National Grid - International Power
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Transcript National Grid - International Power
Welcome to First Hydro
16 July 2010
First Hydro overview
Approximately 200 employees across four sites
Dinorwig
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–
–
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–
largest pumped storage plant in Western Europe
commissioned 1983
total plant capacity 1,728MW
6 reversible pump/turbines
reservoir capacity ~10GWh
Ffestiniog
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–
–
–
–
UK’s first major pumped storage station
Commissioned 1963
total plant capacity 360MW
4 separate turbines & pumps
reservoir capacity ~1.3GWh
Electric Mountain visitor centre
Bala House trading office
Owned by International Power (75%)/
Mitsui & Co, Ltd (25%) since December 2004
Slide 2
First Hydro
Pumped storage principle
Pump water overnight
Generate electricity during the day
Typical cycle efficiency ~70 - 75%
Closed hydraulic system
Slide 3
First Hydro
Asset features
Dinorwig mode transition times
Originally designed and built to
support grid system management
Extremely high reliability and
availability
<30s
Spin Gen
6m
3m
6m
Rapid speed of response
– Dinorwig full output in ~16
seconds
– Ffestiniog full output ~60 seconds
<12s
Generate
6m
Shut Down
8m
6m
7m
Spin Pump
<90s
Pump
<30s
<30s
~25,000 mode changes per year
Asset capabilities provide for a
diverse range of trading and
marketing opportunities
90
Typical start-up times (minutes)
85
80
70
60
60
50
40
30
20
10
0
Slide 4
1.5
Dinorwig
2.5
Ffestiniog
CCGT (hot)
Coal (hot)
First Hydro
The role of First Hydro
1. Energy arbitrage - peak/off-peak
– valuable peaking capacity
– enables efficient running of steam plant overnight
2. Reserve provision
– range of timescales (focus on fast)
– but, limited storage
3. Frequency control
– fast response to plant trips, TV pickups etc.
Roles underpinned by plant reliability and dynamic capabilities
Buying fuel and selling power exports via the same market
Diversity of revenue streams
Slide 5
First Hydro
Optimising value
2088 MW Capacity
Energy limited
First Hydro
competitive
advantage
Market
features
Trading
Slide 6
Bilateral, OTC,
Power exchanges
Half-hourly
resolution shape and
standard products
Balancing
Mechanism
Ancillary
Services
Bids and offers
accepted on a
minute-by-minute
basis
System services
procured by National
Grid
Adjusts final traded
positions to match
supply and demand
Facilitate system
security, and power
quality on a secondby-second basis
Ability to deliver any
half-hourly shape,
and notify up to
gate closure
Attractive, fast
dynamics
Wide range of offered
services including
reserve, response,
black start, reactive
Expertise in
prompt/spot trading
Ideally suited to
covering plant trips,
TV pickups etc.
High quality offering,
uniquely dynamic
capabilities
First Hydro
TV pick up: England vs USA 12th June
National Grid
FHC Output over same period:
300
250
DINO-1
DINO-6
FFES-1
FFES-4
150
100
50
22:00
21:45
21:30
21:15
21:00
20:45
20:30
20:15
20:00
19:45
19:30
19:15
0
19:00
MW
200
Time
Slide 7
First Hydro
Dinorwig physical layout
Slide 8
First Hydro
Dinorwig physical layout
Slide 9
First Hydro
Power station/unit cross-sections
Underground cavern
cross section
Generator/motor
Pump/Turbine
Slide 10
First Hydro
Market review
Significant market volatility
Winter 05/06 and throughout
2008
– Positive impact of additional
storage on utilisation/value
in 2008
Less stress on system in
2009/10
– Impact of new build and
recession-led demand
reduction
– But, some intraday volatility
– Retain ability to capture
value during ‘system shocks’
Slide 11
First Hydro
Market outlook
EU’s 2020 targets &
UK commitments
Material levels of
wind generation, new
nuclear
Large Combustion
Plant Directive
Closure of 11 GW
thermal plant by
2016
Industrial
Emissions Directive
Limited hours
operation on most
remaining fossil plant
from 2016
Increased EU
market integration
Greater levels of
interconnection with
EU
Projected New Build
DECC – Updated Energy and Emissions
Projects, June 2010
GB plant mix to
change radically in
next 10-15 years
Security and balancing challenges
Premium on flexibility and reliability
Significant impact of wind intermittency
Increased reserve requirement
Increased spot market volatility
Potential for reforms to market framework
Slide 12
First Hydro
Ancillary services developments
Demand for reserve services to
increase
– Impact of increased wind generation
– Intermittency increases system risks
across a range of timescales
Frequency response requirements to
be revised upwards
– To be consistent with increased wind
generation, new generation nuclear
reactors, and large offshore wind
connections
New providers expected to enter
these markets
– Dynamic demand response
– New OCGT plant
FH well positioned, with diverse
capabilities
Source Data: National Grid “Future Requirements”
Slide 13
First Hydro
Plant investment strategy
Assess changing
market environment
–
Opportunities and challenges
Preserve competitive
advantage
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–
–
–
Maintain current levels of
performance
Focus on quality of core
maintenance
Replace or refurbish
ageing/obsolescent equipment
Retain expertise within business
Enhance capabilities
–
–
Improve reliability/availability
Increase quality or range of
products
Invest to maintain
assets
–
Engineering integrity and plant life
Invest to improve
assets
Additional
storage
Slide 14
New
runner
Increased
automation
First Hydro
Dinorwig additional stored energy
Extension of Marchlyn Mawr
planned 2005/6
Permissions granted 2006
Completed October 2007
Increased storage by
approximately 8%
Short payback period
Slide 15
First Hydro
Plant automation
% Instructions
First Hydro despatch is already
extremely accurate
40
35
– 99% of instructions are delivered
within one minute of required time
30
25
Engineers manually accept
instructions from grid and despatch
the plant
20
15
Aiming to automate majority of
despatch instructions
10
5
0
60+ 45 30 15 0 15 30 45 60+
Seconds early/late
Based Jan-Jun 2010.
>13000 instructions.
14 not delivered
Slide 16
– Improve despatch precision to
maintain/enhance competitive
advantage
– Target 99% within 15 seconds
Automate progressively from 2011
to 2014
First Hydro
Turbine runner
2008 record utilisation; pumping
costs >£100m
Re-established project to look at
improving cycle efficiency
Turbine design optimised in
2007/8 via computational and
physical modelling
Currently replacing a turbine
with completion targeted for Q3
2010
– Unit efficiency gain > 2%
– Short payback period
Slide 17
First Hydro
Summary
First Hydro remains highly relevant to the UK system
Future market developments will increase the need for
response and reserve
– Providing critical reserves to support intermittent generation
– Ability to “time-shift” excess wind generation off peak
– Complement new nuclear build
Historic investment in plant has maintained integrity/longevity
Current investment program improves market position
– Increases competitive advantage
– Enhances ability to capture current and future value
Slide 18
First Hydro