Ofgem has approved an alternative process for determining whether the connection of generators to distribution networks will have an impact on the transmission network.
The regulator said the new process will allow connections to be assessed on an aggregated basis, rather than individually, and give all parties greater visibility over available network capacity.
Under the current process set out in the Connection and Use of System Code (CUSC), distribution network operators (DNOs) must submit a request for a Statement of Works to the Electricity System Operator (ESO) if they believe the connection of a small or medium-sized embedded generator is reasonably likely to have an impact on the transmission network. This request must include technical information about the generator as well as its proposed connection date.
The ESO then has 28 days to respond with a Statement of Works, saying whether or not the generator will have a significant impact on the transmission network. A generator is currently considered to have a significant impact if their connection requires the expenditure of more than £10,000. The statement does not explain what this impact is or how it could be mitigated.
If the ESO determines that the generator will not have an impact on the transmission network, then the DNO can proceed with the connection. But if the generator is expected to have an impact on the transmission network, the DNO has 90 business days in which to submit a Confirmation of Project Progression, along with relevant data. If this is not submitted, the Statement of Works is considered withdrawn and the DNO may not connect the generator.
Upon receipt of a valid application, the ESO has three months to assess the scale of the impact and possible mitigation options, and prepare a Modification Offer for the DNO, which is valid for three months.
The ESO charges fees for undertaking both stages of the process but DNOs can skip straight to the second stage if they are certain that the generator in question will have an impact on the transmission network.
All medium-sized generators must go through the Project Progression stage. In England and Wales, a generator is considered is medium sized if it has a capacity of more than 50MW and less than 100MW. In Scotland, there is no medium category and generators are considered large if they have capacity of more than 30MW or 10MW, depending on the licence area.
As explained by Ofgem, this two-step process is “inefficient and time-consuming.” Faced with a growing volume of connection applications from embedded generators, DNOs have for a number of years been trialling and refining a new process referred to as Appendix G.
Under this process, which has been implemented through an appendix to the Bilateral Connection Agreements between DNOs and the ESO, the ESO informs DNOs of how much headroom is available at each grid supply point.
DNOs provide monthly updates to the ESO of their newly accepted connection offers. If these connections do not exceed the headroom, the connections are signed off by the ESO. However, if the headroom is exceeded, then DNOs must submit a Confirmation of Project Progression for the connections in that batch.
However, this process is not standardised and varies between DNOs. The ESO therefore proposed a CUSC modification in 2018, designated CMP298, which would formalise the process by incorporating it into the code.
This standardised process will be known as a Transmission Impact Assessment. Upon the initial setup, the ESO will determine a Planning Limit for each grid supply point (GSP) reflecting the maximum power export that the transmission network accommodate without further reinforcement, and set out indicative works that would be required to increase the limit. It will be up to the DNO to decide how to allocate the capacity available below this “cap”.
The ESO will also set a Materiality Trigger for each GSP, which will act as a “checkpoint” for reviewing the limit and the trigger. DNOs will provide regular, normally monthly, updates on how much of the available capacity it has allocated to new connections. DNOs will also be able request a review at any point.
CMP298 will also introduce new ESO fees for the initial creation of a Transmission Impact Assessment and requests to increase a Materiality Trigger.
It will not remove the existing Statement of Works and Project Progression process from the CUSC, which DNOs will still be able to use for individual projects.
The modification has now been approved by Ofgem – more specifically an alternative version (WACM3) that would require the ESO to accept or reject data submitted by DNOs as part of their regular updates within five working days. This version also omits proposals in the original version to allow the ESO to charge DNOs for re-work that is necessary if the data they submit does not meet its requirements.
Ofgem said the modification will “streamline” the connections process, which has been deemed “inefficient and time-consuming by multiple parties across the industry.” By allowing generation connections to be assessed on an aggregated basis, the regulator said it will reduce bureaucracy and administrative costs, and cut the time the needed by DNOs to provide connection offers to customers.
It said the modification will also have an important signalling function, providing greater visibility over the capacity available at each GSP, which will be published on a monthly basis by the ESO: “Due to widely available information on GSPs’ capacity, customers can make more informed investment decisions and connect, knowing where headroom capacity is available, and no significant reinforcements are needed.”
The noted concerns over the disparity between the treatment of generators of similar sizes in England and Wales and Scotland due to the differing size thresholds but said this matter is outside the scope of the modification.
CMP298 will be implemented later this month. Ofgem has also approved an associated modification to the System Operator Transmission Owner Code.