Ofgem: temper overambitious ‘Gone Green’ assumptions to manage network spend

National Grid has placed too much weight on its ‘Gone Green’ Future Energy Scenario in the way it proposes to assess where the electricity network requires immediate reinforcement, regulator Ofgem said. It has asked the System Operator to look again it its proposed methodology and produce a revised version by March 2017.

Ofgem is concerned that in the event the ‘Gone Green’ scenario had a very different view of new generation to other scenarios it may have too much influence in decisions on where to reinforce. It may drive immediate network investment to an area where in the longer term  and in other scenarios it was not beneficial. That could ‘strand’ the reinforcement, needlessly raising costs for customers.

The regulator said the SO had assumed that the most ambitious Gone Green scenario was as likely as other scenarios, but in fact it involved “significant developments in energy policy, the economy, environmental legislation and technology compared to the status quo”.

This is the second iteration of the SO’s so-called Network Options Assessment methodology. Ofgem said in this version one issue around National Grid’s use of the Gone Green scenario had been resolved: that was whether it allowed for accurate assessment of transfer capability across internal system boundaries.

The regulator also said the SO had made good progress on assessing reinforcement options against the competitive tendering criteria, reviewing the cost estimates of options, and identifying potential economic opportunities for interconnection.

National Grid will go ahead with plans to publish a Network Options Assessment in January 2017 using its current methodology. Ofgem said that document would be useful to stakeholders although the final methodology was still in flux. Also, National Grid is using the NOA to take decisions on upcoming investments, instead of its previous ‘Network Development Policy’ published in 2013.

 

Further reading:

Ofgem’s open letter

Ofgem tells National Grid: ‘We are not “Going Green” ’

National Grid’s Gone Green scenario ‘too cautious’, new Energy Systems Catapult hears

From the interview archive: Heat and transport will make the UK miss its decarbonisation targets, says UK Energy Research Centre chairman

 

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