Hydro- Québec PLANNING FOR THE TRANSMISSION NETWORK

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Hydro- Québec
TransÉnergie
Application R-3605-2006
PLANNING
FOR THE TRANSMISSION NETWORK
Original : 2006-07-06
HQT-9, Document 1
Page 1 of 15
Hydro- Québec
TransÉnergie
Application R-3605-2006
TABLE OF CONTENTS
1. CONTEXT .....................................................................................................................4
2. PLANNING METHOD OF THE TRANSMISSION NETWORK .................................... 5
2.1 Design and Planning of the Transmission Network ................................................ 5
2.2 Planning Process of the Transmission Network...................................................... 8
3. PROJECTED INVESTMENTS AND NEW DEVELOPMENTS OVER A 10-YEAR
PERIOD ............................................................................................................................ 9
3.1 Description of Investment Categories ................................................................... 10
3.2 Projected Investments and New Developments ................................................... 11
4. CONCLUSION ............................................................................................................ 15
Original : 2006-07-06
HQT-9, Document 1
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Hydro- Québec
TransÉnergie
Original : 2006-07-06
Application R-3605-2006
HQT-9, Document 1
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1
1. CONTEXT
2
The present document deals with the planning of the electricity transmission network
3
over a 10-year period and it is divided into four sections. Section 1 is introductory and
4
outlines the contextual elements. Section 2 describes the design method and the
5
planning process of the transmission network. While taking into account the instructions
6
of the the Régie de l’énergie (the Régie) in decision D-2005-50, Section 3 illustrates the
7
projected investments and new developments over a 10-year period, from 2007 to 2016,
8
as well as historic data for 2005 and a projection for 2006. Section 4 is comprised of the
9
conclusion.
10
As shown in the Transmission Provider’s previous rate applications, all of its
11
transmission assets form an integrated whole and their interaction is necessary to the
12
proper functioning of the transmission network. The guiding principles for the conception
13
and planning of the transmission network are: compliance with design criteria;
14
acceptability on financial and environmental levels, flexibility of operation and adaptation
15
of the territory. Compliance with the design criteria remains the most fundamental of
16
these principles, the implementation of which is necessary in order to ensure an
17
adequate reliability of the transmission service for the Transmission Provider’s entire
18
customer base.
19
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TransÉnergie
Application R-3605-2006
1
2. PLANNING METHOD OF THE TRANSMISSION NETWORK
2
In order to adequately meet, in an economical and reliable manner, the transmission
3
needs of its customers, which constantly fluctuate over the years, seasons and days, the
4
Transmission Provider must manage its existing assets, as well as their development.
5
In Quebec, these needs are more pronounced during the cold winter periods, namely
6
because of space heating. The network must then have access to sufficient transmission
7
equipment to meet maximum power demand. In addition, the planning of the
8
transmission network is established according to the winter peak. The Transmission
9
Provider then carries out the required studies to ensure that the transmission network
10
can achieve the balance between supply and demand year after year, particularly during
11
the winter period when the transmission needs are highest.
12
Over time, the Transmission Provider has therefore acquired a structured and integrated
13
approach for asset management so as to meet the needs of the native load and of its
14
other customers all the while ensuring the long-term operability of the equipment. This
15
approach ensures the reliability and performance of the transmission network.
16
The Transmission Provider’s method provides an overall vision of the evolution of the
17
network over the long-term all the while ensuring the coherence of all the activities
18
necessary to carrying out its basic mission.
19
2.1 Design and Planning of the Transmission Network
20
The planning of the transmission network which namely leads to adding equipment,
21
takes into account the application of guiding principles. These guiding principles are:
22
compliance with design criteria, acceptability on the financial and environmental levels,
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TransÉnergie
Application R-3605-2006
1
flexibility of operation, and adaptation to the territory. Compliance with design criteria is
2
still the most fundamental of these guiding principles.
3
In order to ensure an adequate level of reliability for its network, the Transmission
4
Provider complies with design criteria, which is at the root of its planning research. In
5
fact, these criteria ensure that the transmission network has a sufficient amount of
6
flexibility and robustness of design to securely be able to meet requirements despite the
7
variability of operation conditions and in spite of the possibilities for failure and
8
unavailability of equipment.
9
The network’s design criteria are used as the basis to the judgment the Transmission
10
Provider must make on the network expansion and reinforcement needs and on the
11
solutions it proposes to meet those requirements.
12
In particular, the network design criteria illustrate the electrical parameters that the
13
Transmission Provider must analyze in order to correct problems that may arise on the
14
network, considering the evolution of requirements or any other change that can occur
15
on the network. They deal with the performance of equipment as well as the behaviour
16
of the network, in established or transitional conditions. The aspects that they deal with
17
refer as much to the stability of the network as to the capacity of equipment, the
18
continuity of supply (made possible, for instance, by the redundancy of some equipment
19
or by transmission loop projects), the capacity to operate, the maintenance of
20
installations that are in good condition, wave quality, as well as the selection of
21
equipment.
22
In this way, these criteria seek to counter two potential disruptions on the network:
23
normal events and exceptional events. The respect for reliability standards is an integral
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TransÉnergie
Application R-3605-2006
1
part of the design criteria applied in the planning process for the transmission network.
2
These standards provide a framework for the performance the network must have during
3
such events or operating conditions. They are applied according to a deterministic
4
method, which intrinsically provides for a basic reserve in terms of equipment.
5
Normal events are those which the network is expected to face regularly and that it must
6
deal with, when they occur, without incurring any loss of load. The criteria that concern
7
these normal events determine the degree of robustness of the network that is
8
necessary to securely meet transmission requirements, in accordance with the expected
9
level of service quality. They lead to the addition of equipment associated with the very
10
structure of the network.
11
Exceptional events, more severe and less probable than normal events, could not be
12
covered at all times without incurring considerable expenses in order to significantly
13
increase the robustness of the network. Thus, when such events take place, the
14
Transmission Provider resorts to automatisms such as rejecting generation and load
15
shedding to limit damage to the network.
16
The Transmission Provider notes that, in addition to applying its own internal standards
17
on the subject, the standards of the North American Reliability Council (NERC) and of
18
the Northeast Power Coordinating Council (NPCC), which are organizations that are
19
recognized as authorities on the subject of reliability of electricity transmission, have
20
been applied for several years.
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TransÉnergie
Application R-3605-2006
1
In fact, in decision D-2003-65,1 the Régie repeatedly mentions that the standards are
2
generally satisfactory, necessary, that they allow the Transmission Provider to efficiently
3
manage its network, and that they are already applied.
4
In regards to the reliability standards applicable to electricity transmission networks, it is
5
worth noting that the Federal Energy Regulatory Commission (FERC) adopted the
6
Energy Policy Act in 2005. This act deals with several subjects and includes several
7
dispositions to facilitate capacity reinforcement and the reliability of electricity
8
transmission. Moreover, this act specifies the establishment of mandatory reliability
9
standards, including financial penalties in case of non-conformity. A new group called
10
the Electric Reliability Organization (ERO) will be responsible for the creation of
11
standards and of their application by all North American networks. This organization will
12
have to acquire its certification in the United States, and also be recognized in Canada
13
and in Mexico.
14
In regards to reliability, the design criteria can evolve as a function of the evolution of
15
regulatory changes.
16
2.2 Planning Process of the Transmission Network
17
The process used by the Transmission Provider for the planning of the transmission
18
network covers a 10 year period and allows the Transmission Provider to have an
19
overall vision of the issues problems and requirements that underlie actions that must be
20
implemented in order to meet native load requirements, as well as to meets the
21
requirements of the Transmission Provider‘s other customers.
1
R-3598-2002, Application for the standards relative to operations, technical requirements and HydroQuebec’s transmission network reliability, november 2002.
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TransÉnergie
Application R-3605-2006
1
Furthermore, this process provides an overall view of the projects to be carried out to
2
keep the transmission network in good condition, to ensure its reliability and, thus, to
3
continue to offer quality service.
4
The Transmission Provider seeks to establish the most accurate portrait as possible of
5
the required investments over the next 10 years. Consequently, we have evaluated
6
Hydro-Quebec’s requirements, in its electricity distribution activities (the Distributor), for
7
native load supply, power generator requirements, long-term operability requirements,
8
technological innovation requirements, as well as system control requirements.. These
9
requirements are based on available and foreseeable information which have strong
10
chances of occurring, or on methods and analyses, as is notably the case with the
11
establishment of long-term operability requirements.
12
The projects that must be implemented translate into investment requirements that are
13
defined from an efficiency perspective. These investment requirements are established
14
as parametric costs, namely because a certain degree of uncertainty is related, for
15
example, to carrying out certain growth projects. Maintenance or long-term operability
16
projects can also be carried out early or postponed because the Transmission Provider
17
will profit from growth projects to optimize the solution to a problem in a given area or for
18
a particular equipment.
19
3. PROJECTED INVESTMENTS AND NEW DEVELOPMENTS OVER A 10-YEAR
20
PERIOD
21
This section deals with the projected transmission investments and new developments
22
(mises en exploitation) over a 10-year period, over the 2007-2016 period. This exercise
23
takes into account the instructions set out by the Régie in decision D-2005-50, in which it
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TransÉnergie
Application R-3605-2006
1
ordered that the table be presented in two formats, according to two categories: the
2
projects that do not generate additional revenue and those that generate additional
3
revenue, including, on the one hand, the underlying sub-categories, which are
4
Maintenance of fixed assets, Respect of obligations and Improvement of service quality,
5
and, on the other hand, projects for Growth of customer requirements.
6
3.1 Description of Investment Categories
7
As specified earlier, the investments are divided into two big categories, which are:
8
investments not generating additional revenue as well as investments that generate
9
additional revenue. Hereafter, the Transmission Provider provides a brief description of
10
the investment categories:
11
Investments that do not generate additional revenue
12
Maintenance of fixed assets: Investments in this category are
13
required to maintain the service capacity offered by the Transmission
14
Provider to its customers all the while profiting from the most recent
15
available and useful technical advances.
16
Improvement of service quality: investments under this category are
17
geared toward customer satisfaction and toward the maintenance or
18
improvement of the service quality rendered by the Transmission
19
Provider for existing demand. Essentially, these investment projects
20
represent the optimal solutions selected to answer to questions of
21
performance, which deal namely with: the behaviour of the
22
transmission network, continuity of service, the reliability of
23
equipment or wave quality.
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TransÉnergie
Application R-3605-2006
1
Respect of obligations: investments in this category seek to comply
2
with the acts and regulations that are in effect, the contractual
3
obligations that the Transmission Provider must respect, and to the
4
internal frameworks and standards.
5
Investments that generate additional revenue
6
Growth of customer requirements: The investments in this category
7
stem from the requirements and requests made by the Transmission
8
Provider’s customers. The investments classified in the Growth of
9
customer requirements category seek, on the one hand, to meet the
10
growing needs of native load while increasing the transmission
11
network capacity through the addition of equipment by following the
12
parameters established together with the Distributor. On the other
13
hand, connection work, network extensions or modifications allow for
14
the integration of power produced by a new generating station and
15
ensure the transit of additional power generated by the addition of
16
new generation groups or the modification of generation groups in an
17
existing generating station.
18
3.2 Projected Investments and New Developments
19
Table 1 hereafter shows the investments to 2016, in accordance with the previously
20
described categories and follows the orders set out by the Régie in decision D-2005-50.
21
The first column of this table contains the investments for the 2005 historic year. The
22
investments for the 2006 base year follow as well as those for the 2007 projected test
23
year.
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TransÉnergie
Application R-3605-2006
1
Finally, the investments for 2008 to 2016 allow to complete the presentation over
2
a 10-year period.
3
4
Table 1- Investments by Category to 2016
($M)
5
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TransÉnergie
1
2
Application R-3605-2006
Table 2 below shows the summary of planned investments by category and table
3 then shows
3
Table 2- Summary of Investments by Category to 2016 ($M)
Actual
Budget
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
340.5
477.6
523.9
491.7
657.0
479.7
445.1
335.7
308.2
355.8
275.0
312.6
276.3
306.2
335.0
342.2
357.2
357.6
378.2
392.7
404.2
415.4
425
425
71.6
74.5
61.9
46.0
40.9
22.5
30.0
30.1
30.0
30.0
30.0
30.0
29.1
120.0
38.1
51.8
79.1
108.8
101.1
42.9
52.6
76.0
50.0
0
34.2
67.8
31.4
31.0
31.0
31.0
31.0
31.0
31.0
31.0
31.0
31.0
Subtotal not generating
additional requirements
411.2
568.5
466.4
471.0
508.2
519.9
540.3
496.7
517.8
552.4
536
488
Total
751.7
1046.1
990.3
962.7
1165.2
999.6
985.4
832.4
826.0
908.2
811.0
798.6
Category
Generating additional revenue
Growth of requirements
Generating additional revenue
Maintenance of fixed assets
Improvement of quality
Excluding ice storm
Ice storm
Respect of requirements
4
Table 3- Summary of New Developments to 2016 ($ M)
Category
Actual
Estimated
Budgeted
2005
2006
2007
MAINTENANCE,
IMPROVEMENT,
RESPECT
403.0
GROWTH OF
REQUIREMENTS
268.7
SECURITY OF THE
NETWORKS
Total
5
Planned
414
5.6
677.3
Planned
2008
21.8
828.7
2010
2011
2012
2013
2014
2015
2016
414.9
409.4
439.8
465.0
477.4
509.8
590.0
590.0
726.8
452.8
436.9
374.3
231.4
181.7
220.5
220.5
35.0
130.9
115.8
40
53
106.4
30.0
30.0
1176.7
993.1
992.5
879.3
761.8
797.9
840.5
840.5
474.8
468.5
392.9
2009
542.9
186.6
1198.0
362.8
30.0
867.6
The hypotheses used for the inflation rate are detailed in Table 4 hereafter.
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TransÉnergie
Application R-3605-2006
1
Table 4 Inflation Rate
2
3
The projected investments and previously mentioned new developments are based on
4
the projected needs of the transmission service customers shown in table 5.
5
Table 5 - Projected Requirements of the Transmission Provider’s Customers (MW)
Projected requirements of the Transmission Provider’s customers
(in MW)
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Native load
34974
35371
35862
36215
36507
36722
36832
36880
36946
37002
37067
37129
Long-term
point-to-point
405
479
479
1317
1420
1420
1420
2268
2268
2848
2848
2848
Total
35379
35850
36341
37532
37927
38142
38252
39148
39214
39850
39915
39977
6
7
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TransÉnergie
Application R-3605-2006
1
4. CONCLUSION
2
In this document, the Transmission Provider describes the planning process of the
3
transmission network as well as projections for investments and new developments to
4
2016.
5
In the coming years, the Transmission Provider intends to continue to improve
6
transmission service quality and to respond efficiently to customers’ requirements.
7
Responsible for managing the reliability and security of the electricity transmission
8
network in Quebec, the Transmission Provider also intends to maintain the performance
9
of its transmission network in compliance with the standards that it has adopted, as well
10
as those of North American regulation organizations in the industry, and to ensure the
11
improvement of security of supply.
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