Scottish Affairs Committee - A Robust Grid for 21st Century ScotlandWritten evidence submitted by the John Muir Trust

Terms of Reference addressed in this submission:

The current condition and technological state of Scotland’s electricity transmission network, and what conditions they are built to withstand.

The advantages and disadvantages of using an alternative electricity transmission infrastructure, particularly regarding its vulnerability to weather-related damage, but including all significant consequences.

How the regulation of Transmission System Operators and Distribution Network Operators impacts upon investment in Scotland’s electricity transmission network.

Executive Summary

1. The Inquiry should consider how much of the storm difficulties came from transmission lines and how much was from distribution lines.

2. The Inquiry should consider whether there were significant causes of recent power cuts other than direct damage to lines.

3. Were any of the recent power outages in storms due to sudden fluctuations on the grid, as a result of powering down a very significant proportion of wind production? (See records for 3 January 2012 in text).

4. Are there any grounds for concern about the grid’s ability to cope with the growing level of fluctuations and variable generation from wind production?

5. The Inquiry should consider what the big risks to power supplies will be in the years to 2021

6. Will Ofgem’s recently-announced £7 billion spend on transmission address the kind of problems seen in recent storms—since that spend is for transmission, not for improving distribution lines?

7. Ofgem has not analysed cost-benefit evidence from transmission companies adequately on a previous occasion—Beauly Denny transmission—the costs of which have doubled before the line is built, or correctly compared costs for alternatives.

8. The UK Parliament has an opportunity to ensure adequate scrutiny of public spending on transmission.

John Muir Trust Submission

Observations on Terms of Reference

1. The fairly narrow Terms of Reference run the risk of starting from the premise—and, therefore, predicting the conclusion—that more investment in Scotland’s transmission network is urgent and that that would minimise the problems of power outages in storms, such as those experienced in December 2011 and January 2012.

2. The weather-related incidents of the last two months need to be examined to see whether they were caused by damage to infra-structure by high winds and related damage, eg trees falling on lines, or whether some of them are caused by grid management problems—for instance, the sudden loss of power from a particular source leading to problems balancing the grid.

3. The John Muir Trust believes that the Inquiry remit should be extended to consider—“What investment is needed in the Scottish electricity system taking account of all issues?” Unless all relevant issues are considered it could be that money will be spent unnecessarily on the transmission system. In the present time of financial difficulty this would be a very undesirable outcome.

4. The Inquiry should examine the frequency and severity of power cuts taking account of all potential causes, including what proportion of those cuts were caused directly by weather damage. So, following on from considering “The frequency and severity of weather-related power cuts in Scotland”, a relevant point to consider is “The frequency and severity of power cuts in Scotland and whether there are significant causes, other than direct damage to lines”.

5. The Inquiry should examine “what are the big risks in the years to 2021?”.

Example of risk situation—wind generation fluctuation on 3 January 2012

6. The 3 January wind generation record from BM Reports, see graph below, shows a very high average production for the day, as was publicised by the renewables industry. For instance, at 12.30am on 3 January, the forecast and the actual production were closely matched at 2680MW.

7. N.B. The wind production data which is used here is that which is monitored by National Grid and publicly available and comes from the BM Reports NETA website. It gives the output of a very significant proportion of all major wind generators in the UK—about two thirds of UK installed wind capacity and includes about 80% of Scottish wind output. England & Wales is not monitored by the Grid for onshore wind as there the grid voltage is at 275kV, unlike Scotland where the grid is at 132kV.

8. Sudden variations in wind generation on the grid are of very real concern. When such swings combine with other large generator plant loss a risk to grid stability can arise. The data taken during the storm on 3 January shows how quickly and dramatically wind production can drop. Moreover, the difference between the output which has been forecast, and used to plan grid arrangements, and the actual wind production which occurs can be massive—as was demonstrated around settlement period 17 (ie 0830 hours) on 3 January.

9. Data from BM Reports, New Electricity Trading Arrangements website: 3–5 January 2012.1

10. Between 0800 and 0900 on the same day, 3 January, output was a third of what had been forecast, having dropped to 1087MW whereas the forecast for this period was 3480MW. The explanation for this massive drop is likely to be that the storm meant wind turbines all over the country had to be switched off, for safety and engineering reasons. This generally happens above 56 miles per hour (25metres/sec).

11. Note that, during a period between period 9 and period 37 (ie 14 hours) when the forecast was for high production in a fairly stable pattern, actual production dropped from approximately 2700MW to approximately 1000MW. This was about 2400MW lower than the forecast around period 17. Production then rapidly rose again, although not to forecast levels.

How big a challenge is balancing the grid?

12. The Committee may wish to invite evidence from the actual System Operation engineers “at the sharp end” who balance the grid as to the extent of the challenge that unexpected 2400MW shortfall was. This sudden drop in wind production results from turning off turbines for safety and engineering reasons in high winds.

13. Were any of the power outages on 3 January 2012 due to sudden fluctuations on the grid, as a result of powering down a very significant proportion of wind production?

14. The Committee may also wish to ask the cost that will be incurred in carrying extra response and reserve generating plant to meet contingencies such as this event, when the full programme of wind generation by 2020 is on the grid.

Is a high level of wind production a risk?

15. At the other extreme, the challenge of coping with exceptionally high levels of wind generation during high winds was recognised by RenewableUK who commented on 6 January 2012, “As we’re generating increasingly large amounts of electricity from wind, feeding those large volumes of power into the system represents an engineering challenge to the National Grid—a challenge we are pleased to see they met over Christmas.” RenewableUK media release 6 January 2012. This seems to imply that there was some doubt within the industry about the ability of the grid to cope with the current level of fluctuations and variable generation.

Will Ofgem’s preferred grid expansion deal with the problems?

16. Another issue the Committee will be considering is Ofgem’s announcement on 23 January 2012 regarding Scotland’s grid upgrade. This, unfortunately, puts the cart before the horse saying, “Fast-tracking of SP Transmission Ltd (SPTL) and Scottish Hydro Electric Transmission Ltd (SHETL) cuts red tape and enables a focus on delivering efficient services for consumers”. By praising specific aspects in the consultation, Ofgem seems to prejudge its own consultation, this Inquiry and also Scottish planning decisions. For instance, the map in Ofgem’s consultation includes a sub-sea cable to Shetland where no major renewable projects have yet been approved and a sub-sea cable to the Western Isles is included although several more large-scale developments beyond that currently consented would be needed to justify the cost.

17. The John Muir Trust understands that the high voltage grid needs to be looked at and some substantial work will be needed. However, the Committee may wish to consider whether it is financially appropriate to justify transmission reinforcements based on an assumed power output from wind generation higher than the probable median value ie on over-inflated estimates of grid capacity need.

Ofgem’s regulation—The adequacy of assessment of cost-benefits and environmental issues

18. Whether Ofgem’s attention to all aspects of its role as regulator is adequate is a question which needs significant UK parliamentary scrutiny. Ofgem seems to wish to consent to spending on a massive scale, including sub-sea cables, on an assumption that North West Scotland and the islands will have many more major wind projects consented. The Committee may also wish to note that the proposed £7bn expenditure does not include the costs of further transmission reinforcements required within England to take the power to the load centres in the south—so further spend will be required, which is not being scrutinised alongside the Scottish allocation. The Committee may wish to ask about what further expenditure is required to get power from the proposed upgraded Scottish grid to where that power is actually to be used. The lack of such an assessment was a major defect in the Beauly-Denny cost analysis which served to exaggerate the benefits.

Environmental assessment

19. There is little sign of Ofgem having done the required environmental assessments for these projects although it has a duty under the Electricity Act. Yet, when such projects come to be consented by the Scottish Government, there will be no ability to interrogate the assumptions behind these projects. There was a minimal Strategic Environmental Assessment of these grid developments when they were included in the Scottish National Planning Framework as, at that time, the proposals were extremely sketchy. Now, however, the “need” for them is assumed to have been proven—despite any changes in economic and technical considerations and with almost no significant environmental scrutiny.

20. Ofgem, therefore, is almost the sole arbiter at this point for whether these projects proceed. As the UK Parliament is the regulator for Ofgem, the UK Parliament must ensure any spending approved is achieving value for public money, whilst protecting the environment.

21. Some press coverage (BBC Scotland news, presumably after interviewing Ofgem), of Ofgem’s “announcement of £7 billion spend” strongly suggested that this spend was designed to avoid a repeat of this past winter’s power cuts in many areas. The item was accompanied by footage of trees on power lines and transmission engineers out in gales. However, a considerable amount of the damage to lines in a gale will be to distribution (lower voltage) lines, not transmission (high voltage) lines. Unless a significant proportion of those power cuts were due to transmission (high voltage) line failure, the belief that this spending will alleviate such problems is extremely misleading. It is reminiscent of people in Ayrshire being told in the 1990s—when the Scotland—Ireland high-voltage interconnector was planned—that they would benefit locally from more reliable electricity supplies once the line was in, despite the two issues being unconnected.

22. The Committee will wish to consider the Ofgem announcement and consultation about replacing high voltage transmission but might also ask Ofgem what specific measures they are taking to address the possibility of significant distribution line damage in future storms.

23. The Committee will wish to distinguish between problems and costs relating to distribution and those related to transmission.

Inadequate cost-benefit analysis by Ofgem and alternative methods of transmission

24. When considering the viability of alternative methods of transmission, it should be noted that Ofgem has inadequately analysed cost-benefit evidence from transmission companies on a previous occasion—the 400kV Beauly Denny transmission line. The costs of this have doubled before the line is built and were queried at Inquiry.

Sub-sea cables

25. It should be noted that sub-sea cables were ruled out of consideration before Public Local Inquiry as an alternative to the Beauly Denny, 220km, 400kV overhead transmission line due to cost and readiness for deployment. Five years later, it is the stated intention of UK government and Ofgem that a sub-sea cable from the north-east of Scotland to England will go ahead in the near future.

So the public is now paying for both overhead and sub-sea options after inadequate or misleading cost-benefit analysis before and at the Beauly-Denny Public Local Inquiry. This is something which various expert witnesses including Sir Donald Miller, ex-Chairman of Scottish Power, and Professor Andrew Bain, an Emeritus economics professor, tried to bring evidence on at that Inquiry. They were not allowed to bring that evidence forward.

Undergrounding cables

The Trust has not commissioned detailed work on the costs of undergrounded cables. However, the just-released report by engineering consultants Parsons Brinckerhoff gives weight to the argument that transmission companies have consistently over-estimated the costs of undergrounding cables, and continue to quote costs for outdated technology.

Need for a National Energy Commission

26. Many engineering bodies, eg Institute for Engineers and Shipbuilders In Scotland, are calling for a National Energy Commission to look at the technical and economic aspects of current UK and Scottish policy and to consider the viability and costs of both energy production and transmission. It is absolutely essential that this is done, with a significant proportion and range of independent experts and other relevant stakeholders. For too long, both UK and Scottish Governments have taken most of their advice from the energy and transmission industries themselves, as if they were disinterested players.

27. To ask the transmission industry whether they believe £7 billion must be spent on transmission in Scotland by 2021 is like asking a road haulier whether a motorway to John O’Groats is needed—explaining that the cost will be taken indirectly off consumers; the asset of the road will be handed over to the haulier’s company and he will receive revenue from others using the road. In both cases, the answer will be “yes”.

28. The current market-led system of electricity supply and Ofgem’s regulation may not adequately protect Security of Supply and will also excessively increase consumer bills. This will, in turn, impact on the economic performance of the UK. The economic, social and environmental aspects of the proposed grid upgrades must be examined in a holistic manner. There is no evidence that Ofgem is adequately doing that so the UK Government and Parliament must ensure it is done. The Committee may wish to take evidence from the relevant Minister on this aspect.

Conclusion

The UK Parliament has a duty to ensure public spending on electricity transmission infra-structure is properly audited and this Inquiry is a useful part of that.

1 February 2012