1. CAP169 BSSG 12/03/09

2. 2 Today  Recap on developments to date  Discuss and agree Terms of Reference for the group  Begin to work through proposal, capturing: Areas of consensus in proposal Areas of concern in proposal  Consider timetable going forward

3. 3 Progress to Date  BSSG 27/01/09 Outlined proposals with initial exchange of views  Grid Code 05/02/09 Outlined proposals and invited participation in WG for development  CUSC Panel 27/02/09 Amendment Proposal formally raised (CAP169) Recommendation that CAP169 proceed to WG, BSSG actioned to act in capacity of WG Standard WG period of 4 months – returning June 26th (with acknowledgement from the Panel that an extension may be required on the basis of other ongoing resource requirements) Invitation for participation issued  In advance of today Indicative legal drafting for Amendment Proposal circulated Materiality assessment of DNO restrictions circulated Draft Terms of Reference Circulated

4. 4 Terms of Reference  Based on generic Terms of Reference used for CUSC Working Groups  Adopted to include actioning of BSSG and Grid Code participation  Key points to note/agree  ToR apply to joint CUSC/Grid Code WG under CUSC governance  2 week consultation period  Membership  Definition of WGAA  Working Group Alternative Amendment definition An alternative amendment to the Amendment Proposal developed by the Working Group under the Working Group terms of reference (either as a result of a Working Group Consultation or otherwise) and which is believed by a majority of the members of the Working Group or by the chairman of the Working Group to better facilitate the Applicable CUSC Objectives than the Amendment Proposal or the current version of the CUSC

5. 5 Joint Governance Process Joint CUSC and GCRP Working Group under CUSC governance (including Working Group consultation) Working Group Report to CUSC Panel Company Consultation Panel Vote Report to Authority Working Group Report to GCRP Grid Code Consultation Report to Authority

6. 6 CAP169 – The Proposal  Raised by National Grid with the intention of improving reactive power arrangements within the CUSC  With changes proposed in relation to: Power Park Modules Large Power Stations Embedded Generators  Taking each section in turn, we intend to: Summarise the proposal (particularly for the benefit of those who did not previously attend the BSSG) Outline the specific changes proposed Take any initial comments

7. 7 Power Park Modules – The Proposal  Grid Code CC6.3 already amended to incorporate reactive capability requirements from Power Park Modules  Corresponding changes are required to CUSC  The Amendment Proposal is designed to change current arrangements to facilitate this, in particular:  introducing additional referencing to reactive power from Power Park Modules  capability tables within the Mandatory Services Agreementss  The proposal also looks to introduce similar reference to DC Converters, which has also been previously changed in the Grid Code (CC6.3.2)

8. 8 BM Unit / CCGT Step Up Transformer BM Unit Template for MSA (CUSC Schedule 2 Exhibit 4 and associated text) record Reactive Capability at Generator Stator Terminal and Commercial Boundary

9. 9 Directly Connected Wind Farm in England and Wales (using current definitions) 0.69/33kV Commercial Boundary Power Park Units Grid Entry Point 33kV400kV 0.69/33kV 33/400kV Power Park Units Grid Entry Point 33kV400kV Grid Code CC 6.3 Reactive Capability requirements at Grid Entry Point (E&W). HV side of transformer for Scotland or User System Entry Point if embedded Recording information at Generator Stator Terminal and/or Commercial Boundary not sensible

10. 10 Proposed Solution – ‘Move’ the Commercial Boundary 0.69/33kV Commercial Boundary Power Park Units Grid Entry Point 33kV400kV 0.69/33kV 33/400kV Power Park Units Grid Entry Point 33kV400kV Commercial Boundary  CUSC allows this to be achieved in the site specific MSA  Allows for all types of connection to be accommodated

11. 11 Current Definitions - Commercial Boundary “(unless otherwise defined in the relevant MSA), the commercial boundary between either The Company or a Public Distribution System Operator (as the case may be) and the User at the higher voltage terminal of the generator step-up transformer;” CUSC Section 11  Not sensible to uniquely define the Commercial Boundary for Power Parks in CUSC  Proposed solution - use the individual MSAs to document where the Commercial Boundary will be (normally it will be at the Grid Entry Point or User System Entry Point for embedded)

12. 12 Current Definitions - Generating Unit “Unless otherwise provided in the Grid Code any apparatus which produces Electricity”, CUSC Section 11  This definition leads to a solution at the individual turbine level rather than at the Power Park Level  Changes to Grid Code definition would have other impacts  Proposed solution - any text in CUSC which refers to a “Generating Unit” should be changed to “Generating Unit or Power Park Module”  Similar reference to DC Converters required

13. 13 Directly Connected Wind farm in Scotland 0.69/33kV Commercial Boundary Power Park Units 400kV 0.69/33kV 33/400kV Power Park Units 33kV 400kV Grid Code CC 6.3 reactive capability requirements at HV side of transformer for Scotland (User System Entry Point if embedded). Metering may be at LV side of transformer TO in Scotland can own step up transformer

14. 14 Power Park Modules - Changes Proposed (1) Section 1: Applicability of Sections and Related Agreements Structure  Add referencing to Power Park Modules and DC Converters (1.3.3) Section 4: Balancing Services  Add referencing to Power Park Modules and DC Converters (4.1.1)  MVAr redeclarations clause updated to include Power Park Modules (4.1.2.3)  Addition of Power Park Modules in the Grid Code obligation to provide reactive power clause (4.1.2.8) Section 11 Interpretations and Definitions  DC Converter  Power Park Unit  Power Station

15. 15 Schedule 2, Exhibit 4: Mandatory Services Agreement  Addition of Non-Synchronous Generating Units to applicability clause (3.2.1)  3.2.2 (demonstration of Grid Code compliance) expanded to include non-synchronous generating unit, DC Converter and PPM  3.3.1 expanded to include 2 further sections for PPMs, referring to new capability tables in appendix 1  Appendix 1, Part 1 Capability Tables Reference to applicability of different tables Introduction of specific Capability Tables for Power Park Modules to capture reactive capability at 100%, 50%, 20% and 0% rated MW Table A reflects capability at commercial boundary Table B capability at Grid Entry Point (or User System Entry Point) for situations where metering is not located at the commercial boundary  More detail added to Part II table on Meters and Aggregation Principles  Additional Further Definitions Commercial Boundary Grid Entry Point Power Park Modules - Changes Proposed (2)

16. 16 Schedule 3 Balancing Services  Add referencing throughout to Power Park Modules and DC Converters  Recognition of reactive power from Power Park Modules as an Obligatory Reactive Power Service (1.1 and 1.2)  Appendix 3, Section 2 - QC and QR definitions adjusted to cater for different categories of Power Park Modules  Appendix 5, 4.1 – submission of other technical information in relation to a reactive market tender updated to include Power Park Modules  Appendix 8 – a new Part 3 for formulae to convert reactive capability at the generator stator terminals to HV and Commercial Boundary Power Park Modules - Changes Proposed (3)

17. 17 Methodology for Aggregation of Reactive Power Metering  Adapt for Power Park Modules as required to accommodate potential metering configurations of Power Park Modules Can be developed for discussion in the WG Power Park Modules - Changes Proposed (4)

18. 18 Large Power Stations – the proposal  Current provisions require that National Grid is only “obliged” to conclude or amend MSAs if the Reactive Power capability of the Generating Unit is 15Mvar or more – equating to approximately 45MW  Large Power Stations are defined as those which in: NGET’s Transmission System have a Registered Capacity of 100MW or more; SPT’s Transmission System have a Registered Capacity of 30MW or more SHETL’s Transmission System have a Registered Capacity of 10MW or more  All three categories of Large Power Stations have the obligation to provide a Reactive Power Service  This proposal seeks to extend this obligation whereby, upon request from a Large Power Station with a reactive capability below 15Mvar, National Grid is obliged to conclude a MSA  The change for Large Power Stations proposed: Schedule 3: Default Payment Arrangements  Additional clause to reflect this introduced to 2.8 and Appendix 6 (1.2)

19. 19 Embedded Generators – the proposal  Some embedded generators have DNO connection conditions which prevent instruction from National Grid to the embedded generator to reduce output to 0 Mvar Resulting in it not being possible for National Grid to instruct the relevant generator with regards use of Reactive Power across the Transmission system  The Proposed Amendment seeks to facilitate partial payment to generators under such restriction conditions, reflecting: The Grid Code requirement and dynamic benefit from those under restriction That it is not possible for National Grid to despatch Reactive Power from such generators to 0 Mvar in line with system operation requirements  Payment under such restrictions would be in line with current arrangements in CUSC Schedule 3, Appendix I (2) whereby a 20% payment is made in the event that certain conditions are not met  A communication is required to National Grid to trigger acknowledgment and corresponding action as a result of the described restriction – best received from DNOs and placed in the Grid Code

20. 20 Embedded Generators – the changes proposed Schedule 3, Appendix 1  A new point 2(e) added whereby 20% would be made when a restriction on despatch through 0 is in place  Based on a notification from the Network Operator Schedule 3, Appendix 2  Reference to the change as above Section 11 Interpretations and Definitions  Network Operator Grid Code change

21. 21 Next Steps  Comments in relation to the proposal to be circulated, including on the suggested legal drafting to interpret the proposal  Any initial indications of alternatives that might be considered to be circulated

22. 22 Potential Timetable March 12thBSSG meeting - Draft ToR/timetable - Overview of proposal, capturing initial areas of concern/consensus w/c April 6 th ? (will 1 meeting be sufficient?) BSSG meeting - Assessment of original proposal - Discussion of any draft alternatives - Discussion of implementation - WG consultation May 1 st ?Launch of WG consultation May 15 th ?Close of WG consultation May 20 th ?BSSG meeting - WG assessment of consultation responses/ requests - Draft WG report June 11 th WG report circulated for comment (last date possible) June 18 th Papers Day- Report circulated to Panel June 26thCUSC Panel- Panel consider report