The bulk of the rewiring effort to prepare Britain for 10% of electricity from renewables by 2010 could well end up taking place in local power networks rather than in huge transmission upgrades. Over 75% of the renewables target will come from onshore technologies -- most of which will connect into lower voltage distribution grids. This new generation, plus a large amount of combined heat and power (CHP), which is also being encouraged, will demand substantial changes to the way networks are run.
Energy system regulator Callum McCarthy has called on Britain's 14 distribution network operators (DNOs) for a radical rethink of the way they manage their networks. He warns that government targets for renewables and CHP could lead to 300 distributed generators connected to every substation, compared with today when typically a DNO could have 300 generators within their total network.
One of the reforms among McCarthy's proposals for rewiring Britain's local networks to have been welcomed by the wind power industry is that of a move towards shallower connection charges for distributed generators. The difference between "shallow" and "deep" charges means that generators pay for the network assets they use to connect to the system, but not for the deeper reinforcement costs that could also benefit later network users. The proposal brings distribution networks in line with the National Grid's high voltage transmission system which already uses a shallow charging policy.
Since shallower connection charging can obscure locational signals, McCarthy now proposes introducing use of system charges that vary according to location of generating plant. As Guy Nicholson from grid services company Econnect comments: "The transmission system already has that capability. We will now need to structure distribution charges to send the right locational signals."
Nicholson, however, is concerned that the regulator's latest proposal under the price control review to give DNOs an incentive to connect distributed generators may confuse the issue. "Ofgem's work on the structure of charges and price control incentivisation have got to be joined up. The danger is that we will end up with a perverse outcome that is either good news or bad news for certain generators. The risks are there if we do not have clear thinking."
DANGER IN HAND OUTS
He warns that transmission companies want to jump on the incentives bandwagon. "They are saying: Why aren't we incentivised too? There is a danger in doling out money to the network operators without it being the most cost effective way." The question is, says Nicholson, how do you encourage DNOs take the right investment decisions on network upgrades and how is the investment to be recovered?
What is absolutely crucial, he says, is that high costs of upgrades to accommodate large numbers of renewable generators in a single area should not fall just on that DNO's customers. "That would be a disaster for the industry," he says. Nicholson believes that generators should contribute to the costs of running a distribution network with a lot of renewable energy. "That could result in lower costs to customers in windy areas."
To take increased levels of distributed renewable generation, DNOs will have to manage their networks more actively -- like the high voltage transmission system operators do, he says. Plans are underway for pilot schemes, known as Registered Power Zones, where active network management techniques can be tried out in a controlled environment to move the technology forward and improve understanding. Using existing assets more effectively and intelligently presents a quick way forward," says Nicholson. "We have the ability, we have the techniques, we can start active network management tomorrow."