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20131127 Presentation - TransGrid Deliberative Forums
- 1. TransGrid and thechanging energy market Deliberative forums with consumers – Sydney CBD, Wagga and Parramatta November 2013 This TransGrid event brought together a range of community members to provide feedback our five year business plan and revenue proposal. Some small changes have been made to the following presentation as details will continue to change as we take feedback from our consultation process. All details were correct at the time of publication, E&OE.
- 2. Overview of TransGrid TransGridpromotional video This video is current unavailable 2 November 2013 TransGrid Deliberative Forums
- 3. The electricity supplychain 38% wholesale plus carbon 3 8% November 2013 TransGrid Deliberative Forums 34% Total 13% retail 7% green residential schemes bill
- 4. Generating and transporting electricity Generatingcapacity in the National Electricity Market 2013 4 November 2013 TransGrid Deliberative Forums The transmission network is like the freeways for electricity
- 5. TransGrid‟s key statistics 94substations 63 generator connections 362 distributor and direct customer connections November 2013 TransGrid Deliberative Forums 47 kms underground cables 5 12,609 kms high voltage transmission lines 1,083 employees, with more than 70% based outside Sydney
- 6. TransGrid‟s revenue TransGrid isa government-owned ‘natural monopoly’ . It is for-profit, to encourage efficiency. Regulator sets revenue NSW Government equity investor / shareholder in business Revenue collected through electricity bills 80% of profits returned to owner (NSW Government) 20% of profits reinvested in TransGrid 6 November 2013 TransGrid Deliberative Forums
- 7. What TransGrid does Design,maintain and operate the network to: Keep the lights on Get the cheapest generation to market 7 November 2013 TransGrid Deliberative Forums
- 8. The market haschanged 70,000 GWh Total electricity demand in NSW 1951/52 8 November 2013 TransGrid Deliberative Forums 2012/13
- 9. Index movement Significant electricityprice rises NSW residential electricity price 400 300 200 CPI 100 2009 2004 November 2013 TransGrid Deliberative Forums 1999 1994 9 1990 2013
- 10. TransGrid‟s new approach Adaptive planning Sydney CBD 2012/13 Summer demand management (like taking 50,000 air conditioners off the grid) Effective engagement „Have your say‟ website Public review of consultation practices Smarter regulation A new way of thinking about the reliability / cost trade-off 10 November 2013 TransGrid Deliberative Forums
- 11. Engaging with stakeholders Government and regulators Industrialand commercial consumers Distributors and other transmitters Residential consumers Generators 11 Impacted communities November 2013 TransGrid Deliberative Forums TransGrid‟s 5year plan, and broad engagement to understand needs and behaviour Particular network needs
- 12. The energy conversation Cost Reliability 12 November2013 TransGrid Deliberative Forums
- 13. Draft five yearplan
- 14. Business plan overview $2,100 Typicalannual electricity cost $168 14 TransGrid‟s 2013 TransGrid Deliberative Forums November Draft Business Plan TransGrid part of bill
- 15. Business plan overview Breakdownof typical residential annual transmission charges Consult today on operating expense proposal Tax & depreciation Operating expense Return on proposed capital investment Return on capital already invested 15 TransGrid‟s Draft Business Plan Forums November 2013 TransGrid Deliberative Consult today on new capital proposal
- 16. How TransGrid‟s pricescompare Prescribed revenue per energy transmitted (c/kWh nominal) 3 ElectraNet (SA) Transend (Tas) c/kWh nominal 2 Powerlink (Qld) TransGrid (NSW) 1 SP AusNet (Vic) 0 2005-06 2007-08 2009-10 16 TransGrid‟s 2013 TransGrid Deliberative Forums November Draft Business Plan 2011-12 2013-14 2015-16 2017-18
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- 18. How much networkdo we need? 18 Capital – non build focus November 2013 TransGrid Deliberative Forums
- 19. Replacement dominates proposed capitalinvestment Proposed capital investment for 2014 to 2019 Category Description Augmentation New or upgraded infrastructure to cater for growing demand Replacement Updating infrastructure which is wearing out Market benefits New or upgraded infrastructure to expand generator access and competition Others Non network infrastructure, including commercial property and IT systems, and security compliance 19 Capital – Overview November 2013 TransGrid Deliberative Forums
- 20. Peak demand hasslowed and is less certain 20 Capital - Augmentation Deliberative Forums November 2013 TransGrid
- 21. History of networkdevelopment is driving replacement needs 21 Capital - Replacement Deliberative Forums November 2013 TransGrid
- 22. Comparison with other maturenetworks Annual Replacement Spend as % of Depreciated Asset Value 10% 8% 6% 4% 2% 0% National Grid (UK) Transpower (NZ) SP AusNet (Vic) 22 Capital - Replacement Deliberative Forums November 2013 TransGrid Transend (Tas) Powerlink (Qld) TransGrid (NSW/ACT) ElectraNet (SA)
- 23. Proposed replacement project portfolio Forecastreplacement projects for 2014 to 2019 Category Powering Sydney‟s Future („contingent‟) Substation renewal Control system renewal Transmission line renewal Individual equipment replacement 23 Capital - Replacement Deliberative Forums November 2013 TransGrid
- 24. „Market benefits‟ projectsto dispatch cheapest generation 24 Capital – Market benefits November 2013 TransGrid Deliberative Forums Queensland to New South Wales interconnector upgrade Snowy to Yass / Canberra upgrade
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- 26. TransGrid performs wellagainst international peers 26 Operating expense – Overview Forums November 2013 TransGrid Deliberative
- 27. Breakdown of draft operatingexpense proposal Proposed annual operating expense for 2014 to 2019 Category Description Plan and manage assets Planning the development of the transmission network and capital portfolio management Maintenance Inspections, preventative, conditionbased and corrective maintenance Operate the network 24 hour control room operations, outage planning and technical studies Supporting the business IT, health and safety, property and insurance 27 Operating expense – Overview Forums November 2013 TransGrid Deliberative
- 28. Increased planning and engagementcosts Planning cost trend 12 10 More responsive capital expenditure decisions 8 6 More transparent investment decision making 4 2 - Planning cost increases to date: Proposed increases Consumer engagement Demand management innovation 28 Operating expense – Planning Forums November 2013 TransGrid Deliberative
- 29. Efficiencies in maintenance, operationsand business activities 29 Operating expense – Maintenance November 2013 TransGrid Deliberative Forums Innovation in operations (virtual control room and automation of functions) to reduce costs Video of transformer failure Automation of condition monitoring and control systems to reduce maintenance costs Efficiencies achieved in procurement, accommodation and payroll
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- 32. Minimising our buildprogram: past success Demand-driven capital approved by the regulator for 2009 to 2014 Responding changing Responding toto changing demand forecasts demand forecasts Approx $700 million deferred Advocating smarter Advocating smarter reliability reliability standards or standards or grid innovation grid innovation Continuing to procure non-build options such as demand management 32 Capital – Non build focus November 2013 TransGrid Deliberative Forums Approx $1.2 billion completed or underway
- 33. Increasing focus oninnovative non-build options Demand management Peak load management through time of use tariffs, interruptible loads and load shifting etc. Local generation Local generation (biomass, solar, cogeneration) to reduce loading on network Energy efficiency Increasing customers‟ use of efficient appliances, lighting, motors etc. 33 Capital – Non build focus November 2013 TransGrid Deliberative Forums
- 34. Consulting on requirementsfor Powering Sydney‟s Future Works underway to defer / avoid the need: advocacy for changed reliability standard seeking network support energy efficiency uptake study‟ electric vehicles study planning and demographics study „low build‟ options (eg cable backfill remediation) 34 Capital - Replacement Deliberative Forums November 2013 TransGrid
- 35. Potential non-build options Consumereducation on saving electricity Research understanding consumers‟ behaviour Demand management to postpone network investment Large companies being willing to turn off Interruptible loads (eg air conditioning fan off at peak times) Load shifting (eg washing machine at night) 35 Battery storage pilot program November 2013 TransGrid Deliberative Forums
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- 38. Allocating transmission revenue betweenconsumers 38 The pricing methodology must be submitted to the regulator at the time of the revenue application Transmission pricing should promote efficient outcomes across all consumers, and cover the total cost of transmission services November 2013 TransGrid Deliberative Forums
- 39. Transmission bill components 38% Wholesale powerplus carbon price 8% 35% 13% Retail and retail margin 7% Green (FiTs, RET, o ther) 39 November 2013 TransGrid Deliberative Forums
- 40. Allocating transmission prices– two options Postage stamp User pays TransGrid‟s charges are now approximately half “postage stamp” and half “user pays”. 40 November 2013 TransGrid Deliberative Forums
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- 43. For further informationon TransGrid or this presentation please contact TransGrid’s External Communication Manager on 02 9284 3016. Alternatively visit our consultation website – yoursaytransgrid.com.au