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Update on Review of Embedded Generation Benefits

Update on Review of Embedded Generation Benefits. Andy Wainwright. Background. Standard Licence Condition C13 Introduced at BETTA (2005) Addressed different treatment of 132kV connected small generation in Scotland (transmission) with that in England and Wales (embedded)

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Update on Review of Embedded Generation Benefits

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  1. Update on Review of Embedded Generation Benefits Andy Wainwright

  2. Background • Standard Licence Condition C13 • Introduced at BETTA (2005) • Addressed different treatment of 132kV connected small generation in Scotland (transmission) with that in England and Wales (embedded) • Time limited: due to expire 1st April 2016 • Embedded review needs to consider overall implications on GB generation • Informal industry focus group established Spring 2013

  3. Objectives of transmission charges • Cost reflectivity • Facilitate competition • Developments in transmission businesses • Recover transmission costs • Non-discrimination Affected transmission ‘charges’ TNUoS BSUoS Losses Focus Group agreement to consider TNUoS first

  4. TNUoS Charges - Locational Element • Net approach • Embedded generation nets with demand • Therefore subject to a negative demand locational signal • Based on output at Triad • Equivalent to generation signal: zoning limitations TNUoS Locational Elements only Tariffs • Gross approach • Embedded generation receives same generation signal as transmission connected • All demand receives locational signal Charging Zones

  5. The effect of the generation residual element • Embedded generator avoids paying generation residual element 30 Avoidance of generation residual charge 25 20 15 Gen 10 Dmd 5 0 A B C D E -5 -10

  6. The effect of the demand residual element • Positive demand can avoid paying the demand residual element if able to net with embedded generation • Embedded generation therefore has a value equal to the demand residual element 30 25 20 15 Gen Netting of positive demand 10 Dmd 5 0 A B C D E -5 -10

  7. Combination of both residual elements • In summary, embedded generation can receive TNUoS ‘benefit’ through two effects on residual elements; • netting of positive demand (i.e. reducing demand charge) • avoidance of generation residual charge Avoidance of generation residual charge Netting of positive demand 2 x Residual uplift

  8. How much benefit should be paid for offsetting +ve demand? NGET GSP infrastructure reinforcement costs 1 RPI factor for 2009/10 to 2012/13 = 1.132992

  9. Should embedded generation pay for transmission? How does embedded generation use transmission? Comparing transmission and distribution charges Note 2013/14 average TNUoS charge: £7.75/kW Average TNUoS charge: £7.57/kW (2013/14)

  10. Impact on >100MW generators Exporting GSPs Offshore Transmission Implications Other areas under consideration

  11. Next steps • National Grid report to be published October • Include Focus group & bi-lateral discussions • Three week open letter • Formal CUSC modification proposal potentially later in Autumn

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