Summer Outlook Report - National Grid

Page created by Emily Bowman
 
CONTINUE READING
Summer
   Outlook
   Report
   2018

APRIL 2018
Summer Outlook Report 2018                                                         01

How to use this interactive document
To help you find the information you need quickly
and easily we have published the Summer Outlook
Report as an interactive document.

Home                                       A to Z
This will take you to the contents page.   You will find a link to the glossary
You can click on the titles to navigate    on each page.
to a section.
                                           Hyperlinks
Arrows                                     Hyperlinks are highlighted in bold
Click on the arrows to move                throughout the report. You can click
backwards or forwards a page.              on them to access further information.
Summer Outlook Report 2018                                                                 02

Welcome to the 2018 Summer Outlook Report.
The report draws together analysis and feedback
from across the industry to present a view of supply
and demand for the summer ahead.
                   We had a great response to our      • Winter Review and Consultation
                   recent readership survey and          – explores the actual energy
                   I’d like to thank you for taking      demand and supply patterns
                   the time to share your views.         and how they compare with our
                                                         forecasts. This year it will include
                   Acting on your feedback we have:      an analysis of the recent cold
                   •	strengthened the information       weather spell on both the gas
                     we have included on the             and electricity systems. We’ll
                     markets we are connected to         be publishing this in early June.
                   •	provided more commentary
                     and background on the factors     In them you can find out more
                     affecting these markets           about the evolution of the energy
                   •	provided more in-depth           landscape, and how we’re
                     analysis of the recent changes    working with our stakeholders
                     to the electricity generation     to build and operate the gas and
                     capacity profiles of a number     electricity systems of the future.
                     of major European countries       Thank you for taking the time to read
                   •	concentrated on the impact of    this year’s Summer Outlook Report.
                     transit gas and the changing
                     profile of LNG supplies to GB.    To find out more, and register
                                                       for email updates, go to our
                   The Summer Outlook Report is        website. We want to make sure
                   just one in a suite of documents    our publications are as useful
                   from the System Operator            to you as possible, so please let
                   exploring the future of energy.     us know what you think. You can
                   I encourage you to read our         email your feedback to us at
                   other publications including:       marketoutlook@nationalgrid.com,
                   • Response and Reserve Roadmap     join the debate on Twitter
                      – explores the complexity of     using #FutureofEnergy
                      balancing supply and demand
                      in a changing energy landscape   Fintan Slye
                   • Future Energy Scenarios – will   Director UK System Operator
                      explore the longer term trends
                      in the industry and how that
                      may impact the energy mix
                      from today to 2050. Look out
                      for the FES 2018, which we’ll
                      be publishing on 12 July 2018.
Summer Outlook Report 2018                                                                                                                                        03

Contents

Executive summary.................................................04
National Grid’s role..................................................06              Chapter two
Accessing further information.............................07

                                                                                    Gas..............................................................................51
  Chapter one                                                                       Gas demand..............................................................52
                                                                                    Gas supply.................................................................59
                                                                                    Europe and interconnected markets..................62
Electricity................................................................... 11   Gas operational outlook.........................................65
Electricity demand..................................................12
Operational view including
generation/supply...................................................24                Chapter three
Europe and interconnected markets..................37
Electricity operational outlook.............................47
                                                                                    Appendix....................................................................70
                                                                                    Glossary.....................................................................76
Summer Outlook Report 2018                                                                   04

Executive summary

The Summer Outlook Report is an annual publication
delivered by National Grid each spring. It presents our
view of the gas and electricity systems for the summer
ahead (April to September). The report is designed to
inform the energy industry and support their preparations
for this summer and beyond.

 Overview: Electricity summer 2018
 Both peak and minimum transmission            the daytime demands we see on the
 system demands this summer are expected       transmission system are supressed by
 to be lower than the 2017 weather corrected   it, which can make forecasting difficult.
 outturn. Minimum transmission system          Solar PV and wind generation connected
 demand is expected to be 17 GW, this          to the distribution networks have increased
 equates to 21.1 GW of underlying demand,      to 12.9 GW and 5.7 GW respectively.
 only marginally lower than last summer’s      Increased supply and demand variability
 minimum. Peak transmission system             caused by these periods of low demand
 demand is anticipated to be 33.7 GW           and high levels of renewable generation
 between the high summer months of June        can create operability challenges. As a
 to August. We expect there to be sufficient   result, we may need to take more actions
 generation and interconnector imports         to curtail generation and possibly instruct
 to meet demand throughout the summer          inflexible generators to reduce their output
 period.                                       in order to balance the system.

 The increase in distribution connected        In our operational outlook chapter we
 generation, for example wind and solar        explore these challenges and we continue
 PV, has contributed to this downward          to work with industry participants
 trend in demands. Solar PV continues          to develop the tools and services needed
 to impact the daily demand profile because    to manage them.
Summer Outlook Report 2018                                                                    05

Executive summary

 Overview: Gas summer 2018
 Gas from the UK and Norwegian Continental       In the gas demand chapter, we explore
 Shelf, or ‘beach’ gas, is expected to be the    how much of an impact the effect of weather
 dominant component of gas supplies into         has on gas demand. The difference between
 GB this summer. We anticipate that gas          a day with high wind and solar generation
 from the more flexible, ‘non-beach’ supplies,   and a day with low wind and solar generation
 particularly interconnector imports and         can amount to 20 per cent of demand on
 LNG will remain low. However, base              a summer’s day. The change in demand
 LNG volumes are expected to be higher           patterns can introduce significantly more
 than we have seen during winter periods.        within day and day to day changes in
 Our analysis informs us that the total gas      flows on the gas transmission system, and
 supply will be in excess of what is required    reinforces the need for a more agile network.
 to meet GB demand. As a result, we expect
 to see GB sourced gas to be routed to           This summer we expect to see one of the
 where the gas price is more attractive.         highest volumes of maintenance on the gas
 Therefore we anticipate transit gas demand      transmission system to date. Summer can
 on the network during the summer period.        be a challenging time to manage supply
                                                 and demand variability as well as providing
 The increase in renewable electricity           access to the network even though GB
 generation not only has an impact               demand is lower.
 on the operability of the electricity
 system, it also affects demand on               We continue to work closely with our
 the gas system. Lower overall electricity       customers to minimise the impact of
 demand, along with increased renewable          maintenance during this busy period.
 generation, means there is less of a            As we continue to see our customers
 requirement for gas fired electricity           using the network in different ways, we
 generation. As a result, we expect              will continue to develop the operational
 overall gas demand to be 35.7 bcm               tools to manage the within day variations
 this year, slightly lower compared              of supply and demand on the network.
 to summer 2017.
Summer Outlook Report 2018                                                                    06

National Grid’s role

National Grid plays a vital role in connecting   On the gas side, we own and operate the
millions of people to the energy they use,       high pressure gas transmission network for
safely, reliably and efficiently.                the whole of Great Britain. We are responsible
                                                 for managing the flow of gas to our connected
We own and manage the high voltage               customers and businesses; working with other
electricity transmission network in England      companies to make sure that gas is available
and Wales. We are also the System Operator       where and when it is needed.
of the high voltage electricity transmission
network for the whole of Great Britain,          We do not own the gas we transport and
balancing the flows of electricity to homes      neither do we sell it to consumers. That is
and businesses in real time.                     the responsibility of the energy suppliers
                                                 and shippers.
We don’t generate electricity and we don’t
sell it to consumers. It is the role of energy   Together, these networks connect people
suppliers to buy enough electricity to meet      to the energy they use.
their customer’s needs from the power
stations and other electricity producers.
Once that electricity enters our network,
our job is to plan and operate the system
to make sure supply and demand are
balanced on a second-by-second basis.
Summer Outlook Report 2018                                                                     07

Accessing further information

The Summer Outlook Report is just one of the        together some of the other ways you can stay
ways we provide information to and engage           up-to-date throughout the year.
with the industry. In this chapter, we’ve brought

Key publications from the System Operator
System Operator publications The                    For gas, these issues are considered in
Summer Outlook Report is just one of the            the Gas Ten Year Statement and Future
documents within our System Operator                Operability Planning publications. We share
suite of publications on the future of energy.      aspects of our analysis with the industry
Each of these documents aims to inform the          during the development of these documents
energy debate and is shaped by engagement           to make sure that the proposed solutions
with the industry.                                  meet the needs of our stakeholders.

The starting point for our analysis is the          You can find out more about any of these
Future Energy Scenarios (FES). This document        publications, and how they incorporate insight
considers the potential changes to the demand       from our stakeholders, by clicking on the
and supply of energy from today out to 2050.        document front covers on the next page
                                                    or by visiting our Future of Energy webpage.
The network and operability changes
that might be required to operate the
electricity system in the future are explored
in the Electricity Ten Year Statement,
System Operability Framework and
Network Options Assessment.
Summer Outlook Report 2018                                                                                                                                                                          08

                                                       Figure 0.1
                                                       Key publications from the System Operator 2017/18

                                                                                              Network Options                                                                              Winter                             Winter Outlook
                                                                                              Assessment                                                                                                                      Report
                                                                                                                                                                                           Outlook
                                                                                                                                                                                           Report
                                                                                                                                                                                           2015/16

                                                                                              January 2018                                                                                                                    October 2018

                                                                                              The options available to meet                                                                                                   Our view of the gas and
                                                                                              reinforcement requirements                                                                                                      electricity systems for the
                                                                                              on the electricity system.                                                                                                      winter ahead.

                                                                                              Summer                                                                                                                          Electricity Ten
                                                                                                                                                       Network Options Assessment 2015

                                                                                              Outlook Report                                                                                                                  Year Statement
                                                                                                                                                                                           Electricity Ten Year
                                                                                                                                                                                           Statement 2015
                                                                                                                                                                                            UK gas electricity transmission

                                                                                              April 2018                                                                                                                      November 2018

                                                                                              Our view of the gas and                                                                                                         The likely future
                                                                                              electricity systems for the                                                                                                     transmission requirements
                                                                                              summer ahead.          National Grid plc
                                                                                                                     National Grid House,
                                                                                                                     Warwick Technology Park,
                                                                                                                     Gallows Hill, Warwick.
                                                                                                                     CV34 6DA United Kingdom
                                                                                                                     Registered in England and Wales
                                                                                                                     No. 4031152
                                                                                                                                                                                                                              on the electricity system.
                                                                                                                     www.nationalgrid.com

                                                                                              System Needs and                                                                                                                Gas Ten Year
                                                                                                                                                        Gas Ten Year Statement 2015

                                                                                              Product Strategy                                                                                                                Statement
                                                                                                                                                                                            Gas Ten Year
                                                                                                                                                                                            Statement 2015
                                                                                                                                                                                            UK gas transmission

                                                                                              April 2018                                                                                                                      November 2018

                                                                                              Our view of future electricity                                                                                                  How we will plan and
                                                                                              system needs and potential                                                                                                      operate the gas network,
                                                                                              improvements to balancing
                                                                                                                    National Grid plc
                                                                                                                    National Grid House,
                                                                                                                    Warwick Technology Park,                                                                                  with a ten-year view.
                                                                                              services markets.
                                                                                                                    Gallows Hill, Warwick.
                                                                                                                    CV34 6DA United Kingdom
                                                                                                                    Registered in England and Wales
                                                                                                                    No. 4031152

                                                                                                                    www.nationalgrid.com

                                                                                              Winter Review                                                                                                                   Future Operability
                                                                                                                                                        Future Operability Planning 2016

                                                                                              and Consultation                                                                                                                Planning
                                                                                                                                                                                            Future Operability
                                                                                                                                                                                            Planning 2016
                                                                                                                                                                                            UK gas transmission

                                                                                              June 2018                                                                                                                       November/December

                                                                                              A review of last winter’s                                                                                                       How the changing
                                                                                              forecasts versus actuals and                                                                                                    energy landscape will
                                                                                              an opportunity to share your
                                                                                                                    National Grid plc
                                                                                                                    National Grid House,
                                                                                                                    Warwick Technology Park,                                                                                  impact the operability
                                                                                              views on the winter ahead.                                                                                                      of the gas system.
                                                                                                                    Gallows Hill, Warwick.
                                                                                                                    CV34 6DA United Kingdom
                                                                                                                    Registered in England and Wales
                                                                                                                    No. 4031152

                                                                                                                    www.nationalgrid.com

                                                                                              Future Energy                                                                                                                   System Operability
                             Future Energy Scenarios

                                                                                                                                                        SystemOperability Framework 2015

                                                                                              Scenarios                                                                                                                       Framework
                                                        Future Energy                                                                                                                       System Operability
                                                        Scenarios                                                                                                                           Framework 2015
                                                        UK gas and electricity transmission                                                                                                 UK electricity transmission

                                                                                              July 2018
                                                                                                                                                                                                                              How the changing
                                                                                              A range of plausible and                                                                                                        energy landscape will
                                                                                              credible pathways for the                                                                                                       impact the operability
nal Grid plc
nal Grid House,
 ck Technology Park,
                                                                                              future of energy from today
                                                                                                                    National Grid plc
                                                                                                                    National Grid House,
                                                                                                                    Warwick Technology Park,                                                                                  of the electricity system.
                                                                                              out to 2050.
ws Hill, Warwick.                                                                                                   Gallows Hill, Warwick.
 6DA United Kingdom                                                                                                 CV34 6DA United Kingdom
tered in England and Wales                                                                                          Registered in England and Wales
031152                                                                                                              No. 4031152

nationalgrid.com                                                                                                    www.nationalgrid.com
Summer Outlook Report 2018                                                                             09

Accessing further information

Latest operational information
The information provided in our Outlook              Gas
reports is based on the best data currently          To support market participants and other
available to us. This outlook will change as         interested parties, we publish a range of
we progress through the summer. There are            data on the operation of the gas transmission
a number of sources of information you can           network. The Market Information Provision
access for the most up-to-date view, both            Initiative (MIPI) publishes information required
for electricity and gas.                             under UNC and EU obligations, as well as
                                                     additional information we feel is useful for
Electricity                                          the market.
Much of our electricity analysis is based on
generation availability data provided to us by
generators. This is known as Operational Code
2 (OC2) data. As generators update their plans
each week, the picture of supply and demand
will change. You can access the latest OC2
data, which is published each Friday, on the
BM Reports website.

Our demand forecasts are regularly updated
throughout the year. The demands published
in this report are based on forecasts from
March 2018. For the most up-to-date information,
we encourage the industry to view our latest
forecasts on the BM Reports website.

The System Operator Notification Reporting
system (SONAR) provides real time operational
information for market participants and
members of the public. The system informs the
market about certain changes that generators
have made to their operational parameters, or
instructions the Control Room may have issued
to start up power stations. You can view these
notifications and sign up for email alerts via the
SONAR website.
Summer Outlook Report 2018                                                                     10

Events
We host industry events throughout the year to     changes. You can find out more about
discuss the operation of the gas and electricity   our gas and electricity operational forums
systems, and debate important industry             on our website.

Please tell us what you think
We want to make sure that we continue              publication. You can share your feedback by
to provide you with the right information to       emailing us at marketoutlook@nationalgrid.com.
support your business planning. To do this,
we’d like to know what you think about this
Summer Outlook Report 2018                    11

Chapter

                                                    Chapter one
one
Electricity demand                             12
Operational view including generation/supply   24
Europe and interconnected markets              37
Electricity operational outlook                47
Summer Outlook Report 2018                                                          12

              Electricity
Chapter one

              Summer demand

              This section presents our current view of demand for summer
              2018. All demand figures in this chapter are transmission system
              demands. These demands are based on national demand plus
              a station load of 500 MW. Further information on the demand
              assumptions can be found at the end of this chapter.

               Key messages
               • Overall transmission demands will   •	Daytime minimum demand is estimated
                  be lower than 2017.                   to be 1.1 GW lower than 2017 at 20.1 GW.
               •	Distribution connected generation   • Minimum summer demand is expected
                  will continue to grow.                to be 0.6 GW lower than 2017 at 17 GW.
               • Peak demand for the high summer
                  period is expected to be 33.7 GW.
Summer Outlook Report 2018                                                                          13

                                                                                                          Chapter one
 Key terms
 • Distribution connected generation:                 • Underlying demand: demand varies
      any generation that is connected to the               from day-to-day, depending on the weather
      local distribution network, rather than to            and the day of week. Underlying demand
      the transmission network. It also includes            is a measure of how much demand there
      combined heat and power schemes of any                is once the effects of the weather and the
      scale. Generation that is connected to the            day of the week have been removed.
      distribution system is not directly visible to   •   Weather corrected demand: is the
      National Grid and therefore acts to reduce            demand seen on the transmission
      demand on the transmission system.                    system, with the effect of the actual
      You can access our latest daily distribution          weather removed and the impact of
      connected generation forecasts up to                  normal weather added.
      7 days ahead on our website.                     •   Network Innovation Allowance (NIA):
 •   High summer period: the period                        is a set allowance each RIIO network
      between 1 June and 31 August, or weeks                licensee receives as part of their price
      23 to 35. It is when we expect the greatest           control allowance. Its aim is to fund
      number of planned generator outages.                  projects directly related to the Licensees
      At the same time, this is when we                     network that have the potential to deliver
      normally experience higher demand,                    financial benefits.
      predominantly driven by the increased            •   Normalised demand: is the forecasted
      use of cooling systems.                               demand using long term trends to estimate
 •   Transmission system demand (TSD):                     underlying demand with a 30 year average
      demand that National Grid, as the                     (on a weekly resolution) for the weather
      System Operator, sees at grid supply                  component added.
      points, which are the connections to the
      distribution networks. It includes demand
      from the power stations generating
      electricity (the station load) at 500 MW.
Summer Outlook Report 2018                                                                           14

              Electricity
Chapter one

               Overview
               The key characteristics of the summer period        demand on record (actual demand based
               is low demands and variability day to day.          on actual weather including station load).
               Periods of low demand have an impact                In figure 1.1, we see that out of the 10 lowest
               on how we operate the transmission system.          system demands, seven occurred in 2017
               As a result, it is important that we understand     alone. This downward trend in demand
               the minimum levels of demand along with             is largely due to an increase in distribution
               the peak demand that we can expect to see           connected generation (both renewables
               during the summer months. During summer             and non-weather generations) connected
               2017, we saw the second lowest system               to the distribution networks.

               Figure 1.1
               Ten lowest demands
                          17.8

                          17.6

                          17.4
              Demand GW

                          17.2

                          17.0

                          16.8

                          16.6

                          16.4
                                 07/08   11/06   08/08   02/02   12/06   25/06   21/08    28/05    02/10     11/09
                                 2016    2017    2016    2017    2017    2017    2016     2017     2017      2017
                                                                  Date
                            System demand
Summer Outlook Report 2018                                                                   15

                                                                                                   Chapter one
Summer system demand
Our analysis suggests transmission demands      network. Because it is connected to the
for the coming summer are likely to be lower    distribution system and is therefore not
than last year’s weather corrected outturn.     directly visible to us, it acts to reduce
This is mainly because of the increase          demand on the transmission system.
in distributed energy sources combined          Table 1.1 illustrates the gradual reduction
with an anticipated drop in the underlying      in demands year on year along with our
demand. Distributed energy sources refer to     forecast demands for summer 2018.
the generation connected to the distribution

Table 1.1
Weather corrected summer system demands for the last 3 years and the forecast for 2018

Year                    Summer minimum         Day time minimum         High summer peak
                        (GW)                   (GW)                     (GW)
2015                    18.4                   25.8                     37.5
2016                    17.8                   22.7                     36.3
2017                    17.6                   21.2                     34.4
2018 (forecast)         17.0                   20.1                     33.7
Summer Outlook Report 2018                                                                      16

               Electricity
Chapter one

                Weekly peak demand
                Figure 1.2 shows the weather corrected               This is 700 MW lower than last year’s weather
                weekly peak demand for summer 2017,                  corrected outturn as a result of the increase
                along with our forecast for 2018. Our                in distributed generation and a reduction in
                peak demand forecast for the high                    underlying demand.
                summer period (between June and
                the end of August) is 33.7 GW.

                Figure 1.2
                Weekly peak demand outturn for 2017 against our 2018 forecast
                          45
                          44
                          43
                          42
                          41
                          40
              Demand GW

                          39
                          38
                          37
                          36
                          35
                          34
                          33
                          32
                          31
                          30
                               13   15   17   19     21   23    25 27 29 31 33 35               37   39    41    43
                                                                 Week number
                                Peak summer period        Forecast peak 2018 Peak 2017
Summer Outlook Report 2018                                                                                 17

                                                                                                                   Chapter one
  Summer minimum demands
  In order to support the operation of the                     transmission system because the availability
  system during the summer months, it is                       of flexible plant during these periods is
  important to consider both the summer                        reduced. The daytime summer minimum
  minimum demand and the daytime summer                        demand for 2018 is expected to be
  minimum demands. Historically, the lowest                    approximately 20.1 GW, 1.1 GW lower
  demand occurred overnight; however, with                     than last year’s weather-corrected outturn.
  the growth in renewable generation, wind
  and solar PV, the lowest demand can now                      The summer minimum demand for 2018
  occur during the day. Minimum demands                        is also forecast to be 17 GW, 0.6 GW lower
  are becoming increasingly more significant                   than last year’s weather corrected outturn.
  when balancing supply and demand on the

  Figure 1.3
  Weekly minimum demand outturns for 2017 and our forecast for 2018
            30
            29
            28
            27
            26
            25
Demand GW

            24
            23
            22
            21
            20
            19                        20.1                           20.2
            18
            17
            16                        17.1              17.0             17.1
            15
                 13   15   17   19    21     23     25 27 29 31                 33   35    37    39    41     43
                                                     Week number
                  Peak summer period
                  Weekly daytime summer minimum 2018      Weekly day time summer minimum 2017
                  Weekly summer minimum 2018      Weekly summer minimum 2017

  In accordance with Grid Code, we publish                     in February 2018. For the latest forecasts,
  our most recent forecasts on the BM reports                  please visit our BM reports website.
  website1. Demands published in this report
  are based on demand forecasts conducted

  1
      https://www2.bmreports.com/bmrs/?q=demand/2-52-weekahead
Summer Outlook Report 2018                                                                     18

              Electricity
Chapter one

               Daytime minimum demand                            9 April, whilst the PV outturn had dropped
                                                                 to 7.5 GW compared to the previous day,
               In summer 2017, we experienced something
                                                                 wind had increased to 1.9 GW, giving a
               we hadn’t experienced before on the
                                                                 total of 9.4 GW of distribution connected
               electricity transmission system; we saw
                                                                 generation. Accurate forecasts on the
               the day time minimum demand fall lower
                                                                 day meant the Control Room were well
               than the overnight minimum.
                                                                 equipped ahead of time to manage both
                                                                 periods of low demand.
               This happened on two occasions, on the
               08 and 09 April and was caused by very
                                                                 We see in figure 1.4 the effect that
               high distribution connected generation.
                                                                 distribution connected generation had
               solar PV and wind output, coupled with
                                                                 on the transmission demand for both
               high temperatures during the day reduced
                                                                 dates. We are likely to see this repeated
               the demand on the transmission system.
                                                                 if we get high PV days with wind and
                                                                 high temperatures.
               PV generation for the 08 April was 8 GW
               and wind was approximately 900 MW,
               giving a total of 8.9 GW. Similarly, on the

                Figure 1.4
                Daytime minimum demand vs overnight demand

                           36.0
                           34.0
                           32.0
                           30.0             08/04/17
               Demand GW

                           28.0                                                   09/04/17
                           26.0
                           24.0
                           22.0    23.1GW
                                                   22.5GW
                           20.0                                        21.0GW             20.8GW
                           18.0
                             00:30 04:30 08:30 12:30 16:30 20:30 00:30 04:30 08:30 12:30 16:30 20:30
                                                               Time
                              System demand     Solar PV     Wind      Night level   Daytime level
Summer Outlook Report 2018                                                                    19

                                                                                                      Chapter one
  Daily demand profile
  In the daily half hourly demand profile in           generation. The purple bars represent
  figure 1.5, demand ranges from a minimum             when solar begins to generate and/or
  of 16.5 GW and a maximum peak of 35.4 GW             when generation begins to reduce.
  (please note this excludes the 500 MW station        The red bars represent the times when
  load). The orange bars represent the times           there is no solar generation.
  when there is the highest amount of solar

  Figure 1.5
  Daily half hourly demand profile from the high summer period 2017

            40

            35
Demand GW

            30

            25

            20

            15
                 0:30   2:30   4:30   6:30   8:30 10:30 12:30 14:30 16:30 18:30 20:30 22:30
                                                     Time
                 Demand range         Average demand    Overnight    Sunset/sunrise   Daytime

  Figure 1.5 suggests the daily minimum                During the summer months, demand profiles
  demand is likely to occur between 5am and            can change from day to day depending on
  6am. Demand then increases until 8am,                the levels of renewable generation on the
  where it remains relatively flat until 4pm and       system, in particular, solar PV. Variability
  then begins to pick up for the evening peak.         on the system has increased as the amount
  Daily peak demand is largely influenced by the       of renewable generation has grown which
  amount of solar radiation, for example, if it is     ultimately creates challenges when managing
  a bright and sunny day, the peak demand is           system operability. Maximum solar generation
  likely to occur either in the morning between        output usually coincides with the demand
  8am and 9am, or after sunset. The daytime            reduction after lunchtime.
  demands between 9am and sunset are
  suppressed by distribution connected
  solar generation.
Summer Outlook Report 2018                                                                        20

                Electricity
Chapter one

                  Summer peak demand
                  Figure 1.6
                  Estimated summer peak demand timings
                               44

                               42
              Peak demand GW

                               40

                               38

                               36

                               34

                               32

                               30
                                    13   15    17   19   21   23   25 27 29 31       33    35    37    39       41   43
                                                                    Week number
                                     Peak after sunset    Peak before 9am

                  Figure 1.6 shows our estimated timings for          generation. The daily peak demand
                  the peak demand based on seasonal normal            is significantly impacted by the amount
                  weather. Our analysis suggests daily summer         of solar PV generation.
                  peak demand is likely to occur between
                  8am and 9am during weeks 23 to 30 due
                  to late sunset times and the amount of solar
Summer Outlook Report 2018                                                                            21

                                                                                                                    Chapter one
        Distribution connected solar generation
        Figure 1.7
        Historic and forecast PV capacity and daily maximum output
                             16,000
                             14,000
Solar capacity/output (MW)

                             12,000
                             10,000
                              8,000
                              6,000
                              4,000
                              2,000
                                 0
                                  Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Feb Aug Feb
                                 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019
                                                                     Month
                                Smoothed solar capacity    Daily max solar output  Forecast solar capacity
                                Daily max solar forecast

        Figure 1.7 shows historic solar PV capacity                Distribution connected solar capacity had
        growth and daily maximum generation output.                increased to 12.9 GW by February 2018.
        It also includes our year ahead (March 2018
        to February 2019) forecast for both installed
        capacity and maximum daily output.
Summer Outlook Report 2018                                                                22

              Electricity
Chapter one

              Assumptions
              All demand figures in this chapter are          2.	Distribution connected solar PV capacity
              transmission system demands. These                 in February 2018 was 12.9 GW. Currently
              demands are based on national demand               our 2-52 weeks ahead forecast assumes a
              plus a station load of 500 MW.                     110 MW increase in the capacity per month.
                                                                 Our long range forecast models assumes
              1.	Underlying demand is corrected for             around 14.7 GW of solar capacity by the
                  the impact of weather and day of week.         end of March 2019.
                  This is likely to be 500 MW lower in 2018
                  compared with summer 2017. Our 500 MW       3.	Distribution connected wind capacity
                  assumption is based on the analysis of         has increased from 4.8 GW in 2017
                  the underlying demand levels over the          to 5.7 GW, and we anticipate it will
                  last 12 months.                                be broadly flat this summer.
Summer Outlook Report 2018                                                                           23

                                                                                                           Chapter one
 Spotlight:
 Forecasting solar generation and
 Network Innovation Allowance (NIA) projects
 National Grid is involved in a number of            solar PV forecasts. All solar power forecasts
 projects with external partners to improve          rely on an accurate prediction of the weather,
 the monitoring and forecasting of solar             in this case solar radiance; this has proven
 PV generation.                                      to be a dominant source of PV forecasting
                                                     error. Our NIA partnership with the Met
 Because all solar is connected to the               Office has led to a new post-processing
 distribution networks, historically National        technique, which had an immediate
 Grid, as the System Operator, has no visibility     impact during summer 2017 and we expect
 of live metering from solar generation.             to see further improvements during 2018.
 This has meant that accurately forecasting          From summer 2018, we will be joined by
 demand has proved challenging. With                 a Natural Environment Research Council
 installed solar PV capacity increasing since        (NERC) sponsored meteorologist from the
 2011, it has become an important component          University of Reading. The project will focus
 in our demand forecast. To improve the              on whether extra meteorological information
 accuracy of our demand forecasts, we have           and data can be used to guide and adjust
 launched a number of projects to help us to         our solar forecasts.
 tackle this directly. The result of this work has
 meant that by summer 2017, we had seen a            Another NIA project we are a part of
 marked improvement in our daytime demand            focuses on the methods used to translate
 forecasting accuracy. As a result, our average      forecast solar radiance values into solar
 midday demand error has reduced.                    power generation. Our collaboration with
                                                     the University of Reading proposed a new
 Our NIA partnership with Sheffield Solar            model incorporating seasonal and time of day
 continues to provide near-real time estimates       effects, which is currently being assessed.
 of national solar power outturn. Together
 we have developed a system to produce               We are also involved in a three month venture
 localised outturns at each of the 327 Grid          with the Alan Turing Institute for Data Science.
 Supply Points in the UK. These datasets are         This has resulted in a new artificial intelligence
 invaluable for live monitoring and network          based solar power forecasting model,
 planning, as well as providing the framework        which has shown accuracy improvements at
 to build solar power forecasting models.            7 days ahead. We are also in the process of
 We are now in discussion to continue                evaluating this as a future forecasting model.
 this collaboration to provide high frequency
 data which will supply 5 minute solar outturn       These projects are serving to improve
 data, rather than the current 30 minute             solar PV forecasting and monitoring and
 outturn data, as well as improving and              ultimately to improve our demand forecasts.
 validating further outturn values. Real time        We are also continuing to explore further
 solar PV generation output can be accessed          opportunities to enhance the improvements
 here https://www.solar.sheffield.ac.uk/pvlive       we have already seen, all of which help us to
                                                     balance supply and demand more accurately
 We are also involved in a number of other           and economically.
 projects which address the accuracy of our
Summer Outlook Report 2018                                                                        24

              Operational view including
              generation/supply
Chapter one

              Our operational view is based on historic performance
              and data provided to us by generators. We use this data
              to present a picture of operational surplus for each week
              of summer and to determine the actions we may ask
              generators to take during periods of low demand.

               Key messages
               •	We are able to meet normalised demand        •	There is a possibility that we may have
                   and our reserve requirement in all weeks        to instruct inflexible generators to reduce
                   throughout summer including the shoulder        their output, in order to balance supply
                   months of April and September under all         and demand.
                   interconnector scenarios.

               Key terms
               • Operational Code 2 (OC2): data:              • Inflexible generation: types of
                    information provided to National Grid           generation that require long notice periods
                    by generators. It includes their current        to step down or ramp up their output, do
                    generation availability and planned             not participate in the Balancing Mechanism
                    maintenance outages.                            or have obligations that influence when
               •   Operational surplus: the difference             they can generate. Examples of inflexible
                    between the level of demand and                 generation include nuclear, combined heat
                    generation expected to be available,            and power (CHP) stations, and some hydro
                    modelled on a week-by-week basis.               generators and wind farms.
                    It includes both notified planned          •   Shoulder months: are those months that
                    outages and assumed breakdown                   are not technically heat driven months, nor
                    rates for each power station type.              are they cooling driven months. Yet, they
               •   Flexible generation: types of                   can cause demand for either heating or
                    generation that can respond quickly             cooling or both in the same month.
                    to requests to change their output,
                    such as interconnectors, some coal
                    and gas units, pumped storage and
                    most large wind farms.
Summer Outlook Report 2018                                                                        25

                                                                                                        Chapter one
Operational view
Our operational view is based on current             requirement of 900 MW and a range of
generation availability data called Operational      interconnector flows, to provide a week-by-
Code 2 (OC2) data. This is submitted weekly          week view of the operational surplus.
by generators. In our analysis we have used
data provided to us on 15 March 2018.                The operational view does not consider
                                                     any market response by generators to high
The OC2 data includes generators’                    demand or tighter conditions. The availability
planned maintenance outages. To account              includes those with capacity market contracts
for unexpected generator breakdowns,                 that are only incentivised to run during a
restrictions or losses close to real time,           system stress event. We know that generators
we apply a breakdown rate to the OC2 data.           have greater flexibility in planning summer
The breakdown rate is based on the units             outages and, as market prices change
availability, maximum export limit (MEL),            to reflect the level of operational surplus,
during the highest demand days over summer           generators may take a commercial decision to
or winter excluding units we know are on             move their planned maintenance programme.
planned outage. This is done by unit but             For the most up-to-date information, we
grouped and applied by fuel type. The data           encourage the industry to regularly view the
is then modelled against forecast normalised         latest OC2 data, which is published each
transmission system demand, plus a reserve           Friday on the BM Reports website.

Figure 1.8
Operational view summer 2018
     54
     52
     50
     48
     46
     44
     42
     40
     38
GW

     36
     34
     32
     30
     28
     26
     24
     22
     20
          26 02 09 16 23 30 0714 21 28 04 11 18 25 02 09 16 23 30 06 13 20 27 03 10 17 24 0108 15 22
          Mar     Apr          May         Jun          Jul           Aug         Sep        Oct
                                                  Date
          Max normal demand (including full Ireland export)        Short term operating reserve
           Assumed generation with low interconnector imports
           Assumed generation with maximum interconnector imports
           Assumed generation with medium interconnector flows
Summer Outlook Report 2018                                                                     26

              Operational view including
              generation/supply
Chapter one

              Figure 1.8 compares the expected weekly              Based on current operational data, the
              generation and differing levels of interconnector    minimum available generation is expected to be
              flows, against the weekly normalised demand          42.1 GW in the week commencing 9 July (under
              forecast for the summer period. It is based on       the low interconnector scenario). We are able
              the OC2 data provided to us by generators on         to meet normalised demand and our reserve
              15 March.                                            requirement in this week, and throughout
                                                                   the summer period, into the shoulder month
              In the summer months, maintenance outages            of September, even with low interconnector
              reduce the available generation capacity from        imports. Our operational view is based on
              power stations. This is because power stations       the best data currently available to us.
              use this period to carry out maintenance to          Changes to the notified generation and
              ensure their availability over the winter months     forecast demand will alter this outlook,
              when there is higher demand and stronger             potentially increasing or decreasing the level
              market prices. Based on current economic             of operational surplus. For the most current
              conditions, we expect some coal power                information, we encourage the industry to
              stations to be temporarily mothballed during         regularly view the latest OC2 data, published
              summer 2018. We would expect them to                 each Friday on the BM Reports website.
              become available if there was an obligation
              to fulfil their Capacity Market contracts, if they   Unlike the operational view presented here,
              have them, or if the price increased to a level to   the data presented on the BM Reports website
              make it profitable to generate. These units can      is largely unadjusted which means that it
              require a few days’ notice to run. As a result of    does not include derating for breakdowns;
              these factors, the lowest levels of generation       with the exception of wind, which is included
              are typically seen during the high summer            at an assumed load factor for each month.
              period, between June and August.                     The forecast peak demand for the week and
                                                                   a level of reserve are then compared to this
                                                                   to calculate the operational surplus. Data on
                                                                   BM Reports does not include interconnector
                                                                   imports or exports.
Summer Outlook Report 2018                                                                         27

                                                                                                          Chapter one
Assumptions
1. Demand                                           wind or solar forecast will increase the level.
The demand used in our operational view is          However, we have assumed a real time reserve
normalised transmission system demand (TSD)         requirement of 0.9 GW for each week of our
as mentioned in the ‘demand’ chapter. This          analysis. This is shown in figure 1.8 as a purple
takes in to account the rise in output from the     bar above the maximum normal demand.
increase in distribution connected generation
which acts as a reduction in demand. The            3. Available generation capacity
demand also includes the power used by              during summer 2018
generating stations when producing electricity      Figure 1.9 shows the generation capacity
(the station load at 500 MW) and interconnector     expected to be available during summer 2018.
exports. We have assumed 1000 MW of                 This is from the maximum declared availability
export to Ireland across the Moyle and EWIC         from the OC2 data, per unit, by fuel type, for
interconnectors during the peak demand period.      the summer period. Later on we will apply a
The IFA and BritNed interconnectors are treated     de-rating factor to account for breakdowns
as a source of generation.                          and restrictions and include planned outages
                                                    which will result in plant having decreased ability
2. Reserve                                          to generate at its normal level for a particular
To be able to manage the second-by-second           week. The capacity includes only the generation
regulation of system frequency and respond          that is connected to the transmission system
to sudden changes in demand and supply,             and submits data to OC2. This is higher than
National Grid is required to maintain a level of    last year due to the increase in installed wind
reserve. In reality, this level of reserve varies   capacity and some coal and gas plants that
daily depending on system conditions. A high        were expected to close in 2018 remaining open.

Figure 1.9
Available generation capacity for summer 2018
  80

     70                                             4.00

     60
                                                    29.4
     50
                                                             0.8
GW

     40                                             2.9

     30                                             2.4
                                                    13.5
     20
                                                    11.8
     10                                             1.1

      0                                             9.2

                                                 Capacity
          Nuclear     Hydro         Wind       Coal      Biomass           Pumped storage
          OCGT       CCGT          Interconnector
Summer Outlook Report 2018                                                                        28

              Operational view including
              generation/supply
Chapter one

              4. Generator breakdown                             They are based on the following:
              The operational data provided to us by             •	historic summer breakdown rates over
              generators only includes their planned               the last 3 years
              maintenance outages. As mentioned earlier,         •	they are taken from a units output against
              closer to real time, there may be unexpected         its capacity, on demand peaks higher than
              generator breakdowns or availability reductions.     the 80th percentile
              To account for this in our analysis, we assume     •	it excludes zeroes if the outage was notified
              a breakdown rate for each generation type.           to us, and was therefore planned.
              These rates are shown in table 1.2.

              Table 1.2
              Assumed breakdown rates for summer 2017

              Power station type      Assumed breakdown rate
              Nuclear                 8%
              Interconnectors         0%
              Hydro generation        5%
              Wind generation         84%
              Coal & Biomass          13%
              Pumped storage          3%
              OCGT                    8%
              CCGT                    12%

              To determine how much weekly output we             for summer daytimes and is shown in figure
              could reasonably expect from wind generation       1.10. We use the median wind load factor
              this summer, we use a load factor as a             of 16 per cent in our analysis as a scenario.
              realistic scenario. This is calculated from        This means there is a 50 per cent chance of
              the historic wind farm load factor distribution    the wind being either higher or lower than this.
Summer Outlook Report 2018                                                                                        29

                                                                                                                                  Chapter one
         Figure 1.10
         Summer daytime wind load factors
                                      100%
Percentage probability of exceeding

                                      90%
                                      80%
                                      70%
                                      60%
                                      50%
                                      40%
                                      30%
                                      20%
                                      10%
                                       0%
                                         0.0     0.1       0.2   0.3    0.4     0.5     0.6      0.7      0.8     0.9       1.0
                                                                       Wind load factor
                                        Wind load factor

         Interconnectors
         Our analysis is based on three possible                              The three interconnector scenarios listed
         interconnector scenarios for periods of peak                         below, assume full export to Ireland, which
         demand, shown by the graph in figure 1.8.                            adds 1,000 MW to expected demand:
         Each scenario includes a varying level of import                     •	Low imports of 500 MW, resulting
         from Continental Europe. Further details on                            in a net export of 500 MW.
         interconnectors can be found in the ‘Europe                          •	Medium base case of 1,800 MW,
         and interconnected markets’ chapter.                                   resulting in a net import of 800 MW.
                                                                              •	Full interconnector imports of 3,000 MW,
                                                                                resulting in a net import of 2,000 MW.
Summer Outlook Report 2018                                                                    30

              Operational view including
              generation/supply
Chapter one

              System operability during periods of low demand
              In the summer, there is a significant reduction   To help us to understand the actions that we
              in the demand we see on the transmission          may need to take this summer to respond to
              system. This is because there is less of          periods of low demand, we model levels of
              a requirement for heating and lighting            inflexible generation against current expected
              compared with winter and a higher output          minimum demands for each week. These
              from distribution connected solar generation.     forecasts are updated weekly throughout the
              As as result, there are fewer generation units    summer and can be found on our website.
              needed on the system to meet demand.
                                                                To understand potential operability issues we
              However, the system still needs to respond        need to stack de-rated inflexible generation
              to the largest generation or demand loss.         against the forecast minimum demand.
              It is also necessary to maintain positive and     Ideally we want to keep this inflexible
              negative regulating reserve levels. This is to    generation producing electricity, plus volumes
              account for forecasting errors and reductions     for response and reserve which are required
              in generator availability closer to real time.    to be maintained. This is shown in figure 1.11
                                                                as a weekly resolution. Pumped storage
              As a result, we need to make sure that there      demand is included at an assumed load factor
              is sufficient flexible generation on the system   of 70 percent; this is a method of increasing
              to be able to reduce their output low enough      demand and is a routine action.
              to meet that level of demand, and still have
              the ability to increase or reduce further
              to maintain sufficient frequency response.
Summer Outlook Report 2018                                                                      31

                                                                                                       Chapter one
Figure 1.11
Weekly minimum demand and generation profiles
     32
     30
     28
     26
     24
     22
     20
     18
GW

     16
     14
     12
     10
      8
      6
      4
      2
      0
          25 01 08 15 22 29 0613 20 27 03 10 17 24 0108 15 22 29 05 12 19 26 02 09 16 23 30 07 14 21
          Mar      Apr           May        Jun          Jul           Aug          Sep       Oct
                                                   Date
          Nuclear        Inflexible BMUs (e.g. CHP)        Inflexible hydro
          Interconnector imports after trades       Plant total providing regulating reserve
           Plant providing voltage support       Inflexible wind
          Minimum demand            Minimum demand incl. pumping

Based on current data, we can see that               As we approach real time, these requirements
inflexible generation is expected to exceed          may change depending upon the weather,
minimum demand (blue line) during periods            wind conditions and the generation available
of the summer. As a consequence, we                  on the day. We will continue to update this
anticipate that we will be asking pumped             forecast during the summer. We will inform
storage units to increase demand by more             and engage with inflexible generators where
than the assumed level by moving water back          actions have been exhausted on flexible
to their top lakes, and trading further to reduce    generation and further balancing is required
the level of interconnector imports.                 (please see appendix).
Summer Outlook Report 2018                                                                         32

              Operational view including
              generation/supply
Chapter one

              Modelling flexible wind generation
              As the amount of installed wind capacity              In figure 1.12, flexible wind farm output has
              continues to increase, it has become                  been added to the cumulative minimum
              economic to carry a proportion of regulating          output (the pink bars at the top), assuming
              reserve on large wind farms in times of high          the same wind load factor of 51 per cent.
              wind. Regulating reserve is the amount of             It shows that if flexible wind does not
              generation that National Grid holds back              contribute to meeting the frequency response
              on units, to manage the second-by-second              and regulating reserve requirements, it will
              regulation of system frequency to respond             need to be curtailed this summer to ensure
              to sudden changes in demand and supply.               that supply does not exceed demand.
              The flexibility of wind farms allows us to issue      This curtailment will either be carried out
              curtailment instructions if necessary, asking         via the Balancing Mechanism or by direct
              them to reduce their output for a short period.       trades. There is a possibility of curtailment
              The number of instructions we issue to wind           across the summer period, depending on
              farms is likely to increase in the future, as         wind conditions. This action will be carried
              we continue to see reduced demand at the              out in economic order, along with increased
              summer minimum (with more distribution                pumping, and trades conducted to reduce
              connected solar capacity) and fewer                   import on the interconnectors.
              flexible generators running overnight
              and in the afternoon.

              Figure 1.12
              Weekly minimum demand and generation profiles including flexible wind output
                   32
                   30
                   28
                   26
                   24
                   22
                   20
                   18
              GW

                   16
                   14
                   12
                   10
                    8
                    6
                    4
                    2
                    0
                        25 01 08 15 22 29 0613 20 27 03 10 17 24 0108 15 22 29 05 12 19 26 02 09 16 23 30 07 14 21
                        Mar      Apr            May         Jun        Jul          Aug           Sep         Oct
                                                                  Date
                        Nuclear         Inflexible BMUs (e.g. CHP)      Inflexible hydro       I/C imports after trades
                         Plant total providing regulating reserve      Plant providing voltage support
                         Inflexible wind         Flexible wind     Minimum demand
                        Minimum demand incl. pumping
Summer Outlook Report 2018                       33

                                                       Chapter one
In our analysis, we have only considered
possible wind curtailment at a national level.
It is also possible that we may need to curtail
wind at a local level this summer. Local issues
are likely to be caused by constraints on the
system resulting from faults, maintenance or
network design. They may result in a higher
level of generation in a geographical area
than is needed or that can be safely exported
to other areas of the electricity network.
You can find out more about constraints in the
appendix, or by accessing the latest forecasts
for potential wind curtailment on our website.
Summer Outlook Report 2018                                                                   34

              Operational view including
              generation/supply
Chapter one

              Modelling inflexible generation

              Assumptions
              1. Load factors                                  this summer in the ‘Europe and interconnected
              In order to determine how much inflexible        markets’ chapter. More information about
              generation is likely to be available during      RoCoF can be found in the appendix.
              periods of low demand either early morning       The load factor for flexible and inflexible
              or during the afternoon, we apply a load         wind is determined from figure 1.13.
              factor to each generation type. These load       This shows that on at least one of the
              factors, which are shown in table 1.3, are       days where we might reasonably expect
              based on historic availability over previous     the lowest demand to occur, we can assume
              minimum demand periods. We also apply a          a wind load factor of 51 per cent. Again,
              load factor to interconnectors. This is based    there is a 50 per cent chance of the wind
              on the price differential between Continental    being higher or lower than this. The other
              Europe and GB plus a reasonable number of        load factors are chosen to represent a realistic
              trades it would take to resolve rate of change   low demand scenario. The interconnector
              of frequency (RoCoF) issues by limiting the      flows are after trade action which we would
              size of the interconnector loss. You can find    aim to do in advance of an issue.
              out more about expected interconnector flows

              Table 1.3
              Inflexible load factor assumptions at minimum demand

              Generator type                                   Load factor
              Nuclear                                          0.9
              Inflexible Balancing Mechanism units (CHP)       0.5
              Inflexible hydro                                 0.5
              Flexible and inflexible wind                     0. 51
              Moyle interconnector                             0.5
              East West interconnector                         0.5
              BritNed                                          0.70
              Interconnexion France-Angleterre                 0.70
Summer Outlook Report 2018                                                                                       35

                                                                                                                                 Chapter one
         Figure 1.13
         Wind load factors at minimum demand
                                      100%
Percentage probability of exceeding

                                      90%
                                      80%
                                      70%
                                      60%
                                      50%
                                      40%
                                      30%
                                      20%
                                      10%
                                       0%
                                         0.0     0.1       0.2   0.3    0.4     0.5     0.6      0.7      0.8      0.9     1.0
                                                                       Wind load factor
                                        Wind load factor

         Generation merit order
         A generation merit order describes the                               As an example, figure 1.14 shows the output
         sequence in which generators provide                                 of different types of generators over the course
         energy to the market at any given time.                              of a typical mid-summer day. It is based on
         It is predominantly based on the cost of                             data from 17 August 2017. It does not include
         producing it, for each type of generator.                            solar or embedded wind because these are
         The price at which energy can be sold                                embedded and therefore do not make up the
         varies throughout the day, depending                                 transmission connected demand or generation
         on the levels of demand and generation                               which is illustrated in figure 1.14. We expect
         capacity on the transmission system.                                 generator output to follow a similar pattern
                                                                              in summer 2018.
         The most cost-efficient power stations feature
         first in the merit order, providing continuous
         output across the day, known as baseload.
         Less cost-efficient generators may respond
         to peaks in demand, when the price at which
         electricity can be sold is higher.
Summer Outlook Report 2018                                                                         36

                 Operational view including
                 generation/supply
Chapter one

                  Figure 1.14
                  Generator output for a typical mid-summer day
                          35,000

                          30,000

                          25,000
              Output MW

                          20,000

                          15,000

                          10,000

                           5,000

                               0
                              00:30 02:30 04:30 06:30 08:30 10:30 12:30 14:30 16:30 18:30 20:30 22:30
                          Most likely to run                        Time                  Least likely to run
                             Nuclear         Interconnector    Wind     Hydro Other    Gas       OCGT
                             Coal          OCGT        Pumped storage

                  Nuclear power stations, as shown in figure            stations. These power stations are called
                  1.14, typically provide a large proportion of the     the marginal plant and are able to adjust
                  baseload in the summer. Wind generation also          their output in response to price signals
                  features early in the merit order as it has no fuel   as demand varies throughout the day.
                  costs. However, it can only run when the wind         Based on analysis of current prices,
                  is blowing. As a result of their input costs and      gas-fired units are likely to feature ahead
                  efficiency, the most variable generator output        of coal in the generation merit order, as
                  is typically from gas and coal-fired power            they will be more economical to dispatch.
Summer Outlook Report 2018                                                                       37

Europe and interconnected markets

                                                                                                       Chapter one
Our Europe and interconnected markets chapter
explores interconnector behaviour and provides
market insights into the impact to GB, of pricing
and renewable generation in neighbouring countries.

 Key messages
 •G
   B forward prices for summer 2018 are               exports of electricity on interconnectors
     expected to remain higher than markets in         to Ireland during peak, switching to imports
     Continental Europe.                               overnight and during periods of high wind.
 •   Based on historical views and forward        •   Further nuclear outages in France are not
      prices we expect there to be net imports          likely to impact margins, even during the
      of electricity on the interconnectors from        shoulder months.
      Continental Europe. We also expect net

 Key terms
 • Operational Code Section 2 (OC2)               • Flexible generation: types of
      data: information provided to National            generation that can respond quickly to
      Grid by generators. It includes their             requests to change their output, such as
      future generation availability and                interconnectors, some coal and gas units
      planned maintenance outages.                      and most large wind farms.
 •   Operational surplus: the difference          •   Inflexible generation: types of
      between the level of demand and                   generation that require long notice periods
      generation expected to be available,              to step down or ramp up their output, do
      modelled on a week-by-week basis.                 not participate in the Balancing Mechanism
      It includes both planned outages and              or have obligations that influence when
      assumed breakdown rates for each                  they can generate. Examples of inflexible
      power station type.                               generation include nuclear, combined heat
                                                        and power (CHP) stations, and some hydro
                                                        generators and wind farms.

Overview
The direction which interconnectors flow is        interconnector availability for summer 2018
determined by price, which in turn is influenced   based on outages, forward pricing and activity
by the weather, and the amount of renewable        in Continental Europe. All of these factors may
generation available. This chapter looks at        affect interconnector flows into or out of GB.
Summer Outlook Report 2018                                                                       38

              Europe and interconnected markets
Chapter one

              Interconnectors
              The weather impacts price because of                 The forward seasonal prices between the
              the influence on demand and distributed              GB, French and Dutch markets for summer
              energy sources. This is as a result of the           2018 indicate positive price spreads in favour
              increase in renewable generation and                 of the GB market. We expect to export
              demand fluctuations caused by changes                to Ireland during peak times on both the
              in temperature. As a result, we expect               Moyle and East West interconnector (EWIC)
              occasional variations to interconnector              interconnectors, turning to imports during
              flow patterns.                                       the night and periods of high wind.

              The Netherlands and France
              Interconnexion France-Angleterre (IFA), the
              interconnector between France and GB, is
              currently under a fault outage with a reduced
              capability of 1.5 GW until the end of April. It is
              then expected to be at its full 2 GW capability
              this summer apart from two planned outages
              for essential maintenance. These outages               0.5GW
              are scheduled for 18 June to 29 June and
              03 September through until 14 September
              inclusive. During these periods the capability          Ireland
              will reduce to 1 GW.
                                                                       0.5GW                    1GW
              The BritNed interconnector has a 1 GW
              capability between GB and the Netherlands.
              There are two planned outages this summer                                               Netherland
              scheduled for 14 May to 18 May and 17
              September through until 21 September                                     2GW
              inclusive. The capability will reduce to 0 GW                                 France
              during both of these outages.

              We note that the start of the second BritNed
              outage is within a few days of the completion
              of IFA’s September outage. Any delay to the
              return of IFA may impact the planned start
              of BritNed or result in both IFA and BritNed
              being on outage at the same time. At present,
              this would not adversely impact security of
              supply or operability; however, we will keep
              this under review.
Summer Outlook Report 2018                                                                         39

                                                                                                         Chapter one
Ireland
The East West Interconnector (EWIC) is               Moyle interconnector to Northern Ireland is
currently under a fault outage with zero             expected to be at full capability throughout
capability until 29 March. It will be on a planned   summer 2018, however, the maximum flow
outage for 9 days starting 01 May through until      is subject to Transmission Entry Capacity
09 May inclusive. During this time its capability    (TEC) values.
will reduce from 0.5 GW to 0 GW. The 0.5 GW

Increase in renewable generation since summer 2017
Renewable generation capacity including              while solar capacities have increased
wind, solar and biomass also continues to            significantly in the Netherlands, Belgium and
grow in Continental Europe and GB. These             GB. Gas and coal capacities are generally
generation types now contribute towards a            decreasing. Nuclear capacity has reduced in
larger proportion of the generation mix. Figure      Germany since last summer and although the
1.16 shows the increases in the generation           increase in its renewable capacity is not as
components in GB and neighbouring countries          great as other countries, the total renewable
from 2017 to 2018 (negative values are shown         capacity has reached a new record of 94 GW
in blue). The chart shows that onshore wind          which equates to 47 per cent of total capacity.
capacities have increased in each country,
You can also read