A National Grid Fit For The Future Chris J Murray. Newton Institute - 26th May 2010

National Grid

UK and US

Electricity and Gas

Transmission and Distribution

England and Wales

transmission owner

National system

operator

Our role is being

redefined

The energy world is changing – utilities playing a critical role in a sustainable future

Today’s evolving market

Distributed generation

Energy efficiency

Infrastructure enhancement

Smart grid

Demand management

Wind sources

Solar sources

Clean technology

Energy storage

Coal/gas fired power station

Energy volume drives energy

company revenue

Small range of conventional technologies

Large centralised generation

Static infrastructure

$$$

Price and reliability are main determinants of customer choice

Energy flows to users

Gas productionHydro-electric power

Nuclear power station

Energy flows to users

Industrial and

commercial

Traditional energy market

Climate change is driving an energy revolution

SustainabilitySustainability

AffordabilityAffordabilitySecurity of

supplySecurity of

supply

Impact of UK generation closures on plant margin*

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%

30%

2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2020/21

Demand Nuclear Coal & Oil Gas Margin

* Margin refers to the difference between the total generation capacity and total demand.

Best view of new UK generation

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%

30%

2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2020/21

CCGT Renewable Clean Coal Nuclear Existing margin

* Margin refers to the difference between the total generation capacity and total demand.

The changing generation mix

Transmission connected generation (GW)

0 20 40 60 80 100 120

2010

2020

2030

Gas Coal CCS Wind Other Renewable Nuclear Interconnectors

Existing / potential interconnectors

Ireland

NorthernIreland

France

Belgium

Netherlands

Norway

France

Existing

Under construction

Possible future

Offshore wind

390MW currently connected

8,806MW contracted for future connection

Developer information provided indicates 14.3GW of Offshore Renewables by end of 2020

More to do!

UK Strategic investment (electricity)

Sizewell

Pembroke

Osbaldwick

Rowdown

BeddingtonChessington

West

Landulph

Abham

Exeter

Axminster

Chickerell

Mannington

Taunton

Alverdiscott

Hinkley Point

Bridgwater

Aberthaw

Cowbridge

Pyle

Margam

SwanseaNorth

CardiffEast

Tremorfa

Alpha Steel

UskmouthUpper Boat

Cilfynydd

ImperialPark

Rassau

Whitson

Seabank

Iron Acton

Walham

Melksham

Minety DidcotCulham

Cowley

Bramley

Fleet

Nursling

Fawley Botley Wood

Lovedean

Bolney

Ninfield

Dungeness

Sellindge

Canterbury

E de F

Kemsley

Grain

Kingsnorth

Rayleigh Main

Littlebrook

Tilbury

Warley

Barking

Redbridge

W.HamCity Rd

Tottenham

BrimsdownWaltham

Ealing

Mill HillWillesden

Watford

St Johns

Wimbledon

New Hurst

Elstree

Rye House

N.Hyde

Sundon

Laleham

Iver

Amersham Main

Wymondley

Pelham

Braintree

BurwellMain

Bramford

EatonSocon

Grendon

EastClaydon

Enderby

Walpole

NorwichMain

Coventry

Berkswell

Rugeley

Cellarhead

IronbridgeBushbury

Penn

Willenhall

OckerHill

KitwellOldbury

Bustleholm

NechellsHamsHall

BishopsWood

Feckenham

Legacy

Trawsfynydd

Ffestiniog

Dinorwig

Pentir

Wylfa

Deeside

Capenhurst Frodsham

Fiddlers

Rainhill

KirkbyListerDrive

Birkenhead

WashwayFarm

Penwortham

Carrington

SouthManchester

Daines

Macclesfield

Bredbury

Stalybridge

Rochdale

WhitegateKearsley

Elland

Stocksbridge

WestMelton

Aldwarke

Thurcroft

BrinsworthJordanthorpe

Chesterfield

Sheffield CityNeepsend

Pitsmoor

Templeborough ThorpeMarsh

Keadby

WestBurton

Cottam

HighMarnham

Staythorpe

Stanah

Heysham

Padiham

Hutton

BradfordWest Kirkstall Skelton

Poppleton

Thornton

Quernmore

Monk

EggboroughFerrybridge

Killingholme

SouthHumberBank Grimsby

West

Drax

Lackenby

Greystones

GrangetownSaltholme

Norton

Spennymoor

Tod Point

Hartlepool

Hart Moor

Hawthorne Pit

Offerton

West Boldon

South Shields

Tynemouth

StellaWest

Harker

Eccles

Blyth

IndianQueens

Coryton

RatcliffeWillington

Drakelow

Shrewsbury

Cross

Weybridge

Cross

Wood

North

FrystonGrange

Ferry

Winco Bank

Norton Lees

Creyke Beck

Saltend North

Saltend South

Hackney

BaglanBay

LeightonBuzzard

PatfordBridge

Northfleet EastSinglewell

Fourstones

Humber Refinery

SpaldingNorth

West Thurrock

ISSUE A 02-12-08 41/177609 C Collins Bartholomew Ltd 1999

Dingwall

Dounreay

Newarthill

Cumbernauld

Kincardine

WishawStrathaven

KilmarnockSouth

Ayr

Coylton

Inveraray

HelensburghDunoon

Inverkip

DevolMoor

Hunterston

Sloy

Fort William

Bonnybridge

Neilston

Ceannacroc

Conon

Fort Augustus

Foyers

Inverness

Stornoway

Elvanfoot

Kaimes

Glenrothes

Westfield

Grangemouth

Longannet

Linmill

Bathgate

Errochty Power Station

Torness

Cockenzie

Keith

Thurso

FasnakyleBeauly

Deanie

Lairg

Shin

Nairn

Kintore

Blackhillock

Elgin

Keith

Peterhead

Persley

Fraserburgh

InvergarryQuoich

CulligranAigas

Kilmorack

GrudieBridge

Mossford

OrrinLuichart

Alness

Brora

Cassley

Dunbeath

Mybster

St. Fergus

Strichen

Macduff

Boat ofGarten

Redmoss

Willowdale

Clayhills

Dyce

Craigiebuckler

Woodhill

Tarland

DalmallyKillin

Errochty

Tealing

GlenagnesDudhope

Milton of Craigie

Dudhope

Lyndhurst

CharlestonBurghmuir

Arbroath

Fiddes

Bridge of Dun

Lunanhead

St. Fillans

Finlarig

Lochay

Cashlie

Rannoch

TummelBridge

Clunie

Taynuilt

Nant

Cruachan

PortAnn

Carradale

Auchencrosh

Lambhill

ClydesMill

Glenluce

NewtonStewart

Maybole

Dumfries Ecclefechan

Berwick

Hawick

Galashiels

Dunbar

Meadowhead

Saltcoats

HunterstonFarm

SP TRANSMISSION LTD.

Kilwinning

Currie

Cupar

Leven

Redhouse

Glenniston

SCOTTISH HYDRO-ELECTRICTRANSMISSION

Telford Rd.Gorgie

KilmarnockTown

Busby

Erskine

Strathleven

MossmorranDunfermline

Broxburn

Livingston

Whitehouse

ShrubhillPortobello

Devonside

StirlingWhistlefield

SpangoValley

Ardmore

Broadford

Dunvegan

NGC

Easterhouse

EastKilbrideSouth

Gretna

Chapelcross

THE SHETLAND ISLANDS

Tongland

GlenMorrison

Clachan

400kV Substations275kV Substations400kV CIRCUITS275kV CIRCUITS

Major Generating Sites Including Pumped Storage

Connected at 400kVConnected at 275kVHydro Generation

TRANSMISSION SYSTEM REINFORCEMENTS

Langage

BlacklawWhitelee

Iverkeithing

Marchwood

BickerFenn

Coalburn

REINFORCED NETWORK

Under Construction or ready to startConstruction subject to consents

Reinforcements in Development.Pre - Construction Activities only

Series Capacitors

New 400kV CCT between Hinkley & Seabankprovides capacity for offshore windCCGT/Nuclear

New Circuit for 710MW contractedonshore wind2015

Additional 400kV double circuit to Pentir+3GW new generation capacityoffshore/Wylfa

HVDC Link increases capacity by up to1.8GW2015

Advance asset replacement at Deeside400kV substation.

Reconductor +Series Capacitorsincrease B6by 1GW2015

HVDC Link increases capacity by up to1.8GW2018

HVDC Link from Humber to Walpoleprovides 3GW offshore wind/CCGT 2018

Complete Bramford Substation andnew 400kV line to Braintree 2016Capacity for 5GW wind/nuclearCCGT.

Focus on ScotlandDriven by onshore renewables

Focus on East CoastDriven by offshore renewables / nuclear

Focus on South & WestDriven by nuclear/wind

£4.7bn onshore investment identified

Where’s the UK’s gas coming from?

0

20

40

60

80

100

120

00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19 20/21

bcm

/ y

ear

UKCS Norway LNG Continent Demand inc exports

Actual Forecast

UK gas transmission load related investment

New Norway

West of Shetland

New continental link

New southern basin developments

Langeled

Bacton

TheddlethorpeEasington

Teesside

St Fergus

Barrow

Milford Haven

Grain LNG

recent construction

future potential investment

LNG importation

Terminal

existing network

0

200

400

600

800

1000

1200

demand capacity

mcm

/dPotential gas world…….

Capacity far exceeds demand

Will new storage be built?

Norwegian

UKCS

LNG

Continent

•How confident are we that the molecules will turn up?

•What investment is required for security of supply

In 2020 - 80% of gas is imported and over 50% of electricity relies on gas

What does this mean for gas transmission?

New Norway

West of Shetland

Langeled

Bacton

TheddlethorpeEasington

Teesside

St Fergus

Barrow

Milford Haven

Grain LNG

New southern basin developments

New continental

link

Its not just electricity investment…

Carbon Cap Storage

Future investmentRecent investmentTerminal construction

LNG importation

Scotland

Teesside

Humber

Liverpool Bay

Cluster Region

CO2 volume

Scotland 18Mt

Teesside 11Mt

Humber 60Mt

Liverpool Bay*

10Mt

Thames 28Mt

Gas transportation

Network flexibility becomes increasingly important

2010 Demand is a given Second by second balancing achieved by

flexing generation

Future Dynamic demand Smart meters Storage Flexing generation

2010 Major flows from UKCS & Norway

Future Less UKCS Variable flows from Norway, European

interconnectors & LNG

Balancing the UK networks

Electricity Gas

But… we have a skills gap to manage…

Our Challenges and Opportunities

Developing future

networks

Decline of UKCS

Transition to a low carbon

economy

2020 EU Targets Thinking about 2050

Ageing Assets

Security of supply

Planning + Strategic

Investment

Changing economic

climate

Affordability

Thank you