Grid Issues Charles Davies Commercial Director, National Grid Company British Wind Energy Association April 2002

Outline  Overview  National Grid obligations  Reinforcements  Commercial/regulatory/charging issues

N ational Grid Obligations  owner & operator of high voltage transmission system in England & Wales  offer connection to anyone who applies (within 3 months)  offer use of system to anyone who applies (within 28 days)  charge on the basis of approved charging principles  wind generators treated like any other generator - but is tailoring needed?

Generic Transmission Connection Generation Circuit Grid Substation Generation Spur Deeper Infrastructure Generation OwnedShallow Connection Charge TNUoS Tariff

National Grid Obligations - Issues  If connection interface is onshore, then existing procedures address:  direct transmission connection; or  ‘use of system’ if distribution connected  However, do obligations extend offshore? If so  are connections regulated or not?  are charging principles same as onshore?

ACS Power Flow Pattern for 2003/04 generation demand SCOTLAND UPPER NORTH NORTH MIDLANDS CENTRAL ESTUARY SOUTH WESTFRANCE B1 B2 B3 B7 B

Reinforcement - Issues  Potentially significant costs (UK studies in progress)  Basis of investment  Contractual?  Strategic?  Market determined? (Tx Access?)  Timing/consents  Reinforce then connect?  Connect then reinforce?

Commercial, Regulatory & Charging  Shallow connection (for transmission):  minimum capital cost scheme  charges based on scheme specific costs  sharing with subsequent users  Deeper infrastructure:  guarantees sought from connectees  but costs shared via TNUoS tariff

Connection - Issues  Individual transmission connections expensive for wind developments  Sharing connections reduces costs to connectees  Is there a role for National Grid in finding partners?  Are changes to connection charging principles needed? – connection tariff – shallower boundary

System Infrastructure Charges  Based on contracted developments  locationally based tariff – reflects incremental network reinforcement costs on both demand and generation who use capacity  capacity-based charges – highest registered capacity of directly connected generator – triad demand contribution (basis of embedded benefit)  Future review likely (eg. Tx Access)

Conclusions  Wind can get access to the transmission network now  Potential benefits in tailoring processes to achieve necessary connection sharing  Need to clarify off-shore ground-rules  Significant challenges from access review  Constructive dialogue underway  “Getting Connected Guide” see

National Grid UK overview Scotland France Key Statistics 2001 Installed Capacity67.9 GW Max Demand 53.2 GW Energy Supplied303 TWh Route km 7650 km No. of Substations 300