New Substation Budgeting, Financing And Designing

An active planning process is necessary to develop the business case for creating a substation or making major modifications. Planners, operating and maintenance personnel, asset managers, and design engineers are among the various employees typically involved in considering such issues in substation design as load growth, system stability, system reliability, and system capacity, and their evaluations determine the need for new or improved substation facilities. Customer requirements, such as a new factory, etc., should be considered as well as customer relations and complaints.

New Electrical Substation
New Electrical Substation

In some instances, political factors also influence this process, such as when reliability is a major issue. At this stage, the elements of the surrounding area are defined and assessed, and a required in-service date is established. The planning process produces a basic outline of what is required in what area.


Having established the broad requirements for the new station, such as voltages, capacity, number of feeders, etc. the issue of funding must be addressed. This is typically when real estate investigations of available sites begin, since site size and location can significantly affect the cost of the facility. Preliminary equipment layouts and engineering evaluations are also undertaken at this stage in order to develop ballpark costs, which then have to be evaluated in the corporate budgetary justification system.

Related: Types of Electrical Substation

Preliminary manpower forecasts for all disciplines involved in the engineering and construction of the substation should be undertaken, including identification of the nature and extent of any work that the utility may need to contract out. This budgeting process will involve evaluation of the project in light of corporate priorities and provide a general overview of cost and other resource requirements. Note that this process may be an annual occurrence. Any projects in which monies have yet to be spent are generally reevaluated during every budget cycle.


Once the time has arrived for work to proceed on the project, the process of obtaining funding for the project must be started. Preliminary detailed designs are required in order to develop firm pricing. Coordination between business units is necessary to develop accurate costs and to develop a realistic schedule. This may involve detailed manpower forecasting in many areas. The resource information has to be compiled in the format necessary to be submitted to the corporate capital estimate system, and internal presentations must be conducted to sell the project to all levels of management.

Sometimes it may be necessary to obtain funding to develop the capital estimate. This may be the case when the cost to develop the preliminary designs is beyond normal departmental budgets, or if unfamiliar technology is expected to be implemented. This can also occur on large, complex projects or when a major portion of the work will be contracted. It may also be necessary to obtain early partial funding in cases where expensive, long-lead-time equipment may need to be purchased, such as large power transformers.

Traditional and Innovative Substation Design:

Traditionally, high-voltage substations are engineered based on established layouts and concepts and conservative requirements. This approach can restrict the degree of freedom in introducing new solutions. The most that can be achieved with this approach is the incorporation of new primary and secondary technology in pre-engineered standards.

Related: A Brief History of Electric Power Systems

A more innovative approach is one that takes into account functional requirements such as system and customer requirements and develops alternative design solutions. System requirements include elements of rated voltage, rated frequency, system configuration present and future, connected loads, lines, generation, voltage tolerances (over and under), thermal limits, short-circuit levels, frequency tolerance (over and under), stability limits, critical fault clearing time, system expansion, and interconnection.

Customer requirements include environmental consideration (climatic, noise, aesthetic, spills, right-of-way), space consideration, power quality, reliability, availability, national and international applicable standards, network security, expandability, and maintainability.

Carefully selected design criteria could be developed to reflect the company philosophy. This would enable consideration and incorporation of elements such as life-cycle cost, environmental impact, initial capital investment, etc. into the design process. Design solutions could then be evaluated based on established evaluation criteria that satisfy the company interests and policies.

Source: Electric Power Substations Engineering

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