Review of progress and future work

1. DTI / OFGEM OFFSHORE TRANSMISSION EXPERTS GROUP Review of progress and future work SQSS Sub Group 2 August 2006

2. Content • Review of likely boundary between Offshore Generator and Offshore TO • Cost benefit analysis • Work plan • Data availability and transparency • Other issues

3. Offshore Ownership Boundary • Reason for review • Need to understand the scope of the offshore transmission system to understand the required scope of the offshore security standards • This assessment has taken into account 4 options • Each option has been compared to existing onshore arrangements, and existing CUSC, STC and charging methodology definitions. • More detailed paper to be made available for wider consultation.

4. Option 4; TO to own up to the individual wind turbine generator transformer. Windfarm electrical system Windfarm electrical system Option 3; TO to own up to the disconnector on the busbar side of the circuit breaker on the incoming windfarm circuit 33kV assets Single offshore platform Option 2; TO to own up to the transformer LV disconnectors 132kV assets Offshore transmission system Options considered Option 1; TO to own up to the transmission voltage busbar clamps on the platform transformer circuit

5. Initial Thoughts • Option 3 is recommended as it: • Best facilitates competition in generation • Simplifies ownership of offshore platforms • Allows the offshore TO to provide Users with a consistent level of security • Option 1 could be considered but provides less benefits than Option 3 if more than one Offshore Generator is connected • Options 2 and 4 are not recommended

6. Initial Thoughts • Sub-group intends to develop a detailed paper explaining the recommendation • Sub-group has assumed that the default offshore ownership boundary will be as its recommendation (Option 3) • Main Impacts: • Transformer circuits will be included within the security standards for offshore transmission • Assumption will require a review of the consequential impact on Grid Code, access rights and charging methodology

7. Cost-Benefit Analysis • Concept • Scope • Example configurations • Work progress and key results • Proposed format of SQSS for offshore transmission

8. Concept of cost-benefit analysis Cost Total Cost Cost of curtailed wind energy and losses Investment &Maintenance Costs Network Capacity and Redundancy Optimal network

9. Scope of cost-benefit analysis • Offshore networks • Switchgear reliability, installation cost, platform cost, ratings, maintenance requirements • Cable reliability, installation cost, maintenance requirements, ratings, electrical parameters • Transmission mode (AC vs DC) • Compensation requirements • Losses • Windfarms • Wind resource characteristics • Typical turbine ratings, availability, cost • Windfarm size • Windfarm distances from shore • Future value of energy and ROCs • Impact on onshore system operation • Additional reserve costs

10. Windfarm electrical system Windfarm electrical system Examples of single AC connections 33 kV 33 kV 132 kV 220 kV Shoreline 132 kV 220kV Onshore network Onshore network

11. Example of a shared AC connections 33 kV 33 kV 33 kV 132 kV 132 kV 132 kV 132 kV 400 kV 400 kV Onshore transmission network

12. DC AC DC AC DC AC AC DC AC DC AC DC Example of a shared DC connection 33 kV 33 kV 33 kV 132 kV 132 kV 132 kV 132 kV 400 kV 400 kV 275 or 400 kV On-shore transmission network

13. Progress and key results • Methodology for the evaluation of cost and reliability performance of alternative offshore transmission configurations has been developed • Key differences between offshore and onshore networks • Significantly higher capex requirements • Technology constraints • Wind generation operates at lower load factors than conventional plant • Analysis of a range of connection types suggests that generally lower levels of redundancy can be justified for offshore transmission networks when compared with onshore transmission networks • Justifiable levels of redundancy will be influenced by the size of the wind farm and its distance from shore • Initial analysis suggests significant benefits in providing flexibility at the platform and interconnections between offshore platforms in close proximity

14. Illustrative results Wind farm size (MW) • Numerical values shown are indicative ONLY. • Studies are NOT complete and key assumptions and electrical, reliability and cost data need validation. • Comprehensive sensitivity studies are yet to be carried out 600 Three circuits 450 Two circuits 300 150 One circuit 10 50 Distance to shore (km)

15. Proposed Table form of SQSS for Offshore Networks/1 Numerical values are indicative ONLY

16. Proposed Table form of SQSS for Offshore Networks/2 Numerical values are indicative ONLY

17. Work plan

18. Work plan and key dates • Further develop the cost-benefit evaluation models (by 14 August) • Take account of the impact of losses • Quantify the impact of diversity in the windfarm output • Take account of the impact of reactive power effects • Develop models further and carry out sensitivity analysis • Carry out cost-benefit studies and propose Draft Tables and Processes for forming SQSS for offshore transmission networks for review by the sub-group (by 24 August) • Submit draft SQSS Generation Connection Criteria for offshore transmission networks to OTEG for consideration (31 August) • Carry out detailed sensitivity analysis. • Re-assess and refine draft SQSS Generation Connection Criteria for offshore transmission networks (30 September) • Proposed workplan discussed at subgroup meeting on 28/07/06

19. Data Availability and Transparency

20. Data availability • The study work is conditional on receipt of all data from suppliers and developers • The sub-group has defined the data requirements and highlighted the data that has not yet been provided • There is risk that the timescales in the work plan will not be met if this data required is not provided • The current work plan is contingent on all data being provided by 14th August.

21. Transparency of data • All results of the cost-benefits evaluations should be re-producible • All data used in the analysis should be visible • Some of the cost information and wind data is only being provided to the DTI Centre for Distributed Generation and Sustainable Electrical Energy (under confidentiality agreements). • It is hoped that suitable anonymous, generic, representative data can be produced from project specific data • Concern is that the sub-group may not be able to make a recommendation based on the results of the analysis work if the input data was not available to them.

22. Other Issues

23. Other issues • Offshore TO/DNO/GBSO Interface • Sub-group is concerned by the possible implications on the security of an offshore transmission network connected to the onshore transmission network via a distribution network. • Particular concern relates to differences between the design standards applicable to transmission and distribution networks. • Sub-group will investigate and provide feedback to OTEG • HVDC • Sub-group is considering DC connection options as part of the cost benefit analysis work • Paralleling main onshore GB transmission network through offshore transmission network • The subgroup is un-aware of any proposed windfarm connection that will parallel any nodes of the GB transmission system. • Islands • National Grid currently developing Commercial Charging arrangements for Islands connections. Sub group work to concentrate on establishing optimum offshore network technical solution with any commercial arrangements to follow.