National Farmers Union 28 February Connecting to the electricity and gas networks

Transcription

1 National Farmers Union 28 February 2013 Connecting to the electricity and gas networks Olivia Powis Senior Manager Smarter Grids and Governance, Ofgem

2 2 Content Connecting to the electricity and gas network Role of Ofgem - Regulatory Tools and Price Control Growth in Distributed Generation (DG) What does this mean for farmers? DG Forum Areas of improvement since 2011 Outstanding issues Biomethane distribution onto gas network Next steps

3 3 Connecting to the electricity network Generation Transmission 400/275kV Distribution 132kV and below End User 6 Electricity Distribution Network Operators (DNOs) in UK

4 4 Connecting to the gas network Production Transmission Distribution Pipes pressured between 7-85 bar Pipes pressured below 7 bar Domestic End User 4 Gas Distribution Networks (GDNs) in UK

5 5 Role of Ofgem - Regulatory Tools Primary Duty: to protect the interests of consumers by making sure there is a reliable network both now and in the future, whilst delivering value-for-money for customers. Tools POLICIES Outcomes Charging for network connections & use of distribution system ENGINEERING RECOMMENDATIONS P2/6, G83 & G59 to ensure the integrity of the network LICENCE CONDITIONS Requirement to offer a connection Timescales for issuing quotes Ability to recover costs for connection and Use of System Requirement to have charging methodologies PRICE CONTROLS DPCR5 ( ) RIIO-ED1 ( ) (Strategy Decision-March 2013)

6 Growth in Distributed Generation (DG) What is DG/embedded/dispersed generation? It is an electricity generating plant connected to a distribution network rather than the transmission network What is an electricity generating plant? Many types and sizes of distributed generation facilities Combined heat and power (CHP) Wind turbines Hydro electric power Solar PV Anaerobic digestion Heat from biomass Electricity generating plant Why has DG increased? Historically, electricity generated at power plant and transmitted to individuals The government has incentivised renewable energy to meet targets (15% by 2020) and reduce CO2 emissions Incentive programmes such as: - Feed-in-tariff (FiT) - Renewable Heat Incentive (RHI) 6

7 7 What does this mean for farmers? Many farmers have invested in DG given their access to land and the longterm investment opportunities Farmers have significantly invested in solar PV Also interested in wind, anaerobic digestion, biomass and micro-hydro Farmers: are not energy experts do not have a choice of location DNOs historically have not had to manage electricity being generated and coming back onto the network Ofgem Working to ensure that development of DG is not unfairly treated by the way networks are operated and regulated.

8 8 What have we done since 2011 DNO standard application form Low Carbon Network Fund Projects Long-term Development Statement DG Connection Guide

9 9 DG Forum events 2012 London UK Power Networks (CEO) Electricity North-West (CEO) Northern Powergrid (CEO) - Renewable UK - National Farmers Union Cardiff Western Power Distribution(CEO) - Regen SW (CEO) Scottish Power (Head of Connections) Glasgow SSE (Director of Distribution) Scottish Power (CEO) - Community Energy Scotland - Scottish Renewables

10 10 Overcoming challenges: DG Forum Ongoing concerns that DG customers (incl. farmers) are encountering a number of difficulties in connecting to the network Need to understand the challenges faced by all parties involved in the connection of DG Platform to share issues associated with connecting and using the network Hear directly from the DNOs on their progress since last year Provide springboard for ongoing engagement between DNOs and customers Opportunity for customers and DNOs to discuss issues and take steps to improve arrangements Provide framework for Ofgem to maintain engagement with stakeholders to inform policy

11 11 Issues raised at DG Forum 2012 Can DNOs provide briefs on technology development they would like to see? Why don t DNO formally acknowledge receipt of applications for connection, informing the applicant of the job reference number and the person responsible for handling the application? What progress has been made by the DNO s in providing information to generation customers on connection capacities at all voltages across their areas? How can DNOs ensure that ALL their staff are helpful and innovative? Overall there is a low rate of acceptance by customers of DG connection requests (5.5% in one DNO). (Many customers submit multiple applications to obtain quotes for different sites/sizes. This is not cost-efficient for the DNO and the acceptance rate could be improved by the DNO providing more upfront information.) DNOs appear to focus more on connection offers of small scale PV rather than larger Biomass type connections Do the DNOs pass too much of the reinforcement costs to the customers why should DG operators pay to enhance the DNO s asset base?

12 12 Outstanding issues response to consultation Application Process Lengthy and requires a lot of information upfront Recognition of heavy workload on DNOs Provision of Information Feasibility studies not detailed or reliable enough Provision of network data would help developers know where and what to connect DNO customer service and transparency Process lacks transparency and not designed around customer needs Charges Disparity of connection costs between DNOs, even where projects appear comparable Transmission and network issues Lack of creative thinking and innovative use of network

13 13 Next steps following DG Forum DNO DG Workplans - Stakeholder mapping - Improve customer service eg. account managers - Provision of information eg.lists of approved technologies and technological advice - Transparent charging and fair deposit - Develop A&D proposal - Ofgem development of Price Control - Sharing of good practice - Address barriers to competition Following DG Forum Stakeholder Engagement Each DNO has published a DG Workplan Surgeries, feedback, DNO DG Forum events Regular monitoring of work-plan progress Set out and agreed between DNOs and DG customers RIIO - ED1 and Policy Development

14 14 Biomethane distribution Biogas is gas manufactured from organic matter (biomass) Biogas can be burned to create electricity and heat and used locally OR Biogas can be processed to produce bio-methane This can be injected directly into the gas network Barriers Cost of equipment High quality control standards

15 15 Summary We have listened to the feedback of DG customers and implemented a number of measures for the DNOs to improve performance: Guaranteed Standards of Performance Common Application Forms Incentivised provision of information DG Forum events x 2 All DNOs to commit to and publish DG workplans DNOs to engage with stakeholders Event (NFU attending) March 2013

16 16 Any questions? Olivia Powis Tel:

17 17