Transmission
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Transmission - Performance against
our objectives - Financial
performance
Descriptions of our progress against our overall objectives in the areas of delivering our strategy, operating performance, talent, relationships, environment, financial performance and responsibility are set out under performance against our objectives. We include below further information specific to Transmission with respect to the progress we have made on transformation, our operating performance and our financial performance.
Delivering our strategy
Key areas of focus |
Key areas of focus for our Transmission business for 2007/08 have been to improve safety performance and to improve processes for network operations, within-year planning, transmission construction and asset management. |
Achievements so far have been the sharing of best practice with regard to safety, comparing processes and procedures across the electricity control rooms, and the development of a common financial approval process. Our Transmission business has progressively integrated its gas and electricity transmission activities in the UK and its electricity transmission activities in the US into a single line of business. Throughout 2007/08 we have continued implementing the improvements identified in our business process review last year. We have focused on improving the efficiency of delivery of our capital investment programme and operational efficiencies to meet the challenges within our UK price control and US rate plans. This has been based on improving our operational planning, managing a higher volume of work that is potentially more volatile if not managed effectively and improving the process of connecting new sources of energy to our networks. We have also been working with our suppliers to constrain or reduce costs wherever possible, with the aim of using the scale of our operations, and the increased level of capital expenditure, to increase efficiency.
Operating performance
Safety |
Our aim is for zero lost time injuries. |
In the UK during 2007/08 there were 15 lost time injuries compared with 13 in 2006/07 and 14 in 2005/06. The lost time injury frequency rate was 0.28 in 2007/08 compared to 0.25 in 2006/07 and 0.28 in 2005/06.
Our US electricity transmission lost time injury frequency rate increased to 0.24 in 2007/08 from 0.19 for 2006/07 as a result of two lost time injuries during the year.
Efficiency |
Our objective is to be more efficient in the delivery of services, in the context of higher expectations from our customers and cost pressures. |
We have been undertaking a number of internal business process reviews to seek out further savings without compromising our other objectives. Efficiency is reflected in our financial performance.
Reliability |
Our aim is to meet or exceed network reliability and availability objectives. |
In the UK, the total amount of electricity transmitted in 2007/08 was 303.0 TWh compared with 303.7 TWh for 2006/07 and 312.4 TWh for 2005/06, while gas transmitted amounted to 1,134 TWh compared with 1,086 TWh in 2006/07 and 1,120 TWh in 2005/06.
In the UK, the winter of 2007/08 saw demand from the electricity transmission network in England and Wales hit a peak of 54.2 GW. This compares with 52.1 GW for 2006/07 and 53.8 GW for 2005/06.
2007/08 saw a maximum gas demand of 419 million cubic metres on 17 and 20 December 2007. This is lower than last year’s peak of 436 million cubic metres.
In the US, the summer of 2007/08 saw demand from the electricity transmission networks in New England and New York hit a combined peak load of 13.2 GW. This compares with 14.0 GW for 2006/07 and 13.2 GW for 2005/06.
Our reliability and availability performance during the year can be summarised as follows:
| Years ended 31 March | |||
|---|---|---|---|
| Measure | 2008 | 2007 | 2006 |
| UK electricity transmission network reliability – target 99.9999% | 99.9999% | 99.9999% | 99.9999% |
| UK gas transmission network reliability – target 100% | 100% | 100% | 100% |
| US electricity transmission network reliability – target < 264 MWh |
437 MWh | 259 MWh | 348 MWh |
| UK average annual availability for electricity transmission network | 95.09% | 95.02% | 95.09% |
| UK electricity system availability at winter peak demand | 98.0% | 98.2% | 97.9% |
| UK gas compressor fleet performance – mean time between failures | 259 hours | 430 hours | n/a (changed definition) |
| US annual network availability | 98.6% | 98.1% | 98.5% |
Our UK electricity transmission network reliability in 2007/08 of 99.9999% excludes interruptions that affect three or fewer directly connected consumers and, in 2007/08, also excluded one incident (equivalent to 0.0003%) relating to supply interruptions that occurred following flooding in central England that was outside of our control.
In the US our electricity system reliability performance declined. Improvement is an objective for 2008/09.
In order to improve gas compressor resilience and to support variations in operating conditions such as we experienced this year, we are progressing investments in electrical drive compressors at approximately 20% of our sites.
Customer service |
Our aim is to support generators and distribution network customers, including our own networks operated by Gas Distribution in the UK and Electricity Distribution & Generation in the US, in delivering energy efficiently and effectively to consumers, in particular in connecting new sources of supply to our transmission networks. |
Our transmission customer service activities principally relate to facilitating new connections and maintaining existing connections and relationships with the customers who are already connected. In the US, much of the interconnection work with our transmission customers is performed in conjunction with the independent system operators in the areas that we operate.
Capital investment |
Our aim is to deliver our planned capital investment programme involving approximately £7 billion of capital expenditure between 1 April 2007 and 31 March 2012. |
UK investment
Investment in electricity and gas transmission systems is, by its nature, variable and is largely driven by changing sources of supply and asset replacement requirements. The gas transporter and electricity transmission licences also oblige us to provide connections and capacity upon request.
We have increased our level of investment as, over the next few years, we replace parts of our UK electricity network as these assets become due for renewal. In addition, parts of the gas transmission network are reaching the end of their lives. These are mainly compressor stations, control systems and valves (ie above ground assets and not the high pressure pipes). This, together with work required to meet changing supply sources, means that the UK electricity and gas transmission business will continue to see a significant increase in investment and network renewal.
Capital investment in the replacement, reinforcement and extension of the UK electricity and gas transmission systems in 2007/08 was £1,600 million, compared with £1,235 million in 2006/07 and £849 million in 2005/06. 2007/08 has seen a substantial increase in the level of investment in gas pipeline projects, some £138 million higher than 2006/07 (2006/07: £244 million higher than 2005/06). Capital investment included £22 million with respect to intangible assets, principally software applications (2006/07: £17 million, 2005/06: £9 million).
Capital investment continues to include high levels of expenditure on the replacement of electricity transmission network assets, many of which were commissioned in the 1960s, and also increasing expenditure on load related infrastructure. Total investment in electricity network assets amounted to £800 million in 2007/08, compared with £607 million in 2006/07 and £530 million in 2005/06.
US investment
Capital investment in the replacement, reinforcement and extension of the US electricity transmission networks in 2007/08 was £111 million compared with £108 million in 2006/07 and £91 million in 2005/06. The increase principally reflects additional asset replacement in New York to increase system reliability.
We expect increasing investment in New England to deliver our regional system expansion projects. Investment in New York will also continue to rapidly deliver on our asset replacement plans and to improve the reliability of the system.