Wikipedia article on estimating costs of transmission upgrade to deal with renewables
Below is an extract from the excellent Wikipedia’s article on National Grid which references Bernard Quigg’s paper at the last Claverton Conference.
Can anyone help on this – it seems to me that the Costs of Transmission derived from Bernard’s’ paper are too high when compared to the method derived from Triad charges, Is this because Bernard is including generator connection charges which it could be argued are the costs of connecting the generator, not transmission. Any thoughts?
Best to comment and then edit the wikipedia article directly (anyone can do this of course)
National Grid (UK)
From Wikipedia, the free encyclopedia
Triad demand is measured as the average demand on the system over three half hours between November and February (inclusive) in a financial year. These three half hours comprise the half hour of system demand peak and the two other half hours of highest system demand which are separated from system demand peak and each other by at least ten days.
These half hours of peak demand are usually referred to as Triads.
In April of each year, each licensed electricity supplier (such as Centrica, BGB etc.) is charged a fee for the peak load it imposed on the grid during those three half hours of the previous winter. Exact charges vary depending on the distance from the centre of the network, but in the South West it is £21,000/MW for one year, or £7,000/MW for each of the three half hours, for convenience assuming they were identical, (which is unlikely however they will be close). The average for the whole country is about £15,000/MW per year. This is a means for National Grid to recover it charges, and to impose an incentive on users to minimise consumption at peak, thereby easing the need for investment in the system. It is estimated that these charges reduced peak load by about 1 GW out of say 57 GW.
This is the main source of income which National Grid uses to cover its costs and these charges are commonly also known as TNUoS – Transmission Network Use of System charges. (Note this is for high voltage long distance transmission and the lower voltage distribution is charged separately). The grid also charges a fee to generators to connect.
 Estimating Costs per kWh of Transmission
If the total number of units delivered by the UK generating system in a year, are divided into the total TNUoS or Triad receipts, then a crude estimate can be made of transmission costs, and one gets the figure of around 0.2p/kWh. This is calculated by taking the total annual Triad charges, which are say £15,000/MW/year x 50,000 MW = £750 million/year and dividing it by the total number of units sold – say 3.6 trillion kWh.
However, according to  which is probably more accurate…”According to the 06/07 annual accounts for NGC UK transmission, NGC carried 350TWh for an income of £2012m in 2007 i.e. NGC receives 0.66p per kW hour. With two years inflation to 2008/9 say 0.71p per kWh”. However this figure will include connections fees paid by generators, so is probably on the high side.
 Upgrading National Grid to deal with Renewables
Questions have been raised about supposedly enormous costs to upgrade the UK or other National Grids to deal with more renewables. However on hte basis of the above figures, this is unlikely to be true. For example if the UK Grid were to be hypothetically doubled, this would only add about 0.71p/kWh which is about 7% of the domestic charge for power in the UK.
 Generation charges
In order to be allowed to supply electricity to the Transmission system, generators must obtain permission to do so from NGET. This permission is supplied in the form of Transmission Entry Capacity (TEC). Generators contribute to the costs of running the System by paying for TEC, at the generation TNUoS tariffs set by NGET. This is charged on a maximum-capacity basis. In other words, a generator with 100 MW of TEC who only generated at a maximum rate of 75 MW during the year would still be charged for the full 100 MW of TEC.
In some cases, there are negative TNUoS tariffs. These generators are paid a sum based on their peak net supply over three proving runs over the course of the year. This represents the reduction in costs caused by having a generator so close to the centre of demand of the country.