Grid Connections for smaller projects
Nick Balmer
I have found the recent posts on HVDC and other grid connections of
very great interest, and I would like to thank those of you who have
spent so much time going into detail.
As a simple construction contractor I find the grid and connections to
it to be a very real issue, and it is impacting on my projects
everywhere.
Let me just illustrate this with a real project I am grappling with at
present. I won't name the parties however as I would breach various
NDA's if I did so.
We are tendering to build a materials recycling facility for a
council. It is worth circa £10m.
We need 800kVa. We have 500kVa at present and are actually in sight of
a big power station and substations.
The DNO started out demanding £150k for the connection. When we got
into more detailed discussions it actually went up to £250k.
Then we contest this, and we are told that actually we can have 800kVa
from the existing system (because we had shown them suitable mains
were running right through the site already, if we pay £758/month
until we use the power. They will only hold the offer for 90 days, and
they will only take the cheque from the property owner.
This is a typical example of a very commonly encountered situation
today where Statutory Authorities and Local Government bodies have
standard procedures that are totally at odds with the procedures in
related organisations, and one part of even the same body seems to
fight the other.
It becomes a Kafkaesque situation for project developers and
contractors, because you have virtually no leverage to control these
interfaces and risks.
The property owner in this case is the very same council we are
ultimately bidding for. They are jumping up and down on me because the
cost of the MRF is "too high." and yet with almost the very next
breath they are telling me to allow for the risk of getting the grid
connection in my price.
We cannot be a charity, so we will have to add the sum in to cover the risk.
So I am ether going to pocket the money if it is not required, or run
the risk that the DNO decides to double the number they first thought
of, and a very substantial slice of my OHP will go down the tube.
The council says that they can't pay the money because this infringes
the procurement rules. So they have told us we must carry the risk on
the grid connection costs, and I have no choice but to add a sum to
our quote.
So much for Achieving Best Value.
They have now delayed awarding the contract so we are out of the
validity of the DNO's quote.
Experience with DNO's on many projects is that these early quotes are
not worth the paper they are written on when you finally get to start
building the project. They can demand more or less whatever they like,
and we are seeing many smaller projects running into very real
problems over grid connections. It is holding up all sorts of projects
just like it has been doing for onshore wind farms over the past four
or five years.
As far as I am aware the DNO's appear to be able to more or less make
the figure up especially for the Deep Charges and I believe that they
are trying either to discourage developers so that they simply go
away, or that they are trying to get the new projects to pay for much
of the upgrading and replacement of the existing time expired grid.
It strikes me that it would be better if a figure for Deep Charges was
worked out for each DNO with the regulator over the budget for the
next five year plan, and it should be levied over the entire grid
network in that DNO area based on energy used.
Then the Shallow charges would be priced per site.
Planning used to be the really big obstacle followed by finance and
then grid costs.
Planning is getting much easier relatively and even finance seems to
be improving, but the grid connection remains a real issue at present.
As I said before, I am not a grid expert, and I hope by my post that
some of you who are might be encouraged to look more closely at the
impact of this on renewable energy delivery.
Regards
Nick Balmer
dave andrews
+ 44 (0) 755 265 9166
+ 44 (0) 1225 837978
Nick Balmer
I am aware of several consultancies full of "old lags" looking into this issue.
I am also aware that it is possible to get quotes for other utilities
besides the DNO, although I have found that unless it is sizeable
connection or in a place where they are particularly keen to compete
with the DNO they can often show little real interest.
Regards
Nick Balmer