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Network Investment Plan 2010-2015

1. Welcome 2. The Electricity Supply Industry 3. Our Assets and Key Facts 4. Our Investment Programme and its Structure 4.1 Load Related Programme 4.1.1 Customer Connections 4.1.2 General Reinforcement 4.1.3 Distributed Generation 4.2 Non Load Related Programme 4.2.1 Asset Replacement 4.2.2 Losses 4.2.3 Flooding 4.2.4 Quality of Supply 4.2.5 Visual Amenity 4.2.6 Diversions 4.2.7 Environment 4.2.8 Safety 4.2.9 Operational IT 4.3 Network Maintenance 4.3.1 Inspections & Maintenance 4.3.2 Faults 4.4 Trees 4.5 Non Operational Programme 4.6 R&D 4.7 Programme Deliverables 5. Contact Us Page 15 Page 3 Page 4 Page 5 Page 6

Electricity North West Network Investment Plan 2010 to 2015

Welcome to Electricity North Wests Investment Plan Statement for 2010 2015. The aim of this document is to explain our role in the energy industry and detail what assets we own. It will then outline how we manage our assets and our resulting network investment plan for the 2010 2015 period.

We are entering an interesting and exciting period in the industry with climate change and green energy playing a greater part in our plans together with the application of new technology. Over the next five years, we intend to efficiently invest over 1.4 billion in the region to meet the challenges posed by the move to a low carbon economy, changes in the pattern of demand for electricity and the needs of servicing an ageing network. Longer-term, we foresee a number of significant future challenges for the industry which could radically change both the networks we own and the way they are operated. We plan to produce a longer-term outlook report later this year which will set out our views to 2050.

Our plans are based on delivering against the recently concluded price control negotiated with Ofgem for the 20102015 period and incorporating initiatives based on feedback gained at previous stakeholder workshops. Our plans are based on achieving several simultaneous targets in terms of the performance of the network, its condition and utilisation, as well as meeting all our legal and statutory responsibilities. This document sets out our plan in terms of the planned investment by driver, detailing the rationale for each and the resulting plans. We would be delighted to hear your views. If you wish to contact us, a number of different ways are listed at the back of this document.

Steve Johnson Chief Executive Officer

Electricity North West Network Investment Plan 2010 to 2015

2. The Electricity Supply Industry

The electricity industry in Great Britain is structured into four main groups;
The generators, who own the major power stations and produce electricity from a variety of fuel sources. The National Grid, who own and operate the 400kV and 275kV transmission network that links the major power stations and transports electricity in bulk across the UK. The 14 Distribution Network Operators (DNOs), who own and operate the remaining electricity network, connecting the remaining generators and the national grid to every electricity customer in the UK. The suppliers, who buy the electricity produced by the generators, sell that electricity to their customers and pay the network operators for the transportation of that electricity across their networks. The electricity market is regulated by the Gas and Electricity Markets Authority (the Authority), which governs and acts through the Office of Gas and Electricity Markets (Ofgem). In the electricity market, suppliers contract with generators (for wholesale power) and with transmission and distribution network businesses (for delivery services), in order that they can provide energy to final consumers. Distribution operators are directly regulated by Ofgem and their charges for use of their networks are subject to a five-year price control mechanism. We are one of the fourteen DNOs and a private limited company. We are owned by a consortium of funds controlled by the Commonwealth Bank of Australia and IIF International Holding GP Ltd which is a constituent of JP Morgan Infrastructure Investments Fund. We have an indirect financial relationship with customers as we charge suppliers for the use of our network and the suppliers in turn charge their customers the total cost for all elements in the supply chain. We account for approximately 15% of the final bill for electricity for domestic consumers. We use these revenues to operate and maintain the network, together with delivering an investment programme of renewal and expansion as detailed in this document.

Electricity North West Network Investment Plan 2010 to 2015

3. Our Assets and Key Facts

We operate a distribution network built of overhead lines, underground cables, transformers, switchgear and ancillary equipment.
Our network comprises of the following key assets: Over 13 000km of overhead lines Almost 44 000km of underground cables Almost 84 000 items of switchgear

Over 34 000 transformers Through this network we deliver over 25 TWh of electricity each year to over 2.4 million customers across 12 500 square kilometres of North West England. Our network covers a diverse range of terrain and customer mix from isolated farms in Cumbria, to areas of heavy industry, urban populations and city centres as shown in the map. Our network assets range from large transformers to individual services. All these assets are held in a register so that we can manage ongoing maintenance through their lives and up until they are programmed for replacement. The investment programme is therefore managed through different types of projects from bulk programmes for the replacement of high volume low value assets through to bespoke large projects for work at single sites.




Barrow Lancaster

In delivering the investment programme we manage thousands of individual projects ranging in value up to tens of millions of pounds.

Blackpool Preston Blackburn

On average, the network performs such that a customer experiences a power cut every two years and is without electricity for less than one hour every year (99.99% reliability)

Bolton Wigan

Rochdale Oldham Ashton Stockport



Electricity North West Network Investment Plan 2010 to 2015

4. Our Investment Programme

We undertake investment for three key reasons;
Expanding and replacing the network (4.1 and 4.2) Maintaining and repairing it, and (4.3 and 4.4) Supporting activities (4.5) Our capital programme aims to expand the network to cater for changes in demand for electricity and to provide new connections. We term this load-related capital expenditure. We are also investing significant funds in replacing the existing assets as they reach the end of their useful life, termed non-load related capital expenditure. In addition to these defined programmes we invest in the network by undertaking routine maintenance, the repair of faults, non operational investment to purchase equipment to help us undertake the work and undertake research and development activities.
31% For the five year period we are planning to invest around 1.4 billion across these areas as shown in the chart below. This represents a 36% increase over the previous five year period. 18% 31% 51% 18%


Load related investment is undertaken to allow growth of the network. This can take a number of forms but is mostly due to the connection of new supplies to the network.

Load Related Plan 2010-2015

KEY New Connections DG Connections General Reinforcement

KEY New Connections DG Connections General Reinforcement 51%

ENW Investment Plan 2010-2015

2% 2% 14% 4% 30%

During 2010 2015 we plan to invest over 400 million on load related projects as shown in the chart above. This represents a 12% increase over the previous 5 years.

4.1.1 CUSTOMER CONNECTIONS KEY Load related New buildings require new electricity connections and, where Non-load related enhancements to the existing network. Customer appropriate, Non-operational connections are a Network Maintenance competitive market area with a number of different organisations providing alternative quotations for Trees R&D connections to our network. new Most connections however are ultimately adopted as part of our network. The size of this investment programme is dependent upon requests from customers for supply and therefore subject to economic conditions. When work is undertaken to provide new supplies most of this is paid for by the customer requesting the supply. The chart opposite shows the number of new connections to our network over a ten year period. The first five years of this chart are actual figures and the remaining five years are based on forecasts. This highlights the effect of the recent economic recession and our forecast for a slow recovery.

47% 2% 2% 14% 30%

KEY Load related Non-load related Non-operational Network Maintenance Trees R&D


Electricity North West Network Investment Plan 2010 to 2015

New Connections
25000 20000 15000 10000 5000 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 0
Within the general reinforcement programme the largest single project is the Wigan 132kV Reinforcement project (which is expected to cost around 20 million). There is a need to reinforce the network in the Wigan area. This will be achieved by building a new large substation in the Upholland/Orrell area of Wigan which will be supplied by a new circuit to be installed to connect to the national grid at Kirkby. This scheme is part of a strategy to uprate the capacity of the Lancashire area as a whole. Another scheme for a new Bulk Supply Point (BSP) at Preston to support the northern end of the group was constructed in 2008. In combination, the two schemes will relieve Wigan, Wrightington, Leyland and Ribble BSPs (serving a total of 247 000 customers) which are all currently loaded at the limit of their capacity.

We will continue to forecast future investment requirements based upon general economic and market information and conditions. As part of this we will liaise with housebuilders and other stakeholders to better understand market trends. We will continue to improve response times to connectors requests and continue discussions with our regulator regarding pre investment in known development areas.

During 2010 2015 we plan to invest over 200 million to connect around 84 000 new supplies.
4.1.2 GENERAL REINFORCEMENT Existing customers change their usage of electricity over time with reductions caused by using more efficient equipment, or increases caused by doing more or using larger equipment. The combined effect of all these individual changes results in changing demand patterns on our network. Where increasing demand causes our network to approach its capacity limits, we will invest to increase the networks capacity. Where we provide an electricity supply to customers it has to be within a specified voltage range. On the infrequent occasions where customers experience voltage outside these limits, we will investigate and, where necessary, correct the problem within a guaranteed period. When we build the investment programme for general reinforcement we go through a process of prioritisation. This ensures that our investment targets those sites that have the greatest need for some form of intervention. This prioritisation takes account of a number of factors that cover a comparison of demand against firm capacity, the amount of time per year the demand is above firm capacity and the number of customers.

During 2010 2015 we plan to invest over 100 million to reinforce our network.

Electricity North West Network Investment Plan 2010 to 2015

Our Investment Programme continued

4.1.3 DISTRIBUTED GENERATION (DG) Climate change and an increase in environmental awareness have led to a change in the mix of fuel sources for electricity generation and also a change in the scale of generation plant. Many new generators are much smaller than traditional power stations and therefore connect to the lower voltage distribution networks, such as that owned by ourselves, rather than the higher voltage transmission network owned by National Grid. Electricity generators connected to the distribution networks are called distributed generation (DG). Most new DG produce renewable energy and/or low carbon combined heat and power. We recognise the importance of the roll out of DG in meeting renewables targets and will continue to provide suitable network connections to meet the needs of the connectors of DG. We will also continue to work with the regulator and the rest of the industry on innovative solutions for network development to provide a more flexible network that can accommodate the wide range of connections envisaged in some of the future scenarios.

The size of this investment programme is dependent upon requests from customers for supply and therefore subject to economic conditions. When work is undertaken to provide new supplies most of this is paid for by the customer requesting the supply.

During 2010 2015 we plan to invest around 80 million to enable the connection of 1GW of generation sites to our network.
The chart below gives a breakdown of DG capacity by technology type. This shows the capacity of DG that we expect to connect to our network based on proposals by the developers of DG sites and our own assessment of the market drivers.

DG installation capacity (MW) by type 2010-2015

350 300 250 200 150 100 50 0
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Electricity North West Network Investment Plan 2010 to 2015



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The non-load related programme is undertaken for a variety of different reasons. A large component of the programme is for the replacement of old assets in poor condition. Other parts of the non-load programme are for specific improvement initiatives. There are some programmes that are currently at an embryonic stage and as such are not listed separately in detail because the spend forecast for the five years is so low. Non-Load Related Plan 2010-2015

4.2.1 ASSET REPLACEMENT All physical network assets have a finite lifespan before they become unfit for purpose. Our asset replacement investment is designed to replace those assets at the end of their life and replace them with their modern equivalent in order to maintain the networks capacity and performance levels. Through good asset management practices, we have been able to extend the life of many of our network asset components, however we are now in a period where we need to replace an increasing number of assets. This reflects previous historic investment linked to UK economic cycles, including the post-war prosperity boom and electrification programmes of the 1960s. This can be seen in the chart below which shows the age profile of ground mounted high voltage circuit breakers. KEY

9% 12% 1% 2% 1% 1% 0% 5% 70%

Asset Replacement Diversions Losses Environment Flooding Age profile for high voltage ground mounted circuit breakers Visual Amenity QoS Safety Operational IT 1200

1000 800
KEY Asset Replacement Losses Flooding QoS

Diversions Environment Visual Amenity Safety Operational IT

400 200 0


During 2010 2015 we plan to invest about 680 million on non-load related projects as shown in the chart above. This represents a 52% increase over the previous five years.

We will continue to invest in our network to maintain its overall health, continuing our historically good performance and safety standards. We will also continue to invest in our asset management systems to ensure we improve the timing and efficiency of any investment we make. We continue to review our asset replacement policies, particularly with regard to the rebuilding of overhead lines to ensure they are resilient to storm conditions and climatic change.

1920 1923 1927 1931 1935 1939 1943 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

Electricity North West Network Investment Plan 2010 to 2015

Our Investment Programme continued

4.2.3 FLOODING An increased environmental risk with climate change is that of flooding from river or coastal sources. A number of our major sites are located near to water sources as they were installed at power stations that required water for cooling purposes. Our smaller sites are located close to customers, many of whom live in homes built on flood plains. We have identified those major sites at risk of flooding and are delivering an ongoing programme to improve flood defences at those sites. We are working locally and nationally with a number of environmental agencies to ensure our modelling is up to date with the latest available information and that our plans are prioritised accordingly.

During 2010 2015 we plan to invest around 7 million to protect those sites most at risk of flooding.

When we define the investment programme for asset replacement we go through a process of prioritisation. This ensures that our investment targets those parts of the network that have the greatest need for some form of intervention. This prioritisation takes account of a number of factors that cover safety to the public and our personnel, condition of the assets, environment, operating history, previous faults on the same type of asset, availability of spare parts and local knowledge.

During 2010 2015 we plan to invest around 470 million on the replacement of poor condition assets.
4.2.2 LOSSES Electricity flowing through a conductor generates heat, whilst a transformer can generate both heat and noise. This results in approximately 5% of the electricity entering our network being lost. Although these losses cannot be totally eliminated, they can be reduced by installing more expensive plant and equipment that is designed to operate with lower losses.

During 2010 2015 we plan to invest around 2 million to install equipment as a trial that will reduce losses at two key substations.
10 Electricity North West Network Investment Plan 2010 to 2015

4.2.4 QUALITY OF SUPPLY Quality of supply investment is undertaken with the aim of improving the overall quality of service experienced by customers. This will be achieved by investing in projects that can reduce the number of customers affected by faults, reduce the length of time customers are off supply in the event of a fault and also reducing the likelihood of faults on the network. In addition we are planning to undertake specific investment to improve the service received by those customers who experience the worst reliability on the network. These are generally located in very rural locations and at the end of long overhead line networks. The quality of supply experienced by customers is measured based on the number of interruptions (CI) to supply and the length of time customers are without supply, or customer minutes lost (CML). 15 year CI CML performance

4.2.5 VISUAL AMENITY In 2005, a specific limited programme of undergrounding overhead lines, identified by regional stakeholders, within statutory National Parks and Areas of Outstanding Natural Beauty commenced. Funding for this programme was allowed by Ofgem up to a value of 5 million following their customer willingness to pay survey and a review of the various environmental obligations placed upon the industry. The two photographs below show an example of such a project before and after investment.

60 50 40 30 20 10 0 2005 2006 2007

We support this initiative as a model of publicprivate partnership and have planned for its continuance at a level equivalent to the current programme in 2010 2015. This is around 7 million during the five years.
4.2.6 DIVERSIONS Sometimes when development work is planned for either building or new road developments, our network assets may be in the path of these developments. Assets therefore need to be diverted to an alternative location to allow these developments to proceed. We plan for this type of work based on historical trends and any known large projects. Diversions projects mostly involve diverting underground cables and occasionally overhead lines and substations.








It should be noted that the programme of planned asset replacement will impact this performance due to the required network outages when replacing assets. These forecasts exclude for the effect of planned outages, which for the five years to 2015 reflect the increased programme we are planning for the replacement of overhead lines. With the effect of planned work excluded, the underlying change to CI and CML performance is a 6% improvement.

During 2010 2015 we plan to invest around 30 million on diversions activities.

4.2.7 ENVIRONMENT Environmentally-driven investment takes place to ensure compliance with environmental legislation. We plan to invest to guard against oil leakage from our sites and to mitigate noise where appropriate.

During 2010 2015 we plan to invest around 4 million on projects that will improve the service experienced by customers, particularly to speed up supply restoration following a fault.

During 2010 2015 we plan to invest around 12 million on environmental projects.

Electricity North West Network Investment Plan 2010 to 2015


Our Investment Programme continued

4.2.8 SAFETY We operate a safe and efficient network. We have a strong safety record and we will continue to invest appropriately to maintain that record. Most of our safety related investment over the next five years is to ensure our overhead lines maintain safe horizontal and vertical clearances in line with the Electricity Safety Quality and Continuity Regulations (ESQCR) 2002. We operate within a modern social environment. Unfortunately, there is an increasing trend of vandalism and other anti social behaviour in and around our substations. With the recent rapid increase in world metal prices we, like all other utility companies, have seen a significant increase in the theft of metalwork from our substations. Our major sites may also be considered a suitable target for some terrorist organisations. 4.2.9 OPERATIONAL IT The operational IT programme is aimed at the replacement and improvement of those IT systems that are used for the real time control of the network. The ability to operate the network remotely offers benefits in terms of the security of supplies and is used to minimise disruptions experienced by customers.

During 2010 2015 we plan to invest almost 60 million on operational IT projects.

BT Group PLC are migrating their existing network to a system known as 21st Century Network. This new network will be unable to offer guaranteed times for the transfer of data signals. Our control and protective systems require a level of certainty in the time taken for a signal to transfer from our control centre to a substation on the network so that we can continue to safely and securely operate our networks. In order to maintain these signal transmission times we will construct our own data network over which we have total control. This will be done by providing a new fibre system where signal transmission times are well within the specification of the protective systems.

We will continue to invest in an ongoing programme of security strengthening at identified sites. We will also continue to work with community partners to reduce anti social behaviour around our installations and reduce the value of our equipment to thieves.

During 2010 2015 we plan to invest over 80 million on projects to improve safety.

12 Electricity North West Network Investment Plan 2010 to 2015


4.3.1 INSPECTIONS & MAINTENANCE We routinely inspect and maintain the assets that make up our network to ensure they remain safe and continue to provide a high level of service. Occasionally some assets need to be turned off to do this safely which may result in an interruption to supply. Where this is necessary, we give customers at least two days notice of the interruption and its length to allow them to make any alternative arrangements they feel are necessary. We will also continue to invest in training and systems to ensure inspection information is efficiently collected and used to continually improve the management of the network.

One of the main external impacts on our overhead lines is trees. We have a routine programme of vegetation management where we cut and prune trees growing in the vicinity of the overhead lines to maintain public safety and to reduce the risk of trees causing faults on the lines. We believe we may be beginning to see early climate change effects, in that the growing season is extending and that the number and severity of storms may be on the increase. We are working with the rest of the industry to update historic practices and develop enhancements such as resilience, where more trees are managed to reduce the risk posed by falling trees in heavy storm conditions.

During 2010 2015 we plan to invest over 110 million on inspecting and maintaining the existing network assets.
4.3.2 FAULTS Occasionally faults occur on parts of our network caused either by deterioration or by a number of outside influences. Fortunately loss of supply is an infrequent occurrence. We have a network availability of over 99.99% with, on average, a customer experiencing one power cut every two years and being without electricity for about two hours for each occurrence. As these are averages, most customers receive a better service but some customers do unfortunately receive worse. Dedicated teams respond to faults when notified either by customer calls or by alarms generated by the network itself. These teams attempt to identify the source of the problem, restore supplies to customers as quickly as possible and then repair the network back to normal. In an average twelve month period we respond to around 14 000 faults, averaging forty to fifty faults per day.

During 2010 2015 we plan to invest over 26 million on projects to maintain clearances from trees.


The non-operational programme aims to deliver projects in areas that will support delivery of the operational investment and management of the business. During 2010-2015 we are planning to invest in the following: Accommodation and maintenance of our buildings Improvement of existing IT and the introduction of new systems Tools to maintain existing stocks and introduce new tools and instruments to improve working practices, customer service and safety The replacement of 500 vehicles out of a fleet of around 750 ranging from cars and small vans to large trucks and specialist vehicles By having the right balance of these resources in place we will optimise the way we are set up and operate to be able to efficiently deliver the investment programme during 2010 2015.

During 2010 2015 we expect to invest about 95 million on work to rectify faults across the range of network assets.

During 2010 2015 we plan to invest almost 60 million on non-operational projects.

Electricity North West Network Investment Plan 2010 to 2015


Our Investment Programme continued

4.6 R&D
We are investing significant amounts of time and money in a variety of research and development programmes funded under Ofgems Innovation Funding Initiative. Since 2004 we have invested over 6 million in a range of projects that are designed to enhance the performance of our network in a variety of ways. We are planning to increase our R&D investment during 2010-2015 under Ofgems new Low Carbon Networks Fund scheme as we prepare the way for electricity distribution networks to help deliver the low carbon electricity system that is required to meet national climate change objectives. There are two Tiers to the Low Carbon Network Fund: the First Tier of the Fund allows us to manage the small scale deployment of new technologies and the Second Tier is for large flagship Smart Grid Projects. Our research and development projects cover three primary activities. Asset Management, Quality of Supply and Smart Grids. Under Asset Management we have a number of projects that are, for example, researching new ways to manage our asset base from investing in biodegradable alternatives to mineral insulating oil, developing new techniques to better understand the condition and ageing of network assets and investigating how we may be able to deliver more capacity from our network by understanding and quantifying the cooling effects of wind and weather on our assets to avoid upgrading where possible. We have a number of projects under Quality of Supply. We are developing a range of instruments that can detect and locate defects on our underground cable network before the defect turns into a fault and customers are disconnected. We are also developing a device for intermittent cable faults, the Fuse Restorer, that can automatically replace a standard fuse into a faulted circuit to restore supplies and then send a text message to an engineer to tell them the location of the fault and the type of fault event. For Smart Grids we are developing a number of projects, funded by the First Tier of the Low Carbon Networks Fund, delivering new technologies including the UKs first superconducting fault current limiter installed on our network at Bamber Bridge near Preston. This can assist with the connection of large amounts of local renewable energy generation to allow us to reduce our reliance on fossil fuels for electricity generation. In addition we will develop proposals and seek funding from the Second Tier of the Low Carbon Networks Fund to manage Smart Grid Projects in the NW.


Our programme aims to replace and refurbish a range of existing network assets, install new assets, restore assets back to service following faults and continue maintaining assets in order to manage network capacity and maintain the condition, performance and safety of the network. Additional network assets will result from the DG and Customer Connections programmes but these cannot be accurately quantified in advance as these depend on exactly what supplies are requested, but more importantly where and also on what network capacity may already be available there. During the five years, excluding Connections and Distributed Generation, we are planning to undertake some form of intervention (replace/refurbish/install new) on: Over 5 300 items of switchgear Over 1 400 transformers Almost 5 500km of overhead lines Almost 1 000km of underground cables Additionally as part of the ongoing maintenance programme we will: Respond to around 14 000 faults annually on the network Inspect 176 000 spans of overhead line and undertake tree cutting to maintain safe clearances for 75 000 spans Continue to undertake routine scheduled maintenance of the network assets in accordance with our Codes of Practice We forecast that this investment will allow us to manage the condition and utilisation of our network. Over the next five years, we will be measuring this through a range of indicators comprising Health Indices (HIs) and Fault rates for specified asset types, and Load Indices (LIs) for the loading of network elements. This is in accordance with Ofgems newly introduced Network Outputs regime for 2010-2015.

During 2010 2015 we plan to invest up to 30 million on R&D projects

14 Electricity North West Network Investment Plan 2010 to 2015

5. Contact Us
We are interested in views on this document and our future plans, including whether there are any areas you feel we have missed, or other priorities and factors we should consider.
Write to us at the following address: Head of External Communications Electricity North West 304 Bridgewater Place Birchwood Park Warrington WA3 6XG E-mail us at the following address:

Or via the link on our website which also includes details of previous stakeholder events:

We look forward to hearing your views!

Electricity North West Network Investment Plan 2010 to 2015


Electricity North West 304 Bridgewater Place Birchwood Park Warrington WA3 6XG