1. CAP169 02/04/09

2. 2 Today  Agree Terms of Reference  Timetable going forward  Discussion of Part 1 and Part 2 Finalise and agree  Discussion of Part 3 Discuss and develop proposal including any alternatives

3. 3 Proposed Timetable – including paper to May GCRP April 2ndCAP169 WG meeting April 21 st CAP169 WG meeting w/c April 27thLaunch of WG consultation w/c May 11thClose of WG consultation w/c May 18th CAP169 WG meeting (assessment of consultation responses) w/c May 18 th Paper submitted to GCRP (or earlier if possible) May 21 st GCRP June 11 th WG report circulated for comment (last date possible) June 18 th CUSC Papers Day June 26th CUSC Panel

4. 4 Parts 1 and 2 Part 1 – Provision of reactive power from Power Park Modules Part 2 – Large Power Stations

5. 5 Part 3 – Distribution Network Imposed Restriction  Considering the possible alternatives to the original proposal discussed in the last meeting  National Grid has reviewed internally and developed an initial view based on our interpretation of what these alternatives may entail

6. 6 Part 3 - Alternative Proposal 1? Restriction applying to all embedded generators unable to receive any form of instruction to amend Mvar output (removal of reference to 0Mvar)  National Grid is keen for the amendment proposal to be drafted tightly to ensure it does not cover all restrictions that may be in place (where access to the reactive power service is possible)  Ability to turn off payment (through instruction to 0) is critical for the proposal (to ensure no inappropriate payments are made) – therefore it is key that 0Mvar is referred to explicitly in the proposal  It is unlikely that National Grid would support this as an alternative

7. 7 Part 3 - Alternative Proposal 2? Remove capability requirement from embedded generators under connection restrictions  The Grid Code requirement for steady state capability inherently provides dynamic capability  The 20% payment recognises the dynamic reactive capability which assists with the control of voltage under fault conditions  It is unlikely that National Grid would support this as an alternative

8. 8 Part 3 - Alternative Proposal 3? Generator’s able to comply with “restricted instruction” would receive full payment (i.e. generator unable to be instructed through 0, but can be instructed between x and y. X would become nominal 0 and when instructed to this level would receive no/20% payment)  Significant settlement system changes would be required to both set up and implement on an ongoing basis  This proposal would be complicated to administer (requiring record of a new “0” level)  The proposal may incur additional cost of balancing the Mvars elsewhere on the system (to counter the non-0 value)  National Grid does not believe that the additional costs associated with such changes would bring the necessary benefits  It is unlikely that National Grid would support this as an alternative

9. 9 Part 3 - Alternative Proposal 4? Generator does not get paid when operating in a specified range (i.e. if a range restriction is imposed between set parameters, which do not include 0, no payment would be made when operating within this range. When able to receive an instruction outside of these parameters appropriate payment would be made)  This appears to be effectively the same as the original amendment proposal, with no payment made when operating in the restricted range  Payment would be made when notification is received that the restriction has been removed, and following this an instruction from NGET may be received  National Grid would have a concern if such notifications were received on a frequent basis (e.g. regularly across one day) then it may become difficult to administer. This may be unlikely to arise on a frequent basis, and as such were this alternative implemented with this result a further amendment could be raised to address if necessary  If a proposer wishes to take this forward, National Grid may support this as an alternative

10. 10 Part 3 - Alternative Proposal 5? Connection and operational restrictions  CAP169 does not cover operational restrictions, and National Grid has no intention to raise an alternative to change this  However, National Grid would consider that any restrictions lasting more than 12 months should be considered a connection condition Long-term restrictions such as this would be as a result of the configuration of the DNO network and embedded connection to this network, rather than representing a short term operational restriction  This would require an alternative to the original proposal to be raised  National Grid will look to consider this further and work up a paper outlining the proposal, including any relevant Grid Code changes that may be required

11. 11 Part 3 - Alternative Proposal 6? Removal of part 3

12. 12 Alternatives  A paper is required outlining any alternatives proposed: Difference to original proposal Why proposer believes it offers a better solution (to baseline and the original proposal) If possible an indication of what the required changes would be  (The CAP146 WG report provides an example of papers detailing alternatives raised)

13. 13 Grid Code Changes Grid Code change needs to reflect:  Network Operator communication of restrictions in place  Possible means for further communication of restriction being removed