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Local asset charging arrangements

Local asset charging arrangements. DCMF April 2008. Agenda. Introduction Progress to date Options Changes to TNUoS Specific treatment of generator connections Specific treatment of distance to zonal hub Local asset charging of substation assets

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Local asset charging arrangements

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  1. Local asset charging arrangements DCMF April 2008

  2. Agenda • Introduction • Progress to date • Options • Changes to TNUoS • Specific treatment of generator connections • Specific treatment of distance to zonal hub • Local asset charging of substation assets • Change to connection/use of system boundary • Summary of pre-consultation responses

  3. Introduction • Treatment of assets local to generation connections within the TNUoS methodology identified as requiring a more cost-reflective approach • SQSS design variations for demand and generations allowed, provided this does not: • Reduce the security of MITS • Result in additional investment or operational costs • Compromise licensees statutory or licence obligations • PLUGS ‘Shallow’ connection charging methodology introduced in April 2004 • Many connection assets moved into infrastructure • Capital savings not reflected in TNUoS charges

  4. Progress to date • GB ECM-06 final proposals submitted to the Authority in November 2006 following consultation • Generic substation and circuit discounts derived from TNUoS • Subsequently vetoed in February 2007 following impact assessment • Considered as insufficiently cost-reflective • GB ECM-09 consultation published in November 2007 • 12 responses received, split in support of • Discount which is consistent with original TNUoS charge • Discount which reflects the actual savings • Not possible to achieve full cost reflectivity for local asset savings and avoid inappropriate signals • GB ECM-11 pre consultation published in February 2008

  5. GB ECM-11 Pre Consultation • 3 high-level options presented • Changes to TNUoS • Specific treatment of generation connections • Specific treatment of distance to zonal hub • Local charge for substation assets • Change to connection / use of system boundary • Charging boundary redefined so local generation assets are charged as connection assets • Full costs charged to specific user, with apportionment rules

  6. Current arrangements “Local” and “wider” circuits subject to the same expansion factor (£/MWkm) “Local” and “wider” circuits different construction type and costs (particularly at 132kV) Specific treatment of generation connections “Local” assets removed from transport model Separate treatment of “local” assets with more specific expansion factor and security factor G G y km G y km x km x km D D Changes to TNUoS Specific treatment of generation connections (1)

  7. Changes to TNUoS Specific treatment of generation connections (2) • Sub-options • Generator only vs. marginal investment • Shared radial spurs • Interconnected tees • Applicable voltages • 132kV only • All voltages • Local expansion factors • Generation zone/ TO region/ GB • construction type/ circuit rating • TEC or CEC • Post TAR – combination of short term and long term access

  8. G1 +100MWkm +90MWkm +80MWkm D Changes to TNUoS Specific treatment of distance to zonal hub (1) • Current arrangements • Transport model used to calculate nodal costs based on standard expansion factors • Tariffs based on zonal costs; weighted average of applicable nodal costs • Distance to zonal hub, nodal charges based on: • Zonal charge • Difference between nodal and zonal MWkm • Difference between “local” and “wider” EF For G1, (75MWkm+ 25MWkm×[EF2-EF1] x SF) G1 +100MWkm G2 G2 +80MWkm Zonal hub +75MWkm For G1 & G2, 90MWkm For G2, (75MWkm-5MWkm×[EF2-EF1] x SF) D

  9. Changes to TNUoS Specific treatment of distance to zonal hub (2) • Sub-options • Local Expansion Factors • Volume weighted for Gen zone or TO region • Simplified model (last connecting circuit) • Average of generation connection circuits • Local Security Factors • Simplified assumptions • Seculf • Selection of Zonal Hub • Generation marginal cost weighted average • Lowest generation node • Demand marginal cost weighted average

  10. Local asset charging of substation assets • Required to reflect the full cost of local assets • A £/kW average cost for the remote end substation • Zonal • TO region • GB

  11. Change to connection/use of system boundary • Deepening of the charging boundary exposes the User to the full specific cost of asset investment • Complexity with applying a consistent boundary • Options • 132kV only or all voltages • Connection asset sharing methodology • TEC • CEC • Fault level contribution

  12. Summary of responses • 9 responses received • Support for Option 1 • Some support for Option 2 – further analysis needed • Very little support for deepening charging boundary • Support for including Substation element in charge

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