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Project Code/Version No

Low Carbon Networks Fund

Full Submission Pro-forma

Section 1: Project Summary

1.1 Project title

1.2 Funding DNO

1.3 Project Summary

1.4 Funding

1.5 List of Project Partners, External Funders and Project Supporters

1.6 Timescale

Project Start Date Project End Date

1.7 Project Manager contact details

Contact name & Job title

Email Address

Telephone Number

Contact Address

External Funding (£k)DNO extra contribution (k)

Second Tier Funding request (£k)

ENWLT204/01

Customer Load Active System Services (CLASS)

Electricity North West Limited (Electricity North West)

Is there an opportunity for DNOs to operate their networks more flexibly, by using dynamic voltage control

technologies to increase asset utilisation and power system flexibility?

The CLASS Project will show how a DNO could use innovative voltage management to provide new demand

response and utilise it to provide added value for customers. At the heart of CLASS is the natural

relationship between voltage and customer demand. CLASS will demonstrate how this relationship can be

used in a low cost, rapidly deployable Solution that can provide a range of demand response capabilities and

network voltage regulation services. The Trials will demonstrate that the Solution can be applied to reduce

peak network demands and to provide a low cost means of voltage management on networks with high

volumes of distributed generation (DG). In addition at GB level it provides a new mechanism for frequency

management and voltage control to support the System Operator. CLASS is highly transferable and can be

readily implemented by all DNOs. The Project will also deliver 4 key outputs: the methodology to allow the

Solution to be deployed across GB; an understanding of the changing relationship between voltage and

demand; confirmation that the techniques do not affect customers or compromise a DNO's existing demand

control obligations; and assurance that there is no detrimental effect on asset health. CLASS has the

potential to defer £90 million of future distribution network reinforcements and provide an attractive

alternative to the frequency control and reactive power services offered by traditional sources.

Impact Research - Customer Engagement & Survey

Siemens UK Ltd, General Electric UK Ltd/ Parsons Brinckerhoff Ltd - Technical Support

National Grid - ICCP installation, Trials and NETS SQSS Change Proposal

Chiltern Power - NETS SQSS Change Proposal

The University of Manchester - Data capture/ analysis, modelling and dissemination

Tyndall Centre for Climate Change - Carbon impact assessment

January 2013

September 2015

Steve Cox, Head of Future Networks

steve.cox@enwl.co.uk

01925 846827

Electricity North West Limited

Network Strategy

304 Bridgewater place

Birchwood Park

Warrington

WA3 6XG

£ 910

£7 174

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Section 2: Project Description

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The CLASS Project proposes a novel, low risk way of operating existing assets to increase the flexibility and

use of the distribution network deriving significant benefits for DNO customers

Aims and Objectives

The problem/challenge which needs to be resolved in order to facilitate the low carbon future

As GB moves to a low carbon future, electricity demand and the level of renewable and low carbon

generation is expected to increase significantly. This decarbonisation pathway will introduce a number of key

challenges for the operators of GB electricity networks with the potential to necessitate expensive capital

investments.

1. High Peak Demands

The expected doubling of the demand for electricity by 2050 will progressively erode existing network

capacity at Grid and Primary substations. The adoption of Low Carbon Technologies (LCT) by customers will

occur at different rates across the network with some groups exhibiting a very rapid rise in demand and

others a more gradual increase. Part of this increase will be offset by customer energy efficiency measures

and the connection of additional low carbon Distributed Generation (DG). When responding to such changes

the DNO needs to assess if the increase is permanent and warrants immediate intervention or will be

eventually offset by DG so that network reinforcement can be avoided or delayed. The rate of apparent

demand increase can also be aggravated by cold weather and other short term factors. To ensure that only

efficient investments are made (for reinforcement, Demand Side Response (DSR) etc), the DNO needs

enhanced flexibility to both manage the immediate rise in peak demand, without unacceptably constraining

customer activity and to retain optionality in its response for as long as possible. In order to defer or avoid

potentially expensive interventions, a new technique is required to enable short term rapid rises in peak

demand to be adequately managed and met using existing assets.

2. Voltage Control

A new challenge faced by all network operators is managing the unacceptably high voltages that can occur

on networks during periods when high DG output coincides with low local demand. Ever improving energy

efficiency measures, including decreasing lighting loads overnight, have significantly exacerbated this

problem in recent years. A low cost and quickly deployable alternative to traditional expensive asset

solutions used to mitigate these excessive voltages is needed.

3. Excess Generation

As the volume of renewable generation increases there is an increasing probability that the available

generation within a network may exceed the demand or network capacity leading to the need to constrain

the generation output. This constraint acts to decrease the efficiency of the generation and hence drive up

costs to customers. A new technique is required that minimises the constraint of renewable sources such as

wind and solar.

4. Response and Reserve

In the period out to 2050, the generation mix in the UK is expected to change significantly from that of

today, with increased amounts of low inertia intermittent generation connected to the system along with

large nuclear generating units that will increase the largest secured generation loss from 1 320 MW to 1 800

MW. As a consequence there will be an increased need to access system reserves to maintain overall system

stability to help avoid cascade tripping events. Owing to the high financial and carbon cost of conventional

spinning reserve, fast acting and flexible demand management for frequency, and system balancing is

expected to become an increasingly important part of future system operation. This is of particular benefit

for local power island balancing within a DNO network, and also offers potential advantages for future

Distributed System Operator (DSO) network management.

To be fully cost-effective, solutions may span traditional company boundaries. The CLASS Method is a case

in point and this proposal identifies where this arises and addresses equitable treatment for distribution

consumers.

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The CLASS Method being trialled to solve the Problem

CLASS is a highly innovative, easily implemented and low cost solution which enables DNOs to deliver

significant savings to customers using existing assets to address the above issues. Specifically CLASS will

help DNOs to enable customer LCT connections whilst managing peak loads on the network, and timing

DNO's eventual interventions efficiently. It will also provide a solution to network voltage control problems

on the entire GB network, assist in reducing the requirement to constrain off low carbon generators for

network balancing and provide a low cost and effective system stability response facility.

The key benefits of CLASS are expected to include:

• Acceleration of the decarbonisation of the UK energy supply;

• Reduction in the DNOs requirements for substation reinforcement by reducing system peaks.

• Provide rapid distribution network peak loading relief (of limited duration) bridging the operational time

period needed until other forms of demand side response (eg via aggregators) or network

reconfiguration actions come into effect in real time

• Boost demand in DG dominated DNO networks and hence balance the network flows thereby maximising

the output of DG for a given network capacity;

• Provision of frequency control at a fraction of current cost & significant reduction in the need and

therefore cost for carbon based spinning reserve;

• Reduction in costs of the ancillary services market borne by all electricity customers.

These benefits can be realised without compromising the quality of supply to customers or impacting the

DNOs ability to meet existing demand control obligations.

There are three key themes which comprise CLASS:

Demand reduction at time of system peak

The ability to actively reduce peak network demand in a manner undetectable by customers has the

potential to significantly reduce the need for network reinforcement and therefore the cost borne by

customers. Critically peak demand management using CLASS allows DNOs to manage demands whilst future

market mechanisms, including smart meter demand signals and the wider DSR market evolve and mature in

their effectiveness to elicit a customer demand response. CLASS also retains optionality for networks to

reach new self-balancing points using DG and efficiency measures rather than reinforcement. There are two

distinct advantages to demand reduction using CLASS during periods of demand peaks:

1. Where in a given network demand rises quickly as is forecast to be the case during the latter half of

RIIO-ED1 and during ED2, CLASS provides a low cost, quickly deployed peak demand reduction

technique during the period during which other smart grid techniques such as storage, network meshing

and active network management are developed, perfected and deployed.

2. Where a network approaches its capacity limit but demand may or may not exceed capacity in the

medium term, CLASS allows deferment of reinforcement until such time as the required capacity is

clearly known to be an issue. CLASS potentially allows deferment of costly decisions in marginal

situations against a highly uncertain future until the situation becomes clearer.

Voltage Control

The operation of existing Primary transformers in a staggered tap configuration provides a highly flexible

and effective means of absorbing reactive power within a network hence controlling potentially unacceptable

over-voltages. The method can deliver reactive power requirements quickly in real time, in a highly

configurable and flexible manner, so as to meet the needs of both the DNO and the GB System Operator

(NETSO). Traditional mitigation measures include installation of reactive compensation assets such as

reactors, constraint payments to out-of-merit generation for VAr support and switching out of long lines to

reduce capacitive gain. This problem of voltage regulation will progressively worsen as system power factor

is further eroded by non- linear loads and by high volumes of non-synchronous DG such as solar PV.

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Technology Explanation

The electrical demand (by which we mean the power consumed at any point in time as measured in kilo

Watts (kW) or Amps) of a resistive load is proportional to the square of the voltage. As voltage increases the

kW demand increases and vice versa. The effect of any change in voltage is dependent on the magnitude of

that change - for example a 2% increase/decrease in the voltage in the home would make a kettle boil

approximately 4% (or about 8 seconds!) faster or slower. Importantly the total energy consumed by a given

load such as a kettle does not change and hence the cost to the customer of boiling the kettle does not

change rather it just boils very slightly slower or faster. The exact relationship between network demand

and voltage depends on the type of loads installed at customers' premises; for example the demand of

electronic devices such as an LED TV is not directly proportional to voltage unlike a kettle. Understanding

the relationship between voltage and demand in a given network allows the network operator to manage the

voltage in such a manner as to bring about small changes in demand when needed. When applied to large

networks or the entire GB network these small changes in the demand of customer appliances aggregate to

become very significant, for example a 2% reduction in voltage to customers across the GB network could

provide a 2-3% reduction in national demand which is equal to the output of a large nuclear power station.

Equally a boost of 1-2% would provide an increase in demand sufficient to absorb the output of several

large wind farms. CLASS allows this response to be used both quickly and effectively across groups of any

size and can be initiated automatically or on demand by the network operator when needed.

Will customers notice? In a DNO network the system voltage is regulated by altering the tap position of

Primary transformers. Each tap changes the voltage by about 1.5%, with a typical tap range of about 20%

available on each transformer. A pair of transformers feeding say 20,000 customers will tap up and down

typically between 2-20 times every day during the course of normal operation. The resultant changes to

voltage are so small as not to be noticeable by customers.

If a pair of transformers feeding a group of customers are operated at different tap positions, ie with

“staggered taps”, a circulating current is introduced around the pair. The circulating current decreases the

network power factor and effectively absorbs reactive power from the upstream network. The consequential

increase in reactive demand reduces network voltages higher up in the grid but leaves customer voltages

unaffected. This technique is highly effective in controlling potential unacceptable high voltages on the 33,

132, 275 and 400kV networks.

This paired arrangement for Primary transformers can also be utilised to deliver a very fast demand

response which can be used to automatically balance a network in the event of loss of a large generation in

feed. For example, if one of the pair is disconnected, supplies are still maintained to all customers in the

group by the second transformer but the voltage supplied to the group will instantaneously reduce by

between 4 - 8% triggering a similar instantaneous demand reduction in the group. When aggregated

across many substations, this response is sufficiently large to counteract the loss of a major power station.

CLASS allows this response to be delivered in a coordinated and controlled manner which meets the needs

of the DNO for network balancing and meets the criteria for primary and secondary frequency response set

by the NETSO.

Section OC 6 of the Grid Code allows National Grid to instruct DNOs to reduce demand by up to 20% in four

stages, or under certain circumstances up to 40% in eight stages. This is normally only used under extreme

conditions when all available sources of reserve generation have been exhausted and the only option

available to balance the system is to reduce demand. Demand reduction can be achieved either through

voltage reduction or direct disconnection of loads. It has historically been assumed that the first two stages

can be achieved through voltage reductions with a 3% voltage reduction providing a 5% demand reduction

and a 6% reduction (maximum allowable under the NETS SQSS) providing a 10% demand reduction.

Building upon existing infrastructure deployed by DNOs to meet these demand reduction requirements,

CLASS aims to show that at least a 1.5% voltage change from transformer tap operation will deliver a

predictable and controlled demand response which when aggregated at a point in a network is adequate for

demand management, whether locally or nationally whilst at the same time not compromising the DNOs

ability to continue to meets its demand reduction obligations or impacting on the quality of supply to

customers.

To quantify and understand the effect of applying the above voltage regulation techniques it is proposed to

supplement Electricity North West's existing network monitoring equipment at various tactical locations

across the Trial networks, including health monitoring equipment on the tap changers of Primary

transformers. This quantification exercise will cover all load groups types (city centre - rural) and will

provide a valuable prediction tool for determining demand voltage relationships for the GB network.

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Customer Effects

To demonstrate customers are not adversely affected by the changes in voltage described above, CLASS will

survey customers through the Trial period. Prior to engaging customers Electricity North West will use the

learning from all existing LCN Funded projects on their customer engagement experiences and use their

learning to shape our approach. Given that the small variations in voltage used by the Method are already

routinely experienced by customers many times each day, Electricity North West do not expect customers to

be negatively affected at all. The network monitoring equipment will quantify the extent of any existing and

future affects.

The CLASS Trials being undertaken to test that the CLASS Method works

The CLASS Method will determine that the application of innovative techniques to existing assets will deliver

a flexible demand response to help address the key network challenges highlighted above. To ensure that

Trials deliver the results and learning that is transferable to all UK DNOs, the CLASS Method will be trialled

on 60 Primary substations across its network, representing 17% of the Electricity North West's total network

and serving around 350 000 customers; approximately 348 500 domestic and 1 500 commercial customers.

The Project will undertake three main Trials; described in detail below, with a high level summary shown in

tabular form in Table 1:

Trial 1 will investigate the voltage / demand relationship from the normal increment and decrement of

system voltage at Primary substations across an annual period. The outcome from this Trial is a voltage /

demand relationship matrix, developed by The University of Manchester, which describes mathematically the

relationship for every half-hour in a year for each group type. Additionally this work will also provide a

simplified guidance for practical application in updating standards and power system modelling assumptions.

Trial 2 will investigate the viability of each of the proposed CLASS techniques in delivering a demand

response, specifically:

• Demand Response for Peak Reduction at Primary substations - The test regime will investigate the use

of a demand response, initiated by a voltage reduction, to manage the peak demand at a Primary

substation. The outcome of this Trial is the confirmation that a demand response provided at the peak

demand of a Primary substation (normally in winter) can defer network reinforcement;

• Demand Response for Frequency Response 1 support to NETSO - The test regime will investigate the

use of a low frequency relay to switch out one transformer of a standard Primary substation and quantify

the demand response. The outcome of this Trial is confirmation that a very fast demand response (ie

<0.5 seconds) can be provided to meet the NETSO criteria for use by the DNO or NETSO;

• Demand Response for Frequency Response 2 support to NETSO - The test regime will investigate the use

of demand response as a means of providing fast frequency response to the NETSO through the lowering

of a Primary Substations taps. The outcome of this Trial is confirmation that a fast demand response (ie

<10 seconds) can be provided to NETSO or DNO.

Trial 3 will investigate the viability of the tap staggering technique for the provision of reactive power

services (ie voltage regulation) to NETSO and DNO. The test regime will initiate the offsetting of the tap

positions across the pair of Primary transformers and will quantify the change in power factor (ie the

reactive power absorbed) at each Primary substation. The outcome of this Trial is the confirmation that a

reactive power absorption service can be provided and to quantify the impact on the distribution network in

terms of losses and network loading and the aggregate impact of this on the transmission network for

voltage stabilisation.

During all the Trials, the health of Primary transformers and tap changers will be monitored, which together

with academic research will help to understand whether the technique has a material and detrimental impact

on these assets.

The CLASS Solution which will be enabled by solving the Problem

The CLASS Solution is a novel method to exploit existing assets and is both a quick to implement and a cost

effective alternative to existing carbon intensive solutions. Applying the technique to reduce the peak

demand at a Primary substation can produce a time extension of between one and three years; versus the

traditional reinforcement of a Primary substation which typically costs on average £560 000 and takes 1.1

years. In addition the technique defers 58 tC0

eq per Primary substation.

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Scaling this up to the GB level the CLASS Solution is expected to defer the equivalent of building new 40

Primary substations, which would cost the customer £75.9 million using traditional reinforcement

techniques, leading to a total asset carbon deferral of 16 266 tC0

eq.

Throughout the CLASS Project a number of outputs will be generated. The sharing of these outputs will

allow any other DNO to quickly and effectively implement the CLASS Solution. The key outputs from the

Project are:

1. Installation and Application Methodologies: The Project will publish the site selection methodology for

the Trial sites and a detailed installation methodology for the retrofit of equipment at a typical GB

Primary substation.

2. Voltage Regulation Scheme: CLASS will publish the data captured in the Trials and deliver a report that

assesses the capability of delivering demand response and how this can be used by network operators.

This will include a detailed characterisation of each Primary Substation, to the load and customer mix

composition on the selected Primary network.

3. Voltage/ Demand Relationship Matrix: The Trials will develop a voltage/ demand relationship matrix for

application in a new CLASS Dashboard, which will display the real-time demand response capability.

4. Asset Health Study: The Project will deliver the results of the study on the change in asset health from

the application of the new dynamic voltage regulation techniques.

5. Customer engagement and feedback: CLASS will describe the method for attracting and engaging

customers in the Trial and detail their feedback, confirming that customers are not affected.

6. Change proposals for planning standard: The Project will deliver changes proposals to update the

existing planning standard on the demand response available from distribution networks.

7. Long Term Monitoring test bed: At the end of CLASS rather than decommission the monitoring

equipment National Grid has agreed to fund its on-going maintenance, data collection and analysis as

part of a published Long Term Monitoring Study on the changing demand response of networks.

Technical Description of Project

The CLASS Project demonstrates innovation through the novel configuration and application of existing off-

the-shelf voltage control equipment previously untested in GB which is used to augment existing voltage

control infrastructure to provide new functionality.

The new Voltage Controllers will be installed at the Primary substation and will communicate with Electricity

North West's Control Room Management System (CRMS) via existing SCADA infrastructure. CRMS will in

turn pass on the relevant information to the version of GE's PowerOn Fusion recently installed, under the

previously funded Capacity to Customers Project. A new CLASS Dashboard, developed within PowerOn

Fusion, will display in real-time the forecast demand response capability and provide Electricity North West

Control Engineers with the ability to apply, and see the results of, the dynamic voltage control techniques.

This will be shared / viewed by National Grid's Electricity National Control Centre (ENCC) via a newly

established and separately funded Inter-Control Centre Communications Protocol (ICCP) link. In order to

allow for the quantification of the effects and benefits of CLASS, the Project will deploy appropriate levels of

representative network monitoring alongside existing monitoring

The basic premise of CLASS is delivery of the following critical demand response services: Demand

Reduction/Boost, Voltage Control, and Demand reduction at time of system peak. CLASS will be delivered by

a combination of local automatic action and central despatch.

Local Control

The local automatic action will be via the operation of frequency sensitive relays which, subject to the

system frequency, will operate appropriate control equipment associated with nominated Primary

transformers to deliver both fast primary frequency and secondary frequency response. The frequency

sensitive relay is expected to interface directly with the Voltage Controller (VC). The Voltage Controller will

in turn initiate one of two automatic actions subject to the magnitude of the frequency variation:

1. Disconnection of one of a pair of Primary substation transformers via use of an interposing relay. There

may be cases where the Voltage Controller will not initiate the trip owing to active constraints such as

network outages, high loads or tap range limitations; and

2. Tapping of the transformer tap changers to reduce/increase demand as a means of providing secondary

frequency response.

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Central Despatch

The central despatch will initiate CLASS via ENWL's existing SCADA infrastructure. Primary substation

remote terminal units (RTUs) will be configured to act as the interface between the central systems and the

newly deployed Voltage Controllers. Central despatch will be used to initiate the following demand response

actions:

1. Demand Reduction/Boost for the purpose of generation/demand balancing or wind following;

2. Tap stagger as a means of providing reactive power absorption to reduce system voltages; and

3. Demand reduction at time of system peak.

The key elements of the end to end CLASS architecture are identified in Figure 1 and detailed further below.

Voltage Controllers

The proposed architecture introduces an autonomous Voltage Controller at the Primary substation which is

configured with the necessary control logic. The Voltage Controllers will be interfaced with the substations

existing Automatic Voltage Control (AVC) scheme. In some instance this may necessitate the installation of

replacement AVC hardware. The underlying functionality of the AVC scheme will remain unchanged but will

also respond to control tap change operation when prompted to do so by the Voltage Controller. The

installation and commissioning of the Siemens autonomous Voltage Controller is a key part of the Project

and as such a small number of site inspections have taken place to identify the principal interfacing

decisions to be made. These initial site inspections have assisted in the preparation of costs and their

findings have informed the site selection methodology.

CLASS Dashboard

CLASS will develop a Dashboard hosted within the PowerOn Fusion (POF) Network Management System

(NMS) that displays the real-time demand response within a defined region. This innovative real-time

display will be developed in conjunction with GE Digital Energy and will take real-time demand data

available within CRMS and calculate the expected demand response available based upon the relationship

between voltage and demand. During the Trials the forecast voltage/ demand relationship will be

characterised by The University of Manchester and the CLASS Dashboard will be periodically updated so that

over time the accuracy of the CLASS Dashboard is enhanced. The new CLASS Dashboard and the time series

voltage / demand relationship information generated by the Trials will be made available allowing the

transfer of this key technology to other DNOs.

Network Management Systems Interface

In order to test the capabilities of CLASS and to actively involve National Grid in the Trials, CLASS will

establish an interface, via an Inter-Control centre Communications Protocol (ICCP) based link, between

National Grid's Network Management System (NMS) and ENWL's (POF) system. As previously noted POF

has already been established under the previously LCNF funded Capacity to Customers Project but

functionality will be added via the CLASS project. The POF system and Electricity North West s existing NMS

will be connected via industry standard protocols, including Common Information Model (CIM) and Simple

Object Access Protocol (SOAP). Both National Grid's NMS and POF are developed and licensed by GE, who

will also install and commission the ICCP link between the two systems. National Grid and GE will fund this

element of the CLASS Project. The newly developed Dashboard will be viewed by National Grid via the ICCP

link and provide National Grid both enhanced visibility and direct control of Electricity North West's network.

Electricity North West will test the operational capability of the ICCP link by allowing National Grid to directly

initiate voltage regulation as part of the Trials under controlled conditions. Having both the visibility and

direct operational capability of such a link will be the first dual control link of its kind in GB. This link will

further inform the characteristics, processes and feasibility of control on future industry Grid Code Demand

Control arrangements.

Network Monitoring Equipment

In order to quantify the effects and benefits of CLASS we will locate monitors at tactical points on the

network that will provide the data for analysis by The University of Manchester. CLASS will use existing

monitoring equipment at 132kV and establish new monitoring equipment at Primary and distribution

substations. The University of Manchester has defined the data sampling rates required for this Project.

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Monitoring at 132kV - For the purposes of the Trials, CLASS will use existing Central Volume Allocation

Meters installed at the boundary between Electricity North West and National Grid.

Monitoring at Primary substations - CLASS will install new transducers onto the existing current

transformers (CT) on Primary transformers so as to more accurately record the demand. The voltage will be

recorded using the existing voltage transformers (VT) with both measurements being supplied to the new

Voltage Controller. Additional monitoring devices within the Primary substations will record data on the

health of the transformer and tap changers during the Trials to assess the long term feasibility of applying

these voltage regulations techniques and any affect on the transformers' life.

Monitoring at Distribution substations - CLASS will install voltage monitoring equipment on the low voltage

(LV) side of the distribution transformer. We will use the equipment and techniques devised under Electricity

North West's LCN Fund Tier 1 project, LV Network Solutions.

Description of design of Trials

Scope of CLASS

CLASS explores the potential for DNOs to adopt novel voltage regulation techniques to manage peak

demand on a DNO's network and help manage the generation and demand balance on the GB electricity

network. The CLASS Method will be trialled on 60 Primary Substations across it's network, representing 17%

of Electricity North West's network and is representative of the type of customer mix and Primary network

assets on any DNOs' network throughout GB.

Site Selection Methodology

The site selection methodology outlined below, has been developed by The University of Manchester in

conjunction with Electricity North West and endorsed by Parsons Brinckerhoff. The indicative Trial sites are

mapped in Appendix A and the full site selection methodology is detailed in Appendix B.

The University of Manchester has recommended that 60 Primary substations should be included within the

Project for the results to be regarded as statistically robust and representative of GB networks. The following

three aspects are applied to filter and select the Primary substations for the Trials:

1. Load Classes - As different load types respond differently to changes in voltages, a Primary substation

can be categorised and highlight different customer groups by load on the network. It is proposed the

CLASS Method is deployed at Primary substations across a range of different customer compositions to

determine the most responsive type of customers and their loads.

2. Primary substation loading level - To understand whether it is possible to defer network investment by

peak load reduction, it is proposed that the CLASS Method is deployed at those Primary substations

whose annual peak demand is a significant percentage of its Firm Capacity.

3. Demand Zones - It is proposed that the CLASS Method is deployed at multiple Primary substation

locations in each of the key GSP demand zones within ENWL's area. This is because a GSP represents

the boundary point with National Grid and is the point at which the aggregate effect is being considered.

Other additional considerations will also form part of the final selection process, as has been highlighted in

Appendix B.

Hypotheses

The CLASS Project will test the following hypotheses:

1. CLASS Method creates a demand response and reactive absorption capability through the application of

innovative voltage regulation techniques.

2. Customers within the CLASS Trial areas will not see/observe/notice an impact on the power quality when

these innovative techniques are applied.

3. The CLASS Method will show that a small change in voltage can deliver a very meaningful demand

response, thereby engaging all customers in demand response.

4. The CLASS Method will defer network reinforcement and save carbon, by the application of demand

decrement at the time of system peak

5. The CLASS Method uses existing assets with no detriment to their asset health.

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Trials

The CLASS Trials will occur over a full year with the objective to rigorously test the Hypotheses detailed

above. To test Hypothesis 2, CLASS will identify and engage with a representative sample of the domestic

and commercial customers supplied from the Trial Primary substations to periodically answer a

questionnaire on the quality of their electricity supply. A Control Group will be established outside the Trial

area to ensure that we can baseline our results for the customers in the Trial area.

The remaining Hypothesis will be tested under the following Trials:

Demand Response Trials 1 & 2

• These Trials and their respective test regime will be developed to provide the evidence to wholly answer

Hypothesis 3,4, and 5 and partly answer 1

Reactive Power Trial 3

• These Trials and their respective test regime will be developed to provide the evidence to partly answer

Hypothesis 1

Test Regime

For those Trials where we seek to understand the response across the annual cycle we propose to apply a

test programme that initiates an action at least once in one half hour for a weekday and a weekend day for

each season, thereby collecting data for a 24 hour period of a weekday and weekend day for every season.

For the Trials that we have identified as being more suitable for application to a specific season, our test

programme initiates an action in all the half hour periods that the necessary response is required.

CLASS will also test the parallel provision of the demand response and reactive power absorption at specific

points during the annual cycle to fully understand the opportunities and boundaries of dynamic voltage

regulation. The CLASS test regime will be executed by Electricity North West but will incorporate the

initiation of actions by National Grid via the use of an ICCP interface. The test regime, the Trials, and

execution methodology will provide The University of Manchester with the data to fully analyse the provision

capability of such techniques by a DNO. The test regime and execution methodology will be developed prior

to the Trials with the assistance of our Project Partners: Siemens, National Grid, GE and The University of

Manchester.

Changes since initial screening process

The scope of the CLASS Project has reduced from our initial ISP submission. The changes are identified

below and in further detailed in Table 2:

1. Deferral of the commercial and market research project elements to a later stage

2. Fewer substations due to the improved selection methodology

3. No DNO collaboration due to the smaller number of sites and improved selection methodology

4. Passive Supplier involvement

5. Revised Customer Monitoring

The redesigned Project will deliver the same benefits outlined in the ISP but now only take 2.75 years to

complete and cost only £9 million versus £12.1 million.

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The CLASS Solution is a smart grid tool which facilitates deferment of network reinforcement and provides

potential frequency control and voltage management mechanisms for all GB networks.

The business case for CLASS is based upon the principle of deploying the CLASS Method in a manner that

represents any DNO's network, and facilitate its adoption to all network operators within GB. CLASS will help

facilitate the transition to a low carbon economy and delivery of GB-wide benefits for all electricity

customers, both in terms of financial and carbon savings. These benefits can be quantified and where

appropriate the business case has sought to highlight these. However, there are other benefits that although

cannot be directly quantified have also been explored and described in the sections below. The business

case includes an investigation into the costs associated with the CLASS Project and these have been

developed in collaboration with our Project Partners throughout the bid preparation phase.

The knowledge gained in undertaking the CLASS Project will allow Electricity North West to build on its

previous Demand Side Response work, and to identify how a DNO can create an opportunity to defer

network reinforcement and provide network services. CLASS will feed this learning into RIIO ED1. Assuming

positive customer engagement, the Project demonstrates potential significant customer benefits through

reduced DUoS charges.

Customer Benefits

Electricity North West, with the assistance of the Tyndall Centre and The University of Manchester, has

undertaken initial modelling work on the potential benefits of its CLASS Project. The modelling has been

based on an assessment of the range of network reinforcements required at substations when demand

exceeds capacity. This modelling work details the type, financial cost, carbon cost and time to complete

reinforcement. Additional modelling has been undertaken by the Tyndall Centre to understand the carbon

savings available by providing demand response and reactive power absorption capabilities to NETSO and

this is included in Appendix H.

Financial Benefits

The principal benefit of the CLASS Solution is that it provides a quickly implemented Method to defer

reinforcement through the application of voltage decrement techniques at times of peak loading to reduce

peak demand. In the short to medium term (within DPCR5 and RIIO-ED1) extending the time to reinforce,

creates opportunity to consider alternative infrastructure investment decisions, including customer demand

response programs; and in the longer term (ie RIIO-ED2 and beyond) the application of this technique

allows the optimal scheduling of resources to manage the expected significant infrastructure development

program from the connection of low carbon technologies.

When the CLASS Method is applied across all Primary substations in the Project, Electricity North West could

gain up to 11.8 MVA of network capacity, and defer the reinforcement of four Primary substations with an

associated expenditure of £2.25 million for up to three years. The CLASS Method can be implemented at one

Primary substation 57 times faster and 12 times cheaper than traditional reinforcement. As it takes one

week to retrofit into a Primary substation at a cost of £44 000 compared with the typical average time to

reinforce a Primary substation of 57 weeks at a cost of £560 000 (Figure 2).

These are the minimum benefits available by reducing the voltage by 1.5% (ie one tap position) at the

Primary substation; additional benefits may be available if the voltage is reduced by more than one tap

position (ie 3% for two taps etc.). The Trials will determine the boundaries of applying such techniques.

If the CLASS Solution is applied first to all ENWL's Primary substations, it could release 69 MVA (the

equivalent of three new Primary substations) and defer £6.7 million in reinforcement expenditure, When

applied at GB scale, it is possible to gain up to 937 MVA (the equivalent of 40 new Primary substations) and

defer £90 million in reinforcement costs (Figure 3 & 4).

The Grid Code obliges a DNO to provide a demand response to NETSO for the management of frequency but

its provision, delivered by the 3% or 6% voltage reduction at DNO substations; but this is generally called

upon when other generation and demand management options such as STOR have been exhausted. There is

no Base Case for the commercial provision of demand response for frequency reserve or reactive power for

voltage control from a DNO to NETSO. This is because the current regulatory model disincentivises such

activities. The feasibility study and the scoping studies developed by The University of Manchester and

Tyndall Centre in preparation of the CLASS Full Submission highlighted the potential revenues from the

provision of these network services to NETSO could be in the region of £25 000 000 per annum, which

would flow directly to DNO customers, through reduced bills (from lower DUoS charges).

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Carbon Benefits

In the CLASS Project the deferment of four Primary substations will defer carbon of 209 tCO2eq and

potentially reduce network losses delivering a carbon saving. Rolling out across Electricity North West,

CLASS would defer 1 251 tCO2eq; whilst GB-wide, the carbon deferred is 16 266 tCO2eq. The actual

reduction in losses from applying the peak reduction technique will be assessed within CLASS.

The Innovation Funding Incentive Report (IFI) highlights the subsequent “Scope of Work” reinforcing the

potential financial and carbon benefits derived in providing demand response for frequency reserve and

reactive power for voltage control. In the CLASS Project, we propose to show that it is possible to support

the wider GB system through the provision of demand response and reactive power absorption to NETSO, as

well as the carbon savings derived. But initially to understand the potential carbon savings available by

adopting CLASS, The Tyndall Centre considered the existing operators in the frequency reserve/ control and

reactive power markets and assumed that these would be displaced by the CLASS Solution

(see Appendix H).

Demand Response: The CLASS Trials will use the inherent functionality of the Voltage Controllers to sense

under frequency events and initiate a voltage decrement by either switching out one of a pair of Primary

transformers or lowering the current tap position of each Primary transformer. CLASS will quantify the

demand response that can be provided at all times of year, whilst maintaining the quality of supply to

customers and the health of our existing assets. Using the Fast Reserve (FR) and the Firm Frequency

Reserve (FFR) markets as a proxy for understanding the current carbon intensity of frequency control

services the Tyndall Centre has shown is that there are significant carbon savings opportunities available by

displacing current providers. The current market participants in FR and FFR have a carbon footprint of

between 500 to 800 gCO2eq per kWh. The CLASS Trials will determine the size of the demand response and

when it could be provided, but in the CLASS Project a demand response could displace up to 360 tCO2eq per

annum from 365 applications ie one hour per day. As the CLASS Method is scaled up the carbon saving at

Electricity North West are potentially up to 2 280 tCO2eq per annum or 18 299 tCO2eq over RIIO-ED1; and

further to GB are up to 29 637 tCO2eq per annum or 237 888 tCO2eq over RIIO-ED1.

Reactive Power: National Grid procures reactive power to manage the energy flows across the transmission

network. This is secured through various market mechanisms or through the operation of compensation

equipment e.g. Static VAr Compensators (SVCs) and Mechanically Switched Capacitors (MSCs). National

Grid monitors the real power and reactive power flows across its network and at Grid Supply Points, the

boundary with distribution network operators. The reactive power requirements change significantly over

each day and on a seasonal basis and where there is a requirement for additional reactive support that the

reactive market cannot provide, then National Grid will install reactive compensation equipment. The CLASS

Trials will apply the `tap stagger' technique to reduce the power factor of the Primary substation by

generating circulating current around the pair of Primary substation transformers, thereby increasing

reactive power demand on higher voltage networks. CLASS will quantify the reactive power absorption

capability that can be created, whilst maintaining the quality of supply to customers and the health of our

existing assets. Using the installation of a STATCOM as a proxy for understanding the carbon intensity of the

traditional solution for managing transmission system voltage The Tyndall Centre has reported that there

are significant carbon savings in the application of the `tap stagger' technique for the provisioning of

reactive power . In the CLASS Project, if the technique is applied at all 60 Primary substations for 360 hours

per annum ( ie 4 hours per night for 90 days) the CLASS Trials are expected to provide 112 MVAr, totalling

40.4 GVArh per annum, and saving up to 4 071 tCO2eq per annum. As the CLASS Method is scaled up the

carbon saving at Electricity North West are 25 845 tCO2eq per annum or 252 527 tCO2eq over RIIO ED1;

and further to GB are 335 950 tCO2eq per annum 3 282 819 tCO2eq over RIIO ED1.

Non Quantified Benefit

Whilst the CLASS Method demonstrates significant potential financial and carbon saving benefits there are

also a number of non quantifiable benefits that should be noted. The first of these is how the Solution will

inform discussions in the RIIO-ED1mid-term review.

A key aspect of RIIO-ED1 is innovation and how customers will benefit from demonstrating this. The CLASS

Project demonstrates innovation in the novel use of dynamic voltage regulation techniques to drive the

greater utilisation of our existing assets. CLASS, like last year's Capacity to Customers Project follows the

same strategy of generating additional value for our customers and stakeholders from the greater use of

existing assets.

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Another key consideration for RIIO-ED1 and beyond is the delivery of network services with long-term value

for money for existing and future consumers. Learning from CLASS will inform whether the innovative use of

dynamic voltage regulation for demand response paves the way for better value for money delivery of

network services. The Project will also confirm whether the Solution can play a role in the delivery of a

secure and sustainable energy sector, reducing the carbon intensity of current balancing services provision.

An updated and enriched understanding of consumer voltage/demand characteristics will enhance power

system modelling at distribution and transmission levels when determining reinforcement timing (immediate

post-fault voltage depressions) and to assess voltage instability risk that can jeopardise power system

security on a large scale.

We also anticipate additional benefits through the availability of an enhanced operational interface (the ICCP

link included in CLASS) between Electricity North West and NETSO. This interface could provide additional

future benefits, as more embedded generation is installed on Electricity North West's network which would

otherwise be `invisible' to NETSO.

The development of the network monitoring equipment within CLASS will form the basis of a fully funded

Long Term Monitoring Study, conducted by National Grid with support from The University of Manchester.

The data collected will help track the change in the voltage /demand relationship over time with the

penetration of customers' low carbon technologies.

The flexibility created by CLASS could facilitate the development of other smart solutions. The fast

application of CLASS could be valuable in bridging the operational time gap before other solutions come into

effect for example enabling forms of DR via aggregators or the effect of price signals from the time of use

pricing via smart metering.

Costs & Assumptions

By having worked closely with our Partners in the scoping of the CLASS Project and through a robust

standardised financial costing methodology, Electricity North West has been able to capture and continually

refine the Project costing model. This continual improvement process and the lessons learnt from C2C and

other LCN funded projects has enabled Electricity North West to develop an accurate and value for money

proposition. The total cost of CLASS is £9 million, with funding for the total costs coming from the following

three areas:

1. LCN Fund: £7.17 million

2. Electricity North West Contribution: £0.81 million

3. Project Partners' contribution: £0.91million

A significant proportion of CLASS will be funded by the Project Partners, with all the Partners contributing to

the funding of CLASS. The funding levels from the Partners are:

• National Grid: £0.39 million

• Siemens: £0.31 million

• GE: £0.12 million

• The University of Manchester: £85k

• Impact Research: £10k

• Parsons Brinckerhoff: £5k

• Chiltern Power: £4k

The total has been broken down into the following main cost segments:

• Project Management: £0.9 million

• Technology Build: £5.7 million

o ICCP Link & Communications Infrastructure £0.9 million

o Dashboard £0.9 million

o Voltage Control Scheme £3.1 million

o Monitoring £0.7 million

• Trials: £0.49 million

o Customer Survey £0.37 million

• Learning & Dissemination: £1.3 million

o Research £1.0 million

o Dissemination Activities £0.3 million

• Contingency £0.6 million

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In developing the CLASS Project costs the following key assumptions have been made:

• All costs include RPI,

• RPI rates are those issued by Ofgem, and

• Project funding includes a 6% contingency.

The main Project costs are for the development of the technology to operate the CLASS Method. These costs

cover the purchase and installation of the Voltage Controllers in the 60 Trial Primary Substations, the

purchase and installation of the network and health monitoring equipment across the network, the creation

of the ICCP interface (which is fully funded from the Partners' contributions to recognize that these costs

should not be borne by DNO customers), and the development of the Dashboard. A detailed breakdown of

the cost components can be seen in Table 3 and Figure 5 on page 17, and within the financial workbook in

Appendix K.

Electricity North West Direct Benefits and Contribution

The Directs Benefits resulting from undertaking the CLASS Project appear in the following two areas and

totals £87 960:

1. the replacement of the Automatic Voltage Control schemes in Primary Substation; and

2. the deferment of network reinforcement in the expected four category Load Indices 5 Primary substations

in the Trial.

A methodology has been developed to calculate the Direct Benefits for each category and these are

described below. The value of the Direct Benefits have been estimated as the 60 Trial Primary substations

will be chosen in the CLASS Project using the agreed site selection methodology, the initial draft described in

Appendix H.

Asset Replacement - There are a wide range of types of AVCs fitted across Electricity North West 's Primary

Substation population. Considering the whole population, approximately 49% of the Primary substations

have AVC assets that we would expect to replace, due to age and limited functionality. The cost of replacing

an AVC scheme is £17 000 per substation. Within the DPCR5 replacement programme Electricity North West

expect to replace network assets at six Primary substations in 2013/14. Therefore the Direct Benefits have

been calculated assuming that Electricity North West will replace the AVC schemes at three Primary

substations as part of the Technology Build Workstream at a cost saving of £52 680.

Network Reinforcement - In the CLASS Trials we expect to defer the network reinforcement of four category

Load Indices 5 Primary substations, which would typically cost £2.25 million. The CLASS Project will prove

that a DNO is able to defer the reinforcement, thereby savings cost of capital for a length of the time

extension, expected to be up to three years. Therefore the Direct Benefits have been calculated assuming

that Electricity North West will save the financing cost of the £2.25 million, totalling £35 280.

As part of the LCN Fund mechanism Electricity North West is responsible for contributing 10% of the total

Project cost, which represents a contribution of £0.81 million. The above commentary details that £87 960

of this would be funded through Direct Benefits and remainder straight from Electricity North West .

The CLASS Project has been through the Electricity North West internal approval process and has been

signed off by the Board.

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The CLASS Method implements dynamic voltage regulation into distribution networks to deliver a low cost,

low risk, non-intrusive way of creating tools for active network management.

Accelerates the development of a low carbon energy sector & has the potential to deliver new financial

benefits to future and/ or existing customers

CLASS will trial a novel method of actively managing the network, through dynamic voltage control

techniques, delivering significant cost and carbon savings to all energy consumers. These savings are

derived from i) a demand response capability deferring expensive network reinforcement and ii) Reactive

Power Absorption and frequency control capabilities providing NETSO with alternative lower carbon options

for the balancing of the network (eg 365 000 tCO

eq per annum).

In this section and with further supporting material in Appendix H, we set out to further quantify the impacts

that the CLASS Solution could have.

CLASS Project: The site selection methodology (described in Appendix B) identified that 60 Primary

substations would be involved in the CLASS Trials. In the Project, Electricity North West could release, at

peak demand, up to 11.8 MVA (the equivalent of a half of a new Primary substation) of network capacity

across all the Primary substations, with a 1.5% voltage decrement (provided through a single tap). Greater

capacity could be released with further decrements and the Trials will determine the permissible range and

any limits on duration, whilst maintaining network integrity and quality of supply for our customers.

Installation is 57 times faster at a cost which is 12 times less the traditional reinforcement approach. A one-

off installation cost of £44 000 per Primary substation to provide the peak reduction functionality then

provides the capability for the demand response for frequency control and reactive power for voltage

control.

Electricity North West: Roll out across the Electricity North West network could deliver 69.4 MVA (the

equivalent of three new Primary substations) and delay the reinforcement of all highly loaded (ie category

Load Indices 5) Primary substations for several years. Applied tactically the peak demand management

technique can be quickly implemented to provide an opportunity to compare the purchase of a demand-side

response programme with other traditional reinforcement options. This quick-win will be highly valuable

towards the end of RIIO-ED1 and beyond, as the rate of electricity demand growth is expected to

significantly increase. The ability to provide demand response for frequency control and reactive power for

voltage control to National Grid has the potential to save up 28 000 tCO

eq per annum.

Great Britain: A rollout of the CLASS Solution across GB could release 937 MVA (the equivalent of 40 new

Primary substations) and delay the reinforcement of all highly loaded Primary substations for several years.

The flexibility gained by dynamically regulating the distribution network voltage is significant whether it is

applied locally to manage network constraints or across the network to assist with GB system stability. The

ability to provide demand response for frequency reserve and reactive power for voltage control to National

Grid has the potential to save up 365 000 tCO

eq per annum and will assist the transition to a low carbon

electricity sector from the support for intermittent generation.

A roll-out of CLASS across GB - accelerated contribution to Carbon Plan

The government's Carbon Plan addresses the challenge of decarbonisation by highlighting the three themes

of `Generating our electricity', `Heat for our home and businesses', and `Powering our cars and vehicles'.

To meet the Carbon Plan more low carbon electricity generation will be needed to meet increased demand

from new electric heat and transport systems. These changes are at risk of delay due to the time and cost of

network reinforcement; this is similar to existing constraints on wind generation schemes planned to the

North of the Beauly Denny transmission reinforcement scheme.

In addition, the power flows across GB's networks will be more changeable due to the intermittency of low

carbon distributed generation. The CLASS Solution will help address these challenges cost-effectively,

quickly and with a lower carbon impact than traditional methods. The CLASS Solution contributes to Chapter

2 - Secure, sustainable low carbon energy and specifically the `Reform of the electricity grid' section within

the Carbon Plan. Class delivers cost effective and non-intrusive demand response for demand management

and potentially demand response for frequency control and reactive power absorption for voltage control. We

have also ensured that The Project will not obstruct or interfere with the smart metering roll-out or other

green government initiatives.

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Secure, sustainable low carbon electricity - CLASS accelerates the creation of a secure and sustainable low

carbon electricity sector in the two ways: firstly the CLASS Solution utilises reliable and proven technology/

assets in a novel way to improve network efficiency whilst maintaining the security of supply to DNO

customers; and secondly CLASS facilitates the connection of low carbon generation whilst deferring the

financial/carbon costs currently required to reinforce the network in providing such additional capacity.

Reform of the electricity grid - The increase in electricity generation and the change in the generation mix

will make system control more complex and demanding. The CLASS Project accelerates the reform of the

electricity networks in two ways: firstly the flexible demand management technique trialled, facilitates the

quick connection of low carbon generation and demand; and secondly the voltage regulation techniques

trialled in CLASS will demonstrate how distribution networks can help transmission system stability by

providing a demand response for frequency control and reactive power for voltage control. Through CLASS,

research and analysis will determine whether distribution network operators can contribute to maintaining

an economic and secure electricity system; through the provision of these lower cost and lower carbon

options.

How a roll out of the Method across GB will deliver carbon benefits more quickly

Traditional reinforcement involves the construction of carbon intensive assets, particularly new switchgear

and transformers. Significant time is currently required in the scoping, design, approval, construction and

commissioning of a new Primary substation. This is increasingly likely to become a bottle-neck, as electricity

demand and generation is expected to grow. In contrast, the CLASS Method is quick-win which provides a

window of opportunity for the network operator to make the appropriate investment decision, whether

traditional reinforcement or the procurement of demand response directly from customers or via an

aggregator. Additional capacity can be released for use in one week simply by installation of a new voltage

controller at a Primary substation, compared with a typical reinforcement timescale for a Primary substation

of 57 weeks. This quicker delivery of capacity will prevent delays in the connection of low carbon generation

and demand to the network, and impact customers' carbon emissions.

CLASS will demonstrate how distribution networks can help transmission system stability by providing a

demand response for frequency control and reactive power for voltage control. The capability to generate

the demand response and reactive power is available at a Primary substation in one week and within one

year across the whole of Electricity North West compared with several years for the installation of new

generation assets or reactive power compensation equipment.

The potential for replication across GB

CLASS will trial the voltage regulation techniques on 60 Primary substations on it's distribution network, this

represents 17% of our Primary substation assets and 1.5% of GB's Primary distribution network. The

University of Manchester's review of CLASS identified that the Electricity North West network represents

7.4% of GB's distribution networks at system peak demand. This indicates that the CLASS Method could be

scaled up to the GB level via a scaling factor of about 13.5; this facto will be refined during our Project.

With reactive power absorption, the scaling factor is slightly lower due to the necessity of two transformers

at each Primary substation and The University of Manchester report indicates a factor of about 11; again ,

this factor will be refined during our Project.

Quantifying the potential carbon contribution of a roll out of CLASS across GB

The Tyndall Centre assessed the carbon impact for the CLASS Project, for an Electricity North West roll-out

and a GB roll-out. No carbon savings have been assumed for deferring the reinforcement of Primary

substation assets as potentially these assets may be required in the future. However, in the CLASS Project

the installation of the Voltage Controllers is marginal at 1.4 tCO

eq, the roll-out across Electricity North West

totals 8.7 tCO

eq, and a GB roll-out totals 113 tCO

eq. Whilst the deferral of carbon could potentially be as

high as 289 tCO

eq in the CLASS Project, 1 736 tCO

eq in an Electricity North West roll-out and 22 571

tCO

eq in a GB roll-out, assuming the building of each new Primary substation is deferred for three years.

These figures exclude the potential carbon impact of reducing losses from the reduction in demand. During

the Trials the carbon impact will be determined.

The carbon savings are potentially very large for the provision of demand response for frequency reserve

and the provision of reactive power for voltage control. The Tyndall Centre considered the two markets of

Fast Reserve and the Firm Frequency Response to estimate the potential lower and upper carbon savings

range. For the CLASS Project the carbon savings are potentially up to 360 tCO

eq per annum assuming the

demand response is provided one hour per week. This scales up to 2 288 tCO

eq per annum for an

Electricity North West roll-out and to 29 750 tCO

eq per annum for a GB wide roll-out. In RIIO-ED1 this

technique could conservatively save 5 100 tCO

eq in an Electricity North West roll-out and 66 306 tCO

eq in

a GB wide roll-out (See Figure 6).

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For the case of the provision of reactive power for voltage control the Tyndall Centre estimates that in the

CLASS Project the potential carbon savings are up to 4 701 tCO

eq per annum. Extrapolated to Electricity

North West wide and GB wide these up to 252 527 tCO

eq and 3 282 819 tCO

eq for the RIIO-ED1 period

(See Figure 7). Note, these estimates derived through a comparison of the losses created by the tap

staggering technique and with the use of STATCOMS to provide the reactive power, rather than generation

which is unlikely to be available at the required locations.

CLASS has the potential to deliver net financial benefits to existing and/or future customers

The CLASS Project proposes retrofitting 60 Primary substations with new voltage regulation equipment to

facilitate the dynamic operation of network voltage. The logic for selecting 60 Primary substation, which

represents 17% of Electricity North West 's Primary substations assets, is that it provides a robust and

statistically significant sample of the GB's Primary network assets and covers all types of demand and

generation customer connected to HV networks. The CLASS Trials will enable The University of Manchester

to derive the voltage/ demand relationship for every half hour in a year so that the Dashboard can display in

real-time the current demand and the expected demand response available. In addition, the Dashboard will

display the expected reactive power absorption capability in advance of each half hour. This information is

considered of use to the NETSO operational teams and our Project will report on these benefits.

Our estimates of the net financial benefits to customers are split across the three techniques of:

• Demand Response providing peak reduction - The Trials will show that a demand response generated by

the dynamic voltage regulation can alleviate the peak demand of a Primary substation. The aim of the

Trials is to prove that Primary substation network reinforcement can be deferred;

• Demand Management for frequency reserve - The Trials will show that a network wide demand response

from the collective dynamic operation of network voltage, initiated by sensing a low frequency event,

can be provided in an acceptable time period, for example less than 10 seconds. The aim of the Trials

is to prove that the demand response generated can assist with the control of system frequency.

• Reactive Power for voltage control - The Trials will show that the power factor of a Primary substation or a

group of Primary substations can be altered through the use of the tap staggering technique, thereby

drawing reactive power from the higher voltage networks. The aim is to prove that the change in

reactive power demand is observed on National Grid's network and can be used to help control the

transmission voltage.

No value will be included for the use of Demand response to provide demand boost technique as there is

currently no proxy for its use. This technique could be used to provide either additional frequency control or

“wind following” ie where demand is boosted to avoid the curtailment of wind generation.

Method cost and Base Case costs at the scale of the Project

CLASS Method Costs: The main network cost of the CLASS Method is the installation of the Voltage

Controllers at Primary substations. The total cost for installing this equipment is £2.0 million, assuming a

saving of 25% against the Trial costs from the sharing of the retrofit methodology and the voltage

regulation scheme.. Once installed there are no additional costs associated to the controllers, and a DNO will

have the ability to dynamically regulate the network voltage to create a demand response and reactive

power effect.

To identify the total cost of the CLASS Method, the cost of enabling systems must be added to the above

installation costs. For the CLASS Project, Electricity North West proposes to develop a Dashboard for real-

time display of the current demand and the potential demand response available and the reactive power

absorption potential. This will be developed by GE within its PowerOn Fusion software module. The CLASS

Project benefits from the installation of the Power On Fusion software under the Capacity to Customers

Project, but the marginal cost of extending the licences for its use into 2014/15 is included. This Dashboard

development will be completed for the Project and is not intended as an enduring solution. As all the other

DNOs operate GE's Network Management Systems, the development cost should be reduced from £430k to

£250k. The Dashboard will be shared with National Grid through a standard ICCP interface which could be

replicated in the other DNOs' Control Rooms for £200k, plus the National Grid costs of £150k per each DNO.

Other DNOs should not need to fit monitoring equipment as extensively on the network and the future

Smart Metering roll-out will provide voltage excursion information from end customers, so no cost has been

included for network monitoring. On the scale of the Project but once the techniques are proven (excluding

all innovation and dissemination costs), this gives a total network costs of £2.6m for the CLASS Method.

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In the Trial, the total capacity expected to be released across the 60 Primary substations is 11.8MVA, the

equivalent of a half a new Primary substations (based on a 1.5% voltage decrement at peak demand). Of

the 60 Primary substations selected typically there will be about four or five substations that would fall

within the Load Indices 5 category ie those Primary substations requiring network reinforcement. The rapid

installation of the Voltage Controllers at a cost of £44 000 has the potential to defer the reinforcement of the

Primary substation for up to three years and potentially avoid the network reinforcement (depending on the

voltage decrement possible and the demand growth of each Primary substation). The extended time window

offers three opportunities to a DNO; the first is confirmation that the Primary substation needs

reinforcement, as experience shows that in some instances (eg one in every ten to twelve cases) the peak

that initiated the reinforcement recedes; second is it facilitates the optimal investment decision; and third is

it allows time to develop or procure a demand response programme.

During the year long Trial, the 60 Primary Substations could provide between 0.22 GWh and 0.43 GWh for

frequency reserve. However this would only provide a small proportion of the Fast Reserve requirement and

the CLASS Trials will determine the characteristics of the demand response potentially available for use as

frequency reserve. National Grid's Fast Reserve market is valued at around £50 000/MW/year, potentially

creating significant future value for Electricity North West customers.

The University of Manchester estimated that the total average reactive power absorption per Primary

substation in the CLASS Trial is 1.87 MVAr, therefore the potential total network reactive power absorption

in the Trial will be 112 MVAr. As reactive power absorption is only required during periods of lowest demand

(ie summer nights) this technique can provide 40.4 GVArh in the trial (assuming 4 hours operation per night

over a 90 day period). The CLASS Trials will determine the characteristics of the reactive power that can be

made available to National Grid and the potential locations for use of the tap staggering technique. Reactive

power is valued at around £2.60/MVArh, and National Grid's North region, which covers ENWL's area, needs

significant values of reactive power provision, compared with other regions. Again this has the potential to

create significant future value for Electricity North West customers.

Base Case Costs: The typical costs of reinforcement and the typical time to reinforce has been generated

from the analysis of several recent case studies. The case studies were used to understand the range and

type of network reinforcement designed and planned when a Primary substation goes out of firm capacity ie

the demand at the substation exceeds its capacity rating. The likelihood of each case study was estimated

through analysis of recent network reinforcement schemes, as was the time taken to undertake the network

reinforcement. Further details can be found in Appendix H. The case studies suggest the typical cost for

Primary substation network reinforcement is £560 000 and the typical time to reinforce is 57 weeks. If, out

of the 60 Primary Substations within the Trial, four substations fall within the Load Indices 5 category then

the typical cost of traditional network reinforcement is £2.25M. This cost can be deferred for several years

or potentially avoided.

If the power factor in one part of the EHV or HV network is lower than normal causing voltage or capacity

issues a DNO would currently install new network assets in the form of VAr compensation equipment to

improve the network power factor ie to generate or absorb reactive power. Electricity North West does not

have VAr compensation equipment installed on its network, but this is likely to change in the future from the

connection of low carbon technologies. A future DSO and/ or a micro-grid operator could consider the

alternative of applying the tap staggering technique within its own network to create a virtual reactor.

Therefore there is no Base Case cost for the use of the tap staggering technique but once proven the

technique can be used locally within the distribution network or at the transmission level.

There is also no Base Case for the provision of a demand response to a third party from dynamic voltage

regulation; although some of Electricity North West 's customers provide a demand response into the Short

Term Operating Reserve (STOR) market, directly or via aggregators. Studies in the UK and around the

World have explored reducing voltage to reduce energy consumption and losses. This technique, known as

Conservation Voltage Regulation, steps down the voltage systematically throughout the year to provide

demand reduction for energy saving purposes and typically has shown a 3% reduction in annual energy

consumption for a 3%voltage reduction. The Trials will determine the characteristics of the demand

response across an annual period and establish the change in energy consumed and losses from a change in

voltage.

Based on peak load, Electricity North West 's network represents 7.4% of GB's distribution networks, which

equates to a scaling factor of 13.5. Extrapolating the CLASS Method to the GB network results in 937 MVA

(the equivalent of 40 new Primary substations), which would be expected to cost £90 million using

traditional network reinforcement techniques.

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