FCP Generation: Varying Test-Size Generator

The assumption of the size of the test-size generator influences the FCP generation prices a lot. Therefore, a study is carried out to see how varying test-size generator would impact the generation prices. The forecast new generation is set to be 30% of the current demand.

To perform this sensitivity analysis, an example is used:

Total Demand 22 MW

As shown in Figure 6.18, the probability of the connection drops as the size of the test-size generator increases. There are cases where the probability goes beyond 1 when

Chapter 6 Pricing Signals of LRIC and FCP Models

the test-size generator chosen is very small, in this example, test-size generator lower than 5MW would produce a probability greater than 1.

Figure 6.18. Probability of connection versus test-size generator

Illustrated in Figure 6.19, as the size of the test-size generator increases the investment horizon is brought forward. This is due to the test-size generator are equally divided into 10 sections and incremented onto the network (in a linear function) each year, hence these generation increments will increase if the size of the test-size generator increases. Therefore, the investment horizon will be closer.

Figure 6.19. Reinforcement year of the reinforcement identified versus test-size generator

The investment cost accounted for the FCP generation price calculation is the proba­

bility multiplied by the present value of the reinforcement cost. For the cases where probability is higher than 1 the investment cost would be more than the total rein­

forcement cost. And the investment cost is decreasing with increasing size of test-size generator, due to the decreasing probability, as shown in Figure 6.20.

Shown in Figure 6.21 is the FCP generation charge before considering the generation benefit. It demonstrates that if the size of the test-size generator is small, resulting in a higher probability of connection, the generation charge becomes relatively more

Chapter 6 Pricing Signals of LRIC and FCP Models

Figure 6.20. Annuitised investment cost considering the probability of connection versus test-size generator

significant. The size of the test-size generator affects the FCP generation, therefore, it has to be carefully chosen.

Figure 6.21. FCP generation versus test-size generator

Figure 6.22 demonstrates the FCP generation charges for two different test-size gen­

erators – 10MW and 6MW, with increasing asset utilisation. For the 10MW test-size generator, there will only be a generation charge when the asset is utilised from about 30%. This is because before that utilisation, this reinforcement project will not be iden­

tified within the 10-year study period. Similarly, the customers will only see a charge is the asset is utilised at more than about 60% if the 6MW test-size generator is used.

The 6MW test-size generator case will have a higher generation charge as the probabil­

ity of connection is higher compared to the 10MW test-size generator case. The results also show that at some utilisation, in this case between 30% to 60%, the generation might see no charges if a smaller test-size generator is chosen.

Chapter 6 Pricing Signals of LRIC and FCP Models

Figure 6.22. FCP generation charges for different test-size generator

Pembroke Network

A sensitivity analysis is carried out on Pembroke network, varying the test-size gener­

ator of the 11kV network. In this study, test-size generators of 9MW, 12MW and 15MW are used. Figure 6.23 shows the FCP generation charges for the 11kV network of the Pembroke Zone 2 area. These generation charges are due to investments identified with the test-size generators increments.

Similarly, the results show that as the test-size generator increase, FCP generation in­

vestment charges decrease. This is because the probabilities of connection drop, while the same investment is identified. Besides that, the results also show that a larger test-size generator will cause some investments, previously not identified with a smaller test-size generator.

Chapter 6 Pricing Signals of LRIC and FCP Models

Figure 6.23. FCP Generation prices for 11kV network of Pembroke Network with different test-size generators

Figure 6.24 is the FCP generation capacity charges, i.e. the FCP generation prices plus the generation benefit, for the 11kV network of Pembroke. The generation benefit for the 11kV network is a negative constant, in this case much higher in value compared to the FCP generation prices. Hence, all the generation capacity charges are negative.

For those nodes without generation investment prices, the FCP generation capacity charges will be the generation benefit.

Figure 6.24. FCP Generation capacity charges for 11kV network of Pembroke Network with different test-size generators

Chapter 6 Pricing Signals of LRIC and FCP Models

The FCP generation tariffs for llkV network (Zone 2) of Pembroke network in illus­

trated in Figure 6.25. As the FCP generation prices are negative and demand prices are generally low, the fixed adder used to reconcile the revenue recovered is relatively high. This further reinforce that smaller test-size generators might result in higher tariffs, with the same investments identified.

Figure 6.25. FCP Generation tariffs for 11kV network of Pembroke Network with different test-size generators