It is frustrating to learn that SPEN are advising our MSPs that their proposed strategic reinforcement project is needed because the existing system is old. So let’s explore this in some depth.
The over-riding driving force is not because the existing system is old. If it were it could be simply replaced on a like for like basis at the same voltage and treated as a revenue project. Instead this is a strategic capital project and one that helps deliver outputs at the heart of Ofgem’s RIIO-T1 regulatory framework as described in SP Transmission’s Business Plan (2011). We refer here to page 5 of SPENs Business Plan which makes clear this particular project is intended to deliver a large strategic capacity reinforcement to meet EU requirements for 450MW bi-directional capacity of the Moyle interconnector and provide capacity for renewable generation. We have not invented these words, the Business Plan states this in black and white.
Given that the existing transmission network is limited to 105MW pre-fault summer rating and the sum of embedded renewable generation in the area is already over 300MW it is obvious the existing network capacity is reaching a constraint. However, when all the presently consented generation in the region is brought into operational over the next several years the generation could reach upwards of 1000MW and would have significantly exceeded this were it not for the announcement by the Secretary of State for Energy and Climate Change on the 18 June 2015.
There is every indication, therefore, that if the network is not already overloaded it will soon become overloaded. Against this background we appreciate there is a need to uprate the system so that it has the capacity to export the excess capacity to load centres in England and Wales. We understand it is not possible or desirable to upgrade the existing system for several reason which include the age of component and difficulty in obtaining spares, the constant need for (and cost of) maintenance as well as the increasing potential for major faults to occur to key items of equipment.
The only option is to replace the existing equipment with modern equivalents. But, and we need to stress again here, the driving force for this strategic project is the increasing capacity demands on the existing network which it will simply not be able to meet. The result will be significant increases in constraint payments over the next decade or so.
In the short-term at least SPEN have confidence in their ability to maintain the current system as they have agreed a target with Ofgem of 224MWh not supplied through to 2021 and we note in Scottish Power UK plc (2014) Annual Report and Accounts for year ending 31December 2014 that they have continued to meet other security of supply metrics which indicates the high level of effort and professionalism that goes into maintaining the system.
In summary, therefore, simply stating that the existing system is old is misleading. After all, the National Grid in their Electricity Ten Year Statement (2014) make clear that although much of the equipment is obsolete, it is in good condition with many years of service left.