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PARSONS BRINCKERHOFF ASSOCIATES REVIEW OF VOLTAGE CONVERSION FACTORS TO DEVELOP MVAKM OUTPUT TERM FOR TOTAL PRODUCTIVITY ANALYSIS Prepared for COMMERCE COMMISSION 10 November 2003 PB Associates TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors TABLE OF CONTENTS SECTIONS 1. BACKGROUND.............................................................................................................. 1 2. INTRODUCTION............................................................................................................. 2 2.1 VOLTAGE/CURRENT LIMITATIONS.................................................................... 2 2.2 CABLES................................................................................................................. 2 2.3 OVERHEAD LINES ............................................................................................... 2 2.4 SELECTION OF CONDUCTORS.......................................................................... 3 3. THE REQUIREMENT FOR A CONVERSION FACTOR ................................................ 4 4. DEVELOPING THE CONVERSION FACTORS............................................................. 5 5. APPROACH ADOPTED ................................................................................................. 7 5.1 LOW VOLTAGE..................................................................................................... 8 5.2 11KV CIRCUITS .................................................................................................... 9 5.3 SINGLE WIRE EARTH RETURN (SWER) SYSTEMS........................................ 10 5.4 22KV CIRCUITS .................................................................................................. 10 5.5 33KV CIRCUITS .................................................................................................. 11 5.6 66KV AND 110KV CIRCUITS.............................................................................. 11 6. SUMMARY OF RESULTS............................................................................................ 12 7. CONCLUSIONS............................................................................................................ 13 APPENDICES: Appendix A: Calculation Sheet from Benchmark Paper DISCLAIMER This report has been provided to the Commerce Commission on the understanding that it will become a public document. Parsons Brinckerhoff Associates Limited makes no representation or warranty as to the accuracy or completeness of the information or opinions set out in this report to any persons or any organisation (other than the Commerce Commission), including any errors or omissions therein, however caused. iManage_314464_1 November 2003 PB Associates 1. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors BACKGROUND As part of its work to reset the price path threshold applying to electricity lines business, the Commerce Commission has engaged external advisers, (Meyrick and Associates) to undertake an analysis of lines business performance. In undertaking a total factor productivity analysis of the industry, Meyrick has utilised a set of voltage conversion factors to derive an MVA.km output term. The approach used to derive the conversion factors is documented in Meyrick's paper, Supplementary Information (14 October 2003), and the use of the factors is described on p 45 of Meyrick's main report for the Commission, Resetting the Price Path Threshold - Comparative Option (3 September 2003). Some submissions from interested parties on Meyrick's report have questioned whether: • the conversion factors used are applicable to NZ conditions, • whether it is appropriate to use the same factor for 11kV, 22kV and 33kV, and • whether using average values sufficiently accounts for differing operating conditions (e.g. urban vs. rural). A key submission in this regard is provided by Benchmark Economics (refer pp 10-11, and Appendix B), on behalf of Powerco Ltd. The report is entitled “Submission to New Zealand Commerce Commission – Regulation of Electricity Lines Businesses Targeted Control Regime Draft Decisions” 20th October 2003. A supplementary commentary on the Benchmark Economics submission on this matter has been prepared by Meyrick entitled “MVAkm Issue Raised in Submission” dated 28th October 2003. PB Associates was engaged by the Commission to: 1. review the appropriateness of the assumptions and calculations used to derive the factors given NZ conditions; 2. recommend appropriate average factors for NZ lines businesses at each of the five voltage levels (0.4kV, 11kV, 33kV, 66kV, and 110kV), and for other voltage levels if these are considered to be significant, recognising that the factors are only applied to line length information that is readily available from information disclosure data; 3. provide estimates of the relevant bounds on these factors for a reasonable range of operating conditions and environments; and 4. document all assumptions used in the analysis. Exclusion: The advice in this paper is restricted to the above scope of work, it does not imply that PB Associates has any position on the validity of any analysis undertaken using the Total Factor Productivity approach, or the use of any form of conversion factors. iManage_314464_1 November 2003 1 PB Associates 2. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors INTRODUCTION From the viewpoint of undertaking economic analysis it is desirable to keep range of conversion factors to a minimum. However, as for many countries, New Zealand power industry has adopted a wide variety of approaches to design of their networks to suit local conditions and requirements, and this affect the appropriateness of factors developed elsewhere. the the the will There were at one time over 80 different organisations responsible for the local distribution (including sub-transmission where necessary) of electricity and due to the long lives of distribution assets the effects of local decisions still remain. 2.1 VOLTAGE/CURRENT LIMITATIONS Circuits can be limited either by the current flowing in them or by the voltage drop associated with the current flow. For circuits operating at the normal supply voltage (230/400 volts, usually referred to as Low Voltage Distribution) in a residential area it is common for the limiting factor to be the voltage drop along the line, however in industrial areas there are often cases where the current will be the limiting factor. At 11kV (and the residual 6.6kV areas), the split tends to be between urban and rural feeders with rural ones being limited by Voltage drop and Urban by current flow. (See also notes on Security below). This also applies to the locations where 22kV is being used as a distribution voltage (as opposed to subtransmission) –e.g. Counties Power. At sub-transmission levels of voltage, (22kV 33kV, 66kV 110kV), the split tends ain to be on an Urban/Rural basis, however this is affected by both the security and the topography issues noted below. 2.2 CABLES The current limitations on cables are set by the maximum temperature at which they can operate; this temperature limit normally reflects the capabilities of the insulation material. 2.3 OVERHEAD LINES The limits on maximum current flow are usually set by the maximum allowable sag in a span such that it still meets minimum ground clearance requirements. iManage_314464_1 November 2003 2 PB Associates 2.4 TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors SELECTION OF CONDUCTORS There are a number of factors that will affect the selection of a particular cable or overhead line conductor including the following: • the planned peak load the circuit is to supply • The topography of the network • Security of supply (alternative supply options) • Standardisation on sizes (minimising cost of stock) • Physical conditions (i.e. span lengths and possible pole locations for lines, soil conditions for cables) • World metal prices (and to a lesser extent alternative insulant prices) • Use of voltage regulators / tap-changers • Consideration of Losses • Import restrictions These often inter-relate with each other and thus over the years there have been many optimum solutions to provide the required electrical supply at minimum cost. iManage_314464_1 November 2003 3 PB Associates 3. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors THE REQUIREMENT FOR A CONVERSION FACTOR The basic principle put forward in the Meyrick report relates to the proposal to adopt the Total Factor Productivity (TFP) index method to calculate the productivity performance of Transmission and Distribution organisations. The desire is to develop some (simple) method of calculating the “capacity” of the system to reflect the lines and cables installed rather than by simply using the peak demand (which is not controlled by the lines owner). Simply adding the lengths of the lines operating at various voltages will not give a sufficiently indicative figure, as the capacity of the lines is voltage dependent. Ideally if the data were available every individual circuit could be converted using the design loading it was installed to supply, however this would be a major task as there have been many conductors used in the past. For example, Orion noted that some 17 different 11kV cable sizes are covered by the ODV Handbook classification of “11kV U/G Medium” and similar numbers can also be found for the other classifications of lines and cables. Thus the requirement has been to find a suitable conversion factor for each circuit voltage commonly in use, to develop an indicator of the total “output” capacity of the network. iManage_314464_1 November 2003 4 PB Associates 4. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors DEVELOPING THE CONVERSION FACTORS As stated in the Meyrick “Supplementary Paper” “…the conversion factors are effectively the typical line ratings in MVA”. Thus for an 11kV line, designed to carry 5MVA for 10kms the line can be said to have an “output” of 5*10 = 50MVAkms. A 5km length of 110kV line designed to carry 50MVA will therefore have an “output” of 250MVAkms. Thus by applying an appropriate factor to the length of lines at each voltage and then summing the resultant MVAkms it is possible to produce a “total output” indicator for a multivoltage network. The factors quoted in the Meyrick main report were taken from a Tasman Asia Pacific report prepared for the Queensland Competition Authority in 2000 on benchmarking Australian Electricity Distributors. The Tasman Asia Pacific Report simply quotes the conversion factors, no calculations are included or any other method provided to show how they were developed. Thus we have not been able to establish how the factors were developed and what assumptions have been made. The factors proposed are: Table 1 Meyrick proposals Line Type Conversion factor - MVAkm Low voltage (400/230 volts) 0.6 (later revised to 0.25) High Voltage (11kV, 22kV, 33kV) 14 SWER 4.6 66kV 35 110 (and 132kV) 100 The submission by Benchmark Economics suggests the factors above are not wholly accurate, particularly identifying that a single factor for all high voltage lines irrespective of voltage (11kV, 22kV and 33kV) is not appropriate and proposing the following table as being appropriate: - iManage_314464_1 November 2003 5 PB Associates Table 2 TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors Benchmark submissions Line Type Conversion factor - MVAkm Low voltage (400/230 volts) 0.6 High Voltage 11kV 17 High Voltage 22kV 34 High Voltage 33kV 51 SWER Not identified 66kV 103 110kV 171 In support of their proposals Benchmark include a table of calculations (included as appendix A), however it has not proved possible to develop their factors (The line BME – Voltage Based Conversion factor in the calculations, repeated in the table above), from the data in the table. Meyrick has attempted to discuss this issue directly with them, but unfortunately the author is unwell. To calculate each of the figures quoted in their table, a load current of 900Amps would appear to be implied, which does not appear reasonable for normal distribution practice, particularly for New Zealand Conditions. For New Zealand conditions it is not considered adequate to have a single conversion factor for 11kV, 22kV and 33kV line as this will distort the position of companies which have significant number of connections with Transpower at 11kV as the proposed average value for 11/22/33kV of 14 MVAkm is at least double the actual capacity of their 11kV lines. iManage_314464_1 November 2003 6 PB Associates 5. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors APPROACH ADOPTED In their “Supplementary” paper Meyrick took an approach of considering typical cable and line ratings to identify the likely combinations of voltage and current capacities, producing the following table: Table 3 Meyrick Supplementary Paper In each case the conversion factor proposed in Table 1 lies between the extremes of possible loads for a given voltage band. As noted there are numerous variations on cable and line designs that have been used in New Zealand and these will usually have significantly different values for Urban and Rural location. To provide an initial test on the validity of the proposed figures in New Zealand it was decided to consider some typical arrangements to identify the likely order of a conversion factor. It is difficult to decide just what a “typical” installation would consist of in view of the factors noted previously, however the following discussions for each voltage level are presented as being “representative” of most New Zealand areas. To develop a more accurate set of factors it would be appropriate to consider including a Disclosure requirement to provide the average design capacity of each voltage of circuits split into Urban and Rural classes. This will then enable average New Zealand values to be developed. iManage_314464_1 November 2003 7 PB Associates 5.1 TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors LOW VOLTAGE At this voltage, the load on typical circuits is such that the allowable voltage drop in the circuit restricts the length of the circuit to less than 1000 metres. Thus to calculate an MVAkm conversion factor per km of circuit, it is necessary to resolve how many shorter circuits are involved and what their loads are. The design of underground cabling for urban subdivisions has been the subject of extensive investigation and debate for many years. Typically there has been two approaches; • Adopting a smaller number of larger distribution transformers (say 300kVA or 500kVA) and installing larger sized cables to distribute the load • Adopting a larger number of smaller transformers (say 50kVA to 150kVA) and installing smaller cables to distribute the load The most economical solution will depend on a variety of factors including the load density (load per dwelling, lot size), and the High Voltage network design including the switchgear arrangements chosen. For the first case a past practice was to use 95mm2 copper conductor neutral screen cable with a rating of around 300 Amps. The conductors were not necessarily designed to run at full load purely from the properties supplied, some provision would be made to allow for current to be drawn from an adjacent substation if the normal source was out of service. For design purposes it has been taken that the peak current normally supplied would be 75% of the maximum, say 225 amps. The allowable volt drop between the source transformer and any property connection is required to be within the range of + 5 or – 5% of the nominal voltage. This 10% range had to cover all the voltage effects and thus part of the volt drop would be allowed for the High voltage system up to the transformer, part for the transformer itself and part for the actual voltage drop in the LV cable. Whilst the split could vary it has been typical practice to allow for a 5% volt drop in the LV cable. 95mm2 Copper cable has a voltage drop of 0.443 mV per amp-meter for a balanced 3 phase load, thus for a 5% Volt Drop (20 volts between phases on an 400 volt system), carrying 225 amps, the cable could be approximately 180 metres long. However, for such a cable the actual load is reducing as it passes each connection point – the load is “distributed” along the cable length. Thus volt drop reduces for each section as it passes each connection point, which results in the theoretical length of cable that could remain within the voltage drop criteria for the last connection point being twice the length calculated for a point load at the end of the cable. Conversely, the basic calculation assumes a perfectly balanced load on each of the three phases, if this is not the case then the Volt Drop will increase. Considering both of the effects it would be typical to allow for around 250 – 300 metres for the circuit length from the source transformer to the furthest customer connection. iManage_314464_1 November 2003 8 PB Associates TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors Taking the peak current of 225 amps gives a load transfer of 1.732*400*225, i.e. 0.156MVA for say 300 metres. Thus 1000 metres of this LV cable (3+ circuits) will carry about 0.5 MVA A similar exercise can be carried out for the smaller transformer and cables option. A typical cable would be 50mm2 Ali single core PVC insulated (Kutu) rated at approximately 200 amps, operated to 150 amps, volt drop 1.4mV/Am. Following the same process gives the result that 1000 metres of this cable would carry about 0.6 MVA. (split into 6+ circuits). For typical urban overhead lines similar results are obtained for typical conductors. For rural situations the arrangements can be quite different. In many cases a small transformer will supply a single property with minimal (Line Company owned) LV lines. The conductor size is likely to be dictated by minimum physical strength requirements. Based on a single supply the load per transfer could be around 0.3MVA per 1000 metres (split into numerous circuits). One fairly common arrangement is where a small three-phase transformer (say 30kVA) supplies a few rural properties (say 6), relatively close to each other. A typical overhead conductor could be 30mm2 Ali (Poko). Whilst this could have a current carrying capacity of around 200 amps, based on a demand of 60amps (single phase) per property, power could be distributed within allowable volt drop limits for a distance of around 80 to 100 metres. This is equivalent to 0.04MVA, which would give a load transfer of 0.4 MVA per 1000 metres of line (10 circuits). Based on the above a conversion factor of around 0.4MVA per km would appear to be of the appropriate order. 5.2 11KV CIRCUITS1 Unlike the LV situation discussed above, the effect of voltage drop is such that it is very unlikely for typical situations that a circuit length would be restricted to under 1000m, thus the conversion factor simply reflects the typical loads on 11kV circuits. The issue of voltage drop is reviewed below. For many years the typical rating of an 11kV circuit breaker, controlling a feeder, was 400 amps, although some 630 amp equipment has also been available. At 11kV, 400 amps is approximately 7.5MVA. A typical cable size to match the breaker rating would be 300mm2 Ali XPLE insulated cable. To meet requirements for “back-stopping” (i.e. provision of alternative supplies during maintenance or for fault restoration) the normal load would typically be restricted to 66% of the maximum possible, i.e. approximately 5.0MVA. The allowable voltage drop in the feeder will depend on the overall design approach taken of allocating the total voltage drop, however if a 2% figure is used in an urban area with the load distributed along the length of the feeder the 1 6.6kV circuits have not been separately considered as this voltage is no longer a preferred one and its use is limited and declining. Switchgear and cables are normally rated for 11kV operation and thus if a specific factor is required at 6.6kV the 11kV factors can be multiplied by 0.6. iManage_314464_1 November 2003 9 PB Associates TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors feeder can be up to 5 or 6 km long. As urban feeders are typically of such length or less, every km of cable can carry the set load. Thus the load per 1000m is 5MVA. Even for the larger (630 amp) circuit breaker configuration the load per km is only 8MVA. For rural feeders the volt drop will restrict the level of load that can be transmitted through a given conductor size, with the effect of impedance becoming more critical. Thus the load per km may well be less than that calculated for the urban situations above. Rural loads of 1 to 2 MVA per feeder could be considered typical, with the conductors sized to suit the voltage drop often having nominal current ratings well above the actual load ratings. Circuits in excess of 50km in length are not uncommon in these locations. Based on the above a conversion factor of say 4MVA per km would appear to be of the appropriate order for 11kV circuits. 5.3 SINGLE WIRE EARTH RETURN (SWER) SYSTEMS In New Zealand the operation of such systems conforms to New Zealand Electricity Code of Practice (ECP) 41 – Single Wire Earth Return Systems. This limits the maximum flow of current in the wire to 8 Amps, which at a voltage between the single wire and earth of 6.35kV is 50kVA. It should be noted that this is the maximum load per line irrespective of its length. Such lines are used in very low load density areas, the traditional rule of thumb being two customers per mile (1.6km) of line. In this case it would clearly be incorrect to use a factor per km, a factor per installed SWER line is appropriate. Based on the above a conversion factor of 0.05MVA per installed SWER line would appear to be of the appropriate order. 5.4 22KV CIRCUITS This voltage was traditionally used as a sub-transmission voltage with ratings chosen to match the step down transformers they supplied. As these transformers usually had tap-changers fitted to compensate for voltage drop the “allowable” voltage drop does not form part of the voltage drop allowance discussed in the above sections. Load sizes in urban areas could see circuit ratings of up to say 20MVA although 10 to 15 MVA would be more typical. In rural areas the load supplied could be as low as a few MVA, (say 2 – 3 MVA), even though the conductor size could have a much higher nominal current rating. More recently some Line Companies (notably Counties Power), have established that it is more economic to re-build their (long) 11kV rural feeders to operate at 22kV due to the growing load causing voltage drop problems. Again, because the design is voltage drop limited, the actual loads will be low compared with the nominal current ratings of the conductors. Loads of 3 to 4 MVA would be representative. Based on the above a conversion factor of say 8MVA would be of the appropriate order on average, although a rural/urban split could be more desirable. iManage_314464_1 November 2003 10 PB Associates 5.5 TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors 33KV CIRCUITS This voltage is used as a sub-transmission voltage with circuits designed to match the zone substation transformer capacities they are designed to supply allowing for alternative supply arrangements requirements to meet security standards. For urban areas circuits rated at over 30 MVA may be used, for rural areas it may be necessary to use 33kV to supply quite small loads of 2 to 3 MVA (as for 22kV), due to the long distances involved. A conversion factor of around 15 MVA would appear to be of the appropriate order, again, as for 22kV an urban and a rural factor could be desirable. 5.6 66KV AND 110KV CIRCUITS There are relatively fewer circuits at these voltages operating in New Zealand and they have been designed to suit specific requirements at the time of their installation. 66kV is understood to apply to line companies in the South Island (particularly Orion) and 110kV primarily in the North Island (particularly Vector). Vector’s stated circuit ratings vary from 20MVA through 40, 50 and 60 MVA to 150MVA at 110kV and are urban or industrial supplies. Orion’s 66kV circuits presently are mainly urban rated at approximately 40MVA although there are two smaller rural supplies rated at around 8MVA. Orion has identified that it is more economic to reinforce the rural area at 66kV, thus further smaller circuits can be expected. Based on the above a suitable conversion factor for 66kV would appear to be of the order of 35MVAkm and for 110kV around 80MVAkm. However, as each company should have accurate records of its installations at these voltages and there are relatively few of them, it would be more appropriate to use the actual circuit ratings and lengths in this case. iManage_314464_1 November 2003 11 PB Associates 6. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors SUMMARY OF RESULTS The following table provides a comparison between the Meyrick and Benchmark figures with those developed in this paper. Installation Voltage (kV) MEYRICK Benchmark Low Voltage 0.4 Old 0.6 New 0.25 This Paper 0.6 0.4 High Voltage 11 14 17 4 High Voltage 22 14 34 8 High Voltage 33 14 51 15 Subtransmission 66 35 103 35 Subtransmission 110 100 171 80 SWER Lines 6.35 4.6 - 0.05 (per line) Considering each voltage in turn we believe that a value of 0.4MVAkm would be appropriate for Low Voltage, this lies between the original Meyrick value and the later lower one. It is likely that the difference reflects the need for there to be several separate circuits at low voltage to make up a total length of 1km. Meyrick provided one factor to cover 11kV, 22kV and 33kV of 14MVAkm. This has been separated in this consideration with values of 4, 8, and 15 respectively being proposed. The 11kV value of 4 lies between the low loads on rural feeders, restricted by voltage drop, and the typical maximum load of 7.5 MVA that a 400Amp circuit breaker would allow. For 22kV there is a need to balance traditional sub-transmission usage of this voltage with the emerging use of it in rural distribution to resolve low voltage issues on existing 11kV lines, the factor proposed of 8 reflects the urban – rural split. For 33kV the value chosen again reflects the balance between urban and rural levels of load supplied at this voltage. The values suggested at 66kV and 110kV reflect New Zealand installations, however they cover a wide range of actual values and as there are only a small number of such circuits it is suggested that individual factors be used to reflect the actual installations in these cases. SWER lines have been based on the actual allowed size of line current and should be on a per circuit basis. iManage_314464_1 November 2003 12 PB Associates 7. TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors CONCLUSIONS There is a wide variety of Line Companies in New Zealand with differing supply arrangements from Transpower. It is therefore considered appropriate to develop a conversion factor for each of the standard voltages in use. The investigation recorded above indicates that the likely values for use in New Zealand differ from those developed in Australia, noting that it has not been possible to establish how the Australian values were originally decided upon. It is suggested that the Disclosure requirements be modified to include providing data on the average design capacities of lines at each voltage split into Urban and Rural classifications and these values are then used to develop New Zealand average values. The values calculated in this paper should be expected to be indicative of the values derived by this survey. As requested we have reviewed the appropriateness of the assumptions and calculations used to derive the factors given NZ conditions. From this review we have identified the expected order of average factors for NZ lines businesses at each of the five voltage levels (0.4kV, 11kV, 33kV, 66kV, and 110kV), and for SWER connections. The likely order of factors developed in this paper, together with the reasonable bounds for each one are as follows: Installation Voltage (kV) Low Voltage 0.4 0.4 0.6 0.3 High Voltage 11 4 8 1 High Voltage 22 8 20 2 High Voltage 33 15 30 2 Subtransmission 66 35 50 8 Subtransmission 110 80 150 20 6.35kV 0.05 (per line) - - SWER Lines This Paper High Value Low Value For both 66kV and 110kV it is suggested that as there are only a small number of such circuits they could be individually converted using their actual ratings. All assumptions used in this analysis are noted in the relevant discussion sections. iManage_314464_1 November 2003 13 PB Associates TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors APPENDIX A Calculation Sheet from Benchmark Paper iManage_314464_1 November 2003 14 PB Associates TOTAL PRODUCTIVITY ANALYSIS Voltage Conversion Factors Extract from Benchmark Economics paper on behalf of Powerco: - iManage_314464_1 November 2003 15