National Transmission Network Development Plan - Response to Consultation Paper

Transcription

1 ~~ TransGrid ABN Elizabeth Street (cnr Park St) PO Box A1000 Sydney South Mr James Barton Project Director AEMO Level 12, 15 William Street MELBOURNE VIC 3000 New South Wales 1235 Australia Facsim ile (02) Telephone (02) Web DX1122 Sydney Dear James National Transmission Network Development Plan - Response to Consultation Paper TransGrid appreciates the opportunity to provide comments on the NTNDP Consultation Paper dated 29 January The release of the NTN DP in late 2010 will be significant in providing a long-term strategic plan for the development of additional interconnection and for the development of a set of future scenarios that can be used to form the basis of more detailed planning work by the Jurisdictional Planning Bodies. TransGrid is committed to working closely with AEMO in the development of this plan and in helping to ensure the transmission developments suggested for the various scenarios are appropriate ly tested for their feasibility and practicality. I would be pleased to discuss any of the matters raised in our comments with you. Should additiona l information be required, you may also contact Dr Col Parker, Manager/System Planning and Analysis on (02) Yours sincerely Peter McIntyre General Manager/Network Development and Regulatory Affairs Encl. I ~ c.,_ IS0 9001UC -!067 ~ d<.0,,,s:,on TransGrid is a NSW statutory State-owned corporation 100% Recycled Paper I o501'001l,:= S:l<ldY""'"""...'

2 Attachment 2010 National Transmission Network Development Plan Detailed Comments Section 2 NTNDP Purpose Influence transmission investment TransGrid and its predecessor organisations have planned and developed the NSW transmission system and interconnections to Victoria and Queensland over the history of the system. QNI and the NSW-Victoria interconnection have been developed as joint projects with the respective JPBs and their predecessors. TransGrid s present planning process is well established in accordance with the NER and stakeholder requirements but TransGrid recognises the greatest value of the NTNDP as likely to be in three areas: In providing a long-term strategic plan for the optimal co-development of generation and major transmission links; In providing a long-term strategic plan for the development of interconnections between the state systems; and The development of a set of future scenarios that can be used to form the basis for detailed planning work and the conduct of the Regulatory Test by the JPBs. Strategic Plans for Interconnectors TransGrid has investigated the potential benefits of upgrading QNI and the NSW-Victoria interconnection with Powerlink and VENCorp respectively in recent times. There is scope for incremental upgrades of both interconnections and also scope for high level upgrades involving the development of new transmission lines involving HVAC or HVDC augmentations. TransGrid is a strong advocate of long-term planning for the system, such as presented in TransGrid s Strategic Network Development Plan for NSW 1 which covers a 20 to 25 year horizon. This provides a general outline plan and is a necessary planning step to enable an orderly and efficient development of the transmission system avoiding the proliferation of lines. TransGrid s strategic plan has enabled TransGrid to identify key future substation sites and line route segments. Whilst long-term strategic planning has been successful within NSW TransGrid considers that a similar plan for the interconnections between States is required. The ANTS and NTS work has quantified over a limited number of scenarios the economic benefits of incremental upgrade options provided by the TNSPs. Whilst the information on benefits provided by the NTS is highly valuable the merits of an incremental upgrade of QNI have fluctuated between the various ANTS and NTS publications which unfortunately then provides no certainty in a project that may take a number of years to plan and construct. Hence benefit is seen if AEMO can establish relatively stable outcomes from progressive publications of the NTNDP. It is also necessary to establish whether the incremental upgrades provide greater economic benefits than higher level interconnection developments. A longer term strategic plan is also required to ensure that any incremental upgrades can be integrated with the longer term market requirements. Scenario planning TransGrid undertakes its main system planning on the basis of a set of generator planting scenarios. These scenarios have covered the range of future economic growth forecasts in NSW, the impact of carbon pollution reduction schemes, water availability and interconnection development. The scenarios include the range of likely generator development locations. Programs of transmission augmentation (or non-network alternatives) are then developed for each scenario. Hence the future 1 Refer to TransGrid s website 1

3 augmentation requirements of the system can be set out in a logical plan. These scenarios are weighted to provide guidance in selecting the most likely set of transmission augmentation plans. TransGrid intends to align closely with the future AEMO scenarios in its planning of the NSW system and any augmentations of the interconnections. TransGrid considers, however, that the planting of new generation based on the ACIL Tasman data alone does not allow for all of the development drivers affecting the location of new generation. It may be necessary for TransGrid to expand on the AEMO scenarios to allow for the permutations of generation development at different sites in NSW. One example of this can be seen in the NTS 2009 outcomes where in one scenario AEMO planted significant gas generation in northern NSW, leading to the need for a major 500kV line development. TransGrid contends that this generation could have been planted in other areas of NSW, with only marginally higher gas prices, which may have resulted in quite different transmission augmentation requirements. TransGrid believes that all of the likely generator planting possibilities need to be assessed in order to ensure that the future transmission system has the flexibility to cater for a range of futures. This is particularly important given the very different lead-times for major line development and gas generation development. AEMO has not indicated a weighting for each of the proposed scenarios. The outcome of the transmission analysis could then be sets of unrelated augmentation streams with no indication of which one should be pursued in more detail. Even if one stream becomes common to the bulk of scenarios, and hence may be viewed as having the most flexibility, there is a risk that the more likely scenario would not be addressed. In practice only one set of transmission augmentations can be built, and this set may change as the lead-time for individual components is approached. Hence AEMO is urged to provide some advice as to the relative likelihoods of the various scenarios or identify a 'most likely' option. Interaction with TNSP revenue submissions, RIT-T and APRs One specific comment is made in respect of Figure 1. The NTNDP, the APR and the RIT-T are very important inputs to the Revenue Submission of a TNSP. TransGrid believes that AEMO should indicate these linkages. Different requirements for different timeframes In the first few years of interest, such as from 2010/11 to 2013/14, it is likely that any major transmission augmentations would already be under construction or committed. Hence TransGrid does not believe that market simulations or investigations by AEMO would provide useful information to stakeholders, above that which may already have been made public via the Regulatory Test process. It is possible that relatively small projects expected to be required by 2013/14 would not already be considered committed. These typically involve work within substations such as reactive plant or switchbay installations and hence in these very localised cases TransGrid expects the value of a national plan to be limited. Non-network solutions to emerging transmission limitations are also routinely investigated as part of TransGrid s normal planning process. TransGrid seeks demand side responses as part of the planning and Regulatory Test processes and has been successful in attracting demand-side solutions in some major projects in NSW. Where network controls or System Protection Systems can be applied TransGrid will utilise them when economically advantageous in the interests of minimising the cost of transmission to the market. Where network support contracts form part of these arrangements a reasonably lengthy lead-time may also be required. Because of these lead-times market simulation covering the short term may not provide useful information. TransGrid believes the NTNDP should provide strategic information for the long term, from about 2013/14 onwards. Hence TransGrid sees value in market modelling from about 2013/14 together with long term strategic planning for the interconnections. 2

4 Whilst simulation is proposed out some 20 years the applicability of the input data over this timeframe needs to be questioned. This particularly relates to the long term accuracy of: generation cost data; and transmission constraint equations that have been developed based on the present day system and load levels; It is suggested that the simulation be carried out over a limited timeframe with longer term plans derived on the basis of a set of potential generation developments and load forecasts. Section 3 NTNDP Scope TransGrid intends to work cooperatively with AEMO in the development of the NTNDP. Prior to 1 July 2009 the IRPC performed a valuable role in coordinating planning activities and input in support of the SOO, ANTS and NTS work. The IRPC coordinated the work across NEMMCO and the TNSPs. At a meeting between AEMO and TNSP planning representatives on the 5 February this year the concept of a planning reference group involving the planning representatives and AEMO to coordinate input to the NTNDP was raised. In TransGrid s view this reference group should be set up to enhance the success of the NTNDP. Much of planning work involves very detailed considerations in determining feasible augmentation options and the scope of works. Transmission developments can often be affected by the details of new generation planting. A significant range of augmentation options for the NSW system has already been developed and in many cases assessed for physical feasibility and cost. AEMO has proposed minimising duplication of effort and hence TransGrid sees the NTNDP as adding value in terms of the strategic long term plan for interconnections and the integration of the interconnection developments into the State power systems. TransGrid considers it critically important that AEMO engages constructively with local TNSPs to test the feasibility and practicality of proposed augmentation options, so as to avoid publishing 'theoretically' ideal but impractical options. Restrictions such as land usage and environmental planning constraints may restrict the range of options that can reasonably be developed. For example, TransGrid attempts to rebuild or upgrade lines using the corridors associated with existing transmission lines wherever possible to mitigate the impacts on the community of new line route development. In some parts of the State, for example in the broader Sydney basin, this may be the only means of effecting increased transfer capacity into this load area due to geographical and social restrictions on acquiring new line routes. AEMO has nominated 5 core scenarios each with two carbon price trajectories. Two important aspects of these scenarios need to be considered: A demand and energy load forecast is required for each of the scenarios. There is also a need to consider the load profiles in cases involving significant changes to demand patterns. It is understood that revised load forecasts will be developed by about May 2010 with the simulations being based on 2009 forecasts. Given the publication date for the NTNDP it may prove impractical to provide an accurate view of the impact of any significant changes as a result of the 2010 forecast information. Section NTNDP NEM system coverage AEMO proposes the use of full transmission network representation with perhaps some simplifications in some cases. TransGrid has found that the extrapolation of detailed models into the future proves practical only to the time when: Issues arise in meeting local supply requirements; or Load growth starts to dominate the ability to solve load flows; or Where reactive power conditions become overly distorted. 3

5 It is not considered practical in long-term planning modelling to address all local reactive power supply or localised transformer loadings, particularly in lower voltage sections of the network. Hence the level of detail of the modelling is usually decreased as the planning horizon progresses. Section Implementation of the NTNDP AEMO proposes to remove network congestion where the market benefits of reducing congestion costs exceed the costs of network augmentation. Two comments can be made: Jurisdictional reliability requirements must be recognised and transmission augmentations may need to be triggered earlier than identified in market simulations; and AEMO has excluded the reduction in transmission losses from the quantification of market benefits (see AEMO s Appendix B.5.1). TransGrid has found in the past that major augmentations to the system can provide significant loss benefits (with consequent environmental benefits) and in a number of cases in NSW the transmission augmentations have been considered to pay for themselves through loss reductions alone. Loss considerations affect the relationship between transmission options and are a factor in the design of the augmentation. Ignoring losses would also tend to bias against demand side response solutions. Hence TransGrid believes that ignoring losses is not a prudent approach. Section 3.2 Network development options AEMO indicates that if armed with a set of credible augmentation options it will be possible to select the most efficient combination of generation and transmission augmentation options. Quite often options will include single circuit lines or double circuit lines or higher voltage developments. In addition, conductor sizes and ratings need to be selected. AEMO should indicate how these decisions are to be made in their planning approach. Section 4 Methodology Market simulation has proven a useful approach to the medium term over a 5 to 10 year horizon. The simulation outcomes are dependent on the data inputs and in the longer term the simulations must become very uncertain particularly considering the relevance of present day information being applied, such as fuel costs and generator bidding patterns. TransGrid has based its longer term scenarios on generation planting derived partly from consideration of reserve plant margin requirements in NSW. It is recognised that reserve plant margin levels are not necessarily fixed into the future and some transmission augmentations may act to reduce the margins but nevertheless it is considered that a high level view of generation requirements can be developed on this basis, taking into account overall state energy requirements. TransGrid suggests this as a means of developing long-term plans. In Section AEMO has also considered an approach based on maximum demand and a defined capacity reserve. TransGrid also notes that there is no proposal to consider outages of the transmission network, only Monte Carlo simulation of generation plant. Whilst the impact of transmission outages in many cases is not material and can be managed, at least for planned outages, by effective outage scheduling there are some critical circuits that invariably cause market impacts when taken out of service (for example, the 330kV circuits between the Hunter Valley and Newcastle). To not consider these outages at all will lead to an under estimation of the benefits of transmission augmentation in that part of the network. It is suggested that AEMO consider identifying the small subset of critical transmission circuits that invariably mpact on market outcomes and model their outages. Sections to Options 1 to 3 TransGrid favours analysis based on market simulations for the period 4 to 10 years. As noted above information over the first three years or so is very unlikely to influence projects with are under 4

6 construction or committed. Beyond about 10 years the number of potential generation planting permutations and uncertainty in the simulation data suggests declining benefits from this approach. Instead the long term analysis could be based on the generation planting derived from more high level considerations (such as TransGrid s scenario approach). In terms of output, TransGrid would prefer: Appendices A 4 to 10 year plan for transmission and augmentation under AEMO s 10 scenarios, with account taken of additional scenarios to cover specific generation development locations; 10 to 20 year strategic transmission plan to cover the range of future scenarios; Indicative market benefits for a range of interconnection development projects from 4 to 10 years. This would need to cover a number of years to ensure that decisions are not skewed by short term benefits occurring in one year. Network utilisation and congestion information similar to the NTS The following are specific comments on data in the appendices. Appendix A4.7 AEMO indicates that it is unlikely that a SENE would need to be jointly constructed by multiple NSPs. TransGrid suggests that this possibility not be ruled out at this stage. Appendix B The Snowy to NSW 5 minute run-back scheme has been included in TransGrid s current revenue reset but the market benefits of its implementation are presently being assessed. Appendix B.4.3 The CAN New Entry shadow generator is indicated as Shoalhaven. Shoalhaven should be recognised. The limitations of using Appendix B4.4 The NSW intra-regional loss factors will be affected by a number of major network development in NSW, particularly: the NSW western 500kV conversion project, which is expected to be completed early this year; the proposed Bannaby Sydney 500kV line; and the proposed Hunter Valley - Eraring 500kV line. Hence the use of present day loss factors will provide only an approximate result. Appendix B4.5 The modelling of Snowy output is based on assumed contract levels. The assumed levels affect the utilisation of the Snowy to NSW system and hence benchmarking of market simulations against recent experience should be undertaken. Appendix B4.11 The retirement of base-load coal-fired power stations requires attention to the source of the replacement base-load energy. AEMO should indicate how the capacity factors on remaining generators is managed in the simulations. It is noted that AEMO can provide this information from the simulations (Appendix B5.3 Table 42). 5

7 Appendix 4.15 Relatively low levels of new entrant wind generation in NSW are shown in Tables 39 and 40. On the contrary TransGrid has received a significant volume of inquiries and applications for connection of new wind generation. Many of these are located near to the main 330kV system which has significant power transmission capacity at times. 6