Phil Sansom – Producer

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Transcript

Giles Whittell: The lush cloud forests of Monteverde… the volcanic peaks of Arenal… the beautiful architecture of San José… this is Costa Rica.

Lucy Yu: But there’s even more to this country than meets the eye. Thanks to its unique geography, forward thinking solutions, and commitment to sustainability, according to its government, Costa Rica’s electricity grid has run on 95 per cent renewable energy since 2017.

With an abundance of free-flowing water, the country is able to generate the majority of its electricity using hydropower. And what hydro can’t cover, Costa Rica complements through wind, geothermal, and solar. 

Giles Whittell: While Costa Rica is not perfect – for example, its transport sector is still heavily dependent on oil – its energy grid could be a model for other countries and municipalities to follow. More than a hundred cities across the world are now mainly powered by renewable energy, and whole countries are following suit. 

Lucy Yu: But Costa Rica has been blessed by nature. Can Great Britain, with over twelve times the population and much higher demand for energy, really follow in its footsteps? And even beyond – to 100 per cent renewable energy?

***

Lucy Yu: Hello and welcome to Inside The Energy Transition – a podcast about the bright future of green energy. I’m Lucy Yu, CEO of Centre for Net Zero…

Giles Whittell: …and I’m Giles Whittell, the editorial lead on climate and sustainability at Tortoise. We’re here to explore the biggest questions, and debunk the most commonplace myths, about the energy transition: one of the defining goals of our time. 

***

Giles Whittell: So Lucy, what’s on the agenda today? What’s today’s myth?

Lucy Yu: Today we’re talking about the idea that you can’t run a country on a hundred percent renewable energy, because things like wind power and solar PV are dependent on the weather. 

And while they might be available some of the time, or perhaps even much of the time, there will always be some periods, maybe some edge cases, in which the weather is not on your side and demand for energy use is particularly high.

Giles Whittell: Good. And how are we going to… what are the main requirements to prove that it’s a myth? 

Lucy Yu: Well, we’re going to welcome three guests today who are going to talk about three separate but related concepts: flexibility, transmission interconnectivity, and storage. 

Giles Whittell: Storage. Yeah. Evening out the supply curve. That’s what it’s about, isn’t it?

Lucy Yu: Yeah. 

Let’s talk about the first of those three important criteria: flexibility. Dr. Nina Klein is here, she’s a senior energy engineer at the UK Department for Business, Energy, and Industrial Strategy. 

Nina, you’re currently on secondment at National Grid ESO modelling the entire GB energy system. Can you first talk to us about the technical challenges of achieving a hundred percent reliance on renewables? 

Nina Klein: Yeah, so it’s definitely a challenge getting the whole way there, but I think it’s fair to say we have made huge progress so far in where we’ve got. But that final mile of really getting to a hundred percent is definitely going to have challenges. 

And I think the key thing is probably that the grid of tomorrow, that is a hundred percent renewable – we won’t be able to run it the same way we run the grid today. And so we are going to need new technologies to come forward and be deployed at scale to both store energy and also shift energy around.

And that’s because we used to shift around supply on the energy system to match demand – so turning up and down fossil fuel power plants – but with a hundred percent renewables, we won’t be able shift supply. When the wind blows the wind blows, and when the sun shines, the sun shines. Until we get a magic weather machine, that’s going to be tricky.

So what we need instead is not so magic, but good and sophisticated technologies to be able to shift demand around. And so that’ll mean maybe shifting when people charge their electric vehicles, when they heat their homes with their heat pumps. Or if we can’t shift that demand, then storing that energy so that we can use it later when we need it. 

And I think we probably also need to think about how we build the supply side out as we do that, to get to a hundred percent renewables, because you could build lots and lots of it and really reinforce the network, or you can kind of do more flexible things and use those technologies I mentioned which will help reduce the cost of that future 100 per cent renewable system. 

Lucy Yu: What does this actually look like in numbers, so what does this look like in Great Britain and in other countries around the world? How much of our generation at the moment is from renewable sources, and what does that actual last quantum actually look like?

Nina Klein: So in the UK, our peak energy supply from wind has been 65 per cent of total total supply. And from solar it’s been 35 per cent. So I think “final mile” is probably a bit of a futuristic… we’re clearly still in the first half-to-three-quarters of the race in some ways.

But I think going from that place where we are now to that final mile is challenging, and requires a lot of coordination, and scale up, and deployment. 

But I think that final mile will probably be the most difficult, because that’s when you really are having to do everything with new technologies, and really aren’t relying on some of those old things to kind of fill in the gaps.

Giles Whittell: You seem to be suggesting that there’s a fundamental choice to make between massive increase in aggregate supply of renewables as one broad strategy, and another one that’s a slightly smaller increase in aggregate supply but being much cleverer with managing demand? Or have I got that wrong – do in fact we have to do both?

Nina Klein: I think the reality is we will need to do both, but I think it’s helpful to characterise them as different to explore the options and to think about what they could be. 

If you assume we’re going to electrify transport and electrify heat, which I think at least to some degree we will… and it looks as though that large-scale electrification of heat and transport will probably increase our demand for electricity by about two times by 2050. And that’s whether we’re smart and flexible about how we use it or not.

And so then the question becomes: okay, we need an increase in generation capacity to produce more of our electricity, and we’re probably going to need bigger cables to push it around to the right places where it’s actually needed. 

But how big you make that supply of generation and how big you make those cables depends on your peak demand. And that’s where smartness and flexibility comes in, because being smart and flexible means you can reduce that peak down and spread it around. 

And so whilst we do need to build out supply and network, we will need to build out much less of it if we can reduce that peak by being flexible and shifting around or storing energy where we can.

Giles Whittell: You want to avoid the Texas scenario, in which renewables get blamed for the lights going off and for bills spiking. So if your plan is to manage it so that you can lower that peak, how do you protect against the risk of inadequate supply when it’s really needed?

Nina Klein: This kind of comes to a point of: how coordinated, and how strategic, and how much forward planning are we going to do for this future energy system. 

As you say, we need to know what demand is going to look like and what that peak is going to be. Hopefully it will be a smart peak cause that would be cheaper for everyone.

I think the analysis shows that between now and 2050, we can save 30-70 billion pounds by being smart and flexible with that peak. So these are big numbers and it is worth it. 

But I think we need to realistically plan and model that peak. And there are lots of people doing really good work on that now, both government, and energy innovators, and academia; and businesses, because they want to know how their future business can go forward. 

So we can plan for that peak. And then we need to have a conversation about: okay, how, and what supply do we want to build out to match that peak?

And I think that requires a lot of coordination and integration across the energy sector, because the people building wind farms aren’t the same people as the people building solar farms, aren’t the same people as the people who own the networks, are not the same people as selling the EVs creating the demand.

And so I think increasing coordination across everyone in the energy sector and the built environment and the transport sector is going to be really important. And I guess that’s where this vision from National Grid ESO of building a virtual energy system can help with some of these issues. 

Because everyone’s building their models, and imagining what their network or their wind farm’s going to look like in 2050. But in order to know what your one should look like, you need to know what the people next to you are doing, and what they’re building, and what we think demand is going to be.

So having tools today that can help us model and visualise the future will mean we can build the right assets now, to make sure we continue to have that incredibly secure and reliable supply that we enjoy here in the UK. 

Lucy Yu: And when it comes to the general public, you talked about this idea of those who are demanding or consuming the energy changing their response, so maybe changing the times that they use energy, or changing the amount of energy, reducing the amount of energy they use. Could you talk a bit about what that will look like on the consumer side? What will that mean in terms of technologies that people might need to own, and what role would they play?

Nina Klein: Yeah, so the idea here is basically: if we can have energy smart appliances – like an electric vehicle, or an electric heat pump, or maybe even your electric washing machine – that is smart and connected and is able to receive signals from the grid, then it can choose when to charge your car, or when to wash your clothes, depending on how much electricity is available on the grid.

And so what might happen is you buy your electric car, you come home, you plug it in, it doesn’t start charging immediately, because at the moment there isn’t lots of wind energy on the grid. It waits.

And maybe you come home and what’s happened is: you loaded your washing machine in the morning and there was loads of solar during the middle of the day, and so by the time you’ve got home, your washing machine knew there was solar, ran your wash during the day, and by the time you’re home, your clothes are washed and they’re all ready. 

Then maybe your electric vehicle, its battery can give electricity to your house while you cook your dinner on your electric stove, for example. That would mean it needs to be connected into your home system. But again, all of this can be automated home technology. 

So you have your dinner and then you go off to bed. And your EV still hasn’t started charging because it doesn’t need to yet, and it knows that overnight actually there’s going to be loads of wind energy. 

And so again, it gets that signal. It knows that overnight is when it should wait to charge. And also your electricity tariff will probably be cheaper then, because there’s so much renewable energy.

And so by the time you wake up in the next morning, your car’s charged, it’s been much cheaper. And all of this has kind of happened automatically and seamlessly in the background, because these signals are being sent by these smart technologies.

It’s kind of important to say, we need to automate as much as possible and make this as easy for people to use as possible. I mean, I’m an energy geek, but even I’m not going to be checking my phone every half an hour to check what the prices are and what the carbon intensity is, and then turning on and off things.

I think the technology’s there to do it, that your devices get all of these signals automatically and can make their own intelligent decisions on your behalf to meet your wishes. 

But I think it is important to say there will be a few small behaviour change things. Like I mentioned, when you come home, you will want to plug in your EV straight away, because then it’s always connected to the grid and if the grid needs it, it can use it, rather than leaving the cable unplugged. 

And you might want to load your washing machine up in the morning so that then in future, at the right moment during the day, the clothes can be washed. So there’s a little bit of behaviour change, but hopefully not too much.

And I think having a bit of behaviour change isn’t the end of the world, because actually at the moment… again, going back to the general public, 70-80 per cent of people are really concerned about climate change. That’s what you get from polling that’s been done. 

And so actually giving people an opportunity to feel like they’re doing their bit and contributing to something positive by using solar to wash their clothes, or using when to charge their car – I think people will be really on board with that and want to be part of the solution. 

Lucy Yu: How do we make sure this behaviour doesn’t just cause a new peak in the system? 

You talked about maybe changing the time we use devices or charge devices to move towards times and maybe ways in which the electricity is cheaper or greener. How do we avoid just creating new sort of spiky peaks in the system? Can automation play a role here?

Nina Klein: That’s a really good question. And I’ll try not to get too technical with the answer, because actually we worked on some really interesting standards that were funded by BEIS, but written by industry.

The mechanism in there that was proposed was: I think you have these kinds of incentives, which encourage people to shift away from the first peak. But as you say, that might cause a second peak.

So then what you also need is a mechanism to be able to send a request signal to say, actually, please turn down now at this moment. And that request needs to be honoured as long as it meets consumers’ wishes. And so there’s a bit of a two tier approach there. And that second tier can help you avoid a second peak and smoothe it over.

Lucy Yu: Whenever we talk about technology we always should keep in mind that there are perhaps people who are digitally excluded in certain ways, who may find it hard to adopt or understand these types of technologies, or even just to afford them in the first place. What does all this mean for equity?

Nina Klein: That’s a really important question, because I think we do have to be really conscious that whenever we’re creating change in a system, it needs to be fair and equitable for everyone.

And that actually comes across really strongly from the evidence. People don’t mind too much what you do as long as they feel that what’s being done is fair. 

And that again comes back to needing to ask people what they want, and convene the public, and ask them – maybe in some form of citizens’ assembly, where you get a representative group of people and ask them what kind of choices they want to make. 

Maybe everyone wants to have their own personal electric vehicle, and they’re willing to give up eating meat in order to have their personal electric vehicle. Or maybe they’d rather have chicken now and again, but get a public bus. And I think those are the kinds of things that are value judgments. 

And the financing, as well, as you say, is really important. At the moment these technologies – in some cases, depending on what market mechanisms are in place – are more expensive. But they aren’t always, and it does depend. 

But I think we all know – and the latest analysis from the Committee on Climate Change shows – that acting now for the UK as a whole saves us money compared to acting later. And so whilst there is an upfront cost with some of these technologies, we know that over time paying the upfront cost is worth it for everyone.

And so I think we need to have a really serious conversation around what financial mechanisms we need to employ in order to help people to get over that first upfront cost, because we know that if we can get everyone over that first upfront cost, it’s cheaper for the whole population in the long run.

Lucy Yu: And what’s the role for business in all of this? We talked a lot about people and households changing their behaviours maybe, but is this something that businesses could do as well?

Nina Klein: Yeah, definitely. And a lot of businesses are doing it today actually, which is almost why I don’t talk about it so much – because it’s already happening, and it’s wonderful.

So I think lots and lots of supermarket chains and hotels have got all of their fridges and freezers and air conditioning units already providing flexible demand and services to the grid. 

So that’s where it’s kind of definitely fair to say: this technology does exist and it’s being done, it’s just being done at a really big scale in a really coordinated way, because that’s what businesses are good at. 

And we need to translate all of those learnings down to individual consumer levels and smaller technologies

Lucy Yu: How can we speed this all up? How can we make it happen faster? 

Nina Klein: Yeah, so the speed is the really critical issue here. And I think if we were being really honest with people about the counterfactual that we’re dealing with of not going fast, I do genuinely wonder if that would speed things up. 

There’s analysis showing that by 2050, the UK could have 2.6 million internal climate refugees. I think we need to be really real about what not doing something could mean.

But more than fear, you need a plan and you need to be implementing it. And so I think we need to get really strategic and really organised. I think we’ve got lots of plans and lots of scenarios, but no-one’s kind of saying, “okay, I’m going to go and do that one.”

I think we really need to start implementing things now with real activities. And part of the issue there is finding the money. At the moment, the incentives and the mechanisms aren’t lined up to deal with that CapEx right now, even though in the long run, it’s beneficial. 

And so I think reforming financing mechanisms and reforming current markets to put those incentives in place for governments, and for businesses, and for individuals is really important.

And I think just… I appreciate the irony of saying this on a podcast, but a little less conversation, a little more action, you know? We need to be getting on there and getting on with it. And I wonder if by being really clear about the risks of not doing something, we’ll be a bit more willing to be bold and take risks in doing something? 

Maybe we’ll fail, and maybe we’ll get some things wrong, and maybe a few of these technologies won’t work in some cases. But I think failure is guaranteed if we don’t try something. So I think being bold, putting steps forward, and being willing to take a few risks is going to be really, really important. 

***

Giles Whittell: Nina touched upon the other two things that are absolutely critical to our future energy system: supply and storage. Now we’re going to dive deep into both of these issues and speak to leaders at the forefront of innovation. 

When it comes to supply, Nina pointed out that we might need some bigger cables to push electricity around to the places that need it. 

And that’s we’re speaking to Sir Dave Lewis, former boss of Tesco, and now chair of Xlinks: a £16bn project with ambitions to create some pretty enormous international connections. Dave, what is Xlinks, exactly?

Dave Lewis: Xlinks is a business which has a very simple purpose, which is to capture and connect the power of nature. The first project for Xlinks is a project in Morocco. With the support of the Moroccan government we’ve secured an area of the Sahara which is about 1500 square kilometres. 

On that area – part of that area – we’re going to put a solar farm and a wind farm, and we’re going to connect directly to the UK national grid in Devon through four underwater HVDC cables, producing about 8 per cent of the UK’s energy requirements, completely emissions free and about half the cost of nuclear power. 

Lucy Yu: Sounds fantastic. What stage are you at? Is this just a nice idea at the moment or has it actually started? 

Dave Lewis: No, it’s more than started. There’s a full team working on it. As I say, it’s been going for nearly three years now. 

All the permitting and the engagement with Moroccan government is almost complete. It forms part of the Moroccan energy export strategy. The connection to the national grid in Alverdiscott in Devin is also signed and agreed. 

And so we’re at the stage of negotiating with the government about how it wants to view this project. Because it’s not a typical renewables project. Actually, renewable energy is quite intermittent in the UK. When the wind doesn’t blow, there is no power, so on and so forth. 

Morocco is blessed, from a weather point of view, from renewable energy. So whilst it’s renewable, it’s completely reliable, dependable. So it does require the UK government to sort of think about it slightly differently than the mechanic that it built for wind. 

Lucy Yu: Has anyone tried to do anything like this before? 

Dave Lewis: No. There’ve been projects that have being talked about before, when the economics were very different. There are large-scale interconnectors already happening; there’s a project that’s trying to link Northern Australia to Singapore, it’s about the same development phase as Xlinks is. 

But this is, from a UK government point of view, it is a first of a kind, because it’s the first time we go into another country and look at international renewables interconnection. 

Giles Whittell: You mentioned that the economics now are very different from when similar things have been tried before. And I remember the Desertec project from a different part of North Africa, and that didn’t go so well. So what are the most important lessons from projects like that for someone in your position, or from other blueprint projects?

Dave Lewis: The thing that has changed fundamentally is the cost of generation has absolutely plummeted versus then. So that’s the great bit of development. 

One example: solar generation is down 82 per cent in terms of cost in the last nine years. So the economics of this have completely changed in terms of the cost of generation. 

I think the other thing that’s very significant is: it’s a direct link between Morocco and the UK. Whereas I think Desertec wanted to go through the European system – very much more complicated in terms of every party that would be involved.

And actually this is a direct connection. It won’t actually be connected to the Moroccan grid. So it will be dedicated to the UK, and therefore completely reliable and dependable.

Giles Whittell: Well you mentioned politics. So how important is buy-in from the host country? You said that this forms part of… that Xlinks forms part of Morocco’s energy export strategy, but put bluntly, what’s in it for them?

Dave Lewis: Well, a couple of things about Morocco. So Morocco have realised that they… they have a stated intention to be a renewable energy superpower. It’s a very important use of raw material for them – their words, not mine. 

They have got a domestic agenda, which is to get to more than 50 per cent renewables for Morocco itself. So investing in the industry allows that transition to carry on. 

It supports the local industry in terms of manufacture of wind turbines, and so on and others. There’s obviously contractual arrangements for land. There’s some levy that comes from the exportation of the energy. 

But what it really does is… so already, Morocco exports renewable energy to Algeria, to Spain, a couple of other North African countries. So they see this as a very important step in their economic development. 

The links between Morocco and the UK are really very good. It’s seen by the UK as a very stable government and economy. Trade is very strong between the two. So there’s actually good political alignment on both sides. So it works domestically in Morocco, but it’s also a good international relationship between the UK and Europe.

Lucy Yu: Dave, there are a lot of countries that don’t benefit from Morocco’s very sunny weather conditions. 

Do you think we’re seeing the start of a boom in these energy interconnected projects between different countries, where there’s a need for more renewably generated power in one place, but it’s a different place that has the right sort of weather profile?

Dave Lewis: Yeah, and you know I’m not an energy expert. But the way that I’ve come to understand this is: there are two ways of getting renewable energy generated in one place to be used in another. Batteries, or long, large-scale interconnections. 

Batteries are getting better, but it doesn’t seem to be any time soon that we’ll be able to rely on that, at scale, for that sort of international transfer. And therefore having these long interconnectors is hugely helpful.

Now you’ve got to remember a couple of things. So it is booming. The biggest rate determining factor here is actually the cabling. 

But there’s already, since 2019, there’s been a 3,300 kilometre cable operating in China. There are a number of long cable interconnections of energy above ground. The UK has just done the largest sub-sea one, which is the Viking link to Norway, which went live earlier this year. 

So it’s very much booming. And one example of that would be, if you want to buy cable from the three people who produce cable in Europe at this moment, you’re talking about a four, five, and in one case six year waiting list for that cable to be available, because there’s so much demand for interconnection.

Lucy Yu: And what do these interconnectors mean for resilience? Does having more of these mean a more resilient system, or does it introduce more risk? If I think back to your earlier comment where I think you said this could supply 8 per cent of Great Britain’s electricity demand, that seems like quite a high percentage to be dependent on this one interconnector? 

Dave Lewis: Lucy, it’s a really good question. I think the best way to see this, and the way I think that the energy experts do see it – so in the conversations I would hope to have with National Grid or with BEIS – is, at the moment we import, from a number of places, energy into the UK. So actually having one more actually adds to the resilience of the total network.

Right? So you’ve got to be secure in each one as best as you possibly can. And the fact that this cable is buried under the sea actually is pretty secure. But you can never say never for any of those sources of electricity, or gas, that we know about. But having one more for the UK actually strengthens the resilience of the grid.

The other thing that if you’re National Grid, you’re particularly interested in for this, is: it’s reliable and dependable. So in the portfolio of options that you’ve got, it’s disproportionately valuable. 

Because, as you know, from the UK energy system, okay, we’ve got 30 per cent of offshore wind, but when it doesn’t blow, you’ve got to make sure that you’ve got alternatives available – and that keeps gas, that keeps coal, that keeps nuclear – that you have to keep on standby for when that doesn’t happen. 

Having 8 per cent of the electricity which is renewable, and I can literally turn it on and off for 20 hours a day, gives the national grid as a portfolio an awful lot more optionality. 

Giles Whittell: Dave, Lucy and I were talking about this before. You’re right in the middle of this. You and your colleagues are used to talking about it amongst yourselves, with people in government, with your partners in Morocco. But take a step back. Isn’t it a monstrously ambitious undertaking? 3,000 kilometres of cable, the whole thing on a scale never before attempted.

And it may be that at some point in the future, we take it for granted, but right now it’s not even built. And it sometimes feels to me like before we built the Channel Tunnel; afterwards, we took it for granted. But do you ever wake up with a cold sweat and think, “blimey, I’ve bitten off more than I can chew”?

Dave Lewis: Honestly, Giles, it doesn’t scare me at all. I think, “what are we trying to do here?” When the government uses phrases like “first of a kind project”, it means it’s a first of a kind project. If you want an innovation strategy, if we want to break through, then we have to push ourselves. 

The interesting thing about this is: the only thing that’s new is this far underwater. So that’s the new bit, right?

But there’s a cable running above ground which is nearly the same length, with higher voltage, and works perfectly. There’s a cable under… the Viking one that’s just gone, which is nearly a thousand kilometres, and that’s working perfectly. So this is not space age technology.

This is not us trying something completely new. I don’t worry about it in that sense. I’m excited by the idea that if we could make this happen, you break open something that for the transition to net zero, would be really quite incredible. So once you do this, where’s the next cable? 

There’s already cables being talked about around the world by lots and lots and lots of different governments. But the connection of the UK to North America is not unthinkable.

It’s not that much longer. But yes, it’s a big engineering project, no doubt. But it’s not like it hasn’t been done before.

Giles Whittell: Are people talking seriously about UK to North America?

Dave Lewis: Yeah. Yeah, well look. What we’re talking about is a grid. If you look at how and where energy is generated and what time it is, the ability to keep using it around the clock is massive. So you either want to go East-West, or in some places North-South, which is the Moroccan example.

So this idea of large scale interconnectors through HVDC cabling is very real. And I gave you the six year order book for cable manufacture as a proof point that this is exploding as the next wave of renewable energy interconnection. 

Giles Whittell: Okay. So it’s not inconceivable that as we go to bed in GMT time zone, we’ll be cooking on electric hobs fed by solar power from five times zones to the west?

Dave Lewis: Not inconceivable at all. 

Lucy Yu: Assuming we see a proliferation of these very ambitious interconnector projects, what do you think are the implications for the energy transition overall?And which countries do you think will take most advantage of this earliest, and what does that mean for the overall timeframe of the transition?

Dave Lewis: You know, onshore generation is now getting lower than 10 pounds per kilowatt hour. So that journey of getting cheaper and cheaper and cheaper, I think, carries on. Transition starts getting better and better and better as we prove more long scale interconnectors. 

And then it’ll come down – the question of, how does this transition and how quickly – this is where individual government policies will start to have an impact. You’ve seen already that countries like Germany have been very keen to take renewable energy into Germany from Scandinavia and other places. There’s a lot of declaration, because everybody’s made their commitments and you know what the UK’s commitments are. And then the question is, how do you get there? So I think once you prove that long scale interconnectors work East-West, North-South, then you open up a massive amount of opportunity here at affordable, clean, and scale.

Because the other thing that’s interesting is, this Moroccan link is, as you say, 8 per cent of the UK’s energy requirement, which is about the same, roughly, as one, very big nuclear reactor. 

Lucy Yu: And finally, what would you say to people who say the transition to 100 per cent renewable energy is impossible. 

Dave Lewis: Ah, think bigger.

***

Lucy Yu: So, let’s take stock for a moment. We heard from Nina about tech-enabled solutions to intelligently manage energy demand – and we’ve just heard from Dave about an innovative way to ensure consistent, green supply. It’s time to address the third part of the energy trifecta: storage. 

Electricity storage technologies are currently being deployed at different scales, from domestic batteries to larger grid-connected facilities. As we increase the volume of renewables on the system, what we need, in short, are more batteries that can store energy for longer. 

Here to discuss how this really is possible is Mateo Jaramillo, CEO of Form Energy. Welcome, Mateo. 

Mateo Jaramillo: Thanks very much, great to be here. 

Lucy Yu: So let’s kick off with the basics. Explain to us why storage is so crucial to a green energy grid.

Mateo Jaramillo: Well, let’s start off with what we want from an electric grid in general. Historically what we have wanted is an affordable, reliable electric grid, right? But increasingly what we want out of the electric grid is to also add that it must be renewable. 

When we say renewable, what we mean largely is a grid that’s driven by weather. Weather is variable, and we need to account for that variability in the system. And so the ability to cost-effectively store it, to make it reliable, now becomes one of the key challenges for the deep decarbonisation of the electric grid. 

Lucy Yu: And just to be clear, when you talk about storage at scale, what sort of scale are we actually talking about here?

Mateo Jaramillo: Well, we’re talking about quantities of storage that are commensurate with the existing power infrastructure. So if we’re talking about, let’s say the UK system is sort of in the tens of gigawatts of power installed, then as a ratio of the total system, we’re talking maybe 10 or 15 per cent that would go through some form of bulk energy storage.

And so those numbers are not inconceivable to go build and deploy, especially in the relevant timeframes. They are large, for sure. But the power sector is large. And I think one thing that the broader climate discussion has helped a lot of people understand is just how big the energy infrastructure is today already, and the arrayed and increasingly aligned entities that are really driving towards this transition over the next decade or two.

Giles Whittell: Mateo, in terms of specific technologies, how much of this storage demand do you envisage being met with existing battery technologies like lithium-ion, or other battery technologies, or other technologies altogether such as hydrogen?

Mateo Jaramillo: The short answer is I think it’s still to be determined exactly what that mix ends up looking like. We have a good amount of energy storage deployed today in the form of pumped hydro. So you take water, you put it up a hill, you have a turbine that it runs through on its way downhill when it’s cost effective to do that, and then when prices are low, you’re pumping that water back uphill. 

And humans have been using water to drive electricity, or to drive power needs, for a very, very long time. It will be a while before any other technology comes close to pumped hydro in terms of the scale that’s already been deployed, and the mix will depend on what’s needed there. 

But in the end, to get to, again, the sort of affordable, renewable, reliable electric grid, you’re going to want a mix. 

Every electric system in the world has a diversity of assets, because one: you want some sort of risk mitigation in terms of the inputs, right – the fuel diversity, as we say. But you also want things that have different roles to play, and you can optimise around those different kinds of roles. 

And one of the analogies here is the gas power generation system that we use today. We have very different kinds of gas generators in the market.

And something similar will appear in the energy storage market as well. You will have something like lithium ion, which of course we know a lot about these days. Every human probably has two or three lithium-ion batteries on them just about every waking hour.

And so lithium-ion is well known and appreciated and increasingly going into the grid, and that will solve one kind of problem. And another type of energy storage will likely have a large role to play in this affordable, reliable, renewable electric grid. 

Into that mix, of course, we consider other technologies entirely as well, like hydrogen. Hydrogen is receiving a lot of attention in the market today.

My strong sense is that we’ll see a lot of everything, again, because of a need for a diversity of assets on the system, and because every system is unique, and there will be projects in hydrogen storage for long-term multi-day energy storage for the grid that will be cost-effective. But probably not everywhere. 

Lucy Yu: What will the physical infrastructure for this level of storage actually look like in practice? 

Mateo Jaramillo: Well, it will look very boring. Batteries charging or discharging is sort of the new paint drying, maybe. I’m joking a little bit, but it will look similar to the power infrastructure that’s already out there. 

They will take up acres, right? These are large systems. And they likely will be co-located with the renewable power generation resources. 

But increasingly we also find that there’s a big role to be played, of course, as a distributed system too. There are different levels of the electric system, all the way from the very large power plant – what they call high voltage systems – all the way down to our places of residence, what we call the lower voltage systems.

And hopefully the place that we get to is, people ignore the electric system in the future as they have for a century, and they just have reliable, affordable, and renewable electricity. 

Giles Whittell: Are they being built fast enough today, already? And how can we be sure that they are being built fast enough?

Mateo Jaramillo: Broadly speaking, the new grid is not being built fast enough, not just energy storage.

We need to be building a lot of our existing technologies much faster. We need to be building a lot more solar, a lot more wind, pretty much everywhere. We also need to be building transmission.

Giles Whittell: But in storage specifically?

Mateo Jaramillo: Yeah, and with it the storage will scale. So is it being built fast enough? No, but also those other power generation resources are not being built fast enough either.

And we need all of it to be going much, much faster. Once the clear marks are set, the mandates are in place, then the industry… I’m an entrepreneur and therefore a capitalist, I’m sure that the market will respond in the right ways and the industry will scale to go meet that. 

Lucy Yu: I want to change tack slightly and ask a bit about the role of governments. Do you think that governments around the world are doing enough to drive innovation in this space? 

Mateo Jaramillo: I think they can be doing more. There’s a notable shift, I would say in the last few years, about the willingness of governments to really step in here, but they can be doing more still. I live in the state of California in the US, and California has been leaning forward on this for some time.

But even here in California, we realise we need to move even faster than what we thought just a few years ago. And we’re starting to see that: doing everything faster, and really figuring out how to get these newer technologies to be deployed at scale. 

So how do you take an earlier stage technology that has an important role to play in the market, like this multi-day type of storage, and get it through this proverbial valley of death, out of the testing phase and into the meaningful deployment phase. 

And so what we’re starting to see across a lot of different jurisdictions is an understanding and therefore focus that: that is the area that requires a lot of attention going forward, right?

These first commercial deployments, these first large scale projects that need to go get built. And that is a role that government can have which is meaningful to get these kinds of technologies and these new assets into the market. So we see a lot of that. 

And one example of that is the BEIS, the Department of Business, Energy, and Industrial Strategy announcement that came recently which had funding for some of these newer techniques.

Giles Whittell: Mateo, the announcement that you mentioned talks of a grand sum of seven million pounds, which even by parlty British standards is kind of a tiny number, isn’t it, compared with the scale of storage that you’ve been describing.

To what extent is storage, and the cutting edge technologies that are going to have to be part of it, the final piece of a renewable grid puzzle, both in terms of… I mean, final is the operative word here, both in terms of getting it built and getting your head around it?

Mateo Jaramillo: You’re right. Seven million pounds in this sector is not a tremendous amount. There are other programs out there that I think we would look to for the deployment, right? 

This is sort of the initial stage of proving something out, but certainly there are many other funds that are out there for actual deployment. 

And we talk about the role that government can play; the system operators also have large roles to play. So national grid, for example, what role do they have to play in this transition? And are they putting their capital to work? And they have their own innovation programs, right? 

So it requires of course not just governmental support, right? All the actors need to be providing the support into the system.

As far as a final piece, you’re right, I think there are many pieces that need to be put in place still. I think a role of this newer technology – for example, when I think about the role that that Form Energy can play in introducing this new idea of 100+ hour duration storage cost-effectively – part of the role there is to show decision-makers that these technologies are coming in a relevant timeframe. 

And when a credible entity comes along, which I think Form Energy is, and says, “hey, this new asset class will be here,” then that enables streamlined decisions around everything else that also needs to be decided.

And there have been some electric utilities who have said, “we are committing to 80 per cent decarbonisation by a fixed timeframe, and we’re committing to a hundred percent decarbonisation, even though we don’t know exactly which technologies are going to allow us to get there cost-effectively, because we have seen the early indications from the market that those technologies will show up, and we’re committed to saying, ‘hey, we’re going to be here ready for them as soon as you are ready as a technology developer to put them into the market.’” And so I see all of these interacting in key ways.

This is sort of the role of innovation, right? To put air under the wings of all the other stuff around it, because people are sure that these innovative approaches will show up, and they’re credible, and it can be scaled, and they will show up again in a meaningful time horizon. 

***

Lucy Yu: Lots of food for thought, right Giles? 

Giles Whittell: You’re telling me. I find it very exciting though. I mean, on the one hand it’s daunting. It requires that everything change. 

But on the other hand, when you have people like Dave talking about – and let’s face it, it matters that he used to run Tesco, he knows how to run stuff – talking about laying 3,000 kilometres of cable along the bottom of the sea to bring blazing Saharan sunshine as solar power to misty… wherever it comes ashore, I think Cornwall, right? I mean, that is incredible. If they really make it happen it’ll be world changing, like when Marconi did the first cables under the Atlantic for telegraph signals, or when… I can’t think of anything else. Like going to the moon.

Lucy Yu: Whenever there are challenging problems to address, human ingenuity normally finds a way. And I think this is just another great example of that. 

Giles Whittell: Yeah. Let’s hope it works.

***

Lucy Yu: You’ve been listening to Inside the Energy Transition, a podcast from Tortoise Media and Centre for Net Zero. A big thanks to our guests this week: Nina Klein, Dave Lewis, and Mateo Jaramillo. Find out more about CNZ and what we do at centrefornetzero.org. 

Giles Whittell: And if you’re new to Tortoise, we’ve got a weekly newsletter called the Net Zero Sensemaker, which tells you everything you need to know about getting to net zero. To sign up for that and more journalism from our newsroom just go to tortoisemedia.com/invite and use my code Giles50 for 50 per cent off membership.

Tune in next time when we’re talking about equality and justice in the energy transition. Some people say switching to renewables will mean the poorest in society pay the price – but we’ll find out how this doesn’t have to come true.

Lucy Yu: This episode was produced by the delightful Phil Sansom, with support from Izzy Woolgar, Gurjinder Dhaliwal, and Clizia Sala. The executive producer is Ceri Thomas.

Giles Whittell: If you enjoyed it, please do leave us a review, or recommend us to a friend. Thanks for listening and see you next time!