You're listening to Redefining Energy. Your co hosts from Berlin, Gerard Raid and
from London Lawrence segalem Today on Redefining Energy, we're going to talk about the
future of the grid, the biggest machine, Laurent the manners our Milt.
But first a world from our partner. Equina Capital is a sustainable investment company
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Yes, job degree is absolutely amazing. Is the boodline of the economy with
all the connection issues, with all the changes happening in the generation, in
the consumption. Now it's on everybody's radar. And of course there are the
three main challengers, which are decabanization, decentralization, digitization. It's not the
seple does because the primary objective of the grid is related so any change.
And I like this image a lot. It's trying to change the engine of
a plane while it's flying. Yeah, and it's not easy. And I'll
tell you what struck me about it. Luran actually was National Grid has been
forced to innovate on a daily basis just to keep the grid up. But
at the same time they must have a zero error tolerance because if that grids
goes down, not only does Finton lose his job, but guess what happens
is those politicians lose their job as well. That's really really interesting. So
it's great that you introduced Finton Sly. He is the director of UK National
Grid ESO SO Electricity System Operator, so in fact it's the doctor of the
grid. Prior he was a CEO of Air Great Groups, so it's the
electric system and market the borodoy in Ireland. Oh yeah, yeah, and
he's at the cutting edge because look at the end of the day. Firstly
it was in Ireland where you've got lots of wind and it's not interconnect it
into any other system across Europe. And now he's gone to the Big Island.
He's gone to Britain and they have a similar issue, which is and
actually you know we saw on Q one that for the first time ever wind
generated more electricity than gas in the UK. I mean that's the stress he
has to deal with all the time. Right, exciting job and important.
Let's bring him in the conversation. Vinton, Welcome to the show thank you
here. Well, Finton, maybe let me just kick off by sort of
asking a little bit about what a grid operator actually does. I mean,
what do you do on a daily basis to make sure that we get twenty
four seven power? Great operators are really at the heart of ensuring that the
Twisty system is managing a safe, secure and reliable way. So on a
day to day basis, part of the job is we have a control room
that runs twenty four to seven that literally, second by second ensures that supply
and demand are balanced. In order to ensure that that work in real time,
you obviously have a huge amount of processes in advance of that leading up
making sure that all of the outages across the system are planned, all the
maintenance that's needed as planned. And in addition to that, we're running a
market as well, because this is a competitive market, so that we're buying
services that we need in order to keep the system stable and secure. But
I think increasingly there's a role for grid operators in working with industry, policy
makers, governments and regulators around the energy transition because that is the challenge of
a generation in order to transform our energy systems and requires huge transformation of all
aspects of the valued chain across electricity, and because the grid operators are at
the center of that, there's a huge amount of work that we do therefore
looking at how we can do that safely and securely, and we need to
ensure that energy the lifability of the economy continues to flow minute by minute,
second by second. At the same time we need to transform it into more
sustainable and rely on sustainable sources of energy for the long term. As you
laid down very clearly, you need to work twenty four seven while transforming it.
And of course the big transformation and everybody's talking about the three ds decentralization,
so you get more and more sources, decarbonization which means more honable,
more termittancy, and digitization, which is behind each electrons thic there is a
set of data. So how broadly do you manage those three ds? In
order to manage those three I think that the solutions to some extent are mutually
reinforcing in that as we think about decarbonization of energy sources, we need more
diverse sources of energy on the system, and therefore that decentralization of energy sources,
and I think in the UK, what you lend up with is emits,
you lend up with a lot more decentralized, smaller disaggregated resources. But
we're also seeing the build out of large scale offshore winds, for example.
So the energy system in the UK in particular, in the future is going
to be a hybrid between that sort of large scale decentralized system and centralized generation
provided by things like large nuclear power plants or offshow winds. And then digitalization
is the thing that's driving huge amounts of innovation. It's the bit that allows
us to control and manage all of this in real time. Those three trends
are actually mutually reinforcing, I think, and enabling us to manage the system
and manage that transformation that we need to happen over time. Vinton I often
say to people that if you want to look at the future of the energy
system, you have to look at island nations, and otherwise you have to
look at the UK, you have to look at Ireland. And the reason
I say that is because it seems to me that it's just much more difficult
for a small island to keep things balanced than it is like being in the
middle of a continent. Am I wrong when I say that? Or how
do you see it? Electricity systems have their unique challenges, but in particular
with reference to sort of islanded systems, in particular where they're not connected by
AC power lines to other systems, then the challenges around system stability and frequency
management are much more acute because they don't have those sort of big, large
scale power systems to rely on. What you see in the UK, you
see it as well in Ireland, is that those challenges around stability, frequency
management, inertia are much more acute, and therefore some of the initiatives that
we're deploying are sort of ahead of what you would see in other parts of
the world. I mean, Australia is another good place to look for some
innovation as well. In terms of island nation you talk about innovation, can
you give a few examples of what those innovations are. One of the key
challenges that we're looking at in the UK is the declining levels of inertia on
the system over time, and therefore we've done two in a bit of things.
One is to create a market and procure inertia as they standalone service.
So traditionally on power systems. Inertia has been provided as a byproduct of large
scale synchronous machines just being on the system and providing energy. But as those
large scales synchronous machines come off the system and are replaced by wind and solar,
etc. At the inertia levels drop. So we have contracted for inertia
to be provided as a service onto the system and then that will allow us
to manage the system with less carbon emitting fosil fuel fire generation because we can
get inertia from other sources and that is ahead of what's being done elsewhere in
the world. And the other piece on inertia is that we have two systems
deployed now that actually monitor real time inertia on the system and provide that into
the control room, so that the control room engineers in real time on a
minute by minute basis, know what levels of inertia on the system, what
that means for stability, and what they need to do in order to manage
it. So both of those two things have enabled us to increase the level
of renewables on the system and push down ultimately the carbon intensity of electricity generation
on the system. Vinton. How is that inertia actually provided we have a
range of technologies coming on to it. So you're seeing is some flywheels,
some synchronous compensators. You're looking at some invert based resources as well with good
forming of vertica. So a range of technologies, and what we try to
do is avoid specifying the technology and just specified the service that we want ultimately
and therefore allowing various different companies and we have multiple participants bidding into those markets.
So initially we've got out with sort of multi year contracts because this is
a new thing and we know that people are going to have to invest capital
in order to provide it. So we sort of multi year contracts for the
provision of inertia and try to allow people to innovate and bring on the most
appropriate technolology over time. We looked at to sort of make those markets more
liquid and more competitive over time. If I look at the geography of the
UK, somehow you've get the same issue in Germany. Most of the wind
in the north and most of the consumption in the south. I guess that
create congestion, So how do you manage that? Yeah, it is one
of the really biggestsues in the UK. At the moment, the UK has
really great offshore wind resource, but that is predominantly as you say, in
the North Country, off of Scotland and coming ashore down. And what we
have done two things. One moving the UK to a much more strategic planning
approach for a network infrastructure. So instead of just looking at it on a
sort of large windform by large windfarm basis, we said, okay, UK
wants to get to fifty giggle, what's by twenty thirty and one hundred plus
by twenty fifty. If we stand back and assess, look, what is
the network infrastructure that you need to support that to Does that mean in terms
of an offshore grid? Can we plan that in a much more holistic way.
And we put forward a multi year, multi billion pound plan to basically
build an offshore grid that will deliver on those sort of government policy ambitions and
allow that generation whoever it's generated, and most an awful lot of it at
the moment is coming on the East coast of the UK, but we see
areas such as the Celtic Sea and the RC actually coming on in future years
as well. What we're doing I suppose in a nuts yet it's moving to
a much more strategic approach to how you plan infrastructure. But the really interesting
thing is as you think about a more poll system approach to it, so
not just electricity, not just thinking about the electricities generated or Scottland, how
do I get the electricity to the stud of the Biglan thinking about it from
an energy perspective, and how might that integrate with the emergence of a hydrogen
economy in the UK. And could you, for example, dart the build
out of a hydraene economy with hydroene electalizers in Scotland and north of those constraints
such that you were moving potentially less energies out so you needed less transmission infrastructure.
And of course Scotland has huge oil and gas resources, has been hugely
successful in that and therefore there are potentially infrastructure in Scotland that could be potentially
repurposed around hygiene. That's sort of trying to take a whole system perspective on
this is really important and I think it's one of the reasons why the UK
Government, alongside the Energy Regulator in the UK off general, are moving to
create a future System operator so it will transition what is currently the Electricity System
Operator. So the ESO will through next year actually become a much more whole
system body, so it'll have responsibilities in gas planning and gas markets. The
Electricity Stem Operator will transform into a standalone central body looking across the different energy
vectors and providing that whole system perspective to how should the UK transition towards net
zero and trying to develop those strategic plans in a much more joint up way
since you get a better answer for UKPLC overall. And I like this because
this has taken a systemic view. If I may say, I think all
we've done up to know is decarbonize electricity. But actually if you want to
decarbonize an economy, whether then you have to look at heat and industry and
other stuff and that requires a different view. That is one of the primary
sort of moves behind the transition of the current Electricity System Operator to that sort
of more whole system central body that will have that perspective across those different energy
vectors. So the plan is through next year this organization will be stood up
and it will be separated out of an astrobod PLC, so it'll be a
stand alone organization in public ownership, so owned by government but completely operationally independent
of comment, and having that systematic whole system view across those different energy vectors
that will be really key to the success of the UK and accelerating that transition
towards net zero and twenty fifty. In relation to that twenty fifty vision,
there was this document published by the government recently called powering Up Britain, which
have not read, but I've run some research from keywords and the world interconnect
of appears thirty two times. Let's still interconnected on Sorry, my questions very
long. So interconnector how would you see the value of being interconnected with other
grids the future energy scenarios that we look at. Across all of the scenarios
we look at, we see an increase in interconnection because that does deliver value
as energy systems decarbonize and more renewables build out, not just across the UK,
but in other energy systems as well. That diversity of energy sources but
diverse city of geography will be really important in ensuring the supply and demand balance
across all of the geographies, and therefore interconnection is really really important in that.
The other piece I would say I think is that increasingly we're seeing a
conversation develop around how do you think about our interconnectors in association with offshore wind
farms, in association with potentially offshore hydrogen production, and indeed some of our
European friends are looking at that in the context of energy islands. But how
do you think about interconnection and offshore wind farms and hydrogen production then, and
the how do you think about those together rather than a sort of series of
individual things. And we see all of those things as really really important because
the UK has massive ambition in offshore wind that has massive resource and therefore building
that out, but building it out in a way that potentially uses multipurpose multipoint
interconnect seems like a really really sensible way to do that, and we see
the start of some of those conversations at the moment around multipurpose interconnectors emerging in
the UK. I would expect that as governments continue to talk, and we
saw announcements recently of the UK and several other European countries talking about the North
Seas developing out when resourcing that that it will be done in a much more
coordinated and joint the way between countries as well, So not only having a
joined up off your grid for UK infrastructure, but also looking at how does
that tie in with other jurisdictions and geographies will become increasingly important. I think,
Finton, can I ask you about what I call flexibility, which for
me is the demand that you can move and also maybe even supply that you
can move. And I'm thinking about whether it's hot water storage and people's homes,
or batteries or even evs, how do you integrate this type of stuff
into the future system. Flexibility is absolutely critical if we're going to make this
transformation, Jared, There's been a huge amount of development and progress on the
supply side of that with battery storage, and we see that coming in the
system really really rapidly. So a lot troups of batteries developing with different business
models from energy arbitrage through to load shifting through to provision of system services.
And that's great. We're only at the start of the journey to fully integrate
the demand side flexibility into the system. We've seen some really really positive results
recently. So over last winter we introduced a new demand flexibility service was introduced
really quickly with cooperation of industry, largely in response to the energy crisis that
was facing UK and all of Europe following Putin's of legal invasion of the Ukraine.
That service allowed households to move their demand out of peak period on specific
days where we notified that there was an issue and get rewarded by their suppliers
for doing that, and that was available down at a household level, and
we sort of really really good take up by that and a lot of positive
coverage across the media around that. So we see that as something that we
are going to continue to build on. The product itself will get more defined
as we sort of learned from what we did, and suppliers continue to sort
of engage with their customers around what works for their particular cohorted customers. So
that is incredibly positive. I think it's something that we will build on.
And the other one we're seeing you mentioned evs. We are seeing some of
the supply companies aggregate up evs in a tariff and then bid that into the
market and we're starting to see that come on now as well, and that
has the potential to grow I would think quite significantly. So some of the
suppliers are offering really inno bitive tariffs where customers allow them to move the charging
of their evs in response to price at a wholesale level. On the customer
side they get a lower tariff, and also some places where they're actually aggregating
up then the EV charging and bidding it into the market, which is really
really great to see. People are going to continue to innovate around that space,
and the increasing proliferation of digital technologies into all of this will allow innovative
products to become developed, and that's what's going to really get the demand side
active, is that innovation through digital technologies. There is a myth flowing in
sudden media saying, oh, if all the transportations that actuified the grid's going
to meld it down? Do you want to kill that myth? The bunkit
TVs and the electrification of transport provides a huge opportunity, if done in a
smart way, to actually help with the flexibility and management of the system.
If everyone were to just plug in their EV at six pm and to force
the charge, then you could see demand rise through peak periods. But with
the proliferation of digital technologies smart charging, there is a real opportunity for consumers
to be so for EV drivers to benefit because they will get lower tariffs and
lower energy into their evs, and for the system to benefit because it will
get that increased flexibility. One of the aspects of the energy transition will undoubtedly
be a move to increasingly electrify elements of the energy value chain, So you
will see a move to increased levels of electricity consumption across the economy, in
part because elements of the electricity value chain, as Jared said earlier, are
easier to decarbonize. So we are definitely going to see that and that will
undoubtedly need more infrastructure to be built as we go forward. But set against
that is the ability to deliver some of that additional energy consumption in a much
more flexible way, which actually helps the system. Done properly, this can
be really really helpful as we think ab out that transition to net zero.
Finton, can I also ask you about what the Germans called this dunkel flota,
which is this January day where demand is high because we need heating and
guess what, we don't have the right weather conditions and there's no wind,
that there's no sun. How do we solve that going forward. So the
issue of resource adequacy over the long term, it's something that we're spending a
lot of time analyzing and thinking about because undoubtedly as the energy makes changes and
you get more renewable resources on, you need to think differently about your resource
adequacy and reliability metrics. What is absolutely clear is that the reliability and security
of the energy system has served the UK and European economies really really well to
date, and that we need to make sure that we don't as we engage
in this transition down grade or reduce that overall reliability of the energy system because
it is the lifebuob of the economy and what we defer need to do is
look at what is the overall resource mix, so it's not just wind and
solar, and just in a UK context, you will likely have significant levels
of interconnection with other countries. You will have an element of nuclear, you'll
have an element of hydrogen probably in an element of carbon capture and storage and
all of those bits. What we need to make sure is when you combine
that with the storage that will be in the system, both from sort of
potentially explicit battery storage and or demand flexibility, that you can meet the requirements
for electricity and energy, so you can meet the demands even in the context
of significant number of consecutive days of low wind and sort of dull solar conditions.
So it's a portfolio question, jerred. I suppose right, it's it's
how do you make sure that the portfolio, when taken as a whole,
delivers the required level of reliability? That is the critical question, and I
like question will be okay, So you discuss with your colleagues whether it's PGM
okay, So air cut in Texas Australia, I guess you off. Of
course, are you discussing your problems innovation solutions together? Absolutely. And one
of the really great initiatives that we have been involved in in the last few
years has been the establishment of what's called the Global Power System Transformation and Consortium,
and that was set up by a number of system operators at the start,
which included ourselves Energy Dead in Denmark, EMO in Australia, KLISO in
California, AIRCT in Texas and airgood from Ireland, coming together with a number
of leading research institutions from around the world, Imperial here in the UK and
in the US to do two things. One share among ourselves best practice,
but to also leaveridge those research institutions to enable us to push the boundaries of
technology and what was possible. So those system operators are all at the forefront
of decarbonizing their energy systems, and therefore by coming together with those research institutions,
we can ensure that that research is focused on pushing the boundaries of technology
and pushing the limits of what's possible. So that's the first thing that it
achieved was doing that. But the second thing then is to take the collective
knowledge of those system operators and indeed other ones that we're working with closely around
the Europe and North America and other places, and apply that in countries that
are at an earlier point in their decarbonization journey, So talking to them and
working with them and helping share experience and technology with them so that they can
effectively leap frogd some of the technology and operational problems that we have solved,
and through that make a step change in global decarbonization of energy systems. So
that is one of the really cool things that personally I'm hugely proud of,
and as an organization, we're hugely proud to be part of well Finturn.
It was really great to have this conversation and I think it's fantastic to see
that you're all collaborating together. We understand the direction of travel and it's great
to have some very scious and professional people around the action. Keep up the
great work job. I'm relieved. Why why the ship as a real captain.
Yeah, yeah, he's a good captain. The Brilish Grid is in
good hands with Fenton. It's really thoughtful, like he really knows exactly what's
going on and what needs to be done. And there's a lot of people
just all around the grid complaining all the time. But the way they innovate.
Also, what I found very interesting is the way they collaborate all the
grids together. They share best practice and so on. That's very reassuring.
Well, listen, if you remember the round we went and did a visit
to the National Grid control room like last year. Right. What is amazing
really is you can see that they have a great team. It's not just
Finton, it's a great group of individuals there that are highly committed to what
they're doing. Right. It's like a maestro, you know, Yes,
his orchestra, all the maps of the wires and you see that gigantique fifty
yars, fifty years, fifty years, all the computer, the system,
but of course there's a lot of engineers around it to just make it sure
if we stick to our fifty years. It is one of the most sophisticated
grid management on the planet. And I know that they are looking in new
type of cables, new type of software, and there's these are superpro and
I'm glad we could have him on the show. And actually, what I
think is again, if I look at the UK, they are at the
forefront of renewable integration because they have to do by themselves. It's not like
Germany, which sits in the center of Europe and can push its problems onto
its neighbors. Let's be clear, that's what they can do, right,
because you've got one big system that's interconnected. So if Germany has too much
solar, guess what its neighbors does too, and the neighbor has to deal
with the problem as well as Germany. Well, the UK has to deal
with its own problems straight away. And it's also wind based, so it's
like wow, you know, as well as I do, a big gust
of wind comes up and suddenly you've got more Mega what hours than you expect
and you have to deal with that on a real time basis. So anyone
who wants to look at the future the gridge, you look at the UK,
you look at Hawaii, you look at Ireland, you look at Australia.
Well yeah, that's the end of episode ninety nine and the next episode
is episone one hundred and we have great guests. Can I ask you how
many years we've been doing it now it will be five years? Oh my
god, time flies. You look engler than you did five years ago around,
so it's been good for you. Okay. We thank Aquila Capital for
their continuous support and job. I talk to you in two weeks time for
episode one hundred. Look forward to it. Thank you for listening to Redefining
Energy. Don't forget to rate the show and subscribe on Apple, Podcast,
Spotify, or the platform of your choice.