National Grid 2014 Annual Report Download - page 32

What we do
We own the electricity transmission system in
England and Wales. Our networks comprise
approximately 7,200 kilometres (4,470 miles)
ofoverhead line, 1,400 kilometres (870 miles)
ofunderground cable and 335 substations.
We are also the national electricity transmission
system operator, responsible for both the England
and Wales transmission system, and the two high
voltage transmission networks in Scotland, which
we do not own.
Day-to-day operation of the system involves the
continuous real-time matching of demand and
generation output. We are also designated as
system operator for the new offshore electricity
transmission regime.
Where we are heading
Although demand for electricity is generally
increasing around the world, in the UK it is expected
to remain broadly flat over the next five to 10 years.
Changes in the sources and characteristics of
generation connecting to our network mean we need
to develop the way we balance and operate our
network to accommodate these sources, including
wind, new and large-scale nuclear generation,
andmany embedded sources that are connected
tolocal networks and not our transmission grid.
Industry forecasts indicate there will be a tightening
of the margin between the available supply of
electricity and the demand for it over the next few
years. We have a central role in developing the
reform of the electricity market, which is designed to
incentivise new generation to be built. We have also
developed two new balancing services allowing the
market to provide us with additional tools to balance
the network if required.
Over the last 12 months some generators have
delayed their connection dates to the network and
this means our future investment profile for electricity
transmission is flatter than in previous years. But we
are ready to respond to connection dates when we
need to. We will continue to renew our network to
deliver the network reliability our customers require
as efficiently as possible.
What we’ve achieved during 2013/14
• We made significant progress with our network
upgrade plans. We are pleased with our progress
on the London Power Tunnels project and have
now started site works on the first 600 kV subsea
HVDC link in the world. Connecting Scotland and
England, this link will support the export of low
carbon Scottish generation.
• In March 2014, the new Transmission National
Control Centre in Warwick became operational.
This will help our focus on the future complexities
of network security, energy management and
streamlining our operational and safety switching
activities, increasing the potential for access to the
transmission system.
• We improved our asset maintenance policy, which
will provide greater efficiency for our maintenance
programme. We are implementing the policy
throughout 2014 to minimise disruption to
customers and planned work.
• We worked closely with DECC and Ofgem to
helpinform and manage security of supply
through a period of significant change in the UK
energy market.
• We have carried out analysis to help inform the
Government’s decisions on energy policy as well
as administering key parts of the enduring regime.
• We have developed two new balancing services
that could be used to provide additional reserves
to support the operation of the electricity
transmission system if margins continue to tighten
towards the middle of this decade. These new
services, known as the Demand Side Balancing
Reserve and the Supplemental Balancing Reserve,
were approved by Ofgem in December 2013, and
the associated funding arrangements approved in
April 2014. We will tender for these services if they
are needed for the forthcoming winters.
Priorities for the year ahead
• Work with our contract partners to continue
improving safety performance.
• Engage with customers and stakeholders while
we progress our major infrastructure projects
through the planning process.
• Continue the roll-out of our new performance
excellence way of working across Electricity
Transmission.
• Develop new, innovative ways to deliver the network
reliability our customers require, at minimum cost.
• Build on the analysis results that informed the first
EMR delivery plan and successfully implement
and operate the Capacity Market and Contracts
for Difference Feed-in Tariff regime, as part of the
Government’s EMR project. This will support a
sustainable, affordable and secure electricity
market into the future, in addition to the
procurement of balancing services to support
mid-decade capacity margins.
• Shape development in the UK and EU energy
industry by continuing the development of
network codes to support the completion of
aEuropean Internal Energy Market in 2014.
30%
UK Electricity
Transmission
adjustedoperating
profit of Group total
Principal operations
continued
UK Electricity Transmission
Thanks to our installed
extra flood protection
atcritical UK sites
ournetworks withstood
the winter storms well,
helping maintain
reliability and
reducecosts.
30 National Grid Annual Report and Accounts 2013/14