ENA Submission to the Parliamentary Renewable and Sustainable Energy Group Inquiry into the access and management of renewables and the Grid

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1 1 ENA Submission to the Parliamentary Renewable and Sustainable Energy Group Inquiry into the access and management of renewables and the Grid 1.0 Introduction 1.1 Energy Networks Association (ENA) is the industry body for UK gas and electricity transmission and distribution licence holders and is very pleased to be able to contribute to the PRASEG Inquiry and the call for evidence on the access and management of renewables and the Grid. 2.0 The network challenge 2.1 The 20/20/20 targets and the UK CO2 emission reduction targets by 2050 will be achieved in great part by de-carbonizing the energy and transport sectors. The mandated introduction of 47 million smart meters by 2020 will represent a very large complex project for the energy sector and network companies will be taking a strategic role in the specification and roll-out of these meters. 2.2 To enable the connection of renewable energy sources, the currently designed passive transmission and distribution energy networks will need to be re-engineered with supporting ICT systems to become active and flexible networks (smart grids) that can accommodate both distributed and micro generation connections whilst maintaining the demand generation balance and correct operation of the networks to maintain secure energy supplies. The intermittency of some renewable energy sources such as wind, will lead to a greater need for energy storage solutions (i.e. heat, EV batteries etc.) and demand side management to encourage energy use when renewable energy is available. 3.0 Shaping the energy networks of tomorrow 3.1 In February 2009, the ENA Board agreed to establish the ENA Energy Networks Futures Group (ENFG) with representation from all ENA member companies. The ENFG is an additional senior strategic forum to complement the existing ENA committees, namely, Engineering, Safety Health and Environment, Regulation and Gas.

2 2 3.2 The ENA ENFG was established to recognize the strategic role that energy networks will play in enabling the introduction of smart grids for both gas and electricity. ENA members have agreed to adopt a leading role in the transition from passive to active networks and will be working with strategic partners under the Low Carbon Network Fund (LCNF) to implement a number of lighthouse projects to identify the technology and solutions that will be adopted across the UK. 3.3 During 2009 the ENFG established nine work streams; Transmission scenarios, Distribution scenarios, Smart Metering, Heat and Energy Saving, Electric Vehicles, Smart Grids, Gas Futures, Feed In Tariffs and ICT. Significant progress has been made in a number of these work streams with some groups being established in the latter part of the year. 3.3 THE ENA ENFG and ENA members have also be represented and actively contributing to the DECC/Ofgem ENSG smart grids working group which has recently developed the UK Vision document for smart grids with detailed supporting material. The working group has also drafted, for ENSG approval, a route map for the introduction of smart grids within the UK and we understand that this will be issued in the spring of ENA and DECC/Ofgem are currently in dialogue regarding the next steps as we move to the implementation phase of smart grids. DECC/ Ofgem have been advised that ENA and its members will wish to be strategically positioned within the smart grids implementation programme. This will require the current ENA structure and the 2010 committee work plans to be reviewed to reflect and support this positioning. 3.5 ENA has representation in Europe through Eurelectric and GEODE, particularly on smart grids and smart metering and is involved in the development work of European and International Standards as appropriate. 4.0 The role of the distribution network in delivering the low carbon targets 4.1 Distribution Network Operators (DNOs) in the UK are all ENA members and have been proactive in supporting connection of Distributed Generation (DG) to their networks by providing a range of advice and guidance, supported by appropriate documentation to meet current levels of demand. 4.2 Although there are a number of technical challenges in connecting large increases in DG it is also vital to ensure that communications and logistics are properly addressed.

3 3 5.0 ENA work to support facilitation of distributed generation 5.1 ENA holds and maintains a suite of UK industry Engineering Documents comprising Technical Standards, Engineering Recommendations and Technical Reports. Some of these documents provide the framework for the connection of DG and are also annexed to the GB Distribution Code where governance is the responsibility of the Distribution Code Review Panel. The Panel has representatives from customers, generators, suppliers, National Grid, DNOs, Independent DNOs, and Ofgem 5.2 The wide array of technical standards and documents include:- Engineering Recommendation G83/1-1 Recommendations for the Connection Of Small-Scale Embedded Generators (Up to 16 A Per Phase) In Parallel With Public Low-Voltage Distribution Networks. The procedures in this document make the installation of small generators in domestic situations extremely straightforward enabling customers to connect approved equipment without prior reference to the DNO. Engineering Recommendation G59/1 Recommendation for the connection of private generating plant to the Public Electricity Suppliers distribution systems. Engineering Recommendation G75/1 Recommendations for the connection of embedded generating plant to public distribution systems above 20kV or with outputs over 5MW. 5.3 The last two documents are in the final stages of updating and will be combined in one new publication to provide a single reference document for all larger generators. 5.4 These documents are available on the ENA Web Site and in addition, a further document is available, the Guide to the Connection of Generation to the Distribution Network, originally sponsored by the DTI. 5.5 Following proposals from Ofgem, ENA is now working with its members and all other interested parties to update and simplify the Guide to ensure it provides clear and specific advice for a range of potential users from a single domestic customer installing micro-generation to a large organisation installing substantial generation. The Guide is being tailored to suit the likely knowledge and requirements of each potential user.

4 4 6.0 Other challenges 6.1 These initiatives are designed to meet current and developing levels of demand. However, schemes such as Feed-In Tariffs are specifically designed to increase the commercial return from Renewable DG thereby encouraging DG installation and contributing to the UK s carbon dioxide reduction targets. ENA Member Companies must be in a position to respond effectively. 6.2 The scale of the challenge will depend crucially on the mix of generation that the market brings forth which may prove difficult to predict. The distribution challenges are very different in providing for the connection of different generation mixes for example:- Large scale wind farms predominate Small wind farms predominate with other renewable DG dispersed around the network Very small local DG predominates 6.3 Current arrangements are expected to cope with the initial anticipated increase in Renewable DG over the next two to three years but it will be necessary to develop innovative technical solutions to allow connection of the expected large expansion in Renewable DG capacity in following years and to be able to handle the range of DG scenarios illustrated above. 6.4 These technical solutions will require the current, generally passive, Distribution Network to be developed over a period of time into a more actively supervised network that will allow appropriate management of demand and load flows generally known as a Smart Grid. ENA and its Member Companies are working with interested partners to produce a road map for Smart Grid development. 7.0 The role of a Smart Grid 7.1 ENA is looking at how we can shape the smart networks of tomorrow. We have established a task group bringing together the industry s foremost experts to examine the issues and challenges. This work will both feed into the Electricity Networks Strategy Group and contribute to the wider debate. 7.2 The Task group has identified how they see them contributing to the future of energy: 7.3 The customer will have: Easy access to a secure, resilient and high quality electricity system Electrical energy that is seen to be affordable, user-friendly, modern, clean and sustainable

5 5 Information available on-demand Assurance of data privacy and confidence that customer choice is respected Engagement and inter-action with the energy provider, receiving automatic payments for services provided Greater awareness of time of use (seasonally and daily) and ability to adjust his/her behaviour accordingly Easy to use home automation and ability to make best use of available capacity from the local network Intelligent charging and demand control services of his/her electric vehicle A range of attractive, integrated, and resilient new energy services to meet present and future needs Access to carbon-efficient heat and transport options and for connection of home generation/ energy storage 7.4 A smart grid will include: The wide use of automation and intelligent systems An extensive communications overlay The use of new materials and power electronics Distributed and centralised intelligence An efficient interaction across the full supply chain Real time monitoring and diagnostics A diminished distinction between Transmission and Distribution networks Designs that reduce losses as much as practicable Integrated cyber security, data protection and data privacy safeguards Designs that are flexible and scalable to accommodate future uncertainly, including climate change impacts, and to facilitate rapid commercial rollout Designed-in upgrade paths, to address future obsolescence and minimise asset stranding Smart ready assets for later conversion 7.5 A smart grid will deliver: New approaches that will meet the 20/20/20 and 2050 goals for energy More efficient connections of renewable energy sources both micro and macro (time and money-wise) A cost-effective and attractive way to meet the needs of the electric vehicle user

6 6 Less infrastructure and visual intrusion Lower cost management of intermittent generation Measures that provide adaptation to climate change Designs that can accommodate uncertainty and be up-scaled for rapid commercial roll-out to maximise smart grid benefits 7.3 What happens next? ENA Futures Group is looking at how we can deliver the smart networks of the future. They are identifying the technical and regulatory barriers. They are also working to identify beacon projects that can point the way to our energy future. 8.0 Access to gas distribution networks ENA are also working with Gas Distribution Network companies on issues arising from the need for access to the networks for renewable gas supplies (biomethane generated from organic waste material, and potentially energy crops). In a recent paper in support of Ofgem s RPI-X@20 project, National Grid identified that bio-methane could make a sizeable contribution (50-100TWh/a) to heat demand in natural gas heated homes by The need for planning reform 9.1 ENA supports the reforms to the planning system and the introduction of National Policy Statements (NPS) to ensure there is a clear policy framework for significant infrastructure. The need to set out at a national level a statement of Government intent will provide clear and unambiguous investment signals to network developers so they can plan efficiently for the future. However the interrelationship between them and the hierarchy of the existing suite of planning policies, statements and guidance must be clear if they are to be effective. NPS must play a significant role in defining the approach of all consenting regimes both the local and regional planning regimes as well as the Infrastructure Planning Commission and the DECC Consents team. 9.2 ENA welcomes the approach set out in the energy NPS on maintaining security of supply as we move to a low carbon economy. The UK must make substantial investment in energy network infrastructure to address the need for low carbon secure energy supplies. Under the current planning arrangements there is a considerable level of planning risk inherent in investing in this infrastructure. ENA has been calling for policy certainty and ENA members welcome the clarity and policy certainty that the NPS introduces. The uncertainties of the planning regime have been an important factor in deciding international investment strategies and in delaying connection of new renewable energy sources.