Electricity Networks Strategy Group

The Electricity Networks Strategy Group (ENSG) says it provides

a high level forum which brings together key stakeholders in electricity networks that work together to support government in meeting the long-term energy challenges of tackling climate change and ensuring secure, clean and affordable energy.

ENSG is chaired by Ofgem (which regulates the electricity and gas markets in the UK) and the UK government's Department of Energy and Climate Change (DECC). It is made up of energy companies and government departments relating to energy networks. The stated aim is to 'support government in meeting the long-term energy challenges of tackling climate change and ensuring secure, clean and affordable energy.'

It was formed in 2003, and reformed in 2008.

History

The group was formed by the DTI (now BERR)and Ofgem. This is a description of the setting up of the ENSG, taken from its first Annual Report in 2005:

The ENSG is a third generation industry group. In 2000, in response to concerns that there were barriers to the development of generation connected to distribution systems, the DTI and Ofgem established the Embedded Generation Working Group (EGWG). The EGWG brought together the main distributed generation (DG) stakeholders. It reported in January 2001. One of its main recommendations was that Ofgem and the DTI should establish a group to address the barriers to DG that it had identified. This led to the formation of the Distributed Generation Co-ordinating Group (DGCG), in November 2001...

The DGCG’s work progressed against a background of new challenges for networks. Growth of renewable generation in Scotland and the prospect of large renewable generation plants (in particular offshore windfarms) posed new challenges for transmission operators. Initially a Transmission Issues Working Group (TIWG) made a start on this work. However, in the second half of 2004 the DTI decided that the work of these two groups should be brought together under a higher level group to which both would report... The ENSG’s establishment was the result...The case for establishing the ENSG is that both the transmission and distribution networks are fundamental enablers for the development of the low-carbon generation base sought by the Government.

Views

There have been two high profile reports:

• A Smart Grid Routemap

Here is ENSG's definition of a smart grid:

A Smart Grid as part of an electricity power system can intelligently integrate the actions of all users connected to it - generators, consumers and those that do both - in order to efficiently deliver sustainable, economic and secure electricity supplies.

The ENSG lists the following as smart grid group members:

AEA | Association of Electricity Producers | CE Electric UK | Centrica Energy | DECC | EDF Energy Networks | Electricity North West Limited | Energy Networks Association | Energy Research Partnership | Energy Retail Association | E.ON Central Networks | Energy Technologies Institute | Intellect | National Grid | Ofgem | Renewable Energy Association | RLtec | RWE Npower | Scottish & Southern Energy | Scottish Executive | Scottish Power | Centre for Sustainable Electricity and Distributed Generation | Smarter Grid Solutions | The Carbon Trust | Western Power Distribution

• Our Electricity Transmission Network: A Vision for 2020

To identify where areas of investment were required, in 2008 Ofgem and the Government asked the Electricity Networks Strategy Group (ENSG)—a senior industry group—to consider what the transmission system would need to look like to meet the 2020 targets for renewable energy. The ENSG published the first phase of its work in March 2009. It identified reinforcement work for a range of projects in areas of Scotland, Wales, East Anglia, London and the South West. It includes potential high voltage subsea cables between Scotland and the north of England along both the east and west coasts. In total, the work could amount to £4.7 billion between now and 2020. This is in addition to network investments already approved to connect renewable generation and through the current transmission price control. Combined, the cost of this work would be equivalent to the asset value of the existing transmission system—potentially the biggest grid development since the Second World War.[77] It is also worth noting that this excludes the cost of connecting future offshore wind. The report notes that provided the work is taken forward in a timely manner, subject to planning consent, the reinforcements could be delivered within the required timescales. They would be phased over the next decade with the resulting network able to accommodate between 29 and 45 gigawatts of new generating capacity.[78]

The principal argument of the report is that in order to generate more energy from renewable sources, there needs to be a sharp increase in investment in order to increase the capacity of the electricity grid. The estimate cost of this is £4.7 billion. The government has ruled out funding this and so it appears likely that energy companies will pass on the cost to consumers, which has caused some concern (as is reported in an article for The Guardian):

The National Grid, which runs the transmission system in England and Wales and will pay for the bulk of the programme in the first instance, said it was government's role to provide the right framework of policies rather than pay directly for it. "We can recover the costs in the same way that we do all our other investments," said a Grid spokesman, who admitted it could need to spend as much as £9bn overall on changes to the network.

The Grid would bill utilities such as Centrica, EDF and E.ON, which generate the electricity and then supply it to customers using the Grid's network. These companies can be expected in turn to pass on the extra costs to the householder.

Chris Stubbs, director at environment consultancy WSP, said the £4.7bn bill highlighted the "worryingly high cost" of embracing new energy generation and that the consumer or taxpayer would end up paying.

"It is important to consider that offshore wind is particularly expensive when compared with onshore wind, as the laying of underwater cabling is costly, as is the building of the turbines," he added.

Although the report has been welcomed by almost all in the energy industry, there has also been some concern voiced that the new capacity is not needed:

Goran Strbac of Imperial College London, said: 'We still need to see whether all of (ENSG's proposals) are actually required.' Professor Strbac is director of the government-funded Centre for Sustainable Electricity and Distributed Generation. 'Our work suggests that the existing system could potentially take much more than what the present thinking is,' he said.

Although there was a consensus between the generators and network companies in favour of significant new investment in transmission reinforcements, this view was not shared by all who gave evidence to the Committee. For example, Dr Michael Pollitt told us a key concern should be “making sure that we do not […] give network incumbent companies a licence to massively increase capacity, which might not be necessary”.84 Prof Strbac noted too that the ENSG work presents a solution that involves a ‘business as usual’ response by the industry that is a direct consequence of the existing regulatory framework.85 Although both acknowledged that investment in the network infrastructure will be needed, they also believed that, in addition to new capacity through network reinforcements, a range of other solutions that can release latent network capacity should also be considered. These include, for example, the application of a variety of operational measures, emerging local generation coming on stream, or allowing a greater role for responsive demand—all of which could substitute for network investment. A further important concern raised by Phil Baker and Dr Bridget Woodman at the University of Exeter was that existing network assets should be fully utilised before making the case for further investment.86 The GB Security and Quality of Supply Standards (SQSS) set out the criteria and methodologies that National Grid must use in the planning and operation of the electricity transmission system. In other words, they determine the level of transmission asset utilisation. Baker and Woodman told us there is scope to improve the utilisation of the existing transmission assets.87 One example could be a move towards weather-related security standards. At present around 70% of transmission faults relate to weather conditions. However, the weather is not taken into account when operating the transmission system, even though it may be possible to relax operational security standards during fair-weather conditions, and so release latent network capacity. Such an approach could significantly decrease the external costs of operating the transmission system and reduce the need for investment without posing a risk to customer supplies.

The Beauly-Denny transmission line, which has recently been approved by the Scottish Government, has been seen as essential by the ENSG:

The proposed Beauly-Denny rebuild is an important step in developing a transmission system in the North of Scotland of sufficient capacity to accommodate renewable development proposals. With this upgrade in place, further reinforcement of the North of Scotland transmission system can be achieved by the strengthening of other elements of the existing system.

A major criticism of the plans to upgrade the Beauly-Denny line was that sub-sea cables could be used instaead, which would obviously reduce any environmental impact. Despite this option having appeared to ahve been ruled out, the ENSG report actually says that this work is needed in addition to the over-land upgrade:

The Herald can reveal in the footnotes to Energy Minister Jim Mather’s announcement that the line would be given the go-ahead on Wednesday, there is confirmation that both these options will also be needed in addition to the 137-mile line.They are included in the Scottish Government’s National Planning Framework 2 (NPF), which was published in June, but was overshadowed by announcements at the time about the new Forth crossing, high-speed rail link to London and Commonwealth Games facilities.

Mr Mather’s statement was accompanied by confirmation that the second national planning framework, approved by the Parliament,includes the upgrading of the east coast transmission route and the reinforcing the Beauly-Keith overhead transmission line. The footnotes also confirm a commitment to pursue a subsea option, in partnership with the UK Government through the Electricity Networks Strategy Group (ENSG). It would mean “... developing off shore subsea cable links between the Scottish mainland and the islands and links to the UK for export”.

The report has received enthusiastic backing from the UK Government:

Energy and Climate Change Minister Mike O’Brien said, ‘This report marks the start of the electricity grid’s makeover to accommodate new low carbon power generation which is needed by 2020.

‘This is a massive long term investment opportunity and this upgrade work will help support jobs across the low carbon economy. ‘Having a grid which is fit for purpose is vital for our ambitions to cut carbon emissions and increase security of supply,’ he added.

People

2006 Members

In 2006 the members of the old ENSG were:

• Claire Durkin Department for Trade and Industry (Chair) Director, Energy Markets
• David Gray Ofgem (Chair) Managing Director, Networks
• Jim Cambell Department for Trade and Industry (New Chair)
• John Scott Ofgem Technical Director
• Simon Cocks NGET Commercial Director,Transmission.
• Jim Sutherland Scottish Power Regulation and Asset Director
• Colin Hood Scottish and Southern Chief Operating Officer
• Phil Jones CE Electric UK President and Chief Operating Officer
• Paul Cuttill OBE EDF Energy Chief Operating Officer, Networks
• Nic Rigby RWE Npower Head of Strategy and Regulation
• Tony White MBE Climate Change Capital Director of Research
• Malcolm Kennedy Formerly PB Power Former Chairman of PB Power
• Wilson Malone (to September 2006) Scottish Executive Head of Energy and Telecommunications
• Ron Loveland Welsh Assembly Director, Energy Wales

2008 Members

In 2008 the reconstituted members of the ENSG were:

• Jonathan Brearley Joint Chair. BERR - Director, Energy Strategy & Futures
• Stuart Cook Joint Chair. Ofgem - Senior Partner, Transmission and Governance
• Nick Winser National Grid
• Mark Mathieson Board Member – Scottish and Southern Energy (Scottish Hydro Transmission Ltd)
• Jim Sutherland Scottish Power Transmission
• Barry Hatton EDF
• Phil Jones CE Electric UK President and Chief Operating Officer
• John Crackett E.ON Managing Director
• David Love British Energy Head of Regulation
• Kevin Akhurst RWE Npower Executive Director
• Douglas Wright Renewable Energy Systems Managing Director – Wind Energy
• Sarwjit Sambhi Centrica Energy
• David Hodgkinson AMEC Wind Energy. Managing Director
• Robert Longden Renewable Energy Association/ British Wind Energy Association/ Scottish Renewables Forum Trade Association nominated representative to ENSG
• Jane Morgan Scottish Executive Head of Energy & Telecommunications
• Ron Loveland Welsh Assembly Head of Sustainable Energy & Industry
• Department for Communities & Local Government To be confirmed
• Neil Witney Department for Environment, Food and Rural Affairs (DEFRA)Head of Sustainable Development Unit
• John Overton BERR Deputy Director, Grid Renewables Deployment Team

• Steve Smith former Joint Chair OfgemManaging Director of Networks (at the time he was Joint Chair of ENSG)

Publications, Contact, Resources and Notes

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