Fill - Free fillable Spd2003isp-arc Slide 1 PDF form

Notes on completion

Before completing this form, please refer to the LCN Fund Governance Document.

Please use the default font (Verdana size 10) in your submission, the text entry areas

are predetermined and should not be changed. Please ensure all content is contained

within the boundaries of the text areas. The full-completed submission should not

exceed 9 pages

in total.

Ofgem will publish all the information contained within the Screening submission.

DNO Group

Participant DNOs

DNO area

Project title

Project summary

Estimated Project funding

Please provide an approximate figure of the total cost of the project and the LCN funding you are applying for.

Total cost of Project

LCN funding

requested

Low Carbon Networks Fund

Screening Submission Pro-forma

Scottish Power

SP Distribution

ARC - Accelerating Renewable Connections

This project will challenge the way DNOs currently connect and manage low carbon

generation on the distribution network. The objective will be to trial a new connections

process and to supplement this with new commercial arrangements and technology to

accelerate the connection of renewable generation connections. Ultimately this will

enable the economic production of greater amounts of low carbon electricity in a timely

and lower cost manner.

The current connection application process has limitations, particularly where the

volume of applications is high. Sub-optimal outcomes can arise because design

decisions have to be taken with limited information which is superseded by new

applications. The project will identify ways to address this shortcoming by trialling

changes to the existing connections process in collaboration with stakeholders.

In order to avoid limiting the range of solutions available, the identification of those

opportunities will be managed through an open process whereby external providers will

be invited to propose solutions to help overcome specified network issues which are

limiting the generation that can connect.

The selected trial area has pressing issues to address due to the volume of existing and

future generation and represents and number of challenges which other DNOs are likely

to be facing in the future. A number of key stakeholders are already engaged with the

project demonstrating the value that this project can offer.

£10m

£9m

Problem

Please provide a narrative which explains the Problem(s) which the Project is seeking to address.

Method(s)

Please describe the Method(s) which are being trialled. Please outline how the Method(s) could solve the Problem. The type of

Method should be identified where possible e.g. technical or commercial.

The Carbon Plan requires an increased contribution from low carbon generation to

support the long term GB wide targets which has a significant bearing on the

distribution network. Further, the Scottish Government is seeking to set targets for at

least 500MW of local and community based renewable generation by 2020. The

timeliness and cost of facilitating this generation onto the network is a key step in

making this transition. However, the current perception of the connection application

process from project developers is of prohibitive costs and long lead times to connect

which, through stakeholder engagement, is a concern echoed frequently. The ARC

project aims to address these issues by creating and demonstrating a new process for

accelerating renewables connections in a controlled manner to avoid the network from

being a barrier to the low carbon transition to the benefit of all parties.

Since 2009 the volume of generation applications in SPD has increased by circa 700%.

In 2011 in excess of 90% of connection offers in SPD, with a combined generation

capacity of approximately 270MW at 33kV and below were not accepted by customers

due to a variety of reasons including time scales and cost.

The application process and regulatory obligations placed upon DNOs can restrict design

engineers from taking a more holistic approach to connecting renewable generation.

The high volume of applications currently experienced can result in a piecemeal and sub

optimal approach to network development. The deterministic design rules support this

approach and network development is based upon traditional copper in the ground

reinforcement methods. This mechanism however is not suited for the transition to an

active network and is increasingly restrictive given the high volume of additional

generation seeking a connection.

The pilot area chosen is the Borders region of Scotland which is located to the South

East of Edinburgh and covers an area of 1500km

. This area comprises a high

penetration of generation which is subject to operational constraints. The existing

generation currently exceeds the demand in parts of the region leading the Grid Supply

Points within the area to export power onto the Transmission system. Currently the

area benefits from 200MW of connected generation with a further 530MW of generator

application/enquires received. This high level of generation at all voltage levels

represents a typical future distribution network and is therefore ideal for trialling new

technologies and processes.

The objective of this project will be the coordination and implementation of a new

generation connection process across the trial area. This will be developed through

collaborative working with stakeholders to design a new process with the

complementary commercial arrangements and technology to realise this involving a

number of key phases:

Commercial Arrangements - Through collaboration with stakeholders, the project will

identify new arrangements for generation connections which will accelerate the

integration of low carbon generation onto the distribution network whilst maintaining

value for money for customers. This will examine alternative approaches such as

connect and manage or stage gate processes as used in other countries. These

changes are likely to involve novel commercial arrangements to be implemented.

Innovative Tools - Technology will be a vital component in facilitating greater volumes

Method(s) continued

Funding commentary

Provide a commentary on the accuracy of your funding estimate. If the Project has phases, please identify the approximate

cost of each phase

Specific Requirements (please tick which of the specific requirements this project fulfils)

A specific piece of new (i.e. unproven in GB) equipment (including control and communications

systems and software) that has a Direct Impact on the Distribution System)

A novel arrangement or application of existing Distribution System equipment (including control and

communications systems software)

A novel operational practice directly related to the operation of the Distribution System

A novel commercial arrangement

of generation in a timely manner and to enable a network which is actively managed.

Technology will be required at various levels of the network including integrated

solutions which manage the overall operation of the network in dynamic circumstances

to minimise constraints, as well as solutions for localised problems. Given the variety of

vendors which have solutions that could address these challenges, SPD will be running

an open process in advance of the FSP to invite parties to provide proposals for this

project. Using an open process will ensure a wide variety of parties can be considered

and that value for money is achieved.

Implement and Optimise Solutions - As new arrangements and technology are

implemented, the design of these will be optimised to ensure that they are operating as

intended and are beneficial for end customers. This will be an ongoing process and

open forums will be created to allow customers and other stakeholders to influence the

process.

Dissemination and Recommendations - The end objective of this project will be to

develop a new set of guidelines on generation connections which DNOs can implement

along with the practical learning that this project will offer. This may result in

recommendations to change regulatory processes in this arena and is likely to have a

bearing on design policies as well as commercial policies, enabling Accelerated

Renewables Connections.

An approximate costing has been developed based on existing activity and other LCNF

projects which are ongoing. As the detail of the technology which will be deployed has

not yet been confirmed, this costing is an approximation but we will be endeavouring to

work within the overall cost estimate of £10m. The cost of each phase is forecast to be:

Phase 1 (£2m) - Commercial Arrangements . The design of new processes and

commercial arrangements which may require payments to customers to manage

constraints and the operation of the network.

Phase 2 (£6m) - Innovative Tools. The deployment of new technology to manage the

operation of the network with a higher penetration of generation. This will involve

integrated solutions to manage the overall operation of the network as well a local

solutions for individual problems e.g. voltage control on feeders.

Phase 3 (£1m) - Implement and Optimise Solutions. Ongoing refinement of solutions

and engagement with customers and stakeholders.

Phase 4 (£1m) - Dissemination and Recommendations. Detailing and publishing

learning outcomes and recommendations for updating policies to allow other DNOs and

stakeholders to replicate the outcome and learning from the project.

✔

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

deliver net financial benefits to existing and/or future customers. Merged evaluation

criteria, as set out in decision letter.

The DNO must demonstrate that the Solution makes a contribution to the Carbon Plan and has the potential to deliver

financial benefits.

Timely connection of renewable generation at all levels of the network is key to

achieving the targets set out in The Carbon Plan. There is also a target for 500MW of

community based renewable generation for Scotland by 2020. The key objective of this

project is to facilitate more renewable generation connections onto the network in a

more efficient manner for the customers. The Carbon Plan highlights the need for

smarter methods to manage energy supply and demand. This project will identify the

issues and techniques required to facilitate the transition to a lower carbon network.

Through this project SPD have an environment which is representative of many of the

challenges that networks across GB will face in the future by already having a high

penetration of distributed generation, and a large pipeline of new connections. This will

enable other customers to benefit from the new processes which are trialled and new

technologies which are demonstrated.

It has been identified that there are shortfalls in the existing connection process as

highlighted by SPD statistics indicating that under 10% of applications result in actual

connections. Stakeholder workshops will identify necessary changes to the connections

process to improve the acceptance rate and so develop a new connections process.

This new connections process will then be trialled in order to determine if these

improvements are realised by increased amounts of generation being connected.

Novel commercial arrangements will be trialled to provide incentives for generators to

operate in conjunction with the new processes and technologies. This could involve

payments for generators who accept dynamic constraints or those providing additional

functions such as voltage control. This is expected to encourage new generators to

connect and will also provide benefits when it is possible to actively share network

capacity.

The introduction of new technologies would enable changes to the deterministic design

rules in order to utilise the existing network capacity in a more flexible manner. The

network design can then be optimised around the characteristics of high levels of

renewable generation. The combination of new technologies and design practices is

expected to result in shorter timescales for the connection of generation. This will allow

a higher contribution from low carbon generation as identified by The Carbon Plan.

We expect the implementation of innovative solutions will also release additional

network capacity through the optmised use of the existing asset base, whilst reducing

network reinforcements and the associated disruption to local communities. This is

expected to deliver financial benefits to the customers through the reduced need for

traditional copper in the ground reinforcement methods. Other significant financial

benefits will be derived from the reduction in time to connect for generators which will

help advance the roll out of renewable generation.

Has a Direct Impact on the operation of the distribution network

A Second Tier Project must demonstrate that the Method(s) being trialled will have a Direct Impact (as defined in v.4 of the

Governance Document) on the operation of a DNO's Distribution System.

Generate knowledge that can be shared amongst all network operators

The DNO must explain the learning which it expects the Method(s) it is trialling to deliver. The DNO must demonstrate that it

has a robust methodology in place to capture the learning from the Trial(s).

The project requires that a new generation connection process is implemented in order

to maximise the use of the existing network. In order to facilitate this new process

additional visibility and control of the network will be required that is not available with

traditional passive networks. This is expected to be realised through the installation of

new technologies onto the network.

Commercial Impact - by implementing a new connection application process a

derogation will be required. This is likely to impact all elements of the existing

commercial arrangements for generation connections and will require the development

of a new approach that is in the interest of all stakeholders.

Technical Impact - by seeking innovative solutions to overcome existing barriers in

connecting renewable generation, the project will impact the current design process and

challenge current network assumptions. By optimising the use of the existing network

capacity and facilitating a more active network with a higher number of participants,

this will directly impact upon the design and management of the network.

Operational Impact - an active network will increase network capacity by overlaying

control systems that provide a response necessary to manage increased levels of

fluctuating and intermittent generation. Such systems, e.g. automatic constraint

systems or voltage controllers, are expected to be deployed that will have a direct

impact on the system operation by controlling power flows and voltages in response to

both demand and generation.

We expect the project to provide learning in the following areas which will be relevant

to all DNOs:

Generator Appetite for Change - to implement a revised connection application process

will require a significant stakeholder engagement programme both in the interim period

to inform the FSP and through the development and implementation of the new

connection process. The project will inform on the willingness of the developer

community to implement change to existing processes and will provide key learning on

the conditions that need to be met the provide confidence to developers to invest in

their projects. Engagement with stakeholders will help disseminate learning and will

also facilitate indirect knowledge sharing through developers' interaction with UK DNOs

on other projects out with the trial area.

Proving the Technology & Commercial Arrangements - the project will provide learning

on the new commercial arrangements which are established and how these are

developed. The project will involve the various project partners in this project as well

as the opportunity for other DNOs to become involved from the design stage. The

project will also prove a variety of new technology and how this can be integrated with

the new commercial processes which are applied.

Revision of Existing Policy - the ultimate learning from the project will be to inform on

any revision required to existing regulatory or industry policy and codes that govern the

connection of low carbon generation in order for all DNOs to implement the learning.

Please tick if the project conforms to the default IPR arrangements set out in

the LCN Fund Governance Document?

If the DNO wishes to deviate from the default requirement for IPR then it must demonstrate how the learning will be

disseminated to other DNOs.

Focus on Methods that are at the trialling stage

Demonstrate why you have not previously used this Solution (including where the Solution involves commercial

arrangements) and why LCN funding is required to undertake it. This must include why you would not run the trial as part of

your normal course of business and why the Solution is not R&D.

✔

We will aim to conform to the default IPR arrangements set out in the LCN Fund

Governance Document. Should the project deviate from these arrangements at the FSP

stage, the project will demonstrate how the learning and benefits will be disseminated.

The rapid increase in connection applications has meant that the current regulatory and

business processes can delay the connection of renewables onto the network. The new

connection process must be trialled to ensure that it delivers best value to the customer

and that it can facilitate the increased levels of generation required. The costs of this

and the associated developments can not be attributed to individual generators and

therefore additional funding is required to undertake them.

The LCNF is the main regulatory mechanism that permits a DNO to undertake a trial of

this scale with the commercial implications that are being considered and investigate

possible enhancements to the regulatory process. A derogation from existing licence

and industry governance arrangements will be required to trial a new process for

connecting generation to the network which would not normally be demonstrated in the

absence of LCN Funding due to the potential commercial and regulatory risk.

The associated business processes and technology solutions that are necessary for the

integration of future generation are system wide methods and devices whose cost

cannot be attributed to a single generator. Therefore the cost of these solutions must be

met by the DNO and would not normally feature in a business plan due to the potential

uncertainty and nature of the investment.

The technology stage will aim to deploy a number of technology solutions which are at

the demonstration phase rather than those at the R&D stage.

Project Partners and external resourcing/funding

The DNO should provide details of any Project Partners who will be actively involved in the Project and are prepared to devote

time, resources and/or funding to the Project. If the DNO has not identified any specific Project Partners, it should provide

details of the type of Project Partners it wishes to attract to the Project.

Derogations or exemptions

The DNO should outline if they consider that the Project will require any derogations, exemptions or changes to the regulatory

arrangements.

A number of groups have been engaged in the development of this project and have

intimated their support for the objectives of the project. Furthermore they agree to

participate in the various workshops and activities required as part of this project.

These include;

• Scottish Renewables - as a representative for renewable generators.

• Community Energy Scotland - Scotland's only national charity dedicated to

supporting communities to develop renewable energy projects.

• University of Strathclyde - Academic partner with strong links to CES.

• East Lothian Council - One of the principal councils in the project area.

• Energy Innovation Centre - To provide assistance in identifying SMEs who

could potentially become involved.

These groups are able to provide access to the wider generation community and

customers as well as potential industrial partners, but further partners may be added as

the project develops. The open approach which is being applied to selecting technology

may also identify further partners and sources of funding.

The project will require agreement to implement a revised connection application

process that covers the trial area. Therefore an exemption from providing individual

connection offers in line with the existing GS and Distribution licence requirements is

required, as by taking a holistic approach greater network design analysis will be

necessary.

Consideration may also be given to a review of existing charging arrangements for

generators dependent upon the configuration of connection and optimisation of network

development i.e. interactive offers and affect of parties withdrawing under current

regime.

We will also seek to develop a revised connection application pro-forma which will give

anyone seeking a connection within the trial area to either be part of the trial or opt out

and receive a connection offer in line with existing processes.

We would seek to implement enduring arrangements in line with the principles of the

trial that would be agreed with stakeholders, furthermore we would not change the

process for G83/1 connections who would operate on a business as usual basis.

Customer impact

The DNO should outline any planned interaction with Customers or Customer’s premises as part of the Project, and any other

direct customer impact (such as amended contractual or charging arrangements, or supply interruptions).

Please use the following section to add any further detail you feel may support your

submission.

Engagement with customers is one of the key project activities which will be used to

develop the new business processes and select new technologies. This engagement will

continue throughout the life of the project to ensure that the systems best meet the

customers needs.

New customers in the pilot area will be subject to the new connection applications

process unless they choose to opt out. All G83 connections would continue to be

connected using the existing separate G83 process. Some existing and future

generation customers may be offered different commercial arrangements to encourage

integration with active network management systems.

The technical arrangements of some the existing generation connections may change as

a result of this project, for instance, to include some demand side management

solutions, however no changes will be imposed without prior agreement with all parties.

Whilst it is anticipated that demand customers will not be affected, any opportunities to

increase network utilisation by interacting with demand customers will be investigated.

Some solutions may require the installation of new technology, new communications

equipment or new monitoring equipment at customers premises within the trial area.

Some future and existing generators may receive connections with a dynamic capacity

limit.

We will launch an open innovation tender to identify solution providers for the problems

identified. The intent is to open the door to a wide range of potential suppliers of all

sizes, to demonstrate their solutions can make a material difference in the way

networks are planned, designed and operated.

The first stage, a screening process, will invite brief proposals based on a simple

proforma in order to determine if the solution is able to address some of the problems

identified. The proposals will be reviewed to identify those that are sufficiently mature

and offer suitable mechanisms for integration with other systems and business

processes. This process is intended to obtain a wide range of proposals giving equal

weight to suppliers of all sizes. We will be working with the EIC to identify potential

solutions. A key criteria will be that technology which is proposed is novel and not

deployed at scale in other Tier 2 projects.

The second stage will invite selected suppliers to further develop their proposals in

order to create a shortlist of preferred suppliers. This will ensure that the technology

integrates with the business processes under development and provides the best

opportunity to deliver the benefits required. This selection procedure is intended to

provide a toolbox of identified suppliers whose solutions can be implemented, as

required, at a later stage in the project.

This range of solutions and a short list of suppliers will be selected before the FSP. As

the new connection process is developed through the various workshops this range may

be further refined.

Contact name

Contact Address

E-mail

Direct telephone line

Job title

Martin Hill, Future Networks Manager

SP Energy Networks,

New Alderston House,

Dove Wynd,

Strathclyde Business Park,

Bellshill, North Lanarkshire,

ML4 3FF

Martin.hill@scottishpower.com

0141 614 1768

Future Networks Manager

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