Reports from other Groups

Powerwatch’s Symposium Review

Sunday, 30 January 2011

Working in the current regime 

The day opened with a presentation from two representatives of National Grid talking about the current and future priorities of National Grid. Richard Smith spoke of the long standing priorities, consumer affordability and security of supply, and how sustainability had been added as a third driver in recent years. With 25% of existing power stations due to close between now and 2020, there is a large drive to replace them with renewable sources. 

Currently, CO2 production is 500 g/kWh, and the aim is to have this reduced to 200 by 2020, and as low as 15 by 2050. 

David Mercer then took over the platform, and made a quick reference to “preservation of amenity” as an important aspect of sustainability, before quickly moving on how policy dictates which options are prioritised. With new installations requiring infrastructure to bring the power into the grid, the emphasis is on using existing equipment, followed by upgrading existing equipment, and the construction of new infrastructure is considered to be a last resort to be used only when necessary. When assessing options for building new infrastructure, overhead lines, undergrounded lines, DC instead of AC lines, and subsea (when appropriate) options are all considered evenly, pending cost-benefit calculations. 

He stated that environmental and socioeconomic costs are modelled in their CBA procedures, but gave no figures of how such costs are incorporated (he stated that more details will be available in the IET / KEMA report). I asked a plenary question on this issue, and the question was evaded, with NGrid stating that investment and capital costs were the biggest drivers, as maintenance and losses in transmission options were comparatively insignificant. In a private question afterwards he said that precise environmental and socioeconomic costs were not available (instead, they typically use comparative estimated orders of magnitude) and that no-one has a magic formula to help drive socioeconomic decisions. I was left with the distinct information that the reality was that they are not able to actually incorporate environmental / societal impact costs at all, simply because the data was supposedly not available to do so. 

David Walker then made a very insightful presentation from East Anglia Offshore Wind (a collaboration between SPR and Vattenfall), specifically in the context of the wind farm development plans off the coast of Norfolk. The current plans are to develop 7.2 GW of wind power generation, in six separate projects of 1.2 GW each. Of these, the consent application is expected to be submitted by November 2012 to be agreed and confirmed by the end of the following year. Constructing is expected to get underway early 2014, with power being delivered into the grid by the end of 2015. The other 5 projects are all expected to have planning procedures completed by 2017, with the aim of all 7.2 GW being fully operational by 2023. 

The planning procedure with National Grid Electricity Transmission (NGET) is to approach with the intended plans, receive viable options from NGET and to then apply formally on one of the options. Once approved, the generator is not allowed to consider the other options, and has 90 days to accept the terms and provide adequate liability cover, after which work can commence. The IPC planning process he described as a legal tickbox exercise with little flexibility or pragmatic value. 

EAOW’s interest is in their investment into generation, and they are not particularly interested in the engagement with alternative transmission technologies other than their 

requirement to deliver energy into the network as soon as safely possible. Transmission assets are, likewise, not an interest to EAOW. 

Living with the current regime 

Paul Hipwell, from No Moor Pylons, started this session with criticism of the existing IPC consultation processes and the National Policy Statements EN-1 and EN-5 as being adequate, from being too restrictively defined and not flexible enough to other considerations. In particularly, EN-5 has a controversial evaluation of the cost of undergrounding, does not consider wider environmental impact, and gives the impression that overhead powerlines are the de facto choice without strong evidence supporting an alternative solution. 

There are plenty of adverse effects of overhead powerlines that are not immediately obvious and very relevant to the context in which they are placed. Not only does terrain affect the cost of undergrounding, but in flat areas of natural beauty they can have an enormous direct effect on tourism and house value, and an enormous indirect effect on the well-being and happiness of those living in the area. 

Importantly, Paul pointed out that one of the biggest issues of fairly assessing alternative solutions was that they were not under the same legislative control (for example, subsea cabling falls under maritime legislation). 

John Foster, from the Suffolk and Essex Amenity Groups underlined that the entire system is based on an archaic model involving old technology and old systems of transport, and that much can be done towards developing a modern integrated solution for the 21st century. 

By 2021, there is to be a six-fold increase in energy export from East Anglia to the South East, 90% of which would be from offshore and coastal generation. Despite this, all transmission and distribution improves were to be overland. At the moment, it is estimated that only 3% of the average consumer’s bill is made up from related transmission and distribution costs, and that the impact of undergrounding cables at the consumer’s cost would have a very small impact (figures ranging from £1 to £10 per year per household). 

Morning Summary 

Sustainability has become a core industry priority 

Existing regulation is not conducive for integrated development 

Existing legislation is legalistic and not flexible or pragmatic 

Little specific values available for environmental and socioeconomic impact 

Capacity of existing network restricts generator’s choice, who are driven by delivery 

Subsea is normally unfeasible because no-one can volunteer to absorb the costs 

Emerging regulatory proposals 

Tom Luff, from DECC, started this session by presenting the EU targets for its member states, particularly the requirement that 20% of energy should be sourced renewably by 2020. Much of this talk was outlining the general principles in which the legislative framework operates, namely: 

DECC sets policy objectives 

Ofgem determine policy 

Industry implements policy 

The IPC uses NPSs to manage policy appropriately, and the new IPU has elected representatives responsible for final decision making. Dates of further developments were identified as follows: 

Jan/Feb 2011 – KEMA and IET report 

Spring 2012 – Revised NPS 

Spring 2012 – Ofgem review 

Spring 2013 – Ofgem price control 

Iain Morgan, from Ofgem, said that the regulator’s role was to prevent monopolisation, and that the primary focus was on energy pricing. They have a new apparent commitment to stakeholder engagement with the new coalition, and the key current project covers working towards the new price control in 2013. He drew particular attention to their latest RIIO model (http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=10&refer=About%20us/CL) 

Technological advances 

Colin Johnston and Steve Aughton presented some of Siemens’ latest technological advances with respect to power transmission, particularly the recent improvements to HVDC technology. Already overhead HVDC lines are in use elsewhere in the World, with a 1400 km line in China carrying 5 GW at 800 kV! Subsea and underground technology has also developed considerably in recent years, and 1 GW can now be transmitted safely in both. 

At the moment, estimates are that optimised integrated development of power transmission and distribution could make a potential customer saving of up to 25%, but the infrastructure is currently insufficient. At the moment, only point to point is the only successful implementation of HVDC, but there is much development work going into a more network orientated approach, particularly with regards to harnessing the wind power potential of the North Sea to take the supply where it was required throughout Europe. 

The really interesting development highlight in this talk was that of Gas-Insulated Transmission Lines (GIL) 

- http://electrical-engineering-portal.com/gas-insulated-transmission-line-gil. These offer theoretically possible links of over 70 km (although only up to 1 km are in active use at the moment), and offer huge advantages over traditional cabling techniques. They are completely quiet (without the hum), have no burn risks, no heat generation, and minimal EMF generation (an order of magnitude lower than traditional underground cabling). GIL installations are expected to run without maintenance for up to 35 years! 

Valuing the environmental and social impacts of transmission systems 

The final talk of the day was a true gem, and the highlight of the day with regards to how we assess the wider costs of powerlines. Allan Provins, from the consultancy firm EFTEC (http://www.eftec.co.uk/) presented some of the latest advances in modelling for socioeconomic costs and environmental impact. 

There are various considerations that fit outside of the direct market costs of implementing and of the possible solutions. These include impacts on local and national employment, equity and amenity. The goal of good CBA maximises not just profit and returns on investment, but also adequately encompasses “welfare” priorities: clean air, clean water, biodiversity, noise pollution, health and safety, and visual amenity. 

Whilst this sounds very hard to integrate with precise figures, there are many models that are used to give approximate fiscal value to the benefits gained. For example, people’s willingness to purchase houses away from bypasses and motorways with respect to clean air and noise pollution, or their willingness to purchase cycle helmets to improve their road safety, gives approximate financial values for how important these aspects of life are to individual members of the public. 

These costs include both use and non-use value – so, for example, costings of a forest may include the value of being able to harvest timber directly, may include people’s happiness at living near a forest, may include the ability to create local jobs running forest tour guides / cycle centres, and may include such things as the forest’s value as flood defence. There is considerable research into providing relatively sophisticated models that encompass this level of detail available already, albeit not widely used in industry practice. 

There are some very interesting papers published on the issue of undergrounding. Day et al 2001 found that the average household would be willing to pay in the order of £60 to £80 per year if affected visually by the presence of a powerline. Navrud et al 2008 found that the cost of damage to visual amenity alone was larger than the cost of undergrounding, both of which give weight to the idea of improving CBA models being a valid way of demonstrating the considerable local value to not having overhead powerlines and the association pylons. 

Afternoon Summary 

DECC is very focused on renewable sources 

DECC values setting formalised legislative frameworks around the planning process 

DECC presented little to no content regarding visual amenity issues 

OFGEM are focused on keeping consumer cost as low as possible 

OFGEM seem cautious of ideas that may increase burden of cost on the consumer 

Siemens have made impressive advances – GIL sounds worth investigating 

EFTEC are light years ahead of the industry on cost modelling 

Many of the costs/benefits NGrid say can’t be modelled precisely already have been! 

Key Points from the day 

There are a number of issues that have all become intertwined. It is clearly understandable that there is a cost involved with undergrounding, and also understandable that National Grid and other distribution companies don’t feel like the cost should be borne by them, as there is no apparent return on the investment. 

This would be different if there was already a case history of liability claims against the industry by local councils to reclaim their losses directly, but this hasn’t happened to date, and I have a suspicion few would dare to try. 

However, the new coalition with its focus on climate change, sustainability, renewability, and to some degree amenity (at least, DECC conceded it as an important concern), opens a valuable door. If there are already well developed models that can assess actual values of environmental and societal impacts, then these can be offset against the cost involved in undergrounding (or other alternatives). There are two possible routes that I can see to recoup the investment costs: 

1. The legal system could find the industry liable for all costs associated with environmental and socioeconomic impact, making it in the interests of the industry to make a cost benefit analysis that fully incorporates those factors. 

2. The government could subsidise the industry for the additional costs of undergrounding (or alternatives). 

3. OFGEM could pass the additional burden of cost onto the consumer’s energy bills – so Industry still incorporate the factors, and recover their cost through the end user of the electricity. 

Taking my naïve hat off, I suspect 1 has little chance (although legal expertise would be infinitely more valuable than my hunch!), 2 would not happen whilst the government is still so insanely tight with money, and 3 is worth investigating. Evidence is demonstrating that undergrounding all new developments would put in the region of £10 per year per household onto their energy bill, which sounds intuitively like a small burden to pass on to the consumer. I asked a public question asking for what evidence that OFGEM has that the consumer is unwilling to bear this burden, particularly in the light of number of elected representatives and their constituents clearly feeling that this is a tiny sum to ask for the advantage of not having overhead powerlines across their landscape. Their reply was that they didn’t really know, and that further research was probably an urgent need!