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Sharing

Andy WainwrightNational Grid

Sharing under CMP213

Sharing on the wider systemReflecting recent developments in transmission investment drivers (GSR009)

Proposed changes to the Transport Model

Reflecting the impact of individual usersProposed changes to the Tariff Model

Workgroup developmentsDiversity

Hybrid annual load factor

Sharing on the peripheries of the system

Sharing

3

Sharing – Defect

Sharing

Increasing variable generation = increased network sharing

Operational Cost(SRMC, Constraints, Commodity)

Investment Cost(LRMC, Assets, Capacity)

Total Cost

= Investment + Operational

Operational Cost(SRMC, Constraints, Commodity)

Operational Cost(SRMC, Constraints, Commodity)

Investment Cost(LRMC, Assets, Capacity)

Total Cost

= Investment + Operational

On wider system greater proportion of investment driven by cost benefit analysis (GSR-009)

Capacity Sharing – Theory

Sharing

Explicit information is not available (TAR)

Implicit assumptions must be made

For investment driven by “year round” conditions, these should reflect assumptions made in cost benefit analysis

£

time

Constraints (SRMC)

Reinforcements (LRMC)

TSOs incentivised to balance SRMC and LRMC

5

GSR-009: Review of NETS SQSS for IntermittentTotal transmission cost = operational + infrastructure

GSR-009 set out to create deterministic standards from detailed cost-benefit analysis (CBA)

http://www.nationalgrid.com/uk/Electricity/Codes/gbsqsscode/LiveAmendments/

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6

GSR-009: Outcomes

Split planning background into peak and pseudo-CBA

Fixed scaling factors for some generation

Supported by full blown CBA for large investments

Sharing

7

Translating GSR009 into TNUoS methodology

Sharing

Sharing takes place on the wider network

Dual backgrounds in the Transport Model – SQSS

Circuits selected as either Year Round or Peak Security based on higher MW flow

8

Reflecting Characteristics of individual users

Sharing

Separate tariffs consistent with network planning

Generator specific load factor multiplier for year round

9

Is load factor a reasonable proxy?

Sharing

Many characteristics of a generator contribute to incremental impact on network costs

0%

20%

40%

60%

80%

100%

120%

0% 20% 40% 60% 80% 100%

Normalised

 Increm

etna

l Cost Impa

ct

Annual Load Factor

Market Model Outputs vs. Theoretical Perfect Relationships

Perfect LF vs. Incremental Cost Relationship

Perfect TEC vs. Incremental Cost Relationship

Market Model Output: Incremental Cost for Generator Plant Type Load Factor

Market model; relationship between generators and network costs

Original; balances simplicity with cost reflectivity

Basics of a Market Model

Fuel Price

CO2 Price

ROC/FiT Price

Capacity

Unit Avail.

Fuel Avail.

Efficiency

Demand

Merit Order

Unc

onst

rain

ed D

ispa

tch Pric

esG

en. U

nit

Mar

ket

Fuel Price

CO2 Price

ROC/FiT Price

Capacity

Unit Avail.

Fuel Avail.

Efficiency

Demand

Merit Order

Sharing

Market Model - Generation Inputs

Price £/MW

Capacity MW

Demand

Merit Order

Market

Capacity/MEL

Efficiency

Unit Avail.

Fuel Avail.

Gen. Unit

Fuel

CO2

ROC/FiT

Prices

Implicit Assumptions

Sharing

Market Model - Generation Merit Order

Price £/MW

Capacity MWTechnology 1Technology 2

Technology 3

Technology 4

Technology 5

Technology 6

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Market Model - Unconstrained Dispatch

100%0%

100%

% P

eak

Dem

and

% Time of Year

Demand Load Duration Curve

Annual Demand Variance

GenerationUnconstrained Dispatch

Demand Samples ( < 8760)

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14

Market Model - Network Capability

Technology 1Technology 2

Technology 3

Technology 4

Technology 5

Technology 6

Zonal Capacities

Zonal Network Representation

G1 = 10GWD1 = 5GW

G2 = 45GWD2 = 50GW

Boundary Capability= 4 GW

Circuits (1GW each)

Unconstrained Dispatch(One Demand Sample)

Boundary Flow = G1 – D1= 5GW

Boundary Flow > Boundary Capability

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15

Market Model - Constrained Dispatch

Technology 1Technology 2

Technology 3

Technology 4

Technology 5

Technology 6

Zonal Network Representation

G1 = 10GWD1 = 5GW

G2 = 45GWD2 = 50GW

Boundary Capability= 4 GW

Circuits (1GW each)

Constrained Dispatch

Boundary Flow = G1 – D1= 5GW

Boundary Flow = Boundary Capability

1GW BM Action

Offer (£/MWh)

Bid (£/MWh)

9GW

46GW

4GW

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16

Elements Influencing Constraint Costs

Unc

onst

rain

ed D

ispa

tch Pric

es

Fuel Price

CO2 Price

ROC/FiT Price

Gen

Uni

tM

arke

t Demand

Merit Order

Con

stra

ined

Dis

patc

hN

etw

ork

BM

Capability

Seasonal Avail.

Outage Avail.

Investment

Bid Price

Offer Price

Installed Cap.

Unit Avail.

Fuel Avail.

Efficiency

Sharing

Pric

e

Price

Key elements affecting incremental costTo

tal I

ncre

men

tal C

ost o

f Con

stra

ints

Constraint Cost Components

Out

put Non

–C

oinc

iden

t R

unni

ng

Con

stra

int

Coi

ncid

ence

Volume

Load Factor = Incremental Constraints

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1818

Load Factor (%)

Incr

emen

tal C

onst

rain

t Cos

ts

(£/M

W)

1000

Non Low Carbon PlantLow Carbon Plant

Diversity Alternatives –Effect of Bid/Offer Price

• In areas with insufficient diversity of plant the SO may be forced to accept bids from infra-marginal plant

Price Effect

(Plant setting bid and offer prices are both marginal plant types)

(Plant setting bid price is infra-marginal)

LRMC

• Asymmetric between bids and offers (bids more important)

• Observed in analysis presented to the group

Sharing

Price

Export constrained zones with low diversityTo

tal I

ncre

men

tal C

ost o

f Con

stra

ints

Constraint Cost Components

Out

put Non

–C

oinc

iden

t R

unni

ng

Con

stra

int

Coi

ncid

ence

Volume

Incremental Constraint Cost

Load Factor

Pric

e ≠

Sharing

Export constrained zones – Simplified Analysis

Simplified ‘test zone’ analysis served to corroborate hypothesis and help quantify effect

Offshore W

ind

Onshore Wind

Sharing

Diversity 1

(YR Shared incremental £/kW) x ALFALF x TEC(YR Not-shared incremental £/kW) x TEC

Sharing

Diversity 2

(YR Shared Incremental £/kW) x ALFALF x TEC(YR Not-shared Incremental £/kW) x TEC

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Diversity 3

(Incremental £/kW) x ZSFZSF x TEC

Sharing

Sharing under diversity alternatives

100/0

LC/C

70/30

50/50

20/80

Boundary 1

Boundary 2

Boundary 3

Boundary 4

Boundary Shared km

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24

100/0

70/30

50/50

20/80

Boundaries and LC/C ratios are illustrative

Sharing under diversity alternatives

100/0

LC/C

70/30

50/50

20/80

Boundary 1

Boundary 2

Boundary 3

Boundary 4

Boundary Shared km Zone A Totals

Sharing

Zonal totals made up of aggregate of relevant boundaries

Load Factor Alternatives

Workgroup concerns over ability of original to reflect step changes in user outputs.

Alternative for user to provide own forecast if different to National Grid calculated ALF

Hybrid Alternative

Penalty payments if forecast is inaccurate

Sharing

Sharing at the peripheries of the system

Diversity impacts potentially greatest at peripheral parts of system

Local circuits still built for capacity

These are managed implicitly in diversity options

For Original, propose to alter MITS definition to improve cost reflectivity

Radial circuits

However, sharing could still exist on such circuits

Heriott-Watt work; CCF

Sharing

0

200

400

600

800

1000

1200

1400

0 13 26 39 52

Peak outpu

t (M

W)

Week

Total output

capacity

95th percentile

median

5th percentile

Potential for counter correlation of low carbon technologies

Could be reflected in radial circuit designs by TOs

Use of counter correlation factor (CCF)

Herriot – Watt Analysis & Counter Correlation Factor

Sharing