the grid serves primarily as a vehicle to move electricity generated in large central facilities to consumers, in the very near future, the grid will need to do much more. As the number and distribution of smaller generators grow, Micro generation (FITs) come on line, the operational challenge of incorporating these independent generated energy resources, while maintaining safety and reliability, will also grow. Meeting this challenge will require a smart grid. Other features of this arrangement will also also drive the development of a smart grid. DNO’s will need to upgrade, renew or replace a significant amount of the existing electricity infrastructure network load monitoring and reporting real time demand and quality of supply (similar in some ways to end customer smart meters to be rolled out) In addition dynamic load forecasting to request power stations load demand requirements. This need creates an opportunity to use smart grid technology both to maximize the use of existing equipment and to improve the efficiency of the grid as it is replaced. Growth and redevelopment also present opportunities to introduce smart grid technologies in newly developed and reconstructed areas. Demands by industry and consumers for increased reliability and power quality technology are also pushing toward a smarter grid.

Promise, Cost and Timing Of a Smart Grid
There are many potential benefits from a smart grid in the areas of economics, environment and operating performance. The ability of consumers to increasingly participate in the electricity market by adjusting their demand in response to price or other signals will help to defer the need for peaking resources and incorporate additional generation from variable sources. Improved system economics will come from reduced losses during electricity delivery (line losses) and better use of power station and distribution network plant & equipment. Potential reductions in network congestion will also allow greater use of the most cost effective generation and improve the capacity to move generation throughout the electrical supply network. Greater ability to integrate generation and load can also reduce the cost of operating reserve and some ancillary services. Finally, improved analytics and the ability for the grid to automatically restore itself from faults can reduce the scope and duration of outages, lower operations and maintenance costs, and improve service to customers. Many of the identified economic benefits also have associated environmental benefits. Reduced losses not only reduce cost, they allow more of the electricity generated to reach consumers thereby lowering the environmental impacts from generation. Increased ability to incorporate distributed energy resources, including both renewable generation and demand response, will allow us to move more quickly to a cleaner resource mix that everyone generally wishes to be collectively archive. Even if if it is viewed by some, that this is achieved by someone else. Using existing assets more efficiently can defer the need to expand the grid to accommodate growth. The smart grid offers enhanced operational performance. Greater awareness of system conditions can help anticipate and address problems before they lead to outages, minimize the scope of outages that do occur, and enable more rapid restoration of power. With a smart grid, these fixes may increasingly occur automatically so that the grid becomes self healing.

The ability to remotely monitor equipment condition and performance can also enhance security, help better target maintenance and improve the accuracy of replacement decisions. The information provided by a smart grid also can be used to improve power quality, which is increasingly important in operating today’s sophisticated equipment controlled by digital electronics.

By automating functions that are controlled manually today, the smart grid will increase productivity, which will be essential in managing the more complex grid of tomorrow and helpful in addressing the demographic issues facing the electric system as the baby boomer’s retire and new workers need to be hired and trained. Finally, the smart grid can provide significant operational advantages through its ability to improve both public and worker safety by increasing the amount of system information available for protection and control and by enabling remote operation and automation of equipment. The costs of the smart grid are difficult to quantify. They will depend on investment decisions and the pace of implementation by numerous companies and individuals undertaking smart grid expenditures. It is through the analysis underlying these decisions that the benefits and costs of specific smart grid investments will be evaluated. Certain cost elements that support the smart grid have already been incurred. Ontario’s investment in smart meters and advanced metering infrastructure provide an important connection with customers and the beginning of the communications infrastructure necessary for a smart grid. Additional communications, with greater bandwidth, speed and reliability will be needed, for full smart grid implementation. Moreover, much of the distribution infrastructure replaced over the last few years is already smart grid compatible.

Customer support also would be a key factor in evaluating smart grid investment and customer education will be necessary to inform consumers on this issue. Investment at this level would require increased availability of demonstrated smart grid technology and the human resources to install and integrate it. Finally, the costs and benefits of proposed incremental smart grid investments would be evaluated through appropriate regulatory processes. The timing of smart grid development also will depend on individual investment decisions, which in turn will be influenced by external policy drivers. The investment plans by Electrical shippers, distribution network operators, IDNO’s, meter operators and consumers that will largely determine the pace of adoption for smart grid technologies will be based on their individual needs and circumstances, and their available capital. Government policy, implemented through incentives, mandates or regulatory initiatives will be a major factor in influencing the timing of investments. In short, because the smart grid is not a single project, but rather a series of actions by a variety of entities to modernize the electricity system, it is difficult to produce a definitive time line for smart grid development.

When it does come together, and matures, the system as a ‘whole’, will be more resilient, but it will dependable on all parties being dependable on each other. Including the micro generation and independent supply generation supply contribution and working efficiently, otherwise extra power stations will still be required to be built or available, just in case all independent customers disconnect supplies from the network, say as a future government protest action, interrupting the collective electrical supply contribution factored in the ultimate smart generation mesh smart grid arrangement.

In some respectsit is similar to the how the internet developed and matured and came to be more resilient and depended by everyone including the internet backbone and local ISP’s provide the network grid to connect people and systems together.

Another interesting development will be how supply authorities & DNO’s will undertake works on the network.

For the purposes of this blog, assume in simplistic traditionally engineering supply arrangements, that electricity is generated from a remote power station, distribution via the national grid 132KV network to the local DNO network (66 / 33 /11 / 6.6KV substation network to a 230 V rated supply and so onwards the the end customer via the service cutout consumption monitored by the electrical meter / CT arrangement . Generally, electrical only going one way – Power station via DNO’s to the end customer.

So isolation of cabling & equipment only required from local substation supply to be dead supply to enable major upgrade work to be undertaken.

In comes the Smart grid roll out which end customers are encouraged to provide their own renewable energy, with spare capacity connected and used by local network So introducing multiple back-feed supply’s. Always connected, but independently controlled and managed by the customer, supply on and off all the time – generally individually, each micro generation arrangement not resulting a constant dependable supply contribution, only achieved collectively when provided in clusters of connection points.

So back to the final distribution feeder cable supply requiring major works to be undertaken. DNO isolates at substation and is checked and tested that the LV cable was a ‘dead’ cable, but it could become live at any time, thanks to customers micro-generation connected supply.

So how do you isolate the DNO feeder cable, to cut or repair the cable?

OK – Live working methods can be used and will have to be adopted through the LV network from now on.

But the customers generation equipment will also have to be able to provide circuit protective devices from a grid network earth fault or the remote chance that the distribution point may not be connected to the network. But thats a separate subject, as well!

In a joint up world – simple things get complicated – but systems change and adapt to “keep it simple” – to make it more easier to manage and control.

Energy firms making £105 profit per customer

Monday, April 5th, 2010

Ofgem has revealed that energy firms are now making £105 profit per customer, over £30 more than they were back in November. This news comes amidst continued frustration at the refusal of the main energy companies to reduce their bills despite the drop in wholesale prices.

Customers have seen little benefit from the fall in wholesale prices, and the news that the profit margins of the main power companies are at a five-year high is not going to do anything to help matters.

The figure of £105 is the profit that is being made from the average dual-fuel customer, according to Ofgem. This represents a rise of 40% over the last three months and is unacceptable for many.

Ed Miliband, the climate change secretary, said the report shows that “energy companies need to cut their prices”. He commended British Gas for recently cutting its bills by 7%, but called on all suppliers to pass on the benefits of the lower wholesale prices to their customers.

The energy providers have hit back at the claims. They have funded their own report that concluded they are making less than £31 profit a year on each customer, much lower than the Ofgem figure.

The news has not been helped by the fact that British Gas just revealed record profits for the year, seeing a 58% rise in profits to £595 million. This is sure to anger many customers, and we will have to wait to see whether the energy companies will take any notice now and start to lower their bills further.

What are Feed-In Tariffs?

Saturday, April 3rd, 2010

The Government is introducing a system of feed-in tariffs (FITs) for small-scale low-carbon electricity generation from 1 April 2010. FITs are a per-unit support payment made directly to generators by electricity suppliers.

The new renewable electricity Feed-in Tariff scheme (FITs) will be available from 1 April 2010. FITs aims to promote domestic and small-scale renewable generation technologies up to a maximum capacity of 5 megawatts (MW). Ofgem will be running the behind the scenes administration of the scheme on behalf of the Department of Energy and Climate Change (DECC).

There are two routes to apply for FITs depending on the type and scale of technology installed:
• Generators with Microgeneration Certification Scheme (MCS) accredited solar, wind and hydro generating equipment up to 50kW in capacity that are installed by an MCS accredited installer can apply direct to a ‘FIT supplier’ – usually their energy supply company – with their installation details and to enquire about FITs payments. We expect the majority of installations will fall into this category.
• Generators with larger installations between 50kW and 5MW (or anaerobic digestion at 5MW or less) will first need to apply for accreditation through Ofgem’s Renewable and CHP Register before they can apply to a supplier for the tariffs.

Its intend that FITs will replace the Renewables Obligation (RO) as far as possible as the financial support mechanism for microgeneration (with a declared net capacity 50 kW or less) in Great Britain.
FITs will complement the RO by providing the simplicity and certainty needed to support householders, communities and businesses involved in small-scale generation. Installations with a capacity of 5MW or less will be eligible for FITs. Whereas the level of reward under the RO is exposed to fluctuations in the value of Renewables Obligation Certificates (ROCs), FITs will guarantee a fixed level of reward for each unit of electricity you generate, for as long as you are eligible to receive support.The Feed-In Tariffs are based on the electricity generated by a renewable energy system and there will be an additional bonus for any energy which is ‘exported’ to the grid. This means you get paid more for the energy you don’t use than for that which you do which encourages energy efficiency.

At times when you are producing less electricity than you are using, the shortfall will be ‘imported’ from the grid and you will pay your electricity company for this in the usual way.

The Feed-in Tariff therefore gives you these three financial benefits:

  1. A ‘generation’ tariff based on the Total generation and the energy type, plus
  2. An ‘export’ tariff for any energy Exports when generating more than you need, and because you are now producing some of the energy you use
  3. Lower bills from your supplier for the energy you Import from them

What you need to do
You will require an additional electricity meter to measure the electricity that your system is generating, and also to measure how much is being fed back into the electricity grid.

Once you have installed your generating technology you must inform your chosen energy supplier that you are eligible to receive the FIT. The supplier will then register your installation onto the Central FIT Register, which is administered by Ofgem. Payments will be made by your energy supplier at intervals to be decided between you and your supplier. You may be required to provide meter readings to the suppliers if requested.

If you want to opt out of the guaranteed export tariff you must inform the supplier. You may want to do this if you chose to use a power purchase agreement.
Tariff levels, for technologies installed between 15th July 2009 and 31st March 2012

Technology___________Scale____________Tariff level (p/kWh)________Tariff lifetime (years)
Solar electricity (PV)____≤4 kW (retro fit)___ ____41.3____________________25
Solar electricity (PV)____≤4 kW (new build)______36.1____________________25
Wind_______________≤1.5 kW____________34.5_____________________20
Wind _______________>1.5 – 15 kW________ 26.7 _____________________20
Micro CHP ___________≤2kW _____________10.0 _____________________10
Hydroelectricity _______≤15 kW ____________19.9 _____________________20

Tariff levels vary depending on the scale of the installation.

The tariff levels shown in the table above apply to installations completed from 15th July 2009 to 31st March 2012 for the lifetime of the tariff. After this date, the rates decrease each year for new entrants into the scheme.

All generation and export tariffs will be linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation.
What payments will you be eligible for, and how can you claim them?

The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS scheme:

The following advice applies to domestic installations. If you have installed a qualifying electricity-generating system non-domestic property with a grant from the Low Carbon Buildings Programme, see the Low Carbon Buildings Programme website for further guidance.

Background:
In October 2008 the UK Secretary of State for Energy and Climate Change, Ed Miliband, announced that Britain would implement a feed-in tariff by 2010, in addition to its current renewable energy quota scheme Renewable Obligation Certificates”. In July 2009, he presented UK’s new Feed-in Tariff Programme, expected to begin in early April, 2010. Miliband has given a new name, “clean energy cash back”, to this policy which falls fully within the framework of Feed-in Tariffs and is based on a few, extensively discussed, key elements:

a) Less than 10% of Britain’s electricity consumption, by 2020, will be provided by renewable energy sources. The 2% target requires the “green generation” of only 8 billion kWh (that is 8 TWh) per year. France, thanks to its system of Feed-in Tariffs, in 2008 generated already nearly 6 TWh, and only from wind energy; in the same year Germany generated more than 4 TWh from solar PV (photovoltaic), and reached 40 TWh from wind energy.

b) The project involves only renewables sources which can produce less than 5 MW energy; so, UK’s new FiT’s project cap is 5 MW. Depending on law, only renewable energy sources and generators within this cap can benefit from tariffs: the government still prefers resorting to the Renewable Obligation Certificates mechanism for developing larger projects.
To prevent companies from moving large scale (for example big wind) projects from the ROCs to the Feed-in Tariff programme, a number of anti-gaming provisions has been inserted in the policy design; this should avoid the breaking up of bigger projects into several small ones, to fit within the 5 MW energy size cap.

c) The contract term is 20 years, 25 years for solar photovoltaic projects: this means that, starting from 2010, British providers of Wind Energy, Hydropower, Energy from Biomass and Anaerobic Digestion falling within the Renewable Sources eligible in accordance with the provisions of the proposed FiT scheme will be rewarded with a tariff rate guaranteed for the next 20 years – 25 years for Solar PV generators. In this way UK’s renewable energy industry has a somehow long-term certainty, and can advantage of the FiT over other policy options.

d) Costs for the programme will be borne by all British ratepayers proportionally: all electricity consumers will bear a slight increase in their annual rate, thus allowing electricity utilities to buy renewable energy generated from green sources at above-market rates set by the government.

e) Generators can be green fields (they do not have to be metered customers).

f) The new UK’s Feed-in Tariff Programme review is scheduled for 2013.

Timetable set for ‘fairer’ bills

Tuesday, December 1st, 2009

Oven

The changes come after an Ofgem investigatio

A timetable has been set by the energy regulator for new rules to come into force that ensure the fairer treatment of consumers.

All energy customers will be sent their first annual statement by their supplier by December 2010, Ofgem said.

Changes that allow pre-payment meter customers to switch suppliers even if they have a debt on bills of up to £200 will be in place by January.

The changes come after an investigation by the regulator into household bills.

Bills clarity

Ofgem started the investigation into the state of the energy market in the UK in February 2008.

The [new standards] call on suppliers to be clear, fair and courteous and to take the confusion out of comparing products

Andrew Wright, Ofgem

In its initial findings a year ago, Ofgem said that there was no evidence of collusion between the “big six” suppliers in setting prices and the market was “working well” for most consumers.

But it raised concerns over the difference in prices for those paying in different ways.

At the start of September, the first of the new rules – which ensured different payment methods reflected the cost to the supplier of offering those methods – was brought into force.

The new annual statement, which customers will start to receive from July, will provide customers with details such as their energy tariff, consumption and a reminder of the customer’s right to switch.

Other new rules include the provision of written quotes for doorstep sales, which must be supplied from 18 January 2010.

The same date has been set for the requirement that small businesses be given clear contracts, and more notice of when a new contract can be negotiated.

“The new standards define the spirit of the new rules to go with the letter of the laws,” said Ofgem’s Andrew Wright.

“They call on suppliers to be clear, fair and courteous and to take the confusion out of comparing products.”

From BBC Web site

TECHNICAL – Glossary & terms used for electrical supplies

Wednesday, May 20th, 2009

GLOSSARY
active power – the multiple of the components of alternating current and voltage that equate to true power. Normally measured in kilowatts (kW) or megawatts (MW).
adoption agreement – an agreement between a developer and a DNO, concerning the transfer into DNO ownership of infrastructure supplied and installed by a third party.
approved contractor – a contractor which has been approved by the DNO for carrying out third party connection work.
Balancing and Settlement Code (BSC) – the code which determines the rules governing the Balancing Mechanism and the settlement process for electricity trading in England and Wales as from time to time amended.
capacity factor – a factor, generally applied to renewable energy schemes, which relates the maximum continuous power output of the generator to the expected long run average power output.
committed network – future network configuration for which financial approval has been given.
condition 4 statement – document published by a DNO outlining the basis of charges for connection to the DNO’s distribution system.
connection agreement – an agreement setting out terms relating to a connection with the DNO Distribution System (excluding any bilateral agreement with the transmission licensee).
Connection and Use of System Code (CUSC) – contractual framework for connection to and use of the NGT transmission system.
connection voltage – voltage level at which a site is connected to the transmission or distribution system.
contestable – that part of the connection works which is open to competition.
CDM Regulations – the Construction (Design and Management) Regulations 1994.
Regulations specifying the duties of designers to minimise health and safety hazards involved in the construction of buildings and other installations.
CD&M Regulations – see CDM Regulations.
Declared Net Capacity (DNC) – declared net capacity: the maximum power available for export on a continuous basis minus any power imported by the station from the network to run its own plant.
determination (of disputes) – any dispute arising under certain sections of the Electricity Act 1989 between a DNO and a person requiring a supply of electricity, can be referred to Ofgem for determination. These determinations are then published as a matter of public record, and then form ‘case law’ on the subject.
distributed generator – a generator which is connected to a DNO’s distribution network rather than to the transmission grid. Distributed generation is generally a lot smaller than plant connected to the transmission grid as the maximum operating voltage of the distribution network is 132kV (and 33kV in Scotland).
Distribution Network Operator (DNO) – a holder of a Distribution Licence.
electronic inverter system – an electronic device placed between a generator and the network it is connected to for the conversion of power at one frequency to another (including dc/ac). The output voltage and frequency may be determined by the control equipment associated with the inverter or by the voltage and frequency of the
network it is connected to.
embedded generator – now generally termed distributed generator (see above), although this term is still used in the Distribution Code of Great Britain and the Grid Codes.
extension – It is sometimes necessary to extend the DNO’s distribution network in order to provide a connection for a new user or generator of electricity. Network extensions are often required for generation schemes in remote locations.
fault contribution – the contribution of an electrical source, such as a distributed generator, to the total fault levels in a distribution network.
high voltage (HV) – any voltage exceeding Low Voltage (ie exceeding 1000volts between phase conductors or exceeding 600volts between phase conductors and earth).
induction generator – a type of rotating electrical generator which operates at a speed not directly related to system frequency. The machine is generally excited by reactive power drawn from the network to which it is connected and the output voltage and frequency are determined by those of the network to which it is
connected.
islanding – islands of supply are discrete parts of a distribution system which are capable of generating and maintaining a stable supply of electricity to the customers within those discrete parts without any connections to the rest of the system.
line drop compensation – a voltage control scheme (used for the control of voltage levels in distribution networks) which compensates for the change in voltage drop in a long line as the current in the line changes.
loss of mains – the loss of an electrical connection between a section of a distribution network and the main grid supply, often due to the operation of circuit breakers.
low voltage (LV) – in relation to alternating current, a voltage exceeding 50 volts measured between phase conductors (or between phase conductors and earth), but not exceeding 1000volts measured between phase conductors (or 600volts if measured between phase conductors and earth).
Long Term Development Statement (LTDS) – (sometimes referred to as the LC25 statement). Statement prepared annually by each DNO as required by Standard Condition 25 of the Electricity Distribution Licence.
mains paralleling – the operation of an electrical generator while connected in parallel with the main grid supply.
negative reactance compounding – a voltage control scheme (used for the control of voltage levels in distribution networks) which allows the voltage–regulated system to be fed from two or more transformers in parallel.
Ofgem – the Office of Electricity & Gas Markets (under the Gas and Electricity Markets Authority, established by the Utilities Act 2000).
point of common coupling – the point in the distribution network where the lines or cables which are used solely to provide the supply to one customer (eg a generation scheme) are connected to infrastructure which is also used to provide supplies to other customers.
primary – generic term used by a DNO to indicate the source of the main 11kV or 6.6kV HV distribution network; eg primary substation – 33/11kV or 66/11kV transformation substation infeed to the 11kV network; 11kV primary busbar – source 11kV busbar for an 11kV network.
protection system – the provisions for detecting abnormal conditions in a system and initiating fault clearance or actuating signals or indications.
reactive power – the product of voltage and current and the sine of the phase angle between them which is normally measured in kilovar (kVAr) or megavar (MVAr).
reactor – wound network component generally used to limit reactive power flows and
hence fault levels.
reinforcement – Reinforcement work is usually required to increase the electrical capacity of those parts of the network which are affected by the introduction of new generation or demand. Other work might include upgrading the switchgear at a substation some distance from the proposed generation scheme, due to the increase in fault level caused by the connection of the generator.
Small Scale Embedded Generator (SSEG) – a source of electrical energy and all associated interface equipment, rated up to and including 16A per phase, single or multi phase 230/400V ac and designed to operate in parallel with a public low voltage distribution network.
Static Var Compensator (SVC) – equipment for injecting or absorbing reactive power (Vars) at the point of connection to assist in control of system voltage.
supplier – a person or company providing a supply of electricity. This could be the
local DNO, a second tier supplier or an exempt supplier.
synchronous generator – a type of rotating electrical generator which operates without slip and at a speed that is directly related to system frequency.
thermal rating – the current-carrying capacity of a cable, an overhead line or any other item of electrical infrastructure, which is determined by the heating effect arising from electrical losses.
third party connection – connection provided by a contractor other than the local DNO.
Use of System (UoS) – the use of a transmission or distribution network by a generator, a supplier, a customer or an interconnected party for the purposes of transporting electricity.

Electrical Grid Connected Generation & DNO’s

Wednesday, May 20th, 2009

Grid Connected Generation

Terminology to Start

• Developer

– You!

• Distribution Network Owner/Operator (DNO)

– Owns, maintains, develops and operates the physical network
– SP Manweb, United Utilities in the North West
– Not the slightest bit interested in selling or buying energy from you

• Electricity Supplier

– Party to contract with to buy & sell energy
– Npower, PowerGen, Scottish Power, British Gas, etc…
– Not the slightest bit interested in the physical connection

• Ofgem

– Electricity and Gas Market regulator
– Also administers the ROC process if your technology is eligible

Just Some of the Legal Issues

• If grid connected, then it is a legal requirement to have permission to connect & operate any form of generation

– Needs to have a DNO connection agreement
– Needs to have correct electrical protection
– Needs to have correct earthing
– Needs to have an export meter (if exporting)
– Needs to have a supplier contract (if exporting)

• D-code : Distribution Code for UK Distribution Networks

• G-code : Grid Code for UK Transmission Networks

• Electricity at Work Regulations

Engineering Recommendations

• Technical connection requirements are detailed in the Engineering Recommendations

– DNOs view these as “Rules” rather than just “Recommendations”

• G83: Less than 6kW (16A/phase)

– No connection agreement required but must notify DNO once on

• G59: Less than 5MW and less than 20kV connection

– Must have a connection agreement

• G75: Anything else up to 50MW or transmission connected

– Must have a connection agreement

DNO Responsibilities

• Statutory obligations under the terms of their licence

– Secure operation and development of the network
– Safe & reliable operation of the network
– Ensure fair and equal access to the network
– Least cost options for connection
– Lifetime of network not just your connection

• Must respond to a connection application within 90 days. Remember, they’re not out to get you, but they have responsibilities too!

 Electrical Connection Issues

• Technical issues to be considered during connection study/investigation

– Thermal limits
– Voltage limits & step change
– Reverse power-flows through transformers
– Short-circuit rating of switchgear
– Protection arrangements & co-ordination
– Harmonics & Power Quality
– Transient stability (usually only for larger generators)

• Energy Metering

• There will be the need to provide a reasonable level of data on the generator and the site connections

• The connection and protection will need to be witnessed and approved by the DNO in order to complete the connection process

 Network Capacity Issues

• The Distribution Network has real limits

• Due to load growth and the drive towards maximising use of existing assets, available headroom is often quite limited

– Cable ratings reached during peak load
– Voltage drop/rise reached
– Circuit breaker short-circuit limits reached

• The Capacity Race

– It is not just fiction it is unfortunately real in some locations
– First-come, first-served & Interactive Applications
– There are some solutions but most do add cost and complexity

 Rule of Thumb Connection Capacities

< 6kW 240V
< 1MW 415V (3-phase)
< 1-10MW 11kV
< 30MW 33kV
< 50MW 66kV/132kV
> 50MW 132kV upwards & National Grid interfaces…

As with any project, the bigger the project, it is important that you have the right level of advice or expertise to de-risk the project.

 So, what do I do to get connected?

• Contact your friendly neighbourhood consultant ☺

But seriously:

• Start with a rough idea of what you want to do

– Check that your site can fit it and you can afford it
– Check that all other regulatory issues are okay

• Have an informal “chat” about connection possibilities with DNO generator connections or knowledgeable person

– Check that your initial idea still sounds sensible

 When contacting the DNO

• Contact DNO – generation connections (NOT Demand)

– The connection process will be more likely to be successful with good communication between the developer and the local DNO

• Determine your connection route: G83, G59 or G75
– This may have costs associated with it

• Be prepared for a process not just rubber stamping

– Planning & Information phase
– Detailed Design phase
– Installation phase
– Testing & Commissioning phase

 Working with the DNO

• Seek an early meeting to discuss your project

– Outline the scheme
– Discuss the DNO’s process for connections
– Request an indicative connection design and budgetary cost estimate with a split between contestable & non-contestable works

• Review your project

– Submit the formal connection application
– Remember to accept the connection offer!

• Submission of data to DNO

– Make sure that this is appropriate and timely to avoid delays

• Testing and Commissioning

– Plan in advance to avoid delays as staff will usually be quite busy

 Connection Charges

• Application Fees

– These vary between DNO and size and voltage level of project
– Complex projects may involve additional fees

• Connection Assets

– Developer will be expected to pay full costs for all sole-use assets

• Generation Use of System Charges

– Site dependent & in lieu of network reinforcement costs
– Each DNO has own policy in-line with Ofgem guidance

Competition in Connections

• Developer as two options:

– Get the DNO to do all works necessary for the connection
– 3rd party to provide all contestable works which DNO then adopts

• Contestable Works

– Supply & installation of any new assets up to the point of connection to the existing network. Adoption agreement required.

• Non-Contestable Works

– Any studies, reinforcement or installation on existing network
– Design & specification of any new assets, consents & way-leaves

• Note: The DNO will not get involved in any “on-site” works

 Finally, just when you thought it was too easy

Other non-electrical issues still need to be resolved

– Planning Permission?
– EIA, Emissions?
– Health & Safety?
– Commercial?
– Installation & transport?
– CDM?

UK wind energy market

Tuesday, May 19th, 2009

Overview of the UK wind market in 2009

The UK was one of the first countries to develop wind turbines in the modern era, and had a strong technological position in the 1980’s. When the commercial markets started to become established in the 1990’s however other counties adopted more business-friendly approaches and the lead was lost to Denmark in the first instance.

The first wind-farm was developed in the UK at Delabole in Cornwall in 1991, under the Non-Fossil Fuel Obligation.

Wind energy market and trends

Because the major driver for the industry is currently the Renewables Obligation, the main market is for merchant bulk generation through onshore wind-farms. Some 55% of the onshore wind capacity is owned by the licensed electricity suppliers on whom the obligation falls, and the vast bulk of this is the ‘big six’.

A further 20% or so is held by wind energy developers, who have retained some of the projects they developed, and the balance by dedicated ownership companies (some of which may in turn be owned by the groups listed above).

The renewable energy sector, including wind, is currently suffering from the economic circumstances common to the entire world economy. In particular there are constraints in obtaining project finance, and this is expected to inhibit growth in the short term. The forward projections in this report assume that this is a short term issue and that credit starts to flow again during the course of 2010, and more normal investment conditions return by 2011. That, however, is not a prediction!

The wind sector is expected to remain the highest growth part of the renewable electricity market for the immediate future, and the targets of 14MW onshore and 14MW offshore should be achievable provided that the planning and grid restrictions are eased.

Structure of the industry

As mentioned above, the UK lost its lead in wind energy technology as the large scale market started to develop twenty years ago. Except in the small wind sector (see below), the majority of wind generation technology is imported, though the UK does have some supply-chain capability in certain related components, such as blades and towers, and has aspirations to increase this capability.

The major domestic capability is in project development, financing, management, operation and maintenance. The UK has several strong project development companies, most of which also operate in international markets, such as the McAlpine subsidiary Renewable Energy Systems. It also has some of the leading international consultancies on wind energy technology, such as Garrad Hassan.

All leading wind turbine manufacturers supply into the UK market. Siemens was the largest supplier in 2007 and 2008, and is now second in terms of cumulative capacity behind Vestas. Other major suppliers in the last two years have been Nordex, Repower and Enercon.

Offshore wind

In 2001, eighteen companies successfully pre-qualified for Round One site development options and to date five windfarms have been completed: North Hoyle off northern Wales, Scroby Sands off Great Yarmouth, Barrow off the South Cumbrian coast, Burbo Bank off The Wirral and Kentish Flats in the Thames Estuary. Two more, Inner Dowsing and Lynn are nearly complete and delivering energy to the grid. There are a number of others either under construction or planned for the future.

In 2003 Crown Estate announced a competitive tender process for Round Two sites. The Crown Estate announced fifteen successful Agreements for Lease amount to 7.2 GW and including sites within and beyond territorial waters. The largest of these was the 1GW London Array in the Thames Estuary, originally developed by a partnership between E.On, Shell and Dong. In 2008 Shell pulled out of the project and sold its interest to the other two partners, and Masdar subsequently acquired part of E.On’s stake. There is still no firm information on when the project will proceed.

The competitive tender process for the licensing of Round Three offshore windfarms closed in March 2009 and, the Crown Estate announced it had received multiple bids for each of the nine zones, confirming the potential capacity to achieve 25 GW of offshore wind energy by 2020. There were a total of 40 zone bids from 18 different consortia, including international companies from at least nine different countries

Small wind

The UK has an increasing number of producers of small wind turbines in the range up to 50kW. The best established of these is Proven in Scotland. Wind turbines hit the volume market when Glasgow-based Windsave negotiated a supply agreement with the national DIY chain B&Q. There are now a number of other devices on the market, mostly horizontal axis designs, but some using more novel approaches, such the vertical axis Quiet Revolution device.

Licensing, certification and legislative issues

Projects wishing to benefit from the Renewables Obligation need to be accredited by Ofgem to confirm that they meet the requirements. For wind projects this is typically quite straightforward. There is a procedure for obtaining indicative pre-registration to assist with project financing.

Small scale systems to be installed under the Low Carbon Buildings Programme need to be certified under the Microgeneration Certification Scheme (MCS). The companies selling such systems must be members of the REAL Assurance Code of Conduct and installers need to be accredited under the MCS. It is anticipated that similar requirements will apply to the renewable electricity tariffs.

There is currently no preferential tax treatment for wind energy installations, though they may in future be eligible for Enhanced Capital Allowances.

Market entry, barriers and opportunities

The UK is in principle a very open market. The renewable energy targets it has adopted to meet the EU Renewable Energy Directive require a ten-fold increase in renewable energy delivery in little over a decade. It is anticipated that most of this growth will come from the electricity sector and of that much will come from wind.

Bulk energy production

The most self-evident opportunity for overseas companies is in the supply of the core technology, especially wind turbines and power trains. In view of the medium term potential of the British market, there will certainly be opportunities for established suppliers, who need to expand their capacity, to set up subsidiary or licensed plant in the UK. Both national governments and regional agencies would be very supportive in bringing forward new capacity of that type.

The UK has a well established network of project developers, who are familiar with the process and particularly with the best ways of structuring projects to accelerate their progress through the planning and grid connection requirements. Companies interested in bringing forward projects would be well advised to work with incumbent players, especially in light of the obstacles facing developments described above.

The UK already has the world’s largest offshore wind capacity and this sector is projected to continue to grow strongly. Therefore this will present opportunities not only for wind energy technology but for the expertise and facilities associated with installing and operating plant offshore.

Decentralised wind energy

Though the bulk energy market has been the one where most development has happened in the past, the decentralised energy sector may be an equally exciting one for the future. New drivers, such as the renewable electricity tariffs and the Carbon Reduction Commitment, should stimulate a lot of new demand in this sector.

This will create new opportunities for those with expertise in community projects, energy services companies and technology aimed at energy users rather than energy suppliers.

All in all the UK promises to be a very interesting wind energy market in the coming decades!