Emerald Reactive Support Alternative Solution Expressions of interest

Emerald Reactive Support Alternative Solution Expressions of interest Publishing Date 21/02/2017 Closing Date 21/03/2017

1. Executive Summary Ergon Energy Corporation Limited (EECL) is seeking expressions of interest (EOI) to partner with suitably qualified and experienced organisations provide reactive compensation to Emerald Zone Substation. There are two high level options for this replacement. Reactive compensation such as a capacitor/statcom mix could be installed within the substation environment, or with an alternative solution, external to the substation site, such as, reactive output from a solar farm. This EOI is focussed on the Alternative solution. EECL believe an alternative solution may also provide additional benefit such as reduced system losses and also possibly a better economic/financial outcome. As reactive compensation is so important to the operation of the Emerald Network, any failure or late delivery of an alternative solution may put network performance at risk. Given this risk, a similar parallel process is being run for the internal solution, and an assessment will be made by EECL to determine the most appropriate solution. EECL recognises that the reactive requirements can be met with collaboration with external parties which are able to provide an alternative solution, and is interested in initiatives that will provide the same functionality/capability to the Network as an STATCOM/capacitor. Any solution must provide a demonstrable cost benefit for EECL, and meet various requirements which include, among others: The ability to absorb/supply reactive power as required by EECL The ability to interface to EECL operational systems for the dynamic control of the VAR support. High reliability and availability so as to provide firm VAR support On time delivery of the final solution. System availability of 24 hours per day, 7 days per week, with negotiated maintenance periods A likely alternate solution, which EECL considers may be feasible, is the development of a solar farm, where the inverters can be used to also provide dynamic VAR compensation. Other options may include a combination of solar/batteries, or other forms of generation. EECL is also willing to consider a hybrid approach where an alternative solution is combined with a scaled down substation based solution. As an example, a solar farm as an alternative solution could possibly be combined with a scaled down STATCOM within the substation environment. EECL is focussed on exploring all viable options to provide the best technical and economic outcome. The closing date for submissions is the 3 rd of March, 2017. page 2

Contents 1. Executive Summary... 2 2. Multi stage EOI/offer process... 4 3. Background... 4 3.1. Existing Emerald Network... 6 1.1.1 Existing 66kV Network Capability... 6 1.1.2 Insufficient Future 66kV Network Capability System Normal Conditions... 7 1.1.3 Safety Net Compliance... 9 4. Technical requirements of solution... 10 4.1. Stability Requirements... 10 4.2. Negative Phase Sequence Capability... 10 4.3. Harmonics... 10 4.4. Audio Frequency Load Control... 10 4.5. Reactive System Sizing... 11 5. Possible Solutions... 11 5.1. Renewable Generation Farm... 11 5.2. Summary... 12 6. Further information... 13 6.1. Information a provider is to include in an alternative solution proposal... 13 6.2. Criteria that will be applied in evaluating proposals... 13 page 3

2. Multi stage EOI/offer process The alternative supply of VARs for network support is a new concept for EECL and as part of this EOI process EECL is seeking vendor partners who are willing to work collaboratively to develop processes, standards and business models to ensure a sustainable solution. As this is a new concept, EECL are proposing to perform a multi staged EOI process to ensure that a suitable economic and technical solution is arrived at in a collaborative manner. Therefore our EOI process will be as follows: Stage 1, this stage involves an open expression of interest detailing the network needs and key restrictions. The purpose of this stage is to develop an understanding of the market capabilities and desire to provide a specialist solution for the supply of VAR support. Stage 2, involves a closed expression of interest, following a review of the outcomes of the open expression of interest. EECL may or may not enter into a closed expression of interest with selected parties to further explore the detailed technical options for VAR support. At the completion of the EOI process, EECL reserve the right to enter into closed tender negotiations with one or more of the tenderers. 3. Background Emerald is located in the Central Highlands area of the Central Region of EECL s Network. The Emerald town and adjoining rural area, with approximately 8,700 customers, is currently supplied from Ergon Energy s Emerald 66/22kV 3 x 20MVA Zone Substation, which receives supply from a 66kV line from H015 Lilyvale bulk supply substation, and a 66kV line from T032 Blackwater bulk supply substation. The Emerald maximum demand is presently 39.7MVA and is forecast to grow by approximately 1.7% per annum for the next 10 years. The existing 66kV network does not have sufficient capability to supply the forecast increased load at Emerald under system normal conditions, and voltage constraints may start to occur towards the end of this decade. The following Diagrams (Figure 1 and Figure 2) provide an overview of the sub transmission network in the region and the location of Emerald Substation. page 4

Figure 1 - Emerald Subtransmission Network page 5

Figure 2 - Location of Emerald Substation 3.1. Existing Emerald Network The Emerald area, with approximately 8,700 electricity customers, is currently supplied from Ergon Energy s Emerald 66/22kV 3 x 20MVA Zone Substation. Emerald Zone Substation is supplied by two 66kV subtransmission lines, one from each from the Lilyvale and Blackwater bulk supply substations. The Blackwater line also supplies the Comet 5+2MVA Zone Substation via a tee-off. There are currently two 5MVAr capacitor banks installed at Emerald Zone Substation to compensate for the reactive power demand in the downstream distribution network, and to provide voltage support on the 66kV network. The substation transformers have a tap range of +/-10%. Voltage set point on the distribution bus is currently 101%. The demand on Emerald Zone Substation is a mixture of commercial, industrial and residential loads, and peak loads generally occur in late summer afternoons. In the summer of 2014/15 the load at Emerald peaked at 39.7MVA. Peak load at Comet Zone Substation is around 2.7MVA. The Comet load is largely driven by irrigation and has a relatively low coincidence with the load at Emerald. Typical coincident load at Comet, when the load on Emerald Zone Substation peaks, is 50 70%. 1.1.1 Existing 66kV Network Capability The capability of the existing 66kV network that supplies Emerald is presented in Table 1 below. Table 1 Emerald 66kV Network Capability Thresholds Elements in Service Thermal Capacity Design Temperature Voltage Constraint Threshold page 6

Blackwater Emerald 66kV Feeder SD: 31.7MVA (277A) SE: 33.7MVA (295A) 65 C 23.2MVA at Emerald 1 + 2.5MVA at Comet (full coincident load) Lilyvale Emerald 66kV Feeder SD: 69.5MVA (608A) SE: 71.5MVA (629A) 75 C 36.0MVA at Emerald 2 Both 66kV Feeders in Service As above As above 44.3MVA at Emerald + 2.5MVA at Comet (full coincident load) Both 66kV Feeders in Service + One New Major Customer As above As above 40.8MVA at Emerald + 2.5MVA at Comet (full coincident load) SD = Summer Day (9am 5pm), SE = Summer Evening (5pm 10pm) 1 With Backwater Emerald line in service only. 2 With Lilyvale Emerald line in service only. Comet cannot be supplied with the entire Blackwater Emerald feeder out of service. 1.1.2 Insufficient Future 66kV Network Capability System Normal Conditions The maximum demand at Emerald is presently 39.7MVA and is forecast to grow by approximately 1.7% per annum for the next 10 years. The existing 66kV network does not have sufficient capability to supply the forecast increased load at Emerald under system normal conditions (i.e. with all plant in service). Network modelling indicates that with the current level of reactive compensation, voltage constraints will begin to occur at Emerald Zone Substation when the Emerald load exceeds 44.3MVA (see Table 1, above). Ergon Energy has also received recent connection enquiries for two major customers in the Emerald area, which would take supply from the 66kV network. Connection of either one will reduce the maximum load that can be supplied to Emerald to 40.8MVA. This will bring forward the date that voltage constraints may start to occur such that additional network capability will be required before connection can be offered. To connect both of these major customers, more significant network augmentation, or an alternate connection point, will be required. Ergon Energy does however consider the most probable future scenario to be that either none or one of these major connections will occur. Therefore, the voltage constraint threshold at Emerald that will need to be used when planning for non-network solutions has been set to 40.8MVA. page 7

Figure 3 Emerald Forecast Maximum Demand vs 66kV Network N Capability PoE = Probability of Exceedance. 50% PoE represents the forecast peak load during an average year. Used for contingency management planning. 10% PoE represents a peak load that only has a 10% risk of being exceeded, and that is expected to occur once in 10 years, e.g. during an unusually hot summer. Used when planning for N capability. Figure 3 above illustrates: The 10% PoE maximum demand at Emerald is expected to exceed the voltage constraint threshold of the 66kV network under system normal conditions in summer 2022/23 and onwards. With the connection of either one of the new major customer loads, the 10% PoE maximum demand at Emerald is expected to exceed the voltage constraint threshold of the 66kV network from summer 2018/19 and onwards. In other words, in the absence of any mitigation/solution to address the above issues: Ergon Energy will not be able to offer connection to any of the major customer loads from the Emerald 66kV network. Emerald Zone Substation, and the entire underlying distribution network, may experience undervoltage issues in the event of a 10% PoE load (system normal) from summer 2022/23 and onwards. page 8

Demand (MVA) 1.1.3 Safety Net Compliance Under the revised reliability standards, Ergon Energy is no longer required to provide full N-1 security of supply on the 66kV network that supplies Emerald, i.e. either 66kV feeder alone does not have to have sufficient capability to supply the full peak load at Emerald. Instead, a set of supply restoration targets, known as the Service Safety Net Targets apply. The Safety Net restoration targets specify maximum permissible unsupplied load versus time that has lapsed after a credible contingency has occurred, and as such, define the worst permissible consequence of a system contingency. Under Safety Net, Emerald is classified as a Regional Centre and the following restoration time targets apply for credible contingencies, defined as maximum unserved load: 1. Less than 20 MVA after 1 hour 2. Less than 15 MVA after 6 hours 3. Less than 5 MVA after 12 hours 4. Fully restored within 24 hours Since none of the 66kV feeders alone has sufficient capability to supply the peak load at Emerald, an outage on either 66kV line may result in loss of supply to a portion of the load at Emerald. This potential load shedding is significant for a loss of the Lilyvale Emerald line, due to the comparatively low capability of the Blackwater Emerald line. Actual vs required supply restoration following a contingency on the Lilyvale Emerald line on a peak day is shown in Figure 4 below. A significant section of the Lilyvale line runs through black soil country, remote from any roads. This could present accessibility issues after periods of heavy rainfall, and it is expected it may take as long as 24 hours to return the line to service after a permanent fault. Due to the low capability of the Blackwater line, and limited load transfer/backup supply options available for the 66kV network that supplies Emerald, Ergon Energy would be unable to meet the Service Safety Net Targets. N-1 (max load supplied by Blackwater line) Sheddable Load Transfer to adjacent substations Line Repaired - - - - Load (MVA) 23.2 MVA 0.0 MVA Time 1.0 3.0 hr 24 hr 45 40 35 30 25 20 15 10 5 0 Ergon Safety Net Analysis for: Emerald Load Restoration Timeline for Worst Case Outage - Typical Effort Restoration 0 6 12 18 24 30 36 42 48 54 60 66 72 Timeline (Hours) Load Not Supplied Supplied Minimum Restoration Actual Restoration N-1 Total Demand Safety Net Compliance: NOT COMPLIANT Figure 4 Emerald Safety Net Compliance Lilyvale Feeder Peak Day Contingency To be compliant with the Safety Net, the green dashed line (actual restoration) needs to be at or above the red continuous line (minimum restoration). page 9

4. Technical requirements of solution A suitable replacement to meet EECL s ongoing operational requirements in this system needs to be capable of providing the VAR support characteristics of a minimum of ±10MVAR. EECL seeks this solution to feed in to the Ergon Energy network at 66kV. It is highly desirable that these units have the capability to be expanded up to a total of ±20MVAR, to cater for possible growth and changing voltage constraints beyond 2025. EECL however is also willing to consider other connection arrangements as may be proposed, such as connection at 22kV. Please note however that this is not an exhaustive list and EECL is willing to consider other possible solutions which may be identified as part of this EOI process. 4.1. Stability Requirements EECL has the following stability requirements for any Alternative technology installations: 1. Will not go out of service as a result of inrush currents on Emerald Zone Substation transformers or other substation transformers or devices 2. Will not go out of service if the steady state capacitive or inductive limits are reached. i.e. there is protection put in place such that it will remain operable, without causing damage to itself or adjacent plant and equipment 3. Will not simply trip as a result of reaching Negative Phase Sequence (NPS) limits, but will continue to correct voltage as much as possible at limit levels 4. Will not trip as a result of dips or transients in the network. It will instead look to minimise the impacts of these dips or transients as much as possible 5. Will remain operable if High or Low voltages are seen and look to correct and stabilise these voltages as much as possible. 4.2. Negative Phase Sequence Capability The proposed network solution has negative phase sequence capability in order to maintain voltage balance. The alternative solution must also have NPS capability. This capability must maintain and correct voltage balance across the Emerald network such that EECL meets the voltage unbalance requirements detailed in S5.1a.7 of the National Electricity Rules. 4.3. Harmonics The alternative solution must not cause harmonic problems on EECL s network. It is expected that the alternative solution will meet the automatic access standard detail in S5.3.8 of the National Electricity Rules. Harmonic Voltages at the connection point(s) must not exceed the levels determined in accordance with AS/NZS 61000.3.6.2001. 4.4. Audio Frequency Load Control The alternative solution replacement and associated equipment must not cause attenuation or excessive magnification of the Audio Frequency Load Control signal. It is recommended that when impedance details of any proposed solution are known studies are completed to ensure no problems are introduced. page 10

4.5. Reactive System Sizing The alternative solution shall have a minimum VAR capability of ±10MVAR or equivalent and should ideally be able to be expanded a total of ±20MVAR or equivalent pending possible load or generation growth. It also needs to be noted that this VAR requirement may vary depending on the proposal. For example, a larger Solar Farm may require additional inductive support to maximise real power export, whilst maintaining suitable voltage levels. Any alternative solution must provide EECL with the capability and flexibility to manage 66kV voltage at Emerald. This may mean EECL will require direct control or some agreed level of control over the alternative solution, such that it integrates with EECL s network requirements. 5. Possible Solutions EECL has identified a number of Alternative Solutions which may be possible for the reactive compensation installation. As mentioned, this not an exhaustive list and EECL is willing to consider other possible solutions which may be identified as part of this EOI process. Other combinations including other generation technologies, solar coupled with batteries and or storage may also be possible. It is thought solar would be particularly appropriate as a Renewable Generation option. It is also important to note that the size of any renewable energy farm may also impact the amount of VAR compensation that may be required. It is a requirement of any proposed solution that the capacitive support would be available 24 hours per day, 7 days per week (with negotiated maintenance outages). 5.1. Renewable Generation Farm It may be possible to construct a Renewable Generation Farm and use the inverters for the farm (if suitably specified) to provide reactive support. Please see Figure 5. It would be an essential EECL requirement that EECL effectively has control over the reactive compensation component. page 11

Renewable Energy Farm Inverters Used for Compensation ~ = ~ = ~ = ~ = ~ = ~ = Blackwater Feeder Lilyvale Feeder 66kV 22kV Existing capacitor Existing capacitor Existing Emerald Substation Figure 5: Renewable Generation Farm with inverters used for VAR compensation Please note: the 66kV connection is indicative only, and will be determined depending on the particulars of the proposed solution. It is essential that the reactive support could be maintained in case of an outage of the Lilyvale-Emerald 66kV feeder. 5.2. Summary The alternative supply of MVARs for network support is a new concept for EECL. EECL will continue to develop an appropriate standard and ensure any supplier can meet the performance metrics required for network stability. Network performance will be at risk if the alternative solution is not delivered in time or not able to provide the necessary support hence the network replacement solution investigation will occur in parallel. It is possible that the load may grow more quickly than predicted bringing forward the replacement requirement. page 12

6. Further information 6.1. Information a provider is to include in an alternative solution proposal EECL has provided below a nominal list of the data that should be considered for inclusion in the proposal. The intent of this list is to provide guidance to facilitate information exchange, and to provide a more efficient process for all parties involved in developing such a proposal. The list is not intended to replace or supersede any requirement published in the expression of interest (EOI). Rather, the intent is to provide advance indications of the types of information that EECL would need in the assessment of options. 1. Proponent name and contact details. 2. A detailed description of the proposal, and a brief explanation of the relevance of the proposal in relation to the need for investment in the distribution network. 3. Operational parameters including; - capacity in MW s, MVA or MVAR s of network support to be provided and number of units, if generation. - availability of the alternative resource and any restriction on network support capacity or output at any times of the year, - availability and reliability performance benchmarks, 4. Proposed operational and contractual arrangements that the proponent would be prepared to enter into with EECL. 5. Any special conditions to be included in a contract with EECL. 6. Network interface requirements. 7. The economic life of the proposal. 8. Network interface requirements. 6.2. Criteria that will be applied in evaluating proposals The preferred option is the credible option that maximises the net economic benefit to all those who produce, consume and transport electricity in the NEM, compared to all other credible options. The net economic benefit takes into account the market benefits versus the economic costs of each option. A credible option is a project, or set of projects, established to meet the identified need. EECL is willing to consider a variety of possible financial, ownership and operational models. EECL reserves the right to select the final model at its own discretion. In assessing each credible option that has been identified to satisfy the need, the following broad criteria are taken into account during the option assessment stage, page 13

addresses the identified need commercially feasible technically feasible and possible provision of other technical performance advantages. life cycle cost including ongoing maintenance and operational requirements suitability. This includes the suppliers ability to deliver, ability to maintain the system, and financial suitability. It also includes the technical capability and economic value when compared to other options. An option is commercially and technically feasible where its estimated costs are comparable to (or less than) other credible options that address the identified need. page 14