Memorandum submitted by ABB (FBEN 13)

 

1. About ABB

 

1.1 ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 120,000 people, in the UK ABB employs around 2,600 people. Technology plays a key role for ABB with our nine research centres, 6,000 scientists and 70 university collaborations across the world, of which several are in the UK. ABB is a one of the largest providers of transmission grid plant and equipment to connect Round 2 and proposed Round 3 offshore wind farms to the UK and European Grid systems.

 

1.2 ABB is the pioneer of HVDC technology and has the largest installed base globally. This particular technology will be required for the large-scale connection of offshore wind in Europe and the other countries throughout the world. The development costs associated with this technology and the lead times to manufacture and establish capacity are substantial and early visibility coupled with a good level of confidence is essential to ensure production capacity and engineering resource is made available in time to meet the proposed UK and European renewables 2020 targets.

 

 

2. Executive summary

 

2.1 The Government's vision should be to facilitate the expansion of a fit for purpose electricity infrastructure which is designed to deliver sufficient capacity in advance of the renewable connections requests.

 

2.2 A more whole-life cost analysis should be carried out to assess the true value of early deployment of underground transmission links which attract far less public objections and which facilitate the early connection of renewable energy. It is also important that the current planning reforms are seen through as expeditiously as possible.

 

2.3 It is important that the Government continues to work with industry to provide the leadership and direction for improving the training and certification of our future workforce. This also requires that industry and university establishments are much more closely aligned

 

2.4 A workable and predictable offshore transmission regime, with minimal regulatory uncertainty, is essential to ensure that the UK remains an attractive location for the investment necessary to aid the Government in meeting its renewable energy targets.

 

2.5 The need for interconnectors with mainland Europe is substantial if the Government is to meet its renewables targets. Electricity interconnectors using HVDC technology will be particularly effective at renewable resource levelling, facilitating energy security and allowing energy trading to occur.

 

2.6 The existing transmission system can be enhanced and optimised by the use of smart grid technology which adds a new level of dynamic control to the existing network

 

2.7 The development and deployment of smart grid technology to meet the challenge of the 2020 targets requires a step change in transmission and distribution company research, development and deployment activity.

 

 

3. What should the Government's vision be for Britain's electricity networks, if it is to meet the EU 2020 renewables target, and longer-term security of energy supply and climate change goals?

 

3.1 The Government vision should be to facilitate the expansion of a fit for purpose electricity infrastructure which is designed to deliver sufficient capacity in advance of the renewable connections requests. The transmission and distribution networks should function to support one another rather than independently. Sufficient flexibility should be allowed for in the regulatory process to ensure risks and uncertainties associated with generation mixes can be accommodated. It is essential that a highly co-ordinated approach is adopted with a single design authority responsible for the long term planning of the transmission and distribution system. A piece meal approach driven by apparent short term cost savings will fail to deliver the network required to meet the UK Governments 2020 targets.

 

 

4. What are the technical, commercial and regulatory barriers that need to be overcome to ensure sufficient network capacity is in place to connect a large increase in onshore renewables, particularly wind power, as well as new nuclear build in the future? For example issues may include the use of locational pricing, or the availability of skills.

 

4.1 ABB anticipates that a number of the required transmission system upgrades may well be difficult to construct in time, due to the very lengthy planning processes and resource-consuming public inquiries. Many of these objections are brought about by the use of overhead transmission lines. ABB holds the view that a more whole-life cost analysis should be carried out to assess the true value of early deployment of underground transmission links which attract far less public objections and which facilitate the early connection of renewable energy.

 

4.2 While progress has been made on planning reforms in the UK, it is important that the reforms are seen through as expeditiously as possible. At present, planning issues add to the considerable uncertainty in the resource planning processes for project deployment in the UK. For example, delays on overhead line transmission grid infrastructure projects due to excessively long UK planning inquiries impact negatively on the confidence of resource allocation to these projects by suppliers and contractors.

 

4.3 With regard to addressing skills issues, ABB is delighted to be involved with several UK universities, the Power Academy and the Power Sector Skills Steering Group on skills development. Through this work, we understand the challenges posed by availability (or otherwise) of skilled engineers. The UK is not alone in having a shortage of skilled engineers; it is a problem that exists across the world. It is important that the Government continues to work with industry to provide the leadership and direction for improving the training and certification of our future workforce. ABB believes that industry and government need to work together to develop a fit for purpose skills and training strategy. This requires that industry and university establishments are much more closely aligned so that academic and theoretical learning is tuned to the needs of industry. It may also require that greater financial support - both public and private - is provided to engineering undergraduates and post-graduates.

 

 

5. What are the issues the Government and regulator must address to establish a cost-effective offshore transmission regime?

 

5.1 ABB is committed to helping the Government to achieve the UK's contribution to meeting the EU's 2020 renewable energy target, which in turn will improve security of supply and reduce dependency on non-EU imports. The UK is competing in the international marketplace for increasingly scarce resources for the timely deployment of renewable generation. A workable and predictable regime, with minimal regulatory uncertainty, is essential to ensure that the UK remains an attractive location for the investment necessary to aid the Government in meeting its targets.

 

5.2 The proposed offshore regulatory regime is viewed by many as being overly complex, time consuming and lacking in a long-term strategic view. Multi-level tendering in an environment that will lack overall co-ordination may well lead to a non-optimal offshore transmission system and hinder the ability of the supply chain to plan with any degree of confidence.

 

5.3 A strategic and coordinated approach to offshore subsea networks which link offshore renewables and also interconnect with Europe will deliver a better solution in the long term.

 

 

6. What are the benefits and risks associated with greater interconnection with other countries, and the proposed 'supergrid'?

 

6.1 If the Government intends to reach the target of 32 per cent of electricity supply from renewables then the need for interconnectors with mainland Europe is substantial. Wind power is variable but in the main predictable and offers a substantial source of carbon free energy. However demands on the electricity system may well require the use of energy storage, demand management and electricity interconnections to the rest of Europe. Electricity interconnectors will be particularly effective at renewable resource levelling. This levelling will allow supply excess and shortages to be spread around mainland Europe. This type of approach both facilitates energy security and allows energy trading to occur. HVDC technology is well advanced, and with a strong 50-year track record any of the risks associated with interconnection with Europe will mainly come from non-technical factors.

 

 

7. What challenges will higher levels of embedded and distributed generation create for Britain's electricity networks?

 

7.1 The UK transmission system was not fundamentally designed for very high levels of embedded and particularly distributed generation. However the existing system can be enhanced and optimised by the use of smart grid technology which adds a new level of dynamic control to the existing network. By the careful and co-ordinated application of this technology, much higher levels of embedded and distributed generation will be possible without any impact on the current high levels of reliability that customer enjoy in the UK from the electricity supply system.

 

 

8. How can the regulatory framework encourage network operators to innovate, and what is the potential of smart grid technologies? Is there sufficient investment in R&D and innovation for transmission and distribution technologies?

 

8.1 A smart grid is an infrastructure that puts the emphasis firmly on active rather than passive control. A good analogy is in the control of traffic on a busy stretch of motorway. During off-peak periods, cars can drive freely with no speed restrictions other than the maximum speed limit. But in the rush-hour the warning signs on the overhead gantries are used to impose speed limits on specific lanes. So by restricting the speed of movement of individual streams, congestion is avoided, optimising the flow of all traffic. More intelligent control of power flows in the transmission and distributions systems will allow higher utilisation even during high demand periods. Smart grids will grow through evolution rather than revolution.

 

8.2 The development and deployment of such smart grid technology to meet the challenge of the 2020 targets requires a step change in transmission and distribution company research, development and deployment activity.

 

8.3 ABB currently spends approximately six per cent of its revenue on research and development. However Ofgem only currently requires utility companies to spend 0.5 per cent of their network revenue on research, development and innovation deployment. In the light of such a large scale engineering challenge for UK transmission and distribution companies to address, a target of 0.5 per cent would appear to be inadequate. Utility companies should be incentivised to initiate and deploy large scale network demonstrators of new technologies and where such deployments are successful attract adequate rates of return.

 

March 2009