1 / 11

Offshore Transmission

Offshore Transmission. Giles Stevens Head of offshore electricity transmission. Contents. Regulatory approach Attracting investment User requirements & commitments A potential scenario. Regulatory approach.

cholena-harris
Download Presentation

Offshore Transmission

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Offshore Transmission Giles Stevens Head of offshore electricity transmission

  2. Contents • Regulatory approach • Attracting investment • User requirements & commitments • A potential scenario

  3. Regulatory approach • Approach must ensure that sound investment decisions provide the best value to consumers and offshore transmission users • Sound investment decisions require: • Co-ordination • Minimising risk of stranded assets and ‘gold plating’ • To deliver best value to consumers and network users, the regulatory approach must: • Enable necessary investment to deliver economically efficient, fit for purpose, transmission infrastructure • Provide certainty to investors in offshore transmission

  4. Attracting investment 1 • Investors in offshore transmission will need certainty • What risks are private investors exposed to? • Scope • Timing • Development • Construction • Financing • Operation • Returns • Price control can give certainty over: • Regulated asset value • Performance requirement • Returns • Incentive/penalty regime

  5. Attracting investment 2 • The following are likely to be required: • Fair and transparent selection process • Competitive pressure • Independent ownership of offshore transmission assets • No unfair advantage to incumbents • Clear definition of scope of work i.e. technical standards • User commitment from generators • Enduring regulatory structure, including mechanisms for change

  6. User requirements • Capacity • Location • Additional capacity • Performance • Availability • Time to repair • Delivery date

  7. User commitment TO ensure offshore transmission networks are not stranded investments, need: • Commitment from generators for transmission build • Commitment to be in place before transmission investment • Most efficient investment will take place once all generators committed • Scope of transmission work dependent on firm signal from generators

  8. Geographic areas The following options were set out in the scoping document • Single zone Pros Easiest way to allocate Economics of scale • Cons • Scale (£1bn+) likely to deter all but largest players • Less opportunity for competition • ‘Eggs in one basket’ • No comparison/benchmarking possible • Few ( 3 – 5) Pros Reasonable investment scale Economics of scale Opportunity for competition ‘Spread the risk’ • Cons • More complex regime • Needs cooperation from generators • Many (17 zones) Pros Point to point approach Easy to implement • Cons • Few opportunities for economies of sale • More complex regime • Investment may be too small to be attractive

  9. One potential scenario (1) • Geographic areas • 3 or 5 (as projects of £2-500m maybe most attractive to investors) • Security standards • Present standard, single fault etc • Connection requirements • Generator provides up front commitment • Offshore TO responsible for providing most economic and timely connection • Scope • Requirements defined by generators to get least cost solution

  10. One potential scenario (2) • Selection of Offshore TO’s • By competition • Price control • Provides long term RAV certainty • Regular efficiency reviews • Provides detailed arrangements for investment risks to be managed: • Adoption • Changing scope • Offshore TO failure

  11. Promoting choice and value for all gas and electricity customers

More Related