3. Agenda
TransGrid Reliability Webinar - 19 August 20153 /
3.00pm Introductions and housekeeping
3.05pm Welcome and session objectives
3.10pm Background on how reliability standards are set
3.20pm AEMO presentation on Value of Customer Reliability
3.50pm Implications of reliability standards on our network
4.20pm Options for reliability standards in TransGrid network
5.00pm Closing comments and workshop concludes
5. Session objectives
TransGrid Reliability Webinar - 19 August 20155 /
> Discuss reliability standards as they apply to TransGrid
> Discuss how reliability standards are set
> Understand your views on the balance between cost and reliability
7. What is reliability?
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Reliability generally refers to the extent to
which customers have a continuous supply
of electricity.
8. How are reliability standards currently set?
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˃ Set by NSW Government
˃ Normally expressed in terms of
spare capacity (in terms of
redundancy) that must be available
˃ Set in advance of investment
decisions.
9. Governance in context
TransGrid Reliability Webinar - 19 August 20159 /
Australian Energy
Market Commission
(Rule Maker and
Market Developer)
Australian Energy
Market Operator
(System and Market
Operator)
Australian Energy
Regulator
(Economic Regulator
and Rule Enforcer)
Institutions
NSW
NT
TAS
WA
VIC
QLD
SA
ACT
Commonwealth
Policymakers
COAG Energy
Council
(Policymaking)
Representatives
Energy
Consumers
Australia
10. Towards a national approach
TransGrid Reliability Webinar - 19 August 201510 /
Review
Principles
agreed to
Report to
COAG on
progress
November 2013 December 2014 Late July 2015
11. AEMC’s proposed reliability standard setting process
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Development
of guidelines
and values of
customer
reliability
1. Customer
consultation
2.
Development of
reliability
scenarios
3. Reliability
scenario
selection
4. Reliability
scenario
evaluation
5.
Draft report and
customer
consultation
6. Economic
assessment
report
7. Reliability
standards are
met
8. Publication
of regulatory
proposal
Preparation of
regulatory
proposal
15. SLIDE 15
VALUE OF CUSTOMER RELIABILITY
Transgrid Reliability Workshop: 4 August 2015
PRESENTED BY NICOLA FALCON, GM - PLANNING
16. SLIDE 16
WHAT IS VALUE OF CUSTOMER RELIABILITY?
• VCR represents, in $/kWh, willingness of customers to
pay for reliable electricity supply
• VCR values are applied to help:
o balance electricity cost with value customers place on
reliable supply
• Balance consistent with National Electricity Objective
o delivering outcomes in consumers’ long-term interests
18. SLIDE 18
NO SINGLE VCR VALUE
Duration of
outage?
Severity of
outage?
Season of
outage?
Time of
outage? Peak
or offpeak?
Day of outage –
weekday or
weekend?
Time of
outage? Peak
or offpeak?
$?
Type of
customer
19. SLIDE 19
HOW DO WE ESTABLISH THE VALUE?
• Latest VCR review 30 Sept 2014
• COAG Energy Council requested the review:
o First time NEM-wide study
o Survey 3,000 residential, business, and direct connect
customers – the highest-ever number
• Choice modelling revealed customer preferences
20. SLIDE 20
INSIGHTS
• Outage duration and daily peak most critical
• Only minimal difference between urban, CBD and rural
Residential
• Outage duration
• Weekend outages have a lower impact than weekday outages
• Off-peak outages preferred by industrial and commercial businesses; agricultural
businesses generally indifferent
Business
• Break in production generally exceeds length of supply interruption
• Prolonged outages may result in permanent equipment damage
• No incremental costs with increases in outage frequency
Direct connect
21. SLIDE 21
Direct Connects
KEY VCR VALUES
Sector Agriculture Commercial Industrial
VCR ($/kWh) 47.67 44.72 44.06
State NEM NSW VIC QLD SA TAS
VCR
($/kWh)
25.95 26.53 24.76 25.42 26.88 28.58
Sector Weighted Avg Metals Wood, pulp, paper Mining
VCR ($/kWh) 6.05 5.29 1.44 14.96
Residential customers
Business customers
Directly-connected customers
22. SLIDE 22
PLANNERS’ CHOICE OF VCR VALUE
Depends on availability of local information, materiality, and
sensitivity of outcomes
Aggregate
Locational
Outage specific
Direct over-ride
•Regional demand composition
•All outage scenarios
•Local demand composition
•Only a subset of outage scenarios create
load at risk
•Eg local knowledge of direct connect VCRs
23. SLIDE 23
VCR SURVEY LIMITATION
• VCR values should not solely be relied on to assess high
impact or prolonged widespread outages
• Severity variable was not included in VCR values
o Survey definition was qualitative – “one that impacted on a few
blocks”
Easy to understand, difficult to apply
• Extra information may be sought to understand an event’s
prolonged or widespread consequence
• Supplement VCR with:
o International experiences of city wide disruptions
o Expert advice
24. SLIDE 24
IMPACT OF WIDESPREAD/SEVERE OUTAGES
• Impact of widespread/severe outage can be significant:
o In Victoria
2001 – Melbourne CBD supply interrupted twice
• Severity may have been reduced if system operated N-1 secure
• ESC amended Electricity Distribution Code, 2008
o CBD security of supply upgrade plan, specifically for Melbourne CBD
distribution system
Jan 2007 – Report to Victorian Government
• $500 million = estimated economic impact of a single wide spread
supply disruption
o NE US grid (Business Blackout, University of Cambridge, 2015)
US economy impact $243 billion to $1 trillion
25. SLIDE 25
LINKS TO REPORT
VCR final report:
http://www.aemo.com.au/Electricity/Planning/~/media/Files/Other/planning/SAAF/VCR_final_report__PDF.ashx
VCR application guide:
http://www.aemo.com.au/Electricity/Planning/~/media/Files/Other/planning/VCR%20Planning/VCR%20Applicati
on%20Guide%20%20Final%20report.ashx
VCR Fact Sheet:
http://www.aemo.com.au/Electricity/Planning/~/media/Files/Other/planning/VCR_Fact_Sheet.ashx
28. Supply reliability
TransGrid Reliability Webinar - 19 August 2015
Reliability:
the extent
to which
customers
have a
continuous
supply of
electricity
across the
delivery
system
28 /
29. Balancing act
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Reliability Cost to consumers
But also utilising: > Non-network solutions
> Negotiations with direct connected customers
30. Break up of your bill
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7.1%
11.6%
43.2%
38.0%
Environmental policies
TransGrid
Other network charges
Generation and retail
31. The importance of a reliable transmission connection
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> Affects a large geographical area
> Result in a significant commercial
impact
> Safety could be compromised
> Lead to critical services not being
available
33. Around the NEM
TransGrid Reliability Webinar - 19 August 2015
> Queensland:
Deterministic – (n-1-d) subject to loss
in load ˂ 50MW or ˂600MWh
> NSW:
Deterministic – (n-1) and partial (n-2)
for supplying to Sydney CBD
> Victoria:
Probabilistic – each augmentation is
assessed individually
> South Australia:
Deterministic – (n-x) subject to
minimum restoration time(s).
33 /
34. Our thoughts on reliability standards
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Current issues:
> Lack of flexibility
> Immature demand management market
> Technology
However we look to standards that are:
> Acceptable to the NSW electricity consumers
> Transparent and not complex
> Measurable and enforceable
> Aligned with a common national framework.
37. TransGrid Reliability Webinar - 19 August 201537 /
Weather
Regional / economic growth
Energy efficiency
PV
Intermittent generation
Firm generation
Demand
Generation
Net demand
P(d1)
P(d2)
P(g1)
Other plant
Transmission lines / cables
Transformers
System stability (e.g. voltage stab)
Demand management
Generation
Operational measures
Network augmentation
Increase in
network capacity
Overload
Load curtailment
@VCR
Demand reduction
Capacity with
(n-x)
P(c1)
+
-Thermal
Non network solutions
Network solutions
P(c2)
P(o1) P(o2)
+
-
-
P(d3)
Factors impacting on reliability
38. Consideration of uncertainty of load growth or decline
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Actual
AEMO High
AEMO Medium
AEMO Low
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
2005/06 2007/08 2009/10 2011/12 2013/14 2015/16 2017/18 2019/20 2021/22 2023/24
Estimate
39. Uncertainty of weather variations
TransGrid Reliability Webinar - 19 August 2015
Weather related
uncertainty in
maximum demand
is approximately
12% on average
for NSW
39 /
40. Generation developments and retirements
TransGrid Reliability Webinar - 19 August 2015
> Incentives on the renewable
generation (eg solar and wind) away
from the existing transmission grid
> Retirement of the ageing coal fired
generating plant
40 /
42. Impact of generation retirement and demand growth
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By 2030 the
demand growth,
generation
retirements and
development of
new generation
could drive new
transmission
development.
NSWgeneration
12,830
VIC+Snowytransfer
2,750▲
QLDtransfer1,200▲
Liddellretirement2,000
▼
ValesPointretirement
1,320▼
2015Demand12,050
2030HighDemand
Forecast17,850
2030MediumDemand
Forecast16,600
2030LowDemand
Forecast13,460
43. Impact on safety
TransGrid Reliability Webinar - 19 August 2015
The Electricity Supply (Safety and Network Management) Regulation 2014 requires
TNSP to achieve the following through mandating the establishment and
maintenance of an Electricity network safety management system:
> The safety of members of the public
> The safety of persons working on the network
> The protection of property (whether owned by the network operator or not)
> The management of safety risks arising from the protection of the environment
(for example, preventing bushfires which may be ignited by the network assets)
> The management of safety risks arising from the loss of electricity supply.
43 /
44. Network redundancy over a year
TransGrid Reliability Webinar - 19 August 2015
20%
40%
60%
80%
100%
120%
140%
Capacity with 1 element out of service when no redundancy is built-in
Capacity with 1 element out of service when 2 redundancies are built-in
Capacity with 1 element out of service when 1 redundancy is built-in
Normalised NSW demand
44 /
45. Peak load at risk
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46. Unserved energy vs load at risk (MWh)
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Unserved Energy
for 100 MW Load
Unserved Energy
for 500 MW Load
0
500
1000
1500
2000
2500
3000
1% 10% 19% 28% 37% 46% 55% 64% 73% 82% 91% 100%
MW demand at risk
47. Supply interruptions
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Transmission lines
> Failure rate:
3.5 per 100km each decade
> Average restoration time:
23.8 hours
> Cost to build:
330 kV between $0.9-1.3m per km
500 kV around $2m per km
Underground cables
> Failure rate:
0.5 per 100km each decade
> Average restoration time:
1128 hours
> Cost to build:
Buried between $6-20m per km
Tunnel around $35m per km
48. Supply interruptions
TransGrid Reliability Webinar - 19 August 201548 /
Transformer
> Failure rate:
1.7 per population per decade
> Average restoration time:
63.1 hours
> Cost to build:
330/132 kV between $7-10m per km
132/33 kV between $3-4m per km
Connection point
> Failure rate:
0.7 per population per decade
> Average restoration time:
23 hours
> Cost to build:
Buried between $6-20m per km
Tunnel around $35m per km
50. Next steps
TransGrid Reliability Webinar - 19 August 201550 /
Development
of guidelines
and values of
customer
reliability
1. Customer
consultation
2.
Development of
reliability
scenarios
3. Reliability
scenario
selection
4. Reliability
scenario
evaluation
5.
Draft report and
customer
consultation
6. Economic
assessment
report
7. Reliability
standards are
met
8. Publication
of regulatory
proposal
Preparation of
regulatory
proposal
