Invitation to Tender November 2016 BRIEF FOR CONSULTANT TO CARRY OUT A NETWORK ANALYSIS OF THE WESTERN ISLES GRID, A REVIEW OF BUDGET ESTIMATES RECEIVED AND A STUDY ON FUTURE INNOVATIVE CONNECTION OPTIONS Background Community Energy Scotland (CES) is a registered charity providing help and support to communities on renewable energy development and energy efficiency. CES have been working with community groups in the Western Isles over a number of years, and have supported groups with the installation of over 21.5MW of wholly-owned community renewables energy projects. Other community groups throughout the Western Isles had been anticipating carrying out similar projects but are now unable to progress due to grid constraints. Currently, no projects above the G83 limit can connect to the Western Isles grid. The limiting factor is the capacity of the two undersea cables connecting the Western Isles to the mainland grid: under worst-case conditions of maximum renewables output and minimum demand on the islands these cables are at their nominal export limit. Accordingly, the District Network Operator, Scottish and Southern Energy Networks (SSE) will not issue new connection offers for large generators on the Western Isles in advance of the planned HVDC interconnector. While this issue may be partially resolved with the installation of a new HVDC interconnector between the islands of Lewis/Harris and mainland Scotland, this interconnector is not yet in place and there is no certainty yet as to when, or even if, it will be installed. If it is installed, there may be no benefit for the Uists and Barra, whose capacity will still be limited by the existing undersea cable. In the meantime, groups are unable to progress projects and to benefit from the abundant natural resources available in the Western Isles. SSE first proposed the idea of a Consortia Grid Application system in July 2015. Through this system, developers applying for a grid connection would be able to share the costs of connections and any associated reinforcement works, thereby benefiting from a lower connection fee. The projects identified through this process would also be used to inform SSE of what size of HVDC cable is required and to reinforce the Needs Case for the interconnector, to be submitted to Ofgem. Page 1 of 9
Thirteen budget estimates were received by various community groups at the end of July 2016. These estimated connection costs are prohibitively expensive, leaving groups with no way to connect their projects. Community groups throughout the Western Isles now need a detailed report which explores the current grid situation and which also details what options there may be for projects to be installed either with the interconnector, or without. As part of this work it is imperative that any innovative options are reviewed and detailed. Innovative alternatives are high on the agenda of a local steering group which is attended by Community Energy Scotland, Scottish and Southern Energy Networks, Comhairle nan Eilean Siar, Highlands and Islands Enterprise and Local Energy Scotland. These organisations are aware of this piece of work and will be part of a review team for the final study. Scope The scope of work comprises three separate items as listed below. Prospective contractors are invited to tender for any or all of the three parts, with bid prices detailed separately for the relevant items and subdivided as appropriate. CES reserve the right to award a single contract for the entire scope, or separate contracts for the individual parts, depending on tender response and budget availability. 1. Review of Proposed SSE Connections (1a) Critical review of Consortium Budget Estimates Thirteen projects received a budget estimate from SSE assuming connection as part of a consortium, with cost-sharing of common reinforcement works; the quotes are also contingent on the HVDC link to the Western Isles being built. A detailed and impartial analysis of the figures contained in each of the budget quotes is required. It should address the following points: a) How the costs were derived, and whether they are fair and realistic for the individual project in question; b) Whether the assumptions made regarding the lengths of overhead lines or buried cables were reasonable for the project in question; c) What additional costs might be expected for transmission level access, i.e. via a share of the cost of the HVDC link (it is assumed that the quotes only covered the cost of distribution works). Page 2 of 9
(1b) Assessment of cheaper connection options For each of the thirteen projects, an assessment should be made to establish whether a cheaper connection might be achieved. The following points should be considered: a) Whether there would be cost savings if the contestable works were carried out by a third-party contractor. The feasibility of going to tender and any challenges likely to arise should be commented on. b) In cases where SSE have quoted for an LV connection, whether it would be cheaper to connect at HV, with third-party supply of transformer and associated assets. c) Whether the costs for the particular project would be lower if it was to proceed on a stand-alone basis, independently of a consortium. d) Whether there are locations where a sub-1.5mw scheme might be installed with minimum reinforcement, for example by connection at 11kV rather than 33kV. For each of the above cases (a-d), viable connection options should be identified with indication of budget costs. 2. Network Modelling/Review of ANM The current SSE position is that there is very limited scope for new generation on the Western Isles network ahead of the HVDC link. The possibility of active network management has been raised but SSE advises there is almost no ANM capacity in Lewis and Harris and very little in Uist/Barra (study to be shared with chosen consultant). A key aspect of the present study is therefore to review and scrutinise the SSE position, and identify whether any opportunities may in fact exist for increased generation in the near term, with or without ANM. Work will include: a) Obtaining information from SSE to enable independent load flow modelling on the Western Isles network (at least in the steady-state). Information to include (a) the Western Isles network map and associated technical characteristics (impedance and fault level data), (b) information on existing major generators on the Western Isles network, and (c) power flow data on the existing undersea connections; b) Reviewing the assumptions underlying SSE s network analysis and ANM capacity estimates, including the underlying modelling of constraint conditions, and indicating whether additional capacity might in fact be economically accommodated. An objective and critical assessment is required; Page 3 of 9
c) Identifying locations where existing consumer or industrial loads might accommodate on-site generation, such that no additional export capacity is required beyond their point of connection. 3. Innovative Connections The study will explore innovative solutions for increasing generation capacity on the Western Isles network in the near-term and will examine the following possibilities: a) Virtual private wires (VPW): where a load and generator are located in close proximity under joint or collaborative ownership, but on separate points of connection. A localised form of ANM may then simultaneously monitor generation and demand to ensure that no export occurs beyond the immediate network. The study should consider the relevance of Complex Sites (for a definition see for example the Balancing and Settlement Code [1]) where several points of demand are treated as a single entity for half-hourly billing. The technical and regulatory implications of VPW systems should be established and summarised. b) Community-owned ANM: a wider-scale extension of the VPW concept would be a community-owned ANM scheme. This would potentially contract with SSE to maintain network power flows within agreed dynamic limits, and respond to their requests for balancing services. The study should establish whether it could be technically feasible and financially beneficial. The scalability of a community-owned ANM should also be examined. c) Energy storage systems (ESS): energy storage systems may be combined with a generator feeding an on-site load in order to better match generation and demand, and to maximise the generation capacity within an existing export limit. The prospects for economically viable ESS specifically to allow increased renewables penetration on the Western Isles grid should be explored. d) Demand-Side Response (DSR): conventionally DSR incentivises customers to reduce or shift their electricity use at peak times, in order to help manage the network load and voltage profiles. In the present case the study should investigate the potential for local loads to be switched on and off in response to the output of a new community generator, and determine what type of controls and security would need to be in place. e) Offsetting new demand: there may be opportunity for additional renewables generation in the context of new consumer or industrial loads on the Western Isles network. The study should identify locations where this may be the case, and the nature and scale of the load and generation opportunities that would result. Page 4 of 9
f) Connection sharing: community projects are eligible to share existing connections with private developers, while still being assessed as independent projects for FiT purposes. This may favour the installation of smaller community renewables on large sites, or the introduction of complementary technologies. The possibility of constraint has to be addressed for such projects as existing capacity limits must be adhered to. g) Any other solutions, not considered above, that the consultant believes may offer a realistic route to connection of additional community renewables on the Western Isles in the near-to-medium term. An estimate is required of the cost and works associated with each solution identified in (a-g) above, together with the expected economic benefit (e.g. as estimated gross revenue, or simple payback period). Deliverables Consultants are invited to propose how they intend to approach the delivery of the requirements set out above. In addition to the specific deliverables below, the chosen consultant for each item will be required to hold an introductory meeting with CES (this can be via telephone) to agree on methodology, workplan, timescales etc, and to provide regular progress updates and maintain close contact with CES throughout. The main point of contact for CES is given below. The consultant should also include for a meeting for presentation of the draft report/s to CES and other relevant stakeholders, with opportunities for discussion and question. Following this meeting, the reports can be finalised and electronic copies of the final report must be provided to CES. Copyright of the report is to be vested in CES. Item Scope 1 a) Review of consortium budget estimates b) Assessment of cheaper connection options 2 Network assessment/ review of ANM Deliverables Report, containing objective analysis of SSEN connection costs for identified projects, and estimates of likely additional HVDC costs in each case. For detailed scope see main text above. Additional to the above, identification of cost saving options for individual projects as above, with technical narrative to underpin each case. For detailed scope see main text above. Report, based on modelling the WI network with industrystandard software. To include critical review of current SSE assumptions and capacity estimates, and indication whether and where additional capacity may be available. To include Page 5 of 9
3 Innovative connections non-technical narrative to justify all findings. For detailed scope see main text above. Report, detailing potential solutions for increased community renewables capacity via innovative solutions, including but not limited to those listed in the present scope. A detailed estimate of cost and works for each solution is required, with narrative to establish timescales and practicability. For detailed scope see main text above. Project Timetable Tender published 3 rd November 2016 Tender submission deadline 24 th November 2016 The following timescales are given as an indication, and may vary depending on funding approval. Final timescales will be discussed with the chosen consultant at the introductory meeting. Notification of Preferred Bidder 1 st December 2016 Start of Contract (following funding approval) 15 th December 2016 Draft Report to CES 20 th February 2017 Final Report to CES 1 st March 2017 Guidance on Tender Submissions and Assessment of Tenders The tender response will be scored on the following criteria. Weightings are shown in brackets: a) How the specification will be met (clearly stating any specific exclusions from the scope of work) (30%) b) Relevant experience; at least one contactable reference for relevant previous work should be supplied. (15%) c) Relevant skills and knowledge, including CVs of individuals who will be involved in the delivery of the contract. A primary point of contact responsible for the project should be included (15%) d) Evidence of the ability to effectively manage budgets and other resources (5%) Page 6 of 9
e) How value for money will be achieved in meeting the specific requirements of the brief. Detailed costing should be supplied for all activities, setting out staff costs, travelling and subsistence, overheads, and any other associated costs including VAT where applicable. Separate costs should be provided for each phase of the study (30%) f) A workplan showing anticipated timescales for each activity should be provided (5%) Bids will be scored on criteria a) to f) above, taking into account the criteria detailed in the table below. Consultants should also detail their levels of Public Liability and Professional Indemnity Insurance. Contractors may tender for any or all of Items 1, 2, and 3. CES reserve the right to award a single contract for the entire scope or separate contracts for the individual parts, depending on tender response and budget availability. Item of Scope 1 a) Review of consortium budget estimates b) Assessment of cheaper connection options 2 Network assessment/ review of ANM 3 Innovative connections Criteria Familiarity with the SSE major connections process and relevant personnel; experience of involvement with successful renewables connections at 50kW or above (G59 protocol). As above, plus: experience of private network connection requirements and scoping of contestable works. Familiarity with the SSE major connections process, plus: network modelling capability (at least steady-state); familiarity with the principles of ANM; capability for estimating constraint levels for multiple wind energy projects. Experience with onsite renewables connections; familiarity with monitoring and control requirements for constrained connections; experience of involvement with innovative projects; familiarity with the FiT eligibility rules. For further information, please refer to [2] Community Energy Scotland Terms and Conditions. Page 7 of 9
Budget The successful bidder/s will demonstrate the best value in meeting the specific requirements of the relevant Item/s. General Variations to Contract It is possible that other unforeseen additional work will arise during the course of this consultancy. As any of this may give rise to a requirement for a variation in agreed works or a contract extension, the successful consultancy is expected to quantify its charges for any potential additional work. (This would be subject to formal approval by the group and the funders prior to any further work being undertaken.) Equally, as the feasibility study progresses, showstoppers may become apparent and further work after this would not be worthwhile. In this case, a pro rata payment would be made for the work and associated reports completed. Management The contract will be managed by Community Energy Scotland; the main contact is: Kathleen Macdonald Kathleen.Macdonald@communityenergyscotland.org.uk 01851 707881 Any questions regarding this tender brief should be addressed to: Kirsten Macdonald Kirsten.Macdonald@communityenergyscotland.org.uk 01851 707880 Closing Date The deadline for submission of the tenders is 5pm on 24 th November 2016. Tenders should be as an email attachment and addressed to: Kirsten.Macdonald@communityenergyscotland.org.uk Page 8 of 9
References [1] https://www.elexon.co.uk/wp-content/uploads/2016/06/bscp502_v26.0.pdf [2] Community Energy Scotland Terms and Conditions Page 9 of 9