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National Grid Electricity Transmission Annual Report and Accounts 2006/07 21
the need to invest in our networks to accommodate renewables
and together with the transmission price control, funding costs
for £350 million of investment will be allocated to our electricity
transmission owner activity allowable revenue for the upgrade
of the Anglo-Scottish interconnector and associated works
(conditional on the satisfactory outcome of key planning
consents). At this time, access is being sought by approximately
12 GW of renewable generation consisting of 165 projects,
each with connection agreements in Scotland. For England and
Wales connection offers have been made to an additional 5 GW
of renewable generation.
Performance during the year
The winter of 2006/07 saw demand from the electricity
transmission network in England and Wales hit a peak of 52.1
GW. This compares with 53.7 GW for 2005/06. The total
amount of electricity transmitted for 2006/07 was 303,721 GWh
compared with 312,339 GWh for 2005/06.
Descriptions of our progress against our overall objectives in
the areas of performance, growth, talent, relationships
(including customer service) and responsibility are set out on
pages 4 to 7. We include below further information specific to
Electricity Transmission with respect to our performance,
growth and customer service objectives.
Performance
Our progress against our operating objectives during the year,
in addition to those described on page 5, includes the following:
Objective Performance
Reliability Average annual availability of our electricity
transmission network in 2006/07 was 95.02%,
compared with 95.09% in 2005/06. Reduced
availability reflects the increased amount of asset
replacement activity to ensure the reliability of the
network for years to come.
System availability at winter peak demand was
98.2% in 2006/07 and 97.9% in 2005/06.
Efficiency We have been undertaking a number of internal
business process reviews to seek out further
savings without compromising our other objectives.
Efficiency is reflected in our financial performance,
which is discussed below.
Financial
performance
Adjusted operating profit of £566 million is 16%
higher than 2005/06. This is discussed in further
detail in the financial results sections following.
Growth
Investment
Investment in electricity transmission systems is, by its nature,
variable and is largely driven by changing sources of supply
and asset replacement requirements. Our electricity
transmission licence also obliges us to provide connections and
capacity upon request.
The bulk of the current UK electricity transmission network was
installed during the 1960s and 1970s, with main plant asset
lives typically of between 40 and 50 years. We have increased
our level of investment as, over the next few years, we replace
parts of our electricity network as these assets become due for
renewal. This, together with work required to meet changing
supply sources, means that the Electricity Transmission
business has embarked on a significant increase in investment
and network renewal.
Capital investment in the replacement, reinforcement and
extension of the UK electricity transmission systems in 2006/07
was £606 million compared with £530 million in 2005/06.