SLIDE 1
High Level Principles
- Simple coordinated solutions
- Timetable matching TPCR4
- Retention of price signals
- Recognising practical constraints
- Strategic investment decisions required
- Appropriate and effective transfer of
High Level Principles of Access Reform ARODG Workshop 6 & 7 July - - PowerPoint PPT Presentation
High Level Principles of Access Reform ARODG Workshop 6 & 7 July - - PowerPoint PPT Presentation
High Level Principles of Access Reform ARODG Workshop 6 & 7 July 2006 Jim McOmish Distribution Technical Manager High Level Principles Simple coordinated solutions Timetable matching TPCR4 Retention of price signals
SLIDE 2
SLIDE 3
Simple Solutions
- Degree of change
– Proportionate to extent of problems – Minimum change – Benefits outweighing costs – Improvement to enduring arrangements rather than short term fix – Achievable in relatively short timescales
- Need for co-ordination
– Role for Ofgem / ARODG
SLIDE 4
Change Timetable
- Timetable for change consistent with TPCR4
- Potential interactions include
– Timing of investments relative to timing of revenues – Change to risk profile – Financeability – Cost of Capital
- Transitional arrangements may be required
- Potential for TPCR4 reopeners
SLIDE 5
Price Signals
- National Grid shallow connection charges
– No within zone location price signal – Limited price signal for security of connection
- Final Sums Liabilities
– Less effective than deep connection charges but currently provide only price signal for
- Within zone location
- Degree of security of connection (single or dbl. cct.)
- Certainty of project completion
- Appropriate price signal must form part of
solution
– Avoid increased risk of unnecessary investment
SLIDE 6
Recognising Practical Constraints
- Several practical constraints on TEC delivery
– Planning consents & landowner permissions
- Substantially out with transmission companies control
– Scotland – England & Wales interconnector (Boundary B6)
- Contractually constrained pre BETTA
- Physical network constraint post BETTA
- Below current required capacity
– BETTA transitional arrangements
- TEC rights independent of Boundary B6 upgrades
compound existing physical constraint
- Risk of windfall gains for generators
SLIDE 7
B4 B6
Scotland (SHETL) Scotland (SPT) England and Wales (NGET)
B5
Boundary Reinforcement
SLIDE 8
1000 2000 3000 4000 5000 6000 2005/ 06 2006/ 07 2007/ 08 2008/ 09 2009/ 10 2010/ 11 2011/ 12 2012/ 13 2013/ 14 Transfer ( MW )
50% Range 90% Range Required Capability (Base Planning Assumptions) Proposed Capability
Required B6 Boundary Capability
SLIDE 9
Strategic Investment Decisions
- Transmission infrastructure investment and
capacity release
– Lumpy in nature – Non-linear cost: capacity relationship – Inappropriate to trigger investments and revenues purely on User Commitments
- Strategic investment decisions informed
rather than constrained by User Commitments are required to deliver most economic network solutions
– Collector stations – Inter-area boundary reinforcements – In area reinforcements
SLIDE 10
Appropriate Transfer of Risk
- Users ultimately benefit from efficient
investment decisions and effective market entry
- Appropriate that new and the existing user
community should share proportionately the risk of under-utilised shared infrastructure
– e.g. collector stations
- New generators should continue to