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Our transmission network: Our RIIO-T2 Business Plan and responding to COVID-19

04/06/2020

By Martin Hill, Head of RIIO-T2 programme.

Back in December 2019, we published our Business Plan for SP Transmission which covers how we’ll operate our business from 2021 - 2026. An important part of this is our vision for how our network will need to evolve if we’re all to meet both Scottish and UK government net zero targets.

Our plan was a long time in the making, and throughout the two-year process of engaging with consumers and stakeholders from across Britain, we were all too aware of the uncertainties we’d need to account for - with the changes needed to enable net zero always being at the forefront of our minds.

The very thought of a pandemic, with the impact we’ve seen from COVID-19, wasn’t high on our agenda but does very clearly demonstrate the level of flexibility our plans need.

Like so many families and businesses up and down the country we’ve not been immune from the impacts of COVID-19.

In our day to day operations we have suspended some works to ensure the health and safety of staff and contractors. Our supply chain has been impacted - as much of the equipment and materials we use is sourced from around the world. And, we’ve some deferred outages to help minimise the risk of our customers being without electricity at this time - especially key sites like hospitals and the other care facilities who are crucial in the COVID-19 response. The impact of these measures will undoubtedly continue into 2021 and beyond as we recover our programme of works.

Looking to a post-COVID future

With that in mind, our T2 Business Plan is more important than ever. It provides a platform for the numerous changes we all need to make in our journey to net zero - across the area we serve, and across Great Britain.

Our transmission network in Central and Southern Scotland has a huge number of electricity generators connected to it. Our location means that our network also needs to act as the main corridor for the energy generated in the north of Scotland to reach consumers across England and Wales – bringing the benefits of Scotland’s huge renewable potential to the whole country.

Looking to the future, our plan sets out expectations that we’ll:

  • Directly connect at least 900MW of new renewable generation to our network (enough to power 500,000 homes).
  • Facilitate more than 11GW of generation across Scotland by increasing the capacity of our network.
  • Make sure our network is ready for the increased demand of at least 160,000 new electric vehicles that could be on the roads by 2026 in our network area.
  • Maintain the same high levels of reliability that customers have come to expect of us.

Our plan and the economic recovery as a springboard to net zero

To make sure consumers weren’t being asked to pay for upgrades we weren’t sure would happen, we only included projects in our plan we were very confident would progress. These confidence levels were based on extensive reviews and stakeholder engagement.  We’ve been constantly monitoring these assumptions and, even with the impact of COVID-19, it’s clear the need for these projects hasn’t changed.

If anything, the drive to net zero is only likely to accelerate as Government and other bodies look to use the country’s economic recovery as a springboard for the transition. We’ve already seen ongoing interest in connections for renewable generation since we submitted our business plan back in December due to the prospect of onshore wind and solar being eligible for the next Contract for Difference round (The UK Government’s incentive mechanism for investment in renewable energy).

We need flexibility to respond to the changing situation

As we continue to support Ofgem in their analysis of the business plans and wait for their draft determination in July, the future landscape will continue to change, and the full implications are still uncertain. 

This only supports the need for making sure we have adequate measures in the price control to allow ongoing flexibility and make sure plans can be adjusted fairly for both consumers and network owners.

In our plan we set out uncertainty mechanisms that provide adjustments to our allowed expenditure. By having these, it means timely investment can be made in the network to help deal with emerging operational issues or facilitate more generation or demand connections as needed. 

As we wait for Ofgem’s decision, we’ll continue to closely watch the changes we see around us and plan for how we rise to the challenges they’ll present.  There are opportunities to grasp, and as the country starts to look towards economic recovery – we firmly believe that out T2 Business Plan is well placed to help facilitate a ‘green recovery’ for all.

We’ll keep you updated as we progress with delivering our plans – with more of my colleagues sharing updates and thoughts on our plans over the coming weeks and months.

Martin

Martin is leading the RIIO-T2 programme as well as being responsible the Load related investment. This includes ensuring that users’ plans for how they consume and generate electricity can be accommodated by the transmission network. Martin joined Scottish Power in 2005 after graduating from the University of Strathclyde with a Master’s degree in Electrical and Mechanical Engineering. He also holds an MBA from Warwick Business School. His experience has been gained across a number of roles including operational projects, Investment Planning, Corporate Strategy, Future Networks and Engineering Design & Standards.

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