Select Committee on Environmental Audit Appendices to the Minutes of Evidence


Annex A

Table 1

TRANSMISSION ISSUES WITH RESPECT TO EMBEDDED GENERATION AND NATIONAL GRID'S APPROACH

Issue For National Grid ApproachProgress
Market participants in general, and generators with more variable output in particular, wish to see NETA gate closure moved from three and a half hours to one hour before real-time so that they have increased commercial flexibility to manage power fluctuations. On the basis of operational experience under NETA, develop system balancing processes to facilitate one hour NETA gate closure. A project to develop system control systems and software has commenced. Subject to changes by other market participants, implementation is planned for July 2002.
In the longer-term, renewables may require the purchase of additional reserves and frequency response ancillary services to ensure security and quality of supply.

Ensure continuing availability of ancillary services in longer-term as embedded generators progressively displace present providers.
Encourage development and facilitate national ancillary service markets that are open to all potential providers (including embedded generators).

Encourage aggregator agents to assist smaller participants to provide services in required sizes and dependability. (* This role may in future be performed by distribution network operators either as facilitator of markets to obtain services for distribution network or to sell on to transmission)
Reserve markets in operation with successful contracts with demand side and embedded generation service providers.

Reactive market in operation with licensed embedded providers but no agreements with smaller power stations yet.

Frequency response market currently in active development following establishment of NETA.

Some aggregator agents for reserve and frequency response established.

Analysis of impacts of widespread development of wind generation has been undertaken. Monitoring of actual fluctuations is underway.
Potential need for transmission reinforcements from northern generation developments. Provide market information through Seven Year Statement and provide financial signals through cost-reflective locational transmission charges.

Technical studies of large wind concentrations
Seven Year Statement under continuing development from customer feedback.

Locational transmission charges in place. Further review underway as part of review of transmission access.

Specific guidance for wind developers concerning connection to and use of the transmission network prepared.
Co-ordinate transmission developments with embedded generation developments (mainly affecting our interface with distribution networks). Obtain information on developments that may have material impact on transmission system as early as possible to minimise need for project delays. ** Change contractual arrangements to meet requirements of embedded generators and distribution network operators.
Minimise red tape from National Grid for embedded generation developers. Revise contractual arrangements so that embedded generators can have single point of contact with their host distribution network operator. Modification of Connection and Use of System Code in progress.
Fully recognise benefits brought by embedded generators to transmission system. Embedded benefit recognised by reduction in supplier demand charges relating to transmission network and balancing costs. 100% allowance provided by arrangements that net embedded generation from supplier's chargeable demand.
  Benefit from location recognised in Use of System tariffs.

Benefits from ancillary and balancing service provision recognised in ancillary service markets.
See items listed above.
Network management issues arising from new generation technologies and actively managed distribution networks. Maintain active participation in these developments at industry forums. Grid Code Review Panel, Charging Principles Forum and Connection and Use of System Code Panel established.


  The benefits that would arise from increased participation of distribution network operators in activities concerning the aggregation and facilitation of local service markets was identified in the DTI/Ofgem Embedded Generation Working Group.

  **The benefit of this change to contractual arrangements was highlighted in the DTI/Ofgem Embedded Generation Working Group.



 
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Prepared 22 July 2002