Ofgem has sent National Grid back to the drawing board in the way it assesses options for future network development, saying the system operator (SO) was too ready to assume its ‘Gone Green’ scenario would come to pass.
The regulator said Gone Green – one of four ‘scenarios’ National Grid uses to consider future needs – was “an overly optimistic scenario”, and giving it too much weight “could lead to inefficient planning needs being identified” in National Grid’s new Network Options Assessment (NOA).
The regulator has given the system operator until 1 August to produce a new methodology and the final assessment will be delayed from 1 March 2016 to 31 January 2017. However, Ofgem has told National Grid to publish an initial report in March 2016 as a basis for stakeholder engagement.
This is the first NOA produced by National Grid; a new licence obligation that emerged from Ofgem’s transmission review. It describes the options that the transmission network owners have provided to meet reinforcement requirements in the national electricity transmission system and identifies the SO’s preferred options based on cost-benefit analysis. Alongside, a second NOA will look at the specific requirements for interconnectors. National Grid said it differed from the Electricity Ten Year Statement (ETYS), another forward-looking document, in that “ETYS describes technical aspects of the system and the system’s development while NOA describes options for reinforcement to meet system needs”.
Ofgem’s concerns came in a letter sent to National Grid on 8 December.
It said the reliance on the Gone Green scenario could result in less efficient network planning. It was also concerned that National Grid had used Gone Green to model how much power would be transferred between different regions at the winter peak, and therefore how much reinforcement would be needed. This could be inaccurate, Ofgem said, but National Grid has not used other scenarios in its modelling.
The Gone Green scenario has a high proportion of distributed energy generation. Other scenarios would require more power to be transferred long distances.
The Gone Green scenario assumes a generation and demand background which meets the environmental targets in 2020 and maintains progress towards the UK’s 2050 carbon emissions reduction target. Achieving climate change targets requires use of renewable and low-carbon technologies. EU aspirations regarding interconnector capacity for each member country remain applicable.
Other scenarios are: Slow Progression, where uptake of renewables is slowed by economic constraints; No Progression, where little of our low-carbon ambitions are realised; and Consumer Power, where economic growth prompts new generation at all levels but less focus on renewables.
Ofgem’s letter to National Grid
First published in the February issue of New Power.