Summer Outlook - National Grid ESO

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Summer Outlook - National Grid ESO
Summer Outlook
2019

The Summer Outlook Report is
an annual publication delivered by
National Grid each spring. It presents
our view of the gas and electricity
systems for the summer ahead
(April to September).

The report is designed to inform
the energy industry and support
their preparations for this
summer and beyond.
Summer Outlook - National Grid ESO
Welcome
Summer
Outlook
2019

          Thank you for reading our              this new format will enable you              As always, we would really
          Summer Outlook report. As we           to interact with the Summer                  welcome your feedback so we
          look forwards to this summer, we       Outlook report in a way that                 can ensure our documents are
          are confident that that there will     meets your needs.                            as useful as possible. Email us at
          be sufficient energy available to                                                   marketoutlook@nationalgrid.com,
          meet demand, and that we have          From 1 April 2019, the Electricity           or you can join the conversation
          the right tools in place to manage     System Operator (ESO) will be                using social media via LinkedIn,
          operability in all scenarios.          a new legally separate company               Facebook and Twitter.
                                                 that will carry out our ESO function
          This year, we have responded           within the National Grid Group.
          to stakeholder feedback by trialling   Whilst this will provide focus to our        Fintan Slye
          a new format for this document.        electricity activities, facilitating whole   Director UK System Operator
          We want to ensure that the Summer      system outcomes is also one of our
          Outlook is as clear and succinct       key roles as an ESO going forward.
          as possible, without losing the
          richness of the data that underpins    As we tackle the key energy
          our analysis.                          challenges ahead of us, we expect
                                                 to see increasing interactions
          In order to do this, we have           between gas and electricity markets
          produced a concise executive           and operations. For this reason,
          briefing pack. This aims to quickly    documents such as the Summer
          put across key messages from           and Winter Outlooks will continue
          the Summer Outlook, through            to be produced on a dual fuel
          interactive graphics. Accompanying     basis and we will continue to
          this, we have produced an in-depth     draw out and explore whole
          data workbook, with additional         energy system themes in this
          analysis that we know is valued        year’s Summer Outlook.
          by our stakeholders. We hope that
Summer Outlook - National Grid ESO
Summer
Outlook
2019
Summer Outlook - National Grid ESO
1
Summer                        01
Outlook
2019

          Executive summary
Summer Outlook - National Grid ESO
Overview
Summer                                                                              02
Outlook
2019

          Executive summary

          1
          We are confident that there will
                                           3
                                           Whole system thinking
          be sufficient supply available to     is becoming increasingly
          meet energy demands for the           important as long term
          coming summer. We anticipate          trends of decarbonisation and
          similar gas and electricity demands   decentralisation drive increased
          to summer 2018.                       interaction between the gas
                                                and electricity transmission

          2
                                                systems. In the short term this
                                                is primarily due to gas fired
          We have the right tools and           electricity generators balancing
          services available to manage          the intermittent output of
          operability for the coming            renewable electricity generators.
          summer, particularly during
          periods of low demand, or when
          access requirements increase for
          delivery of key maintenance work.
                                                4
                                                We anticipate no additional
                                                operability challenges for this
                                                coming summer as a result
                                                of the UK’s planned exit from
                                                the EU. We have tested our
                                                planning assumptions in a
                                                broad range of scenarios and
                                                via engagement with industry.
                                                These scenarios fall within our
                                                normal contingency planning.
Summer Outlook - National Grid ESO
Supply and demand
Summer                                                                                                                                                  03
Outlook
2019

          Executive summary

          We are confident that there           We do not think it is likely that            Key statistics, electricity
          will be sufficient supply available   we will need to instruct inflexible
          to meet energy demands for the        generation to reduce output                  Electricity transmission peak demand            33.7 GW
          coming summer. We anticipate          in weeks when demand is low.                 Electricity transmission minimum demand         17.9 GW
          similar gas and electricity           However should this be necessary
          demands to summer 2018.               we have the tools to do so.                  Minimum available generation                    39.8 GW
                                                
          Electricity Demand – weather         Gas Demand – during the summer
          corrected demand seen on the          gas fired electricity generation             Key statistics, gas
          transmission system at both a peak    becomes a more significant
          and minimum level will be similar     component of GB demand, unlike               GB gas demand                                   25.2 bcm
          to last summer, as the recent trend   winter when domestic heating
          of increasing solar generation has    dominates. This drives profiles to           Total gas demand                                36.1 bcm
          slowed. Generation that is not        become more variable in line with
          connected to the transmission         renewable generation. We also                Above demand forecasts are weather corrected.
          network (such as the majority         anticipate greater levels of transit
          of solar generation) reduces          gas than last summer in response
          transmission demand as more           to market conditions.
          demand is met locally.
                                                Gas Supply – we anticipate
          Electricity Supply – we will be       increased liquefied natural gas
          able to meet demand and our           (LNG) deliveries compared to last
          reserve requirement at all times      summer. Whilst this could provide
          throughout summer 2019 under          competition for other supply
          all interconnector scenarios.         sources, it is likely to result in greater
                                                transit flows to the continent.
Summer Outlook - National Grid ESO
Operational outlook
Summer                                                                                                                                                    04
Outlook
2019

          Executive summary

          We have the right tools and services available to manage operability for the
          coming summer, particularly during periods of low demand or when access
          requirements increase for delivery of key maintenance work.

          Key messages – electricity                                               Key messages – gas
          • Low transmission demand and       • Managing reactive power and      • Although the need for              • We are expecting increased
           high volumes of low inertia          voltage levels will continue to     maintenance remains high,             volumes of LNG supply, which
           generation can cause operational     be challenging. We have tendered    we anticipate no major risks          affects flows of gas across GB.
           issues over the summer.              for the provision of (Enhanced)     to National Transmission              As LNG supply is less predictable
                                                Reactive Power services for         System (NTS) access for the           than UK Continental Shelf supply,
          • We will need to take day-to-day    summer 2019 and 2019/20.            planned summer schedule.              we must be prepared to operate
           actions to manage system                                                                                       the network in increasingly
           frequency in times of low           • Work continues to move smaller   • During summer months, gas fired     complex or new configurations
           demand. Usually this will            generation to new protection        electricity generation becomes        at relatively short notice.
           involve working with flexible        settings, which will reduce the     a dominant component of gas
           generation to reduce supply.         need to manage system stability     demand. Its variability results
                                                using operational tools.            in a need for close management
                                                                                    of system pressures. We are
                                                                                    reliant on timely and accurate
                                                                                    physical notifications to minimise
                                                                                    operability risks.
Summer Outlook - National Grid ESO
Whole energy system
Summer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              05
Outlook
2019

          Executive summary

          Whole system thinking                      Figure 1
          is becoming increasingly
          important as long-term
                                                     Load factor of renewable and gas fired electricity generation summer 2018
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               • Output from gas fired
                                                                          60%                                                                                                                                                                                                                                                                                                                                                                                                                    generation mirrors the output
          trends of decarbonisation and                                                                                                                                                                                                                                                                                                                                                                                                                                                          from renewable generation,
          decentralisation drive increased                                                                                                                                                                                                                                                                                                                                                                                                                                                       increasing when renewable
          interaction between the gas and
                                                                          50%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 output decreases and
          electricity transmission systems.                                                                                                                                                                                                                                                                                                                                                                                                                                                      vice versa.

                                               Load fatcor (percentage)
                                                                          40%

          An example of this is how
          increased renewable generation
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               • The resulting volatility in
                                                                          30%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 output required from gas
          on the electricity system, coupled                                                                                                                                                                                                                                                                                                                                                                                                                                                     fired generation also means
          with a gradual move away from                                   20%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 the gas demand to these
          coal, has a direct impact on the                                                                                                                                                                                                                                                                                                                                                                                                                                                       sites is more variable.
          operation of the gas system.                                    10%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               • In turn this variability has an
                                                                          0%                                                                                                                                                                                                                                                                                                                                                                                                                     impact on how we configure
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 and operate the NTS,
                                                                            01/04/2018
                                                                                         08/04/2018
                                                                                                      15/04/2018
                                                                                                                   22/04/2018
                                                                                                                                29/04/2018
                                                                                                                                             06/05/2018
                                                                                                                                                          13/05/2018
                                                                                                                                                                       20/05/2018
                                                                                                                                                                                    27/05/2018
                                                                                                                                                                                                 03/06/2018
                                                                                                                                                                                                              10/06/2018
                                                                                                                                                                                                                           17/06/2018
                                                                                                                                                                                                                                        24/06/2018
                                                                                                                                                                                                                                                     01/07/2018
                                                                                                                                                                                                                                                                  08/07/2018
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                                                                                                                                                                                                                                                                                                         29/07/2018
                                                                                                                                                                                                                                                                                                                      05/08/2018
                                                                                                                                                                                                                                                                                                                                   12/08/2018
                                                                                                                                                                                                                                                                                                                                                19/08/2018
                                                                                                                                                                                                                                                                                                                                                             26/08/2018
                                                                                                                                                                                                                                                                                                                                                                          02/09/2018
                                                                                                                                                                                                                                                                                                                                                                                       09/09/2018
                                                                                                                                                                                                                                                                                                                                                                                                    16/09/2018
                                                                                                                                                                                                                                                                                                                                                                                                                 23/09/2018
                                                                                                                                                                                                                                                                                                                                                                                                                              30/09/2018
                                                                                                                                                                                                                                                                                                                                                                                                                                           07/10/2018
                                                                                                                                                                                                                                                                                                                                                                                                                                                        14/10/2018
                                                                                                                                                                                                                                                                                                                                                                                                                                                                     21/10/2018
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  28/10/2018
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 increasing flexibility
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 requirements within
                                                                            Renewables Load Factor                                                                                         Gas plant Load Factor                                                                                                                                                                                                                                                                                 and across days.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               • The NTS compressor portfolio
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 is increasingly relied upon
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 to manage this variability
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 in operational pressures.
Summer Outlook - National Grid ESO
EU Exit impact
Summer                                                                                                                                      06
Outlook
2019

          Executive summary

          We anticipate no additional
          operability challenges for                        • In all scenarios trading will         • Should the UK leave the EU
                                                              continue, and electricity will flow.    with no deal, cross border trading
          this summer as a result of                          It is expected to flow from lower       of energy would take place
          the UK’s planned exit from                          to higher priced markets as is          outside of the single market
          the EU. We have tested our                          the case at the moment.                 framework, i.e. under World Trade
          planning assumptions in a                                                                   Organisation rules for the majority
          broad range of scenarios and
           via engagement with industry.                    • In a no deal scenario, the             of countries, where no free trade
                                                              mechanisms of cross-border              agreement has been negotiated.
          These scenarios fall within our                     gas trade are not expected              Furthermore, as is the case now,
          normal contingency planning.                        to fundamentally change.                flows on both gas and electricity
                                                              Gas shippers mostly purchase            interconnectors may also be
          Potential impacts concerning                        energy and capacity separately,         impacted by fluctuations in
          interconnector trading are                          and there would be no change            currency exchange rates.
          discussed below:                                    from this in the event of a no
                                                              deal exit from the EU. The UK’s
          • Currently when electricity                       Transmission System Operators
               is traded over interconnectors                 (TSO’s) expect to have continued
               with connected markets                         access to the Prisma gas
               in the EU a day ahead of real                  capacity trading platform1
               time, this is done using implicit              to allocate capacity at
               arrangements. This makes                       interconnection points.
               trading faster and more efficient.
               In the case of a no deal exit
               from the European Union, these
               arrangements would no longer
               apply and interconnectors
               would have to move to fallback
               arrangements.

          1
              https://platform.prisma-capacity.eu/#/start
Summer Outlook - National Grid ESO
Key publications from the System Operator
Summer                                                                                                                                                                                                                                                                                                                                           07
Outlook
2019

          Executive summary

          System Operator publications          The Operability Strategy Report                                                            System Operator publications 2019
          The Summer Outlook Report             considers the current operability                                                                                                Network Options Assessment                                                                                                    Winter Outlook Report
          is just one of the documents          challenges the ESO faces and how                                                                                                 January                                                                                                                       October
          within our System Operator            these are likely to change in future.                                                                                            The options available to meet                                                                                                 Our view of the gas and
          suite of publications on the future                                                                                                                                    reinforcement requirements                                                                                                    electricity systems for the
                                                                                                                                                                                 on the electricity system.                                                                                                    winter ahead.
          of energy. Each of these documents    For gas, these issues are considered
          aims to inform the energy debate      in the Gas Ten Year Statement and
          and is shaped by engagement           Future Operability Planning                                                                                                      Summer Outlook Report                                                                                                         Electricity Ten Year Statement
          with the industry.                    publications. We share aspects                                                                                                   Spring                                                                                                                        November
                                                of our analysis with the industry                                                                                                Our view of the gas and electricity                                                                                           The likely future transmission
                                                                                                                                                                                 systems for the summer ahead.                                                                                                 requirements on the electricity
          The starting point for our analysis   during the development of these                                                                                                                                                                                                                                system.
          is the Future Energy Scenarios        documents to make sure that the
          (FES). This document considers        proposed solutions meet the needs
          the potential changes to the          of our stakeholders.                                                                                                             Operability Strategy Report                                                                                                   Gas Ten Year Statement
          demand and supply of energy                                                                                                                                            Summer 2019                                                                                                                   November
                                                                                                                                                                                 Our view of future electricity                                                                                                How we will plan and
          from today out to 2050.                                                                                                                                                system needs and potential                                                                                                    operate the gas network,
                                                                                                                                                                                 improvements to balancing                                                                                                     with a ten-year view.
          The network and operability                                                                                                                                            services markets.
          changes that might be required
          to operate the electricity system                                                                                                                                      Winter Review and Consultation                                                                                                Future Operability Planning

                                                                                                                                                                                                                                              Future Operability Planning 2016
                                                                                                                                                                                                                                                                                 Future Operability

                                                                                                                                                                                 June                                                                                                                          November/December
                                                                                                                                                                                                                                                                                 Planning 2016

          in the future are explored in the
                                                                                                                                                                                                                                                                                 UK gas transmission

                                                                                                                                                                                 A review of last winter’s                                                                                                     How the changing energy
          Electricity Ten Year Statement,                                                                                                                                        forecasts versus actuals and                                                                                                  landscape will impact the
          System Operability Framework                                                                                                                                           an opportunity to share your                                                                                                  operability of the gas system.
          and Network Options Assessment.                                                                                                                                        views on the winter ahead. National Grid plc
                                                                                                                                                                                                            National Grid House,
                                                                                                                                                                                                            Warwick Technology Park,
                                                                                                                                                                                                            Gallows Hill, Warwick.
                                                                                                                                                                                                            CV34 6DA United Kingdom
                                                                                                                                                                                                            Registered in England and Wales
                                                                                                                                                                                                            No. 4031152

                                                                                                                                                                                                            www.nationalgrid.com

                                                                                                                                                                                 Future Energy Scenarios                                                                                                       System Operability Framework

                                                                                                                 Future Energy Scenarios

                                                                                                                                                                                                                                              SystemOperability Framework 2015
                                                                                                                                           Future Energy                                                                                                                         System Operability

                                                                                                                                                                                 July                                                                                                                          Regular updates
                                                                                                                                           Scenarios                                                                                                                             Framework 2015
                                                                                                                                           UK gas and electricity transmission                                                                                                   UK electricity transmission

                                                                                                                                                                                 A range of plausible and                                                                                                      How the changing
                                                                                                                                                                                 credible pathways for the                                                                                                     energy landscape will
                                                                                                                                                                                 future of energy from today                                                                                                   impact the operability
                                                                               National Grid plc
                                                                               National Grid House,
                                                                               Warwick Technology Park,
                                                                               Gallows Hill, Warwick.
                                                                               CV34 6DA United Kingdom
                                                                               Registered in England and Wales
                                                                               No. 4031152
                                                                                                                                                                                 out to 2050.               National Grid plc
                                                                                                                                                                                                            National Grid House,
                                                                                                                                                                                                            Warwick Technology Park,
                                                                                                                                                                                                            Gallows Hill, Warwick.
                                                                                                                                                                                                            CV34 6DA United Kingdom
                                                                                                                                                                                                            Registered in England and Wales
                                                                                                                                                                                                            No. 4031152

                                                                                                                                                                                                            www.nationalgrid.com
                                                                                                                                                                                                                                                                                                               of the electricity system.
                                                                               www.nationalgrid.com
2
Summer                                                                 08
Outlook
2019

          Electricity
                        In this section we present our current view
                        of electricity demand for summer 2019.

                        We also provide an electricity supply and
                        operational view for the coming summer.
                        Our operational view is based on historic
                        performance and data provided to us by
                        generators. We use this data to present
                        a picture of operational surplus for each
                        week of summer and to determine the
                        actions we may ask generators to take
                        during periods of low demand.

                        In addition, our Europe and interconnected
                        markets section explores interconnector
                        behaviour, and provides market insights into
                        the impact to GB of pricing and renewable
                        generation in neighbouring countries.
Electricity demand
Summer                                                                                                                                                             09
Outlook
2019

                                                                                   Table 1
          Key messages                                                             Weather corrected transmission system demand for summers 2016, 2017, 2018 and
                                                                                   normalised transmission demand for 2019.
          In July 2018, we saw the lowest      Our analysis suggests that this
          transmission system demand           downward trend will slow this       Year                  Summer       Daytime      High summer
          (TSD) on record at 16.3 GW           summer as the growth of                                   minimum (GW) minimum (GW) peak (GW)
          (actual demand based on actual       distribution connected
          weather including station load).     generation, mainly solar            2016                  17.8                 22.7                 36.3
          This continued the downward          photovoltaics (PV), decreases and   2017                  17.6                 21.2                 34.4
          trend in demand that we have         we anticipate minimal reductions
          seen on the transmission system      in underlying demand. Therefore     2018                  18.0                 21.0                 33.9
          since 2011, which has largely been   we expect the weather corrected     2019 (forecast)       17.9                 20.8                 33.7
          due to an increase in distribution   demand in summer 2019 to be
          connected generation.                broadly similar to summer 2018.
                                               •M  inimum summer demand
                                                 is expected to be 17.9 GW.
                                               • D aytime minimum demand
                                                 is estimated to be 20.8 GW.
                                               • P eak demand for the
                                                 high summer period is
                                                 expected to be 33.7 GW.

                                               Further information can be found
                                               in the data workbook.
Electricity demand
Summer                                                                                                                                                                                                                10
Outlook
2019

           Summer system demands

           Periods of low demand can have                         Weekly peak demand                                Summer minimum demands                                 200 MW lower than last year’s
           an impact on how we operate the                        Figure 2 shows the weekly peak                    Historically, lowest demand on the                     weather corrected demand.
           transmission system. As a result,                      demand for summer 2018, and                       transmission system has occurred
           it is important that we understand                     our forecast for 2019. Our peak                   overnight. However, growth of                          Furthermore, weekly overnight
           the minimum levels of demand                           demand for the high summer                        renewable generation has meant                         summer minimum demand for 2019
           along with the peak demand that                        period between June and the                       that lower demands may occur in                        is expected to be 100 MW lower
           we can expect to see during the                        end of August is 33.7 GW. This                    the daytime. As Figure 3 shows,                        than last year’s weather corrected
           summer months.                                         is 200 MW lower than last year’s                  daytime summer minimum demand                          demand, at 17.9 GW.
                                                                  weather corrected demand.                         for 2019 is expected to be 20.8 GW,
           Figure 2                                                                                Figure 3
           Weekly peak demand for summer 2018 against our summer 2019 forecast (weather corrected) Summer minimum demands, 2018 and 2019 forecast (weather corrected)
                      45                                                                                                       30
                      44                                                                                                       29
                      43                                                                                                       28
                      42                                                                                                       27
                      41                                                                                                       26
                      40                                                                                                       25
          Demand GW

                                                                                                                   Demand GW
                      39                                                                                                       24
                      38                                                                                                       23
                      37                                                                                                       22
                      36                                                                                                       21
                      35                                                                                                       20                   20.8
                      34                                                                                                       19
                      33                                                                                                       18
                      32                                                                                                       17                                                17.9
                      31                                                                                                       16
                      30                                                                                                       15
                       14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43                14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
                                                               Week number                                                                                               Week number
                       High summer period   Forecast peak 2019     Peak 2018                                                    High summer period
                                                                                                                                Weekly daytime summer minimum 2019     Weekly daytime summer minimum 2018
                                                                                                                                Weekly summer minimum 2019      Weekly summer minimum 2018
Electricity demand
Summer                                                                                                                                                                                      11
Outlook
2019

          Daily demand profiles

          Daily demand profile                    Peak demand timings                     Figure 4
          During the summer months,               Daily peak demand is largely            Daily hourly demand profiles from the high summer period 2018
          solar generation has a more             influenced by the amount of solar
                                                                                                    40
          prominent impact on demand              radiation. For example, if the sun
          profiles. For a number of years,        is shining all day, the peak demand               35
          maximum solar generation                is likely to occur either in the
          output has coincided with the           morning between 8am and 9am                       30
          fall in demand after lunchtime.         or after sunset. The daytime

                                                                                        Demand GW
                                                                                                    25
                                                  demands between 9am and
          Figure 4 shows the daily hourly         sunset are suppressed by                          20
          demand profile from the high            distribution connected generation                 15
          summer period in 2018. This helps       (mainly solar PV).
          us to forecast the daily minimum                                                          10       Typical summer minimum              Potential minimum at times of high solar
          and daily peak demand timings                                                              5
          for the coming summer.
                                                                                                     0
          Minimum demand timings                                                                          0:30   2:30   4:30   6:30 8:30 10:30 12:30 14:30 16:30 18:30 20:30 22:30 24:30
          Figure 4 suggests that the daily                                                                                                    Time
          minimum demand is likely to occur                                                              Maximum and minumum demand range           Average demand
          between 5am and 6am. Demand                                                                    Daytime (solar generating)    Sunrise/sunset
          then increases until 8am where it
          remains relatively flat until 4pm.
          After this, it starts to increase for
          the evening peak in demand.
Spotlight
Summer                                                                                                                           12
Outlook
2019

          Update on Network Innovation
          Allowance (NIA) projects
                                                      1                                       3
                                                      Following our NIA project with the      Finally, our partnership with
          Installed solar PV capacity is now over     Alan Turing Institute for Data           Sheffield University reached another
                                                      Science, we developed and                milestone during the winter of
          13 GW and continues to have a significant   implemented a new machine-               2018/19, with the release of an
          effect on transmission system demand.       learning based national solar power      updated set of regional solar PV
                                                      model in September 2018. This is         outturn estimates. These have
          We have continued to enhance our ability    the first time that such technology      enabled the production of regional
          to predict solar generation accurately,     has been used in our suite of            solar PV forecasts, which we
                                                      forecasting tools. Compared to           utilise to strengthen our studies
          and during the last 12 months we saw the    previous models, this new tool           of network planning and constraint
          implementation of a number of projects:     has reduced our mean absolute            management during 2019.
                                                      solar forecasting errors across all      Real time solar PV generation
                                                      timeframes by approximately 33%.         output can be accessed here
                                                      We now have an enhanced suite of         www.solar.sheffield.ac.uk/pvlive.
                                                      solar forecasting models, including
                                                      one from our NIA project with           These projects are serving to
                                                      Reading University.                     improve the ESO’s management
                                                                                              of system balancing and
                                                      2                                       network constraints in view
                                                      Also in September 2018, our NIA         of the significant impact of
                                                      project with the Met Office furnished   solar generation. We continue
                                                      an improved data-feed of short-term     to explore and implement further
                                                      forecasts of solar radiation, which     initiatives to stay abreast of the
                                                      is the key driver of solar power        changing energy landscape,
                                                      generation. The new values              and balance supply and demand
                                                      addressed the tendency to under-        accurately and economically.
                                                      forecast solar radiation, and
                                                      therefore solar generation.
Electricity Supply,
Summer                                                                                                                                                                                         13
Outlook
2019

          including operational view
                                                                               Figure 5
          Key messages                                                         Weekly generation and demand summer 2019
                                                                                    54
                                                                                    52
                                                                                    50
                                                                                    48
                                                                                    46

          39.8 GW                          Demand
                                                                                    44
                                                                                    42
                                                                                    40
                                                                                    38

                                                                               GW
          Based on current operational     We are able to meet normalised           36
          data the minimum available       transmission demand and our              34
          generation is expected to be     reserve requirement at all times         32
                                                                                    30
          39.8 GW in the week commencing   throughout summer 2019 under             28
          10 June (no continental          all interconnector scenarios,            26
          interconnector flow scenario).   including throughout the shoulder        24
                                           months of April and September.           22
                                                                                    20
                                                                                          01 08 15 22 29 06 13 20 27 03 10 17 24 01 08 15 22 29 05 12 19 26 02 09 16 23 30 07 14 21
                                                                                                April           May             June        July           August       September         October
                                                                                                                                           Date
                                                                                         Max normal demand (including full Ireland export) Reserve requirement
                                                                                         Assumed generation with no continental IC flows   Assumed generation with base continental IC flows
                                                                                         Assumed generation with high IC continental flows

                                                                               *Please note data on the BM reports website does not include interconnector imports/exports and is
                                                                                largely unadjusted (i.e. does not include derating or breakdowns – with the exception of wind where
                                                                                this is accounted for via the assumed load factor).
Electricity Supply,
Summer
Winter                                                                                                        14
Outlook
2019

>1
Executive
summary
              including operational view
>2
Our role

>3
Electricity   Operational view:
>4            •In the summer months, power                     • T his operational view doesn’t include
                  stations carry out planned                        any generator market response close
Gas                                                                 to real time – for example if market
                  maintenance as there is typically
>5                lower demand and lower electricity                prices increase, generators may
Glossary
                  prices than in the winter.                        move planned maintenance. For the
              • To plan for the summer, the ESO                    latest OC2 data and operational view,
                                                                    see the BM reports website2,
                  uses OC2 data submitted weekly by
                  generators, which includes planned                updated each Friday.
                  maintenance dates. We also apply              •    ased on current economic
                                                                    B
                  a breakdown rate to this data, to                 conditions, we expect some coal
                  account for unexpected generator                  power stations to temporarily shut
                  outages or restrictions close to                  down during summer 2019. This has
                  real time.                                        already been indicated by the loss of
              •  This is then modelled against forecast            availability of two 500 MW coal fired
                                                                    units. Power stations in this position
                  normalised transmission demand
                  (including station load),                         may become available if the price
                  plus a reserve requirement of 900                 increases until it is profitable to
                  MW and a range of interconnector                  generate, or if our control room
                  flows to provide a weekly view of                 approaches them with enough
                  the anticipated operational surplus               notice. Furthermore, some plants
                  (see previous figure, based on data               may decide to close if it is no longer
                  provided on 14 March 2019).                       economical to run. A 2,000 MW coal
                                                                    fired unit has announced closure
                                                                    from the end of September 2019.
                                                                •    urther detail on available generation
                                                                    F
                                                                    for the summer, breakdown rates etc.
                                                                    can be found in the data workbook.

              2
                  https://bmreports.com/bmrs/?q=help/about-us
Operational view continued
Summer                                                                             15
Outlook
2019

          Key messages

          Based on current data we expect      – curtailing flexible wind farm
          that during some periods this           output at a national level via
          summer inflexible generation            the Balancing Mechanism
          output plus flexible wind output        or via direct trades
          will exceed minimum demand           – trading to reduce the level
          (see Figure 6)                          of interconnector imports.

                                               All actions will be carried out
          We therefore anticipate that         in economic order, with cheaper
          we may need to take actions          actions taken first. At a local
          such as:                             level wind may also need
          – requesting pumped storage units   to be curtailed due to local
             to increase demand by moving      constraints or other issues.
             water back to their top lakes
             – (this increase in demand is
             shown by the pink demand
             line in Figure 6)
Operational view continued
Summer                                                                                                                                                                                                                            16
Outlook
2019

          In the summer, there is a significant                        To help us understand actions           Figure 6
          reduction in transmission system                             we may need to take this                Generation and minimum demand by week, summer 2019
          demand, as there is less                                     summer, we model levels of                   32
          requirement for heating and lighting,                        inflexible generation, and inflexible        30

          and a higher output from distributed                         generation plus flexible wind output         28
                                                                                                                    26
          generation such as solar.                                    against forecast minimum demand              24
                                                                       each week (see Figures 6 and 7).             22
          Throughout the summer, the ESO                                                                            20
          needs to keep the demand and                                 These forecasts are updated weekly           18
          supply of electricity in balance at                          and can be found on our website3.

                                                                                                               GW
                                                                                                                    16
          all times. To do this, the system                                                                         14

          still needs to be able to respond                            As discussed previously, minimum             12
                                                                                                                    10
          to the largest generation or demand                          demand is likely to take place in the         8
          loss. We also need to maintain                               early morning, or in the afternoon            6
          positive and negative reserve levels                         when output from distributed                  4
          to account for forecasting errors                            generation is at its highest.                 2
          and unanticipated reductions                                                                               0
          in generator availability close                                                                                 01 08 15 22 29 06 13 20 27 03 10 17 24 01 08 15 22 29 05 12 19 26 02 09 16 23 30 07 14 21 28
                                                                                                                                  April             May          June             July         August          September     October
          to real time (this is discussed                                                                                                                                         Date
          in further detail in the operability                                                                           Nuclear        Inflexible BMUs (eg CHP)
                                                                                                                         Plant total providing requlating reserve
                                                                                                                                                                       Inflexible hydro     I/C imports after trades
                                                                                                                                                                      Plant providing voltage support        Inflexible wind
          toolbox section).                                                                                              Flexible wind        Minimum demand          Minimum demand inc. pumping

          3
              https://www.nationalgrideso.com/balancing-data/forecast-volumes-and-costs
Operational view continued
Summer                                                                                                                                                                                                                        17
Outlook
2019

                                                                                                           Figure 7
              Key messages                                                                                 Inflexible generation and minimum demand by week, summer 2019
                                                                                                                32
              Based on current data, we do                                                                      30
              not expect inflexible generation                                                                  28
              output alone to exceed minimum                                                                    26
              demand in summer 2019.                                                                            24
                                                                                                                22
                                                                                                                20
                                                                                                                18
                                                                       parameters from generators, and
          • The ESO can undertake a number

                                                                                                           GW
                                                                                                                16
                                                                       inform participants of a risk of         14
            of actions if supply risks being                           instructions to inflexible               12
            higher than demand. Usually                                generation. To date a limited            10
            these involve working with flexible                        number of local NRAPMs have               8
            generation to reduce supply.                                                                         6
                                                                       been issued, and no national
          • If however these actions are not
                                                                      NRAPM has been issued.
                                                                                                                 4

            sufficient to bring supply and                             You can read more about
                                                                                                                 2
                                                                                                                 0
            demand into balance, further                               NRPAMs on our website4.                        01 08 15 22 29 06 13 20 27 03 10 17 24 01 08 15 22 29 05 12 19 26 02 09 16 23 30 07 14 21 28
            action may need to be taken.
          • ased on current data, we do
            B
                                                                    • In the longer term the number of                     April              May          June            July
                                                                                                                                                                             Date
                                                                                                                                                                                           August          September     October

                                                                       actions we take as an electricity             Nuclear        Inflexible BMUs (eg CHP)      Inflexible hydro      I/C imports after trades
            not expect inflexible generation                           system operator is likely to                  Plant total providing requlating reserve     Plant providing voltage support        Inflexible wind
            output alone to exceed minimum                             increase as we continue to see
                                                                                                                     Minimum demand             Minimum demand inc. pumping

            demand in summer 2019.                                     reduced demand at the summer
          • If however demand levels fall close
                                                                      minimum (with more distributed
            to the level of inflexible generation                      generation capacity), and fewer
            on the system, we can issue a                              flexible generators running
            national or local Negative Reserve                         overnight and in the afternoon.
               Active Power Margin (NRAPM)
               notice. This is a request to
               encourage more flexible
          4
              https://www.nationalgrideso.com/sites/eso/files/documents/NRAPM%20Forecasting%20Note.pdf
Europe and interconnected markets
Summer
Winter                                                                                                                                                                       18
Outlook
2019

>1
Executive
              (Electricity)
summary

>2
Our role

>3
Electricity   Context                                                                   Figure 8
                                                                                        Interconnector capacities.
>4                                                                                      This figure shows interconnector capabilities, not expected flows.
Gas           There are 5 interconnectors          As renewable generation continues
              connecting the GB electricity        to grow in both GB and connected
>5            market with the Netherlands,         markets, relative prices will be
Glossary
              Belgium, France and Ireland.         largely influenced by the weather,
              The direction electricity flows on   which impacts demand and the
              these is determined by price, with   amount of available renewable
              electricity flowing from cheaper     generation. Flows of electricity
              areas to more expensive areas.       may also be impacted by network
                                                   constraints, and these will be        Moyle (0.5GW)
                                                   managed by collaboration between
                                                   the ESO and interconnectors.

                                                                                                        Ireland
                                                                                            EWIC (0.5GW)                                                     Britned (1GW)

                                                                                                                                                                 Netherlands
                                                                                                                                                                NEMO Link
                                                                                                                             IFA (2GW)                            (1GW)
                                                                                                                                                                 Belgium
                                                                                                                                                 France
Europe and interconnected markets
Summer
Winter                                                                                                                                                                                       19
Outlook
2019

>1
Executive
              (Electricity)
summary

>2
Our role

>3
Electricity   A development since last summer      In addition, the NEMO link             Table 2
              was the launch of the Integrated     interconnector, connecting GB          Planned and current interconnector outages, summer 2019
>4
Gas           Single Electricity Market (ISEM)     and Belgium, successfully went
              in Ireland on 1 October 2018.        live for commercial service on         Interconnector                     Planned outages                   Current outages
>5            This integrated the all-island       31 January 2019.                       (full capacity)                    (resulting capacity)
Glossary
              (Ireland and N Ireland) and
              European electricity markets,        Interconnectors may undertake          France: IFA (2 GW)                 01–26 April (1 GW)                None
              which was expected to help deliver   planned outages over the summer,                                          04–06 June (1 GW)
              increased levels of competition      or experience fault outages. A table                                      17–28 June (1 GW)
              and lower prices.                    of current fault outages and planned   The Netherlands:                   13–17 May (0 GW)                  None
                                                   outages for each interconnector is     BritNed (1 GW)                     16–20 Sept (0 GW)
                                                   listed in table IC-0.
                                                                                          Belgium: Nemo                      23 Sep–4 Oct (0 GW)               None
                                                                                          (1 GW)
                                                                                          Ireland: EWIC                      07–13 May (0 GW)                  None
                                                                                          (0.5 GW)                           21 May (0 GW)
                                                                                                                             28 May (0 GW)
                                                                                                                             19–21 Aug (0 GW)
                                                                                          N. Ireland: Moyle                  12 – 20 June (0 GW)               None
                                                                                          (0.5 GW)*

                                                                                          *Moyle currently has less commercial capacity, subject to TEC values: currently 307 MW for import and
                                                                                           450 MW for export.
Spotlight
Summer                                                                        20
Outlook
2019

          Review of interconnector
          flows summer 2018

          Key messages

          Imports                             Exports
          As anticipated, GB day ahead        As expected we also saw
          electricity prices remained above   net exports of electricity on
          prices in connected European        interconnectors to Ireland
          markets for most of summer 2018,    during peak, switching to
          leading to net imports on these     imports overnight.
          interconnectors.
Spotlight
Summer                                                                                                                                                                                      21
Outlook
2019

          Review of interconnector
          flows summer 2018
          Figure 9 shows GB and European      On some occasions from                 Figure 9
                                                                                     Day ahead baseload prices, summer 2018
          day ahead electricity baseload      September 2018 onwards, Belgian
          prices for summer 2018. As can      prices peaked at much higher levels           120
          be seen here, the GB day ahead      than GB (circled) due to outage                                                                                Belgian prices peaking due
          baseload price was consistently     extensions on the Belgian nuclear             100
                                                                                                                                                             to nuclear outage extensions

          higher than connected markets for   fleet. Once these were resolved,
          most of the summer leading to net   Belgian prices dropped back close              80
          imports into GB.                    to previous levels.

                                                                                    £/MWh
                                                                                             60

                                                                                             40

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                                                                                        26
                                                                                                                                             Date
                                                                                              UK summer baseload        French summer baseload      Dutch summer baseload
                                                                                              Belgian summer baseload
Spotlight
Summer                                                                                                                                                 22
Outlook
2019

          Review of interconnector
          flows summer 2018
          Table 3 shows interconnector flows     In the daytime, the picture            Table 3
                                                                                        Interconnector flows summer 2018
          during the daytime, overnight and at   changed for the Moyle and EWIC
          peak times (5pm to 8pm)                interconnectors that moved to
          for summer 2018 (Nemo is not           export for more daytime hours.                          IFA               Moyle    Britned   EWIC
          shown as it was not operational).      At peak, the distinction between       Daytime (7am to 7pm)
          All interconnectors were importing     continental European and Irish
          for most of the overnight periods,     interconnectors is again clear, with   Import           95.6%             20.7%    88.0%     32.7%
          particularly those connected to        the former importing power from        Floating         0.0%              0.3%     5.5%      13.6%
          continental Europe.                    Europe for almost all peak hours.
                                                                                        Export           4.4%              79.0%    6.5%      53.7%
                                                                                        Total        100.0%                100.0%   100.0%    100.0%
                                                                                        Overnight (7pm to 7am)
                                                                                        Import           97.1%             62.8%    92.5%     71.8%
                                                                                        Floating         0.0%              0.1%     4.1%      12.3%
                                                                                        Export           2.9%              37.1%    3.4%      16.0%
                                                                                        Total        100.0%     100.0%              100.0%    100.0%
                                                                                        Peak hours (5pm to 8pm)
                                                                                        Import           99.4%             19.9%    94.3%     38.9%
                                                                                        Floating         0.0%              0.1%     3.1%      12.7%
                                                                                        Export           0.6%              80.0%    2.6%      48.3%
                                                                                        Total            100.0%            100.0%   100.0%    100.0%
Europe and interconnected markets
Summer                                                                                                                                                                                                     23
Outlook
2019

          (Summer 2019)

                                                                                       Figure 10 shows that forward prices                                           In previous years, there were
          Key messages                        import. Weather variations will          for baseload electricity for summer                                           some periods when IFA exported
                                              also affect flows at all times,          2019 in GB are still higher than the                                          from GB to France driven by
                                              including peak.                          corresponding prices in the French,                                           lower available French generation
                                                                                       Dutch and Belgian markets.                                                    due to nuclear outages. Planned
                                                                                       Therefore we expect to see similar                                            French nuclear outages for this
                                                                                       import/export patterns as last                                                year are lower than previous
          2019                                                                         summer. NEMO link, as a new
                                                                                       interconnector, is expected to
                                                                                                                                                                     summers, so are not expected to
                                                                                                                                                                     significantly affect interconnector
          Forward prices for summer 2019
          are expected to remain higher       Exports                                  behave similarly to Britned as their
                                                                                       market prices and physical
                                                                                                                                                                     flows. Further detail can be found
                                                                                                                                                                     in the data workbook.
          in GB than continental Europe.      We expect GB to export to                capabilities are similar.
          We therefore expect there to        Northern Ireland and Ireland during
          be net imports of electricity       peak times on the Moyle and              Figure 10
          on interconnectors from             EWIC interconnectors. This may           Day ahead baseload prices, summer 2019
          continental Europe to GB            be reversed to import with high                 65

          for most of the summer.             wind output in Ireland or during                60
                                              periods of system stress. The
                                              availability of coal fired generation           55

                                              in Northern Ireland will also impact            50
                                              flows on the Moyle interconnector.

                                                                                      £/MWh
          Imports                                                                             45

                                                                                              40

          We expect imports into GB at                                                         35
          peak times via the IFA, BritNed
          and Nemo Link interconnectors                                                        30

          although occasionally not at full

                                                                                                18

                                                                                                18

                                                                                                18

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                                                                                          07
                                                                                                                                                  Date
                                                                                                   UK summer baseload        French summer baseload      Dutch summer baseload
                                                                                                   Belgian summer baseload
Europe and interconnected markets
Summer                                                                                                                                                                                   24
Outlook
2019

          (Summer 2019)

          In addition, only two of the four       Forecast flows at peak (5pm to       Figure 11                                       Figure 12
          coal-firing units in Northern Ireland   8pm) and overnight (7pm to 7am)      Forecast interconnector flows at                Forecast interconnector flows
                                                                                       peak 5pm to 8pm, high import scenario           overnight, high import scenario
          were awarded a 12-month contract        are summarised in Figures 11 and
          by the Northern Irish SO to support     12, which show flows under a
          system stability and security of        high import scenario, based on
          supply. Should other units close,       historic breakdown rates (see data
          this may encourage more exports         workbook for further detail).
          through the Moyle interconnector.

                                                                                                                                               750MW
                                                                                         750MW

                                                                                                                                                                                    1,000MW
                                                                                                                             1,000MW
                                                                                                                                                                               1,000MW
                                                                                                                           1,000MW                                         1,988MW
                                                                                                                        1,988MW

                                                                                       Peak times 5pm to 8pm, import from Europe and   Overnight, import from Ireland and Europe.
                                                                                       export to Ireland.
3
Summer                                                            25
Outlook
2019

          Gas
                In this section we look at the projected demand
                for gas to cater for heating, industry, electricity
                generation and export needs. We explore the
                supplies of gas we expect to see this summer
                and the impact of global markets on both supply
                and demand patterns.
Gas demand
Summer                                                                                                                                                                                  26
Outlook
2019

                                                                               Figure 13
          Key messages                                                         Forecast gas demand profiles for summer 2019 – seasonal normal weather conditions
                                                                                       350

                                                                                       300
                                                                                                                                                          Peaks and troughs
                                                                                                    IUK outage                                            relate to weekends

          EU export                         Renewables
                                                                                       250                                                                and public holidays

                                                                                       200

                                                                               mcm/d
          Total gas demand across the       Gas demand for GB electricity
          network in summer 2019 is         generation remains steady                  150

          expected to be greater than       but, due to increased use
          in summer 2018 on a weather       of renewables and gas/coal                 100

          corrected basis. This is due      price spreads, presents a
          to an expected increasing         variable profile of consumption.            50

          flow of transit gas into Europe
          as prices drive greater volumes   Another significant impact                   0

          of LNG to be delivered into       on demand uncertainty                        1 Apr             1 May              1 Jun             1 Jul          1 Aug            1 Sep

          UK terminals.                     continues to be the effect                   Exports to Ireland        Daily metered
                                                                                                                                                Date
                                                                                                                                      Storage injection    IUK/BBL physical exports
                                            of weather on non-daily                      Electricity generation       Non daily metered
                                            metered (NDM) demand.
Gas demand
Summer                                                                                                                                                                                   27
Outlook
2019

          Table 4                                                                                              1. In summer 2019, we expect           3.	Gas demand for electricity
          Forecast total gas demand for summer 2019 and history for previous summers                               to see non-daily metered demand        generation is expected to be
                                                                                                                   slightly higher than last year,        slightly lower than last summer,
              bcm              2014         2015        2016        2017       2018     2018        2019           aligned with seasonal normal           as a result of lower overall
                               actual       actual      actual      actual     actual   weather     forecast
                                                                                        corrected                  weather conditions. Further            electricity demand and increasing
              NDM1             9.9          11.3        11.1        10.4       10.6     11.4        10.8           information about NDM demand           renewable generation.
              DM +             4.4          4.2         4.1         4.4        4.1      4.1         4.3
                                                                                                                   can be found in the data            4.	Overall we expect total exports
              Industrial2                                                                                          workbook.                              to Ireland over the summer period
              Electricity      9.2          8.3         11.6        10.5       10.3     10.3        10.1       2. Daily metered (DM) demand is           to be largely the same as last
              generation3                                                                                          expected to decline year on year,      year, despite the decline of
              GB Total         23.5         23.8        26.8        25.3       24.9     25.7        25.2           mirroring the reduction in energy      production from the Corrib field.
              Ireland4         2.7          2.8         1.7         1.6        1.6      1.6         1.6            intensive industries and energy     5.	With increasing LNG in the global
              Export to        3.8          5.0         5.2         7.0        4.5      4.5         7.0            efficiency improvements.               market, we expect to see gas
              Europe5                                                                                              However, significant new               continuing to be routed to where
              Storage          3.6          3.4         2.6         2.5        2.3      2.3         1.9            connections can slow that trend,       the price is more attractive in
              Injection6                                                                                           and this year we anticipate a          Europe (See page 32).
              Total7           33.8         35.2        36.4        36.6       33.3     34.2        36.1           DM demand that is slightly higher   6.	Overall storage injection this
                                                                                                                   than last year.                        summer is expected to be lower
                                                                                                                                                          than last summer as a result of
                                                                                                                                                          the warm winter. (see page 29).

          7
              All totals include NTS shrinkage and will therefore not tally.
Europe and interconnected markets
Summer
Winter                                                                                                                                                                                             28
Outlook
2019

>1
Executive
              (Gas)
summary

>2
Our role

>3
Electricity                                                                                      Figure 14
               Key messages                                                                      IUK Export Flows
>4
Gas                                                                                                                                  IUK outage 2019         IUK outage 2016, 17, 18
               Our projection for 2019 is an          In recent years, IUK has closed                               0
>5             increase in exports to Europe          for maintenance during June.
Glossary       via the IUK interconnector             This year, the maintenance window                            -10
               in comparison to last summer.          is planned much earlier, in April.
                                                                                                                   -20

                                                                                              Export flow mcm/day
                                                                                                                   -30

                                                                                                                   -40

              The GB gas market is connected to       Figure 14 shows export flows                                 -50
              Belgium by the IUK interconnector,      in the last three summers, and
              and to the Netherlands via the BBL      our projection for 2019 is an                                -60
              interconnector.                         increase in export to Europe in
                                                      comparison to last summer.                                   -70
              In recent years, gas has tended to                                                                      01 08 15 22 29 06 13 20 27 03 10 17 24 01 08 15 22 29 05 12 19 26 02 09 16 23 30
              flow from GB to Belgium for most of     This is the first year that IUK has                                      April         May       June              July   August     September
              the summer and from Belgium to          not had all its flows covered by long                            2015/16       2016/17   2017/18
                                                                                                                                                              Date
                                                                                                                                                        2018/19 predictions
              GB during the winter months             term contracts. All of the existing
              through IUK. This trend is largely      contracts expired at the end of            Also this year, the BBL pipeline,                          Currently there is no firm exit
              driven by price differentials between   September 2018. Currently about            between Bacton in the UK and                               baseline capacity however, as
              GB and European markets, so             55% of export capacity is covered          Balgzand in the Netherlands, has                           with any other site, non-obligated
              occasional days of import to GB         by contract. Going forwards,               indicated that it will make gas                            firm capacity could be made
              might be expected during the            contracts are likely to be booked          transportation possible in both                            available by National Grid in addition
              summer if prices dictate. It is         on a much shorter term basis.              directions from the summer of 2019.                        to interruptible.
              increasingly influenced by the
              availability of LNG being delivered
              to UK terminals.
Gas storage
Summer                                                                                                                                                                                                                29
Outlook
2019

                                                                                         Figure 15
          Key messages                                                                   Increasing trend of day to day cycling

                                                                                                                     2,500
                                                                                                                                 Injection and withdrawal both increasing
                                                                                                                     2,000

                                                                                    Injection and withdrawal (mcm)
          Storage                             Outage
                                                                                                                     1,500

                                                                                                                     1,000

          Overall storage injection over      We anticipate that significant                                           500

          summer 2019 is likely to be lower   storage injection is likely                                                0
          than last year. This is because     during the 2 weeks that the IUK                                                        2014               2015                2016         2017                2018
          of the relatively high level of     interconnector is on outage. This                                       -500
          medium-range storage (MRS)          outage is taking place earlier than                                    -1,000
          stock at the end of winter 2019,    usual in the summer, and hence
          due to a milder winter.             we expect to have higher stock                                         -1,500
                                              levels than are typical during the                                     -2,000
          We expect continued day-to-         early summer months.
          day cycling into and out of                                                                                   Withdrawal          Injection                              Lower withdrawal immediately following
                                                                                                                                                                                   very cold weather spell in March 2018
          (MRS) in summer 2019.
                                                                                         With the closure of Rough as a                                                 We have seen an increasing trend
                                                                                         seasonal facility and its subsequent                                           of these sites being used for day-
                                                                                         reclassification as a production                                               to-day cycling, as shippers take
                                                                                         field; the remaining storage in                                                advantage of gas price swings
                                                                                         GB is medium-range storage                                                     over shorter timescales. You can
                                                                                         (MRS). This has increased in total                                             see the increasing trend in Figure 15
                                                                                         volume over recent years.                                                      Storage behaviour can differ
                                                                                                                                                                        significantly across different years
                                                                                                                                                                        as a result of this price driven trend.
Summer
Outlook
2019         Gas storage                                                                                                                                                                                              30

             Figure 16                                                                                                                 MRS starts to fill when IUK shuts         Total injection over the summer
             MRS stock levels                                                                                                          down for maintenance. There is            typically has a dependency on the
                                                                                                                                       no export route for the supplied          level of MRS at the end of winter.
                                1,600
                                                                                                                                       gas, so it goes into storage. The IUK     MRS stocks are currently higher
                                1,400                                                                                                  outage is in April this year (earlier     than last summer as a result of
                                                                             Sharp increase in stock                                   than usual) and we expect that            the mild winter (see Figure 16)
                                1,200                                        during IUK outage                                         significant storage injection is likely
                                                                                                                                       during those two weeks of outage.
          MRS stock level/mcm

                                1,000                                                                                                  We therefore expect to have higher
                                 800
                                                                                                                                       stock levels than are typical during
                                                                                                                                       the early summer months.
                                 600
                                        Stock levels at the start of
                                 400    summer depend upon how
                                        depleted they are at the end of
                                        the winter (e.g. low stock levels
                                 200    following very cold weather
                                        spell in March 2018)
                                   0
                                   01 Oct 01 Nov 01 Dec 01 Jan 01 Feb 01 Mar 01 Apr 01 May 01 Jun      01 Jul   01 Aug 01 Sep 01 Oct
                                                                                Date
                                   2015/16      2016/17     2017/18     2018/19      Projection
Gas supply
Summer                                                                                                                                                                  31
Outlook
2019

                                                                                             1.	The UKCS continues to be the       4.	LNG deliveries are sensitive to
           Key messages                                                                          most significant supply of gas         the world market and production
                                                                                                 to the UK. We are expecting            capacity has grown rapidly in
                                                                                                 aggregate supply in summer 2019        recent years. They offer a more
                                                                                                 to be similar to summer 2018.          flexible response to increasingly
                                                                                                                                        volatile supply and demand
                                                                                             2.	Norway supplies gas through            patterns than offshore production.
           We expect that there will be                  We anticipate increased levels          pipelines to Germany, Belgium          We continue to see this additional
           sufficient gas to meet demand                 of LNG in comparison to last            and France as well as to GB.           LNG supply being transported to
           in summer 2019.                               summer, and excess supply being         Norway production has been high        Europe via the interconnector, in
                                                         exported to Europe in response to       over the winter and is expected        response to price trends. However,
           Supplies from the UK continental              gas prices in both GB and global        to remain so. However due to the       the locational diversity of LNG
           shelf (UKCS) and Norway continue              gas markets.                            expected increase in LNG supply        supply is changing the way we
           to be the dominant components.                                                        we believe it is unlikely that we      operate our networks.
                                                                                                 will see flows that are as high as
                                                                                                 seen in the past few years.        5.	Overall storage injection over
                                                                                                                                        summer 2019 is likely to be lower
                                                                                             3.	Our projection for 2019 is an          than last year. This is because
          Table 5                                                                                increase in exports to Europe          of the relatively high level of MRS
          Forecast and historic gas supply by source                                             via the IUK interconnector in          stock at the end of winter 2019,
                                                                                                 comparison to last summer.             due to a mild winter.
          bcm            2014         2015        2016        2017      2018      2019
                         actual       actual      actual      actual    actual    forecast
          UKCS1          15.1         15.9        16.2        17.4      16.8      16.8
          Norway2        7.4          11.3        12.4        13.1      13.3      12.4
          Continent3     2.2          0.3         0.5         0.1       0.1       0.1
          LNG4           7.5          6.2         5.3         3.2       1.4       5.3
          Storage5       1.3          1.1         1.2         1.9       1.3       1.4
          Total          33.4         34.8        35.6        35.7      32.8      36.1
Liquefied natural gas (LNG)
Summer                                                                                                                                                                              32
Outlook
2019

                                                                                      Figure 17
           Key messages                                                               LNG monthly send-out                                   In early winter 2018 we have seen
                                                                                                                                             a marked change from this pattern,
                                                                                                                                             with supply heading towards levels
                                                                                                                                             not reached since 2012.
           We expect that LNG deliveries                                                          1,800
           this summer will be substantially                                                      1,600
           higher than last summer, but will
           not match the high rates seen in                                                       1,400
           winter 2018.
                                                                                                  1,200

                                                                                    Sendout mcm
                                                                                                                                    Last summer the flows at LNG terminals
                                                                                                  1,000                             were at times down to minimum levels

          LNG deliveries to NW Europe were     LNG shipping costs rose sharply                     800
          higher during last winter than for   during the winter, making Europe                    600
          many years. New liquefaction         a more profitable market than
          capacity has come on line in many    Asian markets for cargoes from                      400
          producing regions, and total         the US and from Yamal in NW                         200
          production capacity has grown        Russia. The combined effect of
          faster than global LNG demand.       this has been that cargoes have                       0
                                               been delivered to GB, to all three

                                                                                                          Jan
                                                                                                          Feb
                                                                                                          Mar
                                                                                                          Apr
                                                                                                          May
                                                                                                          Jun
                                                                                                           Jul
                                                                                                          Aug
                                                                                                          Sep
                                                                                                          Oct
                                                                                                          Nov
                                                                                                          Dec
                                                                                                          Jan
                                                                                                          Feb
                                                                                                          Mar
                                                                                                          Apr
                                                                                                          May
                                                                                                          Jun
                                                                                                           Jul
                                                                                                          Aug
                                                                                                          Sep
                                                                                                          Oct
                                                                                                          Nov
                                                                                                          Dec
                                                                                                          Jan
                                                                                                          Feb
                                                                                                          Mar
                                                                                                          Apr
                                                                                                          May
                                                                                                          Jun
                                                                                                           Jul
                                                                                                          Aug
                                                                                                          Sep
                                                                                                          Oct
                                                                                                          Nov
                                                                                                          Dec
                                                                                                          Jan
                                                                                                          Feb
                                               terminals. As a result, we expect                                  2016              2017                          2018            2019
                                               much higher LNG deliveries this                       Grain   Dragon    South Hook
                                               summer compared to last year.
Liquefied natural gas (LNG)
Summer                                                                                                                                                                                33
Outlook
2019

              Figure 18                                                                                                                              Figure 18 shows the increasing
              LNG delivery cargoes                                                                                                                   variety of source and scale of
                                     1,800                                                                                                           vessel delivery.
                                     1,600

                                     1,400
          Monthly LNG delivery mcm

                                     1,200

                                     1,000

                                       800

                                       600

                                       400

                                       200

                                         0
                                              Jan    Feb    Mar    Apr   May     Jun      Jul    Aug   Sep    Oct      Nov     Dec      Jan    Feb
                                             2018   2018   2018   2018   2018   2018     2018 2018 2018      2018      2018    2018    2019   2019
                                                                                            Date
                                        US      Trinidad    Russia      Qatar          Peru      Norway      Nigeria          Equatorial Guinea
                                        Egypt      Cameroon     Algeria

              This chart has been developed by National Grid using confidential proprietary data from the Argus
              Media Group under licence. Argus shall not be liable for any loss or damage arising from any party’s
              reliance on this data.
Spotlight
Summer                                                                                                                                                                                                             34
Outlook
2019

          Transit gas

          We continue to experience gas            Sale of forward flow capacity in IUK      Figure 19
          being delivered to GB and supplies       is dependent on expected demand           Increasing trend of day to day cycling
          that are in excess of combined           in Europe, and transit gas could
                                                                                                             350
          demand for GB and Ireland are then       increase into the future, as a result
          transported through our networks         of increased fuel switching in Europe                                                             IUK Closed for
                                                                                                                                                     maintenance
                                                                                                                                                                         Transit gas is the gas
                                                                                                                                                                         supplied to GB that is above
                                                                                                             300
          for onward export into Europe.           from coal to gas.                                                                                                     the level of total GB demand,
                                                                                                                                                                         and transported to Europe
          This is known as transit gas.                                                                      250
                                                                                                                                                                         via the interconnector
                                                   For almost the entire summer of

                                                                                           Gas flow mcm/day
          Although gas demand is lower             2018, more gas was being supplied                         200
          during the summer months, total          than was actually needed to satisfy
          demand is only approximately             combined GB demand and Irish                              150
          25% lower than in winter. As a           exports (shown by the dark blue
          result we see export flows via the       line on Figure 19).
          IUK interconnector offsetting the
                                                                                                             100

          reduction in GB and Ireland gas          The surplus of supply was                                  50
          demand. We are also currently            exported to Europe. From early-
          anticipating LNG deliveries that         June through to mid-September,                              0
          are substantially greater in summer      supplies from UKCS and Norway                             1 Apr 2018   1 May 2018         1 Jun 2018      1 Jul 2018        1 Aug 2018     1 Sep 2018
          2019 than last year, as discussed.       alone were greater than the                                                                                  Date
                                                   demand. Norwegian gas was                                    UKCS      Norway       LNG        Storage      Interconnectors       GB demand and Irish exports
          The effect on our network is that the    using GB for onward transit to the
          historical pattern of transporting the   rest of Europe. The only time that
          majority of gas North to South no        supply and demand were aligned
          longer exists. Supply patterns are       was in June when IUK was closed
          more evenly distributed around the       for annual maintenance.
          country, and on occasions we have
          to reverse the flow, moving gas from
          South to North.
4
Summer                                                             35
Outlook
2019

          Operational outlook
                     In our role as System Operator, we need to
                     manage a number of operability issues on the
                     gas and electricity transmission networks over
                     the summer. This section outlines some of these
                     issues, and the tools and services available to
                     use to make sure we can operate the electricity
                     and gas systems securely and effectively.
Operational outlook
Summer                                                                                                                                                                                       36
Outlook
2019

          (Gas)

                                                                                                                  Having timely and accurate physical      System pressures are tending to
              Key messages                                                                                        notifications from CCGTs helps us        become higher in the summer, than
                                                                                                                  to identify and manage the risk of       previously experienced, as a result
                                                                                                                  variability across the network.          of increasing levels of transit gas.
                                                                  Overall supply patterns become                                                           As a result we must place greater
                                                                  less predictable when larger                    Increasing levels of LNG supply          focus on enabling safe access for
                                                                  volumes of LNG are delivered                    will impact patterns of gas flow         the summer maintenance schedule.
              The volume of maintenance                           to GB terminals.                                across GB, potentially reducing
              remains high, but there are                                                                         the traditional north to south flow,     We continue to engage closely with
              no major risks to NTS access.                       We must be prepared for                         and resulting in non-standard            the industry to ensure that outages
                                                                  non-standard and short notice                   configuration of the network.            are coordinated and we will always
              The variability of gas fired                        re-configuration of the network.                                                         aim to facilitate maintenance on the
              electricity generation has an                                                                       With LNG supplies being relatively       network with minimal disruption to
              impact on the management                            We are reliant on timely and                    closer to areas of demand, we            our customers.
              of system pressures.                                accurate demand nominations.                    could continue to see a reduction
                                                                                                                  in compressor usage for bulk             You can find more details on our
                                                                                                                  gas transmission, but we must be         website. The final Maintenance Plan6
          During the winter months, the                           Gas for electricity generation                  prepared for the possibility that LNG    is published at the end of March.
          most dominant driver for gas                            also has an element of weather                  supply falls away, which can happen
          demand is the need to provide                           sensitivity as it responds to the               in summer due to price sensitivity.      Improving Access to Data
          heat. This dynamic changes in the                       varying levels of generation from                                                        In response to a number of recent
          summer months as temperatures                           renewables. When clusters of                    This rapidly changing dynamic of         industry engagements, National
          increase. Instead the most                              Combined Cycle Gas Turbine                      the network means that we must           Grid has mobilised a programme
          significant driver for gas becomes                      (CCGT) generators exist in a                    be prepared to use compression           of work to identify and deliver
          gas fired electricity generation.                       particular region, this variability             at relatively short notice to maintain   enhancements to the operational
                                                                  can have an increasing impact                   system locational pressures.             data currently provided to the
                                                                  on regional pressure management.                                                         industry through its website. For
                                                                                                                  Our thoughts on the longer term          more information please refer to
            https://www.nationalgridgas.com/insight-and-innovation/gas-future-operability-planning-gfop
                                                                                                                  impacts of this are now being            our Operational Data User Guide7.
          5

          6
            https://www.nationalgridgas.com/data-and-operations/maintenance
          7
            https://www.nationalgridgas.com/sites/gas/files/documents/Operational%20Data%20User%20Guide%20-%20   shared in the Gas Future
             Version%201.pdf                                                                                      Operability Planning5 document.
Operational outlook
Summer                                                                                                                                                                                   37
Outlook
2019

          (Electricity)

                                                                                                          In order to balance supply and                change of frequency (RoCoF)
              Key messages                                                                                demand, the ESO can take various              and vector shift (see next slide)
                                                                                                          additional day-to-day actions, as          • manage reactive power in
                                                                                                          described in the electricity supply           different regions, to keep voltage
                                                                                                          section. In addition, a number of             levels stable. In periods of low
                                                                                                          specific tools can be used when               demand, this is likely to be actions
                                                                                                          system conditions are challenging.            to reduce the amount of reactive
              The key factors that cause                             Both of these factors are impacted                                                 power on the system. These
              operational challenges for the                         by the weather, so it can be         In the summer of 2019 the ESO                 could include:
              electricity transmission system                        difficult to forecast in advance     may need to:                                 – setting up contracts in advance
              during the summer are:                                 what services will be needed.        • use footroom services in periods             with appropriate generators.
              • low transmission system                             We will use a number of tools           of low demand to ensure that                 These would ensure minimum
                 demand (making it difficult to                      to manage these challenges.             there is enough negative reserve             profitability so that these
                 balance demand and supply,                                                                  on the system                                generators keep generating
                 and affecting reactive power                                                             • take actions to manage local
                                                                                                                                                         (and providing reactive power
                 and hence voltage levels)                                                                   network constraints. The Western             capability) in periods where
              • high proportions of low inertia                                                             High Voltage Direct Current                  they might otherwise have
                 generation (making it more                                                                  (HVDC) link will help to relieve             been uneconomic
                 difficult to manage system                                                                  congestion on the transmission            – undertaking trading actions
                 frequency).                                                                                 network between Scotland                     within day, or taking bid / offer
                                                                                                             and England                                  acceptances via the Balancing
                                                                                                          • issue a local or national Negative
                                                                                                                                                         Mechanism so that generators
                                                                                                             Reserve Active Power Margin                  provide reactive power capability.
                                                                                                             (NRAPM) notice if demand levels
                                                                                                             fall close to the level of inflexible   We have also tendered for the
                                                                                                             generation on the system (further       provision of Reactive Power
                                                                                                             described in the electricity supply     Services for summer 2019 in the
                                                                                                             section) You can read more              South Wales and Mersey regions,
                                                                                                             about NRPAMs on our website8            and for Enhanced Reactive Power
                                                                                                          • use tools to manage the rate of         services in Scotland for 2019/20.
          8
              https://www.nationalgrideso.com/sites/eso/files/documents/NRAPM%20Forecasting%20Note.pdf
Spotlight
Summer                                                                                                                                                           38
Outlook
2019

          Update on loss of mains protection
          settings for smaller generators

          All generators have loss of mains     balancing actions are having to           The Distribution Code modifications    If you own or operate generation
          protection systems, designed to       be taken on the transmission              under DC0079 to change the loss        which is a) connected to the
          shut the generator down if there      system to manage both RoCoF               of mains protection settings at all    distribution network, and b) uses
          is an issue on the network they are   and vector shift.                         generators greater than 5 MW and       vector shift or RoCoF setting
          connected to. Traditionally, these                                              any new generators below 5 MW          below 1 Hz/second for the loss
          systems would monitor conditions      Industry work is underway to              have already been implemented.         of mains protection, you may
          on the electricity network such as    systematically address the issues         The next phase of DC0079 is to         be able to receive a payment.
          the rate of change of frequency       in this area. Last summer, NG ESO,        ensure the loss of mains settings      This would support changing
          (RoCoF) or vector shift events,       UK Power Networks, SSE and                at existing generators with            the protection ahead of the
          to understand if there was a          Western Power Distribution jointly        capacities below 5 MW, or any          compliance deadline. Look
          network issue.                        carried out an accelerated vector         generators which use vector shift      out for more information from
                                                shift change programme. This              protection, move to more suitable      the ESO and your distribution
          As system conditions have evolved     ensured that generators in the            relay settings as will be mandated     network owner over spring 2019.
          to accommodate an increase in         most high risk areas changed their        by the Distribution Code. Pending
          renewable generation and closure      protection settings away from vector      approval from Ofgem, the
          of conventional generation, these     shift. As a result, the risk of a large   implementation of this retrospective
          historic loss of mains protection     number of generators shutting down        change will start this year.
          techniques, such as RoCoF and         following a vector shift event has
          vector shift, have become less        been reduced to within manageable         As the volume of generation
          suitable. There is a risk therefore   limits. Remaining changes to both         which has moved to these new
          that generators shut down when        vector shift and RoCoF relays will        protection settings increases,
          they don’t need to, and several       take place as part of the wider           the need to manage RoCoF and
          generators shutting down at           change programme.                         vector shift using operational tools
          once can in itself cause network                                                will be relaxed.
          problems, such as a sudden fall
          in system frequency. As a result,
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