Electricity Networks Handling a Shock to the System IET technical report on the whole system challenges facing Britain’s electricity network www.theiet.org/pnjv About This Technical Report The Institution of Engineering and Technology (IET) acts as a voice for the engineering and technology professions by providing independent, reliable and factual information to policy makers and the public. This IET Technical Report developed in collaboration through the IET Energy Sector and Energy Policy Panel informed a Position Statement published by the IET Power Network Joint Vision expert group, which is also available on the IET website. The Institution of Engineering and Technology The IET is a global organisation, with over 150,000 members representing a wide range of engineering and technology fields. Our primary aims are to provide a global knowledge network promoting the exchange of ideas between business, academia, governments and professional bodies; to enhance the positive role of science, engineering and technology; and to address challenges that face society in the future. The Institution of Engineering and Technology is a not for profit organisation, registered as a Charity in England and Wales (No. 211014) and Scotland (No. SCO38698). For more information please visit: www.theiet.org About The IET Energy Sector The IET has recognised that the demands on the modern engineering community have changed. By prioritising five Sectors; Built Environment, Design & Production, Energy, Information & Communications and Transport, the IET has provided an access point to the vast array of knowledge, experience and content available to its members and the international engineering and technology community. 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For more information, visit: www.theiet.org/energy Enquiries [email protected] © The Institution of Engineering and Technology 2013 Contents 3 Contents Acknowledgements 4 Executive Summary 5 Part 1: Power Network Joint Vision - Overview 7 Part 2: Power System Investment Planning 10 Part 3: Operating the Power Network 16 Appendix to Part 1: Power Network Joint Vision - Overview n Appendix 1A - Assessing the Capability of the Industry 23 to Deliver the Objectives of the Power Network Joint Vision Appendices to Part 2: Power System Investment Planning n Appendix 2A - Electricity Demand Change and Information Sharing 30 n Appendix 2B - Active Distribution Networks 33 n Appendix 2C - Network Planning Tools 37 Appendices to Part 3: Operating the Power Network n Appendix 3A - Will an increase in ICT and embedded intelligence cause 40 a decrease in resilience of the transmission and distribution network? n Appendix 3B - GB Electricity Network Operation - Information Flows - Now and Next 46 n Appendix 3C - Questionnaire, Interview Questions 51 n Appendix 3D - Selection of Responses to Questionnaire 53 Annexes to the Whole Report n Acronyms 64 n Explanation of Terms 66 n GB Power Network Industry Groups 68 Electricity Networks Handling a Shock to the System – An IET Technical Report 4 Acknowledgements Acknowledgements The majority of the financial support to produce this Technical Report was provided by The Institution of Engineering and Technology (IET), with in-kind donations from National Grid and Western Power Distribution and additional donations of time and resource from Cardiff University. The following is a list of the IET Power Network Joint Vision (PNJV) expert group participants, who have contributed to the production of this final Technical Report; the IET would like to thank each and every one of them for their time and support in this process. Professor Graham Ault CEng, FIET, MIEEE Duncan Botting, FEI, FEMA, FRSA, MIEEE, MIET Dr Cornel Brozio CEng, MIET Peter Buxton CEng, FIET, BSc(Eng), MSc Mark Drye CEng, FIET Craig Dyke CEng, MIET Helen Farr MIET Neil Fitzsimons CEng, MIET Gordon Graham AMIET, BSc, MBA Dr Vandad Hamidi CEng, MIET, MIEEE Dr Simon Harrison CEng, FEI, FIET Barry Hatton CEng, FIET Roger Hey CEng, MIET Martin Hill MIET Phil Johnson MIET Mike Kay CEng, FIET, MA, MSc Dr Bless Kuri MIET Phil Lawton CEng, MIET Jaime Moniet CEng, MIET, MSc Dave Openshaw CEng, FIET Stewart A Reid FIET Michelle Sawyer John Scott CEng, FIET Professor Goran Strbac CEng, MIET, MIEEE Lee Thomas MIET Roddy Wilson CEng, MIET, MIEEE, BSc The IET also thanks Gareth Evans, CEng, MIET (Head of Profession - Engineering, The Office of Gas and Electricity Markets (Ofgem)) and Craig Lucas, CEng, FIET, MSc (Head of Engineering, Department of Energy & Climate Change (DECC)) for giving up their time to be consulted by the IET as part of the PNJV work programme. The two Case Studies included in this Technical Report (Appendices 3A & 3B) have been developed, researched and compiled by Dr Dia Adhikari, Alasdair Burchill and Lee Thomas, under the guidance of Dr Jianzhong Wu and Professor Nicholas Jenkins, all from Cardiff University. Electricity Networks Handling a Shock to the System – An IET Technical Report Executive Summary 5 Executive Summary Britain’s electricity sector is grappling with the triple challenge of decarbonisation, maintaining security of supply, and affordability to customers. Much has been written on this subject, but little on the impacts of this on the electricity networks that connect generators to end users. However changes such as solar photovoltaic (PV) farms and large scale adoption of domestic solar PV energy, electric/hybrid vehicles, replacement or supplementing of gas fired heating by electric heat pumps, community energy schemes, and the introduction of large scale wind generation have potentially profound impacts on networks and on the electricity system as a whole. The electricity supply chain is already a highly complex interconnected system, and decarbonising securely and affordably will increase this complexity substantially. At the transmission level, traditional tasks such as system balancing and maintaining system stability will become increasingly complex while at the distribution level, managing the impacts of reverse power flows, fault levels, and voltage rise will become increasingly challenging. Solutions might include moving to automatic controls for new applications such as solar panels, electric vehicle charging, and for the adjustment of carrying capacity of transmission and distribution lines according to weather conditions (dynamic thermal rating). The implementation of such wide-scale automation needs to be handled with care to ensure stable operation of the power grid and avoid unexpected and serious outcomes. Network companies are already beginning to see the influence of all these changes on the electrical behaviour of the power system, nationally and locally. These changes are potentially disruptive to electricity supply security and the cost-effective operation of the grid, and this will become progressively more severe. But they also create an opportunity to act in ways which reduce cost and create worldwide opportunity for innovation and UK leadership. The scale and complexity of the challenges ahead is new, and potentially even greater than when the national grid was first developed in the 1930s. Fresh thinking is needed. The IET has undertaken a scoping assessment and has compiled a Position Statement and this report, drawing on technically informed senior practitioners to describe the challenges, the severe consequences we foresee if action is not taken, and makes recommendations for a way forward to allow timely development and implementation of solutions. It is clear that these challenges cross conventional industry boundaries, and extend also into the policy arena. Coordinated action by government, industry and a wide range of stakeholders is needed, and we must maximise learning from international experience. It is essential that we look at the challenges and develop solutions from a “whole-system” perspective to address the many interdependencies involved. Engaging the right people from the outset in a planned and coordinated way will deliver major benefits to customers and the environment, and reduce the risks to vital national infrastructure. Electricity Networks Handling a Shock to the System – An IET Technical Report 6 Executive Summary The IET’s key recommendations We invite the parties affected to consider these recommendations and provide their responses which we would very much welcome: 1. DECC should work with industry to establish a System Architect role to achieve a whole systems approach. 2. Government/industry stakeholder groups should explore and address effective interactions between engineering, market and regulatory aspects to determine changes needed. 3. DECC/Ofgem should develop the regulatory arrangements that will enable demand response and distributed storage to participate in maximising whole system synergies and the mitigation of risks. 4. Network companies should together determine how to address the impact of a data rich environment, including the mechanisms for improved internal and external data exchange. 5. Network companies’ procurement arrangements should facilitate greater access for specialist providers to bring benefits in smart grids, demand management and new customer services. 6. Network companies, the IET, and other interested parties should work out how to address the requirements for increasing engineering, commercial and business complexity, including the means to access skills and research and test facilities, and the sharing of knowledge. Electricity Networks Handling a Shock to the System – An IET Technical Report Part 1: Power Network Joint Vision - Overview 7 Part 1: Power Network Joint Vision - Overview Introduction Fundamental changes to Britain’s electricity power system are already starting to take place and manifesting themselves in ways which had not been anticipated only a few years ago. Moreover, the pace of change is expected to accelerate and it is the IET’s considered view that if not addressed by timely and coordinated action on the part of government, industry, and a wide range of stakeholders, these changes will become increasingly disruptive to the secure and cost-effective operation of the national electricity power network. The inevitable consequence of inaction would be that Britain’s electricity supplies will become less secure and unaffordable. A further casualty of inaction will be the decreasing ability of the grid to accommodate the new low carbon electricity production, transport and heat technologies necessary for Britain to realise its ultimate ambition to decarbonise electricity production and achieve its legally binding commitments to reducing carbon emissions. The changing character of the power network The currently observed changes to the behaviour of power networks are adverse and are primarily a consequence of the early stages of sector decarbonisation, in particular the introduction of new low carbon electricity production technologies which are gradually displacing conventional fossil-fuelled generation and first-generation nuclear plant; however they are also due to changing electricity demand patterns. The observed characteristics of these changes are in terms of wider variations in transmission system voltages, particularly overnight where in some parts of Britain voltages are now rising to levels beyond the design parameters of the installed transmission voltage (and reactive power) management systems; and in terms of less stable system frequency, which can be observed particularly during abnormal system events. In terms of the new generation technologies coming on stream, new nuclear, albeit less flexible in its operation, can be considered a low carbon alternative to conventional fossil-fuelled generation (as well as a direct replacement for first- generation nuclear) in that it will be directly connected to Britain’s transmission system and will continue to be centrally dispatched. Although the management of large (typically 1800MW) nuclear plant brings some new challenges in terms of managing system frequency (for example maintaining stable operation following an unexpected loss of one of these large units to the system) new nuclear stations do not generally give rise to significant changes in the approach to managing the electricity power network. However, much of the new low carbon generation now coming on stream, and set to expand significantly over the next decade, is in the form of renewables, in particular wind and solar PV. Renewable generation has the potential to make a significant and effective contribution to decarbonising Britain’s electricity sector but, unlike the conventional ‘synchronous’ generating plant found in nuclear, coal and combined-cycle gas turbine (CCGT) stations, wind and solar PV generation is, by its nature, intermittent and therefore a less dependable source of electrical energy for system balancing (i.e. matching electricity production to demand in real time). Moreover, wind and solar PV generation is often either widely dispersed deep within the electricity distribution grids (so-called ‘distributed’ or ‘embedded’ generation) or sited in remote and/or offshore locations, and connected only indirectly to the transmission system via direct current (DC) connectors. Due to the ‘decoupled’ nature of these technologies, solar PV, wind generators and interconnectors do not contribute to ‘system inertia’ which is an essential component of maintaining a stable electricity power system that can be depended Electricity Networks Handling a Shock to the System – An IET Technical Report 8 Part 1: Power Network Joint Vision - Overview upon to operate reliably, within acceptable limits of frequency variation, and able to withstand shocks to the system (for example due to sudden changes in demand or loss of generation, or due to transmission faults). New demands on the distribution networks There is a further emerging challenge to the electricity power system due to electrification of heat and transport which is a key plank of the UK Carbon Plan and to delivering on our national obligation towards reduced carbon emissions. Whilst the level of take-up of electric vehicles and heat pumps is currently below some earlier expectations, comprehensive modelling undertaken by the network companies in conjunction with academia illustrates clearly that electricity consumption and, in particular, peak demand (which ultimately drives the need for both generation and network capacity) has the potential to increase significantly above the design limits adopted when the existing electricity distribution networks were installed. On the other hand, there is scope for these new categories of electrical demand to be operated flexibly, particularly private electric vehicles which, as with other forms of private transport, are typically stationary for over 90% of time. Not only can this be helpful in terms of avoiding excessive growth in peak demand, there is the potential to flex the timing of electric vehicle charging so as to align more closely in real time with the output from intermittent renewable generation. This in turn points to an important characteristic of ‘smart grids’: i.e. consumer participation. The willing engagement by consumers of all categories (business and domestic) will in future provide a vital new tool for power system management. Innovative contracts for providing ancillary services such as system balancing, or new tariffs enabled by smart meters, have the potential to make a real contribution to whole system optimisation and hence the objective of secure, affordable, low carbon electricity. Innovation already taking place The anticipated increase in distributed generation, and levels of adoption of electric vehicles and heat pumps, has been the main driver in Britain for the development of ‘smart grid’ technologies. It is beyond the scope of this report to catalogue the many smart grid trials that have been (and are continuing to be) conducted by the Distribution Network Operators (DNOs) in conjunction with a wide range of industry stakeholders (including but not limited to: established manufacturers and smaller entrepreneurial organisations, energy suppliers and intermediaries, academia, and not least participating customers). Suffice to say that, as a result of concerted action by the industry and its stakeholders in developing and deploying innovative new technologies and commercial contracts with customers, Britain can now legitimately claim to be European leaders in terms of deployment of a wide range of credible smart grid solutions which have the potential to provide economically viable (and far less disruptive) alternatives to investment in conventional network capacity. Our European position is demonstrated in a recent EU report.1 The IET expert group In recognition of these changes and forthcoming challenges (and opportunities), the IET has called on the deep source of industry expertise that exists within its membership (including expertise from transmission and distribution companies, smart grid specialists, consultants and academia, together with advice from Ofgem and DECC) to give careful consideration to these challenges and to draw up recommendations as to the actions that need to be put in hand in order to ensure the continued integrity of Britain’s electricity power system in the face of the demands we can expect to be placed on it over the next two decades and beyond. The challenges identified are matters of significance and the expert group has set out the lines of action needed to achieve solutions in a timely way. The approach to this critical work, on which we report in this document, has been to establish three distinct work-streams, each tasked with one of three clearly defined objectives which the overall working group identified as being core to creating the necessary foundation for the recommendations of this report to be taken forward. These three objectives were: Electricity Networks Handling a Shock to the System – An IET Technical Report Part 1: Power Network Joint Vision - Overview 9 n Understanding and Explaining the Overall Problems: undertaking a full SWOT analysis (see Appendix 1A) of the challenges facing the whole electricity power system (partly in order to inform the other two work-streams) and developing an IET Position Statement (see below); n Power Network Investment Planning: identifying the necessary changes in the approaches to planning and designing the Great Britain (GB) electricity power network that will secure the most effective outcomes from a whole system perspective in terms of addressing the anticipated challenges; and n Operating the Power Network: identifying the necessary changes in our approach to operating the electricity power network in light of the anticipated challenges so as to maximise its future effectiveness from a whole system perspective. In terms of reporting the outcome of this study, the IET has been conscious of the different audiences that the conclusions and recommendations need to reach, and hence the style of communication that is most likely to be effective. Documents now available As a result of these deliberations, the working group has produced two key documents: n An IET Position Statement which is aimed primarily at policy makers and other informed professionals; and n A Technical Report (this document) aimed particularly at industry professionals Together, these documents provide a solid foundation for key industry stakeholders (including: network and system operators, the overall industry supply chain, energy suppliers and intermediaries, generators and consumers, government bodies and policy makers) to make the necessary transition to whole system design, planning and operation which the IET believes is essential to avoiding future major disruptive effects to the electricity power system which the nation has (and will increasingly) become dependent upon for delivering secure, affordable, low carbon supplies of electrical energy. Moreover, the IET believes that by adopting the recommendations in this report and taking the necessary next steps, Britain will be well placed to establish a high level of internationally transferrable expertise in the whole system design, operation and management of electricity power networks, and hence will be well placed to leverage its competitive advantage in securing both inward investment and export opportunities for the benefit of jobs and the wider UK economy. References for Part 1 1 http://ses.jrc.ec.europa.eu/sites/ses.jrc.ec.europa.eu/files/documents/ld-na-25815-en-n_final_online_version_april_15_ smart_grid_projects_in_europe_-_lessons_learned_and_current_developments_-2012_update.pdf Electricity Networks Handling a Shock to the System – An IET Technical Report 10 Part 2: Power System Investment Planning Part 2: Power System Investment Planning Introduction This part of the report examines significant issues relating to a whole system approach to power system investment planning. Much of the emerging challenge stems from the changes to generation background (specifically low carbon technology, location, scale and number including embedded generation) and both active and reactive power demand trends. The strains associated with these changes are already evident to network planners and operators who are aware that these are likely to increase as the transition to a low carbon electricity supply and the roll-out of smart grids gathers pace. The overall architectural blueprint for power networks in GB is being set by individual network companies as they respond directly to the decisions and choices that customers make. That said there is already a degree of cooperation and joint vision through the GB Smart Grid Vision and Route Map1, the Electricity Networks Strategy Group (ENSG)2 and the Smart Grid Forum (SGF)3. The focus in this document is on how to do planning, rather than on the shape of the overall plan, vision or blueprint for GB power networks. An electrical power system includes generation plant and a network of electrical circuits that are operated to deliver electrical energy efficiently and reliably to consumers. The equipment for both generation and network transport is sophisticated, expensive and is expected to do its job for as much as 50 to 60 years in some cases. Electrical power system planning is the on-going process of making investment decisions to install or replace power system equipment in line with an overall architecture. When power system planning is done effectively, the right components are installed in the right places at the right time to deliver a reliable, efficient and cost effective power system that provides the essential links between generation and consumers of electrical energy. Decisions to invest in electricity production and develop the electricity production system in GB are made by independent private companies in response to market and legislative signals. These decisions involve the selection of generating technology, scale and location to provide the best value to the generating companies and therefore to the investors in electricity production. Decisions relating to the development of power networks follow a different approach from that for electricity production. The GB power network companies are natural monopolies and are regulated to deliver both efficient investment and operation of the power networks. The power network planning process starts with information about the existing power network and then looks into the future to anticipate coming needs and identifies and analyses the most effective changes to the power network to meet the expected needs in the best way. There are now a number of significant changes to power systems and power networks that have a bearing on both what power network should be developed and also the associated power network planning process. The IET PNJV has made it a priority to identify these challenges, identifying the most important issues for power system operation and recommending actions to address the challenges. Electricity Networks Handling a Shock to the System – An IET Technical Report