Project Summary
The whole system innovation challenge requires coordination of design to reduce duplication and complexity of networks to deliver an integrated system capable of providing net-zero electricity generation. This project supports the coordination of offshore and onshore networks, with the potential to reduce infrastructure, thus improving delivery time and reducing costs, and improving network reliability. Users include offshore wind developers; National Grid ESO; and the Offshore and Onshore Transmission Owners and Operators managing the interface between DC and AC circuits. DCCBs enable broader network strategic changes, primarily the establishment of onshore HVDC hubs, which will be needed given the requirement to rapidly expand offshore wind as a clean energy supply for the UK. The goal of the project is to complete the work necessary to allow the selection of DCCBs as an option in network design.
DCCBs are developing technology with limited information available from the first implementations in China, thus there is a significant risk in adopting the technology. Given the number of stakeholders involved in these first applications, de-risking the first implementation in the UK is significantly complex. The Discovery project has evaluated the cost and critical activities of de-risking necessary to support the first implementation in the UK. Allowing this enabling technology to be available as a viable option for coordinated and efficient grid infrastructure is key to delivering secure, reliable, and clean energy to consumers at the lowest possible cost.
The Alpha Phase of the project will coordinate between networks, generators, market participants, investors, local and national policymakers. This phase will:
· refine costing and value estimation;
· identify design efficiency;
· use the results of DCCB simulation to inform the tender specification; and
· engage the supplier community around an initial UK-focused efficient specification to de-risk the first implementation.
This approach will reduce the duplication of efforts from different stakeholders by working to de-risk across the full stakeholder map in one coordinated effort, focusing on a relevant and specific use case. Learning from the use case will be disseminated to support future projects.
The work packages set out for Alpha Phase will address the areas that the users of DCCBs have identified as necessary to reduce the barrier to entry for DCCB technologies in the UK system.
Therefore, this phase will bring increased detail and reduced uncertainty to the cost-benefit case, take the early steps towards Front End Engineering Design (FEED), as defined in the Discovery Phase recommendations, and establish a case for market development for UK-ready solutions. Beta Phase will deliver FEED in preparation for DCCBs installed after 2030.
The consortium includes five of the partners from the Discovery Phase, and the addition of SuperGrid as a new partner. The partners have been selected based on their expertise and detailed understanding of stakeholders' needs concerning their work package.
· SSEN-T is a Network Owner and familiar with the design of networks and runs the National HVDC Centre, a centre of excellence for HVDC.
· National Grid ESO is accountable for the overall strategy for the design of the future network, including the integration of DC grids.
· SuperGrid bring international experience of the design and testing of DCCBs and also have capabilities testing.
· The Carbon Trust, Renewable UK and National Grid Ventures and have expertise in regulation and policy and also represent key stakeholder groups.
· National Grid Ventures is connected with stakeholder groups interested in investing in network development.
· The University of Edinburgh brings technical electrical engineering expertise and have detailed knowledge of open-source DCCB models that can be used in simulation.
Innovation Justification
The construction of DC circuits and cables will optimise export from remote windfarms to areas of high electricity demand by reducing network losses associated with energy transmission. DC Circuit Breakers (DCCBs) are an enabler for efficient management and control of DC networks. DCCBs are untested in the UK market. This project aims to remove the barriers to the first DCCB installation in the UK.
DCCBs have never been installed in the UK or Europe. DCCBs are at a technology readiness level (TRL) of 9 in China but are at a TRL of between 6 and 7 in Europe (based on results from the €42.7m Horizon 2020 funded Progress on Meshed HVDC Offshore Transmission Networks (PROMOTioN) project). Our approach uses the state-of-the-art HVDC centre to simulate DCCBs, avoiding overreliance on live fault testing and field trials, which comes with high risk for other users of the system.
The UK currently has an installed offshore wind capacity of 12GW and is targeting increasing that capacity to 50GW by 2030 and over 100GW by 2050. Given the scale of the developments proposed and their increasing distance from the onshore grid, the most efficient option to connect these to the network is via a DC network.
Traditionally, offshore wind farms have a point-to-point (PtP) connection via a DC or AC cable with the onshore AC network using a proven AC circuit breaker (ACCB). The drawback of this network design is it results in stand-alone assets connected directly to the transmission grid, increasing the total number of required AC convertor stations. The alternative is to combine multiple dispersed wind farms to the grid in a meshed DC network to a single AC convertor station.
As explained in Q1, this project will de-risk implementation of DCCBs in an efficient manner using simulation of DCCB performance informing specifications that OEM will require to enter the market.
Based on analysis of prior relevant work and the needs of stakeholders, there are several key areas of missing knowledge that are currently preventing DCCBs from being installed in the UK system. These are:
· the operational behaviour of DCCBs;
· the protection scheme design for DCCBs;
· the best configuration and operation of the DCCB, protection and associated network;
· the likely capital and operating costs of DCCBs;
· the quantified benefits of a first DCCB implementation;
· ownership and operation models for DCCBs under current regulatory systems; and
· the level of commercial risk if they were delivered using strategic investment.
Without de-risking DCCB's for the UK market, DC networks will be
· delayed;
· less efficient in their use of resources when implemented (i.e. requirement for more connections and substations); and
· less resilient to the development of faults.
Without DCCBs, the choice in network topology supporting wind targets would be reduced, costs associated with delivering Net Zero increased, timescales lengthened, and result in less resilient networks.
This project reduces the cost of bringing DCCBs to market by using simulation instead of live field testing to de-risk use of DCCBs. If DCCBs are then successfully installed, the cost-benefit analysis, shows a preliminary benefit of approximately £10 billion in a DCCB hub use case, compared to the counterfactual of PtP links (see Question 3). Other benefits include reduced environmental impact through lower land-use change, reduced use of materials, and reduced CO2 production (through construction savings and reduced losses).
DC networks are at an early stage of development. The TRL level means that this is too high a risk to be funded with BAU activities. The uncertainty around where the costs and benefits would sit makes it a problematic investment case for any stakeholder.
Benefits
The Cost-Benefit Analysis (CBA) considers three use cases: (1) DCCB hub design; (2) split circuit; and (3) interconnector spur. We have developed a CBA framework that considers how the project could impact the Ofgem strategic goals.
The CBA framework and qualitative analysis of benefits is shown in the attached appendix. Highlights of these benefits include:
· Lower bills for consumers. Using a DCCB hub reduces the need for AC infrastructure, which in turn reduces necessary investment and cost.
· Ensuring system security, reliability, and sustainability. DCCBs enable the isolation of faults in offshore network components more effectively than the existing PtP arrangements. As such, use of DCCBs would reduce the downtime of offshore assets, increasing system reliability and increasing the amount of clean energy supplied.
· Reduced reliance on non-UK energy. DCCBs are fundamentally an enabling technology for broader network strategic changes, primarily the establishment of a HVDC network, which could help to unlock UK offshore wind capacity in an efficient manner.
· Reduced environmental damage. The DCCB hub requires a smaller onshore footprint than multiple P2Ps, as additional converters per P2P would be needed and additional AC substations. The difference in footprint is ~52,900 sqm.
For each of the potential use cases, a cost benefit analysis has been carried out by modelling the following quantifiable characteristics of both the use case (DCCB) and counterfactual (without DCCB) options:
· Capital expenditure
· Operational expenditure
· HVDC system losses
· Ancillary services requirements
· Land acquisition requirements
We have based the CBA on the RIIO-T2 CBA template and assumed a 45-year asset life span. Given the topologies set out are theoretical and do not have a geographical location in the grid, we have not modelled the AC grid beyond the topology specified. This is reasonable at this stage of development as we are considering that each use case and counterfactual would have an equivalent surrounding AC network, so it would not result in a differential in the outcomes. Where the use case or counterfactual results in a different impact on the AC network, this is modelled as a specific implementation.
The different data collected and calculated for each option are then combined over the same project operational period, with an aligned year of commissioning, for use and counterfactual cases to determine the Net Present Value (NPV) of all options. Since the NPVs are not a full system NPV, they are to be taken as the use case relative to the counterfactual, rather than as stand-alone figures.
The early CBA carried out during Discovery Phase indicates a positive benefit for GB customers compared to current market practices of PtP HVDC links for offshore windfarm connections. All three use cases show relative improvements in NPV due to the avoided ancillary services costs enabled by the fast recovery enabled by DCCBs. ‘Appendix Q3’ sets out the potential benefits of a HVDC breaker relevant to Ofgem goals. Using this methodology, we have estimated a benefit of £10 billion for an individual DCCB installed in the network, against the counterfactual of securing a 4GW Offshore Wind connection with 12GVA of services.
While some engagement with OEMs and a review by National Grid ESO has been used to inform assumptions around the key areas of DCCB costs and ancillary services benefits, these are the areas that have uncertainty. This is due to the fact that existing information on DCCB implementations is very limited due to commercial considerations of the organisations involved. The next step in the Alpha phase towards a first implementation of a DCCB in the UK is to reduce these uncertainties and the risk associated with the commercial aspects of an implementation.
Impacts and benefits
The benefit of Direct Current Circuit Breakers (DCCB) implementation is that more offshore wind could be connected at lower costs and with a reduced environmental impact. This approach addresses the Government's net-zero targets by enabling the connection of more renewable technologies and reducing energy transmission costs, which could lead to savings by end consumers.
The benefits of this Project and the long-term adoption of DCCBs into the energy grid are understood by comparison with counterfactual design cases. Alternative to DCCBs, the expansion of offshore wind can be accommodated by:
• Increasing the number of converter stations or Direct Current Switching Stations (DCSS) built around the coastline (necessitating correspondingly greater quantities of transmission infrastructure),
• Allowing more connections to existing DCSSs and offsetting the resulting risk of grid instability with increased contracting of ancillary service providers or
Compared to the preferred use case of:
• Using DCCB to connect more generation capacity to existing DCSS (or other connection nodes), managing the risks and increasing operational flexibility
Compared with (1), using DCCBs can save valuable space by reducing the number of transmission assets, thus reducing impacts on local coastal communities and those who would otherwise be disrupted by expanded transmission infrastructure. It also reduces costs by avoiding the need to build additional infrastructure. This approach increases the Direct Current (DC) network's flexibility, allowing wind power to be routed more efficiently to centres of demand with reduced constraints and likely reduced curtailment on the wind generation. Cost savings can be passed on to consumers.
Compared with (2), DCCBs can reduce expenditure on ancillary services. Given some of these services are provided by high inertia fossil-fuel powered turbines, there is also the potential to save on greenhouse emissions.
We have quantified the benefits relating to differences in infrastructure expenditure and ancillary service provision (see the Cost-Benefit Analysis (CBA) worksheet in the Project Management Book). This CBA is based on a use case study of the Peterhead DCSS and compared against a counterfactual case of increased infrastructure and a case where more ancillary services are purchased to provide system protection and stability.
This analysis of asset costs and ancillary services indicates that using DCCBs can unlock benefits of several hundred million pounds in the central scenario over a 50-year period.
We performed a sensitivity analysis of the CBA using various scenarios, some favourable for adopting DCCBs and others unfavourable. Favourable cases involved reduced DCCB costs and increased switching station and ancillary service costs, while unfavourable cases featured the opposite. The results of this analysis are set out in the CBA analysis in the project management workbook.
Qualitative benefits of operational flexibility reduced curtailment and network constraints, and reduced impacts on coastal communities will be quantified in Beta Phase and are expected to bolster the quantitative argument for DCCBs.
By opening up DCCBs as an option for network designers via further work, benefits can be realised in other locations and situations. Enabling such a first-of-a-kind project somewhere like Peterhead will scale up across other sites bringing much larger benefits.
We have taken a conservative approach to calculate the benefits based on a single use case at the Peterhead switching station and the approach to cost estimation (high-cost estimate). We have not included additional qualitative benefits listed in the CBA summary in the project management workbook. The quantified benefits are:
1. avoided costs for building point-to-point links and
2. avoided losses in the event of a system fault
The included CBA analysis (see project management workbook) shows a combined positive benefit of NPV(3.5%) ~£3.5 million over the first ten years of operation and NPV(3%) ~£350 million in the expected 35-year lifetime of operation.
The alternative case is to accommodate more connections at a DCSS through the provision of ancillary services to back up any losses due to faults. However, this will incur a cost of negative ~£1200 million compared to the base case, and therefore is not a realistic choice compared to either (1) increased number of point-to-point connections or (2) our preferred case of using DCCB’s
In Beta Phase, additional benefits will be tracked using the following metrics for key stakeholders:
• Reduced network and consumer costs: the unit cost estimate for a DCCB provided by OEMs participating in the Beta Phase, compared to our estimate and sensitivity ranges in the Alpha Phase.
• Reduced network operator costs: the equipment redundancy requirements evidenced by an OEM in their Failure Mode Effects Analysis, compared with our conservative redundancy assumptions in Alpha Phase.
• Benefits expansion across implementations: the continued evolution of the Holistic Network Design and the number of coastal DCSSs foreseen under a "Business as Usual" scenario without DCCBs.
• Reduced constraints for network operators and curtailment for developers: assessing more rigorously the under-utilisation of converter capacity of existing DCSSs.
