Modernising and extending our transmission networks
In the US, we are entering into new agreements with supply chain partners to deliver our commitments for significantly increased investment to replace ageing transmission assets. In the UK, we have also agreed with Ofgem to commit significant investment into planning new infrastructure to connect low carbon power generation ahead of the traditional timescales. In addition, we have committed to developing new processes to enable investment in new physical network capacity, which provides customers with easier access to our network.
Reliability
Our aim is to meet or exceed network reliability and availability objectives.
To monitor our reliability performance we use network reliability percentages as our key performance indicator.
In the UK, the total amount of electricity transmitted in 2008/09 was 296.1 TWh compared with 303.0 TWh for 2007/08 and 303.7 TWh for 2006/07. Gas transmitted amounted to 1,158 TWh compared with 1,134 TWh in 2007/08 and 1,086 TWh in 2006/07.
In the UK, the winter of 2008/09 saw demand from the electricity transmission network in England and Wales hit a peak of 52.9 GW. This compares with 54.2 GW in 2007/08 and 52.1 GW in 2006/07.
2008/09 saw a maximum gas demand of 443 million standard cubic metres on 6 January 2009. This is higher than last year’s peak of 419 million standard cubic metres.
In the US, the summer of 2008 saw demand from the electricity transmission networks in New England and New York hit a combined peak load of 13.0 GW. This compares with 13.2 GW in 2007 and 14.0 GW in 2006.
Our reliability and availability performance during the year can be summarised as follows:
| Years ended 31 March | |||
|---|---|---|---|
| Measure | 2009 | 2008 | 2007 |
| UK electricity transmission network | |||
| reliability – target 99.9999% | 99.9999% | 99.9999% | 99.9999% |
| UK gas transmission network | |||
| reliability – target 100% | 100% | 100% | 100% |
| US electricity transmission network | |||
| reliability – target < 303 MWh | 266 MWh | 437 MWh | 259 MWh |
| UK average annual availability for | |||
| electricity transmission network | 94.64% | 95.09% | 95.02% |
| UK electricity system availability | |||
| at winter peak demand | 97.7% | 98.0% | 98.2% |
| UK gas compressor fleet performance | |||
| – mean time between failures | 405 hrs | 259 hrs | 430 hrs |
| US annual network availability | 98.8% | 98.6% | 98.1% |
In the US, our electricity system reliability performance broadly improved over the previous year as well as the average of the previous five years. However, continued improvement remains an objective for 2009/10.
Capital investment
Our aim is to deliver our planned capital investment programme involving approximately £5 billion of capital expenditure between 1 April 2009 and 31 March 2012.
UK investment
Investment in electricity and gas transmission systems is, by its nature, variable and is largely driven by changing sources of supply and asset replacement requirements. The gas transporter and electricity transmission licences also oblige us to provide connections and capacity upon request.
We have increased our level of investment as we replace parts of our UK electricity network as the assets become due for renewal. In addition, parts of the gas transmission network are reaching the end of their technical lives. These are mainly compressor stations, control systems and valves. This, together with work required to meet changing supply sources, means that the UK electricity and gas transmission business will continue to see a significant increase in investment and network renewal.
Capital investment in the replacement, reinforcement and extension of the UK electricity and gas transmission systems in 2008/09 was £1,259 million, compared with £1,600 million in 2007/08 and £1,235 million in 2006/07. 2008/09 has seen a substantial decrease in the level of investment in gas pipeline projects, some £363 million lower than 2007/08 (2007/08: £138 million higher than 2006/07) as the south Wales project is now substantially complete. Capital investment included £18 million with respect to intangible assets, principally software applications (2007/08: £22 million, 2006/07: £17 million).
Capital investment continues to include high levels of expenditure on the replacement of electricity transmission network assets, many of which were commissioned in the 1960s, and also increasing expenditure on load related infrastructure. Total investment in electricity network assets amounted to £863 million in 2008/09, compared with £800 million in 2007/08 and £607 million in 2006/07.
US investment
Capital investment in the replacement, reinforcement and extension of the US electricity transmission networks in 2008/09 was £182 million compared with £111 million in 2007/08 and £108 million in 2006/07. After excluding the £33 million effect of exchange rate movements, capital investment increased by £38 million in 2008/09 compared with 2007/08. The change principally reflects an increase in regional reliability projects in New England and additional asset replacement in New York to improve system reliability.
We expect increasing investment in New England to deliver our regional system expansion projects including the NEEWS project.
NEEWS is a large scale, regional transmission solution involving improvements to the transmission systems of National Grid and Northeast Utilities. In total it has an estimated cost of approximately $2.1 billion (£1.5 billion) with National Grid’s share estimated at approximately $0.6 billion (£0.4 billion). The NEEWS project is designed to address reliability problems in the southern New England transmission system. The complexity and geographical coverage is on a larger scale than any other transmission infrastructure project built in New England in more than 20 years and represents the most significant addition to the New England 345 kV transmission system since it was first built.
Other investment projects in New York will also deliver our asset replacement plans and improve the reliability of the system.