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The GB Queue – Problems and possible solutions

The GB Queue – Problems and possible solutions. Mark Copley. Purpose . To provide background to the GB Queue To discuss the reasons for the queue To assess the undesirable incentives that may exist To question whether proposals on the table will address any of these incentives

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The GB Queue – Problems and possible solutions

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  1. The GB Queue – Problems and possible solutions Mark Copley

  2. Purpose • To provide background to the GB Queue • To discuss the reasons for the queue • To assess the undesirable incentives that may exist • To question whether proposals on the table will address any of these incentives • To prompt discussion on what else needs to be done

  3. The Queue • NGET issued 13.2GW of offers • To over 165 projects • A series of sequential reinforcements are needed • Connection is not possible in some locations until 2016 and beyond

  4. The problem – At a high level • Unprecedented demand for network capacity in areas of the system with relatively little transmission. • Need for significant system upgrades before this generation can connect • Upgrades take time to receive planning consents and be completed • Offers were made on a first come first served basis which doesn’t reflect the viability of projects • Significant risk that efficient projects cannot connect • Risk that transmission licensees invest inefficiently.

  5. The causes – In more detail • Poor information for transmission licensees • No information from existing parties • A place in the queue is frequently a costless option • Inability for the most viable projects to identify themselves • Either by trading with existing parties, • Buying a less firm/ restricted right style access product, • Advancing their connection date if capacity becomes available

  6. The causes (2) • Inflexible market rules • Arrangements do not promote flexibility. Incentive not to reveal information as it’ll lead to a new offer with a post 2016 connection date. • An overly lenient approach to managing contracts? • Should NGET take a more hands-on role in managing contracts? • Increasing volumes of distributed generation? • Is there a discrepancy in treatment?

  7. Progress to date

  8. Questions for discussion • Have we correctly characterised the problems? • Are any recent developments likely to address them? • Are there any other issues to address? • What role should Ofgem/ transmission licensees/ industry play in this process?

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

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