How To Balance Global Energy Systems with Elena Pravettoni and Phoebe O'Hara (Systemiq)

Hello and welcome to Transmission. Today, we're joined by Phoebe and Elena from Systemic. What's special about this episode is it covers a really wide range of power systems and their associated transitions. Do you want to know whether you're better off being in a sunbelt or in a wind hot spot? And will the cost of balancing that energy create an overall system cost that is greater than the cost of that? We cover these critical topics to demystify the transition globally.

And within this episode, we do cover some reports which we've added into the show notes. So if you want to take a longer read, then you can do. Let's jump in.

Hello, Elena. Hello, Phoebe. Welcome to Transmission.

Thank you. So happy to be here today.

Yes. So happy to be here. Thank you.

So let's kick off with a quick introduction to yourselves. Who are you? Who are the ETC? And how do you know each other? And maybe Elena will come to you first.

Great. Yeah. So my name is Elena Pravettoni. I am the head of analysis at the Energy Transitions Commission. So I lead the production of research and insights across the energy transition space, to inform, policymakers and senior industry leaders.

I'm Phoebe O'Hara. I'm the head of Clean Power at ETC, and I'm the lead author of our recent report on power systems transformation. And I used to work in battery storage, so it's a bit of a dream to be here.

Oh, there we go. There we go. And and ETC, so we, maybe just you described it a little bit there, but, Phoebe, maybe maybe you wanna take this on. Like, just a little bit more about what the ETC is. What what is it trying to do?

Yeah. We're a coalition of fifty five members, so across the energy transition. And we're really working to solve some of the biggest questions around that transition piece and bringing together those voices from the community to work on those. So, Elena, it's been there for longer. I don't know if you wanna add any more detail to that.

Yeah. I mean, I'll just say maybe the our key thesis is really about the importance of clean electrification. So we really think clean electrification is one of what's gonna do a lot of the heavy lifting in getting us to a decarbonized energy system. And why is that? Well, firstly, because electrification is the cheapest, fastest, and most efficient way to essentially replace fossil fuels in energy and money end users. And then also because we have brilliant technologies that are mature particularly wind and solar that can provide that electricity, in a zero carbon way at low cost. So really, we kind of sketch out a huge transformation of the energy system going from around twenty percent of electricity and final energy demand today to around sixty to seventy percent by two thousand and fifty.

And with, that meaning electricity generation growing from around thirty thousand terawatt hours today to ninety thousand by two thousand and fifty. So that's, a big transformation. There's definitely hurdles to that. A lot of the ETC's work has been focused on those barriers. So streamlining planning and permitting, supply chains, some of the trouble that offshore wind has had. And this report is, really looking into how we can operate and run, wind and solar dominated systems.

And you've you've just snuck into that, this report. We haven't yet said what the report is.

So so what is the report?

That's true.

In my life.

We're a few weeks into into the launch, of our our major piece of work. It's been, over a year in the making.

And, we we call it power systems transformation. And so, yeah, came out on July twenty ninth.

Really, a piece of work that involved a really, really broad base of the ETC's membership, many power actors across across the world. And, we set out, the vision for how we can, again, run and operate, these much bigger, cleaner power systems built on wind and solar and what that will cost in different regions of the world.

Okay. And it's as as you've implied, it's a very global piece. Right? So it's not just, say, looking at how do you transform the UK or a certain part of Europe.

It's looking at every single region. One of the key things that kinda highlights is this kind of there's this concept of a wind belt and a sun belt. What's a wind belt? What's what's a sun belt?

So a sun belt is, the countries in the world that are solar rich and, situated in kind of low latitudes. So tropical countries, for example, India, Thailand, Mexico. The wind belt instead is like where the country where we're sitting right now, the UK. So countries that are stronger in wind resource, that also includes, for example, Germany and Canada.

And why does that matter?

A lot of the insights of the report really come from a detailed piece of modeling that we did to look at, how supply, in different countries around the world can meet, the demand profile in a highly electrified system, in in different parts of the world.

And so in, the conclusions that we get from that are really, that some of the differences in the sun belt and the wind belt stack up in very different ways. So in the sun belt, again, as the name implies, solar rich regions, a lot of the generation coming from from solar, the supply from that solar energy is fairly consistent throughout the year. Some variability, for example, monsoon seasons, but broadly a lot of solar resource throughout the year. And then they're also characterized by a, lower seasonality of demand. So while the demand will certainly have daily peaks, over over the year, it's more constant. And so what that means is that, it's more of a shorter term balancing need that these countries face, so below eight hours, basically. Instead, the wind belt would have a higher share of power generation coming from the wind resource.

That, also has some seasonality, so with wind typically being stronger in the winter season, which correlates well with demand, but is also characterized by periods, of wind drought, so where we do find that renewable production really coming down.

And then also a seasonality of demand, a higher seasonality than in the sun belt. So where, the winter demand peaks due to heating needs are sort of usually higher than than in the summer. And so that what that means putting that kind of supply and demand dynamic together is that we find that the wind belt needs a lot of different kinds of balancing. So beyond that short term duration, we also need to provide, low carbon electricity, in for for weekly periods and even, at the security of supply level, reserve backup capacity.

Okay. So you have to kind of the the balance of generation versus demand is perhaps easier in the sun belt because there is a better match of the the shape of generation and demand, whereas in in winter, there can be some quite challenging periods in terms of the wind drought that you were just talking about. One one thing you were mentioning is this kind of concept of, like, monsoon season. So let's say you design your sunbelt, system to have plenty of solar in it to meet, say, air conditioning load, whatever that might be, and then you get monsoon season. How does that how does that actually work?

So the output from the solar would be reduced and so there would be, kind of more call and storage but the system that we kind of model for the tropical archetype does still include some wind generation and that correlates positively actually through monsoon season so there's additional generation.

Okay.

Fascinating. I'm not sure I've ever seen an example of, like, a a sunbelt country going through monsoon, how it actually manages that transition. So if anyone listening to this is kind of very keen to share data, then, yeah, we'd love to we'd love to see it.

And then going down to the cost element of this. So if you're a sunbelt or you're a windbelt, what does the sort of cost of making the transition look like?

So the answer is that the sunbelt has an advantage ultimately because it can meet most of that decarbonized power need through primarily solar and batteries and the caustic lines that we've seen in those technologies, are extraordinary.

Then that basically leads to a total system cost, that is lower than today and that is sort of around the fifty dollar per megawatt hour mark including the grid cost as well. So an opportunity to decarbonize the power system that has a huge cost advantage compared with today. In the wind belt, what we find is that, the cost is, higher than in the sun belt, but still in line with the costs of systems today.

So we're looking, the modeling that we that we did for the wind belt shows around a hundred and fifteen dollar per megawatt hour total system costs in twenty fifty, and that is in line with with costs today.

Yeah. It's kind of a it's kind of a crazy difference, right, between the two. The kind of part part of me starts to think that maybe from an economics perspective, would you then start to have large industry, large loads going, well, I can either be in, say, Northern Sweden, let's say, or I could say, actually, what about, North Africa? You know, that could could be a much better place to be located. Very good very good sun, very good, like, space. Should I be thinking about shifting my industry down there? Because instead of paying you said a hundred and fifty, I think?

Hundred fifteen.

Hundred and fifteen pounds per megawatt. Is it is it all in pounds? Dollars. That's all in megawatt.

Yeah. Yeah.

Yeah. Sorry. I should've asked. It's very UK centric. Okay. So a hundred and fifteen dollars per megawatt hour, versus fifty.

That's a really big difference on sort of an in feed cost for some of these businesses. Is is that does that kind of form part of the analysis? You kinda see more demand coming towards the sun belt countries?

It's it's I mean, it's a great question. It's definitely something that in terms of the the industrial, location aspect is really a big question. And I think that competitive advantage of the sunbelt in terms of the power costs is going to be more and more ingrained. Our assist organization, the Mission Possible Partnership, tracked the kind of harder to abate, industrial projects around the world. And their findings are that one third of those projects are already located in the global sun belt. It's a big development opportunity, I think, for many of these countries. And I think from the industrial value chain perspective, real considerations around which parts of the production might have to relocate and then what part of the kind of value add manufacturing, or what part of the manufacturing value chain might, you know, would still benefit from competitive advantages that Europe has.

Yeah. Because it feels just if you think about just from a pure, electricity cost perspective, then great. Relocate. But then you have all these sort of, additional factors that come into it.

So sort of what is the what are the data laws if if you're building a data center in that a particular place? If you're manufacturing something, okay, it's great to build in the desert, but how do you get it to the place where the consumers are? Or is it, you know, maybe it's a a chemical, so you could pipeline it. Maybe it goes on a ship to be to be moved somewhere.

But if you lose all of your advantage of the lower cost by having to ship things a very long distance, then all of a sudden, there's kind of less there's less reason to do it.

So you Yeah.

Absolutely. I think it will really depend on which industry, depend on on how the the different parts of the value chain stack up in terms of the cost structure.

Okay. And then going back to the power sector. So, for Sunbelt and wind belts, what do the balancing needs look like? So you mentioned a little bit that there were some longer duration needs for wind belt versus sun belt?

Yeah. That's right. So, the wind belt, if we take the UK, which was the case study that we had as the archetype in in the modeling, the, concurrent generation maybe, Phoebe, you have the figures more to mind.

Concurrent generation makes up around ninety percent of demand. And then you've got for the UK a split between short duration and we quantify that as one to eight hours. Medium to long is eight to fifty hours. And that's around, one percent as well as a smaller array. The biggest thing is ultra long duration energy storage, which we quantify as fifty plus hours, and that makes up three percent of demand.

But when we translate that into the total system generation and balancing cost stack, it makes up eighteen percent. So you can see that translation from the three percent of demand, into the cost structure is a is a lot bigger. And I think that, not to jump ahead to, later in the conversation, but that to us is is the signal of how difficult the challenge is for these wind belt countries and the kind of pragmatic conversations you have to have around that security of supply, fifty plus hours, that Eleanor was just talking about.

Okay. And it's it's kind of a a little bit different to what we see in the market today. Right? So in the market today, we see much more short duration storage being built Because from an economic standpoint, it can it actually makes sense to do it. The medium and long duration doesn't have that same economic, like I said, realism, but it's just it's just not getting to an investable case, the the mid duration and long duration. So so how does that sort of how does that get built in your in in in your sort of system design?

I think for us, we looked at costs for the twenty thirty five period, particularly on the basis that we felt that was the period where you'd be needing to be medium to long duration. I think right now, the immediate focus is that short duration, right, is that quick, snappy balance in question. I think the medium to long comes more into question when you've built out more renewables onto your system. So we chose two thousand and thirty five because of that. And with our two thousand and thirty five modeling, some of those medium to long duration come down quite quickly from today. So you're seeing things like batteries play a lot more into that. We're very bullish on lithium ion playing from the eight to twelve hour space.

Compressed air and pumped hydro as well quickly follow because of their scalability.

But I think our final chapter of the report is really emphatic on the idea that you have really critical questions around market design and grid regulations. So it's great that we have the tech these technologies, and it's great that the costs are coming down. But there are really fundamental questions about how you make them financially competitive with existing fossil fuels and enable them to come onto the systems. So I think it's that two part emphasis.

I think Guy, who came onto your podcast, spoke about this. It's invention, but it's also innovation. And I think that innovation part is really critical in the enablers piece. How do we get the right policy there to get them onto the system in the first place?

The UK, great example, actually, cabin floor.

Although they're, you know, back and forth about whether it was good or bad, and maybe you've got some insights on that that you wanna share. But it was a great policy, and that it's it's sped up the conversation around that medium to long and how we actually fundamentally get that onto the system.

Maybe maybe before we go into cap and four because Yeah.

Very happy to go there. Yeah. And great a great plug of Guy Newey's episode. It was a a fascinating, look at the kind of difference between innovation and invention.

On just the role of that long duration storage. Right? So one thing to give another example of another episode, we recently had Tom Glover, who's the country chair for RWE on, and one thing he would talk about, I think, would be the role of sort of gas in the system. And so one of the potentials that that we see going forward is, yes, we have wind.

Yes, we have solar. Both of those very kind of easily easy to build commercially. Yes. You have a lot of short duration storage.

Again, very easy to build commercially or relatively easy to build commercially. And then you have a lot of unabated gas that's already on the system, something like thirty five gigs in GB. And I moved towards starting to do some more CCUS, and that's sort of generally not CCUS on the exhaust of the the gas turbine. That's more sort of CCUS in making, say, blue hydrogen as a feedstock.

TBC, whether that sort of works economically.

But there I think there's kind of a a feeling within the industry that you will have the wind and solar, which will be running its profile, and then you'll have the medium and long duration storage very squeezed by, on one side, the gas fleet, and on the other side, the short duration storage, which keeps on kind of if you look back at documents in twenty sixteen, short duration storage in quotation marks used to be one hour. It is now eight, and you just kind of reference that, by the way, lithium could also be twelve. And Yeah. That's true. Like, of course, lithium could be twelve. So you've kind of got this this squeezing going on of the the space for other types of technology.

So how do you think about that? Do do you think there will be sort of this absolutely mandated sort of this is the this is the line in the sand where we take the gas off the system? Or do you think that there'll be sort of active government involvement from an earlier stage to try and put the solutions in place before we need to take the gas away? How how does that all work?

So we we looked at this in the sense of, I think first thing to say is that squeeze, we do see it in that modeling right, that tiny one to two percent for that medium to long, so eight to fifty hours. That that is that is the smallest amount of storage requirement for a wind belt country. So agree with you on that. I think in the sense of gas, and I love that episode with Tom, but I had a few thoughts to go back to him with.

One of them was with our modeling for wind. So we stacked up the costs, for that ultra long, so fifty plus hours. And what we considered there was hydrogen stored in cabins and then burnt on an OCGT, CCS with CCGTs, so CCS with gas, and then also on a basic gas but with a carbon price. And we mapped those out, again for twenty thirty five for the UK.

And what we found was that the most affordable or cost competitive option was the gas for CCS at a ten percent utilization rate. And then closely followed by unabated gas for carbon price. And I think this goes to one of our biggest takeaways from this report is that if you're trying to get to this, one hundred percent decarbonized system, there are gonna have to be really pragmatic conversations around cost. Because the costs just to give a gauge for that hydrogen, if you're gonna go for the one hundred percent, we got to four twenty five to five eighty dollars a megawatt hour, which is exceedingly high when you compare it against some of the other technologies.

And so if you're our kind of take from the report was the costs for decarbonizing that entire system are going to be so high, it's probably best to, like Nissan were doing, go for a ninety five percent and repurpose some of that investment elsewhere in the economy, some of those harder to abate sectors and industry to make better use of that investment case. So we do see, as a result, if you're going for that cost effective solution, we would see gas staying on the system and continuing to play that role in the UK if you are gonna go for that cost. I don't know if you'd have anything Yeah.

I mean, I think what you're kinda pointing to as well that that is if you build those assets to provide that ultra long duration balancing, would they not then cannibalize some of that medium to long duration?

And I think, I mean, to the extent that they are set up as as fully zero carbon, you would be able to spread that high CapEx over higher utilization, bringing down the cost. That might be one avenue. But equally, if there is a route which sees a very clearly ring fenced role for unabated gas to provide that security of supply, then I think that space for the medium to long technologies really widens.

Okay. I I I actually really like that market design, by the way, in terms of you take your unabated gas. You say, okay. Look. We might need you for certain periods of time, provided it's within a sort of sudden banding of hours. We're happy to kind of that you still exist because when you get these kind of wind droughts and I think this probably also applies to monsoon droughts, but I'm not an expert in monsoon droughts.

But if you kinda have this period where you you have to get through a two to three week period, that is a that is a gigawatt problem of of generation, but it's also a terawatt hour problem. Right? So it's both power and energy. And if you had, say, eight hours of storage, lovely.

But it's not gonna solve either of those kind of the the the gigawatt, the terawatt problem. And, actually, I think even at your sort of three percent number for that long duration storage, it's kind of it's enormously expensive to try and deal with a whole two week period with with that. So I think these are some of the really sort of practical system conversations that I'm very much enjoying going through here. I think to kind of make it more real for listeners, like, when do you think we'll first start to see sort of mid and long duration balancing storage assets coming through?

We've seen already obviously, there are pilots, which is great from a UK perspective. We're already seeing them. We do a kind of global scope. We're seeing them in China, being expanded absolutely massively, and I think that that's hugely beneficial for the market in terms of CapEx being lowered.

It depends what context, I think, is a really boring answer. But I think if we're talking about the UK, the cap and floor is gonna be absolutely fundamental to bringing those online. And I think what we speak about on the report is you need a clear revenue stacking for long duration energy storage to have an investment case without those kind of multiples of investments through different policies. You're just on the basis of a capacity market or just on the basis of ancillary, not gonna see an investment case push through for long duration.

So you need that revenue stacking quite desperately for long duration energy storage.

So this this sounds this sounds expensive.

And maybe maybe maybe not right. Maybe it's because we're just talking about a smaller part of the system.

Is this, give people an idea or is it possible to give people an idea of the cost of the additional balancing requirement that comes through because of, let's say, we're in a wind dominated system?

Yeah. Well, I think the really positive thing to say is that across all the regions that we studied, so we did, four different archetypes for four regions. So we did India for solar, the UK for wind high latitude, Spain for a Mediterranean case, and China for a multi climate and a broad continental country. And across all of those, our total system costs were lower, like Elena said, or comparable to today's. So that includes your grid, your balancing, and your generation. So the the theory there is you can have a totally clean system with the wind and solar and your balancing, and it is lower than or comparable to today's. So for your listeners, the idea that all of this balancing addition going onto the grid, that it's gonna naturally or inadvertently raise costs, just doesn't stand by the modeling that we've seen.

Yeah.

I think the important thing to note that we've discussed is, again, it depends on where you are, that balancing cost in dollars per megawatt hour is sufficiently a lot lower. Say in India, it's around nine dollars a megawatt hour for the total system cost. Compared to the UK, it reaches around thirty. And that is there because of that ultra long cost because those assets are so much more expensive.

And I think this probably highlights a really key point, which is that the energy market, the energy system can be very politicized. And so, if you are looking to try and make a point, you can almost certainly find a data point that that fits your narrative at any in any time. And so it is always kind of very possible to find a certain time when a certain phenomenon has happened, and you could say, oh, yeah. This thing happened, and therefore, this you can just see how expensive all of this stuff is.

But I think the thing you're saying is actually when you take a step back, even if you have to take a couple of expensive actions in medium or long duration, when you run the whole system, you still get a lower cost than as if you're running on gas today. And by the way, sort of point two, and maybe this shouldn't be point two, maybe this should be point three. But point two is you're then also not reliant on, gas majors and geopolitical uncertainty in terms of, like, what prices might be coming through, see, you know, GB power price in twenty twenty two. And as a, like, a last point to that, but not one or two is that's all low carbon, which is ultimately the point of trying to do all of this.

Yeah. And I think that's another really key point to raise with our UK case study. When you compare our total system cost figure for twenty eight fifty for that clean system, it is notably lower than the volatility we saw from gas prices in that twenty twenty two, twenty twenty four period. So, again, this becomes maybe even a security, yeah, an energy security question. You know, if you wanna avoid that volatility, that total clean system with that lower cost, it's much more attractive as well.

Of course. Until you do continue to have some gas in the system that is part of the same market, it is ultimately gas that does set the marginal price. Yeah. We find that gas sets the marginal price, around ninety seven percent of ours in the in the UK. And so kind of pushing more renewables onto the system can help to bring that down and actually feed through some of those lower costs into the bills that consumers are actually paying.

Yeah. I mean, we we definitely see that sort of gas dominating at the moment. One of the interesting sort of phenomenons we start to see is that as you get, enough wind, enough solar on the system, you can start turning off those last gas units, and you get this kind of really sort of funky pricing coming through because you have, like, one one half hour is, like, a hundred pounds per megawatt hour, which is to pay for gas. The next half hour might be zero or negative, so you get this really sort of steep drop off.

And maybe when you get grids where one sort of one is dropping off to zero and the other one's still running at a hundred, it kind of feels like a really obvious call for sort of more interconnection and to build large interconnection between neighboring countries or to be building a cable between, obviously, let let's maybe move on from the UK, but let's think about, say, could we build, say, from, say, Italy? Should we be building east? And could we also be building sort of far north, so it could be towards the Nordics or connecting to a European supergrid and then sort of south into Africa as well.

I don't know. What do you think your what's what's your take on sort of long distance, interconnection? Do we do do you see it in your modeling?

Yeah. In fact, alongside, the main, power systems transformation report in July, we also published, an insights briefing looking at this question of long distance transmission, as we called connecting the world. And, what we did there was really to break down the techno economics of long distance cables. So looking at, you know, unpacking, what are the different cost elements within that, Obviously, the the cable itself, but, the converter stations at either end also factoring in pretty, pretty significantly.

And then looking at what are some of the use cases around the world, where we could find that deploying these long distance cables would actually end up being an economic solution, whether just for a generation purpose, so importing cheaper electricity from a country that's better resource endowed, where where the electricity the clean electricity is just cheaper, but also where the correlation between, the production and the demand profiles of two different countries might actually make that long distance cable beneficial for balancing.

And so to take an example, we looked at this for, a link between Saudi Arabia and India.

And so the the kind of the comparison there is to think about the the LCOE of generation. In in this case, the geography where it's cheapest, Saudi Arabia, we've seen recent, prices around, even twelve dollars per megawatt hour.

But if we think about a kind of fourteen dollars per megawatt hour number there that's kind of the cost of generation and then what's the cost of transmission on top of that and our numbers got us to fifteen dollars per megawatt hour for a fairly high utilization cable.

The distance there is over one thousand five hundred kilometers.

And so stacking that up, that's, fifteen plus fourteen twenty nine dollars per megawatt hour, versus an LCO of solar in India, that might be higher than that today. And so the economics are actually playing in favor of that solution. And so we did this, for a number of, geographies around the world, and really kind of pointed to that that high potential. There's, of course, the political feasibility layer on top of that, where I think we've seen some some recent challenges, in particular the the UK's decision on Xlinks, kind of pointing to that. And I think, you know, in in the report, we really kind of point to the importance of global corporation frameworks, and to strengthen, the development of some of these.

And so just to just to kind of reiterate on that, so running a very long interconnection from Saudi Arabia to India, twenty nine dollars per megawatt hours, sort of the cost of energy you would see from that solution.

Yep. That's right.

It feels incredibly cheap Yeah. As a solution and and sort of perhaps far cheaper than I mean, we've just been talking about fifty dollars per megawatt hour in terms of sun belt and, a hundred and fifteen for for wind belt. But it sort of begs the question, should we be trying to build many more long distance interconnectors to parts of the world, e. G. In North Africa that have kind of this very, very low solar cost?

Yeah. Again, we run the numbers for a few case studies. Italy, Tunisia was another one, and accounting for again the generation cost, that transmission cost, the transmission losses at a high utilization rate and it is quite sensitive to the utilization rate of the cable. But again assuming that it does provide that a fairly consistent flow of electricity then then we did find, that the that the economic stuck up in in many cases.

So why do we not see more of this?

I think it comes back to that question of of political feasibility and concerns around energy security.

I think, the question of the cable under the sea and the potential risks around that, the layer of, there's also been conversations around domestic jobs impact. So I think it's it's a number of issues, that kind of feed into that, into that political decision.

Yeah. I think, if I sort of wear a GB hat for a second and say, if you offered me, sort of firm power at, say, thirty, thirty dollars per megawatt hour, I would take that over necessarily trying to optimize for for jobs. I think, yes, jobs are great, but actually what would be even better for GB's, long term prospects would be would be very low cost power from a for for from another area. But I definitely do see the the security side.

Right? So this is the concept that if you have forty gigs or fifty gigs that you need to meet and five of those gigawatts are coming from some sort of interconnection, then can you always be certain that those interconnection, flows are going to head in your direction and they're always going to be there because a large part of that is perhaps out outside of your control, particularly if it's going over a sort of very long seabed, for example. Super super interesting. Okay.

And just just to kind of to to go back to that piece on interconnection, and and wrap it up, what what was the end result of that piece of work? What what what did you want to see achieved?

Well, we laid out the the opportunity, and so the kind of, global analysis that we did to look at the, the opportunity across all the potential global links led us to the conclusion that we can provide, fifteen percent of global power demand through interconnectors and significant emission savings. I can come back to you on those specific figures.

Okay. Yeah. Okay. Very good. But but check that out if you want to see, some examples of where, interconnection could be put in place.

And then in terms of the the the wider report, so the power systems transformation, what are the end goals of that? Where where do you want that to whose desk do you want that to land on? What decisions do you want to be made as a result of it?

Well, one of the, questions in the debate that we hear is still, a kind of uncertainty around, can we actually run systems with over thirty percent, forty percent variable renewables, wind and solar? Can we, you know, can the system operate at a technical level? Do we have the technologies? Is is storage really gonna cost us so much more? And so what we wanted this report to do is to provide the confidence around the world, for that system vision, that we we really kind of set out that we have the technologies, out there today, to do what it takes when this wind isn't blowing and the sun isn't shining.

And, in in again, to provide that in a cost effective way. But also noting that despite all the exciting progress that's been happening for many countries, the key priority is really just to continue scaling up that wind and solar. We're still very far away from that seventy percent to eighty percent generation, in many parts of the world. So really a a confidence and certainty as many countries really, are at the beginning of scaling their wind and solar.

And I think we also like I said, that final chapter is really, okay, we see how we do all of this.

We see the balancing models. We see the grid costs. We see what we've gotta do. How on earth do we make that happen?

And I think, in the near term, the fundamental thing is we've gotta fix market design and grid regulations. Otherwise, we're gonna be stuck in connection queues rather than cutting emissions. And I think the two key things to emphasize there really is, like I said to you, that kind of revenue stacking piece. How do we make these technologies investable?

How do we bolster that case to get them onto the system as soon as we can? And then part two, grid rags, like connection queues, grid fees, those are really kind of they're not simple steps, but it's a really clear understanding of what is wrong there in terms of regulation. And the UK and parts of Europe and the US have started to make moves on that, but I think that the earlier we start working on them, the better it'll be to bring that wind and solar onto the grid, but also the new technologies.

And then the other three bits that we emphasize in the enablers piece, that are equally important but not that near term focus is number one, AI. That's the buzzword of the century. But if a great example there is something like Google X's tapestry work in Chile, you know, helping them to bring down their coal phase out by ten years really showcases from a power system level what you can do when you institute AI across some system level planning.

For for listeners, just just just explain that a little bit more.

So Google X Tapestry essentially, is a part of Google X that uses AI system planning. So they'll work locally. In this in this case, they work locally with the Chilean, electricity network providers.

And they used AI to institute, monitoring and evaluations of the entire system. So noting what all their generation was, where it was cited, because there wasn't clarity on that before. And then it was working to map the entire system to to see how they could institute better renewable energy build out and also balancing. And it essentially helped them to bring down their coal phase out cost from two thousand and forty to two thousand and thirty.

So that ten year saving is absolutely massive. And that is just one example of how we can institute that kind of technologies across across the world.

And the other final two kind of sections that we do think are deeply important, and we've seen it come to the fore recently, is supply chain and workforce. So really building up resilience there to ensure that we're not left with a kind of chip, situation that we had with semiconductors two or three years ago or with lithium ion batteries.

And then simultaneously, a massive bit of our work is on consumer engagement. So, you know, there's massive, opportunities with those kind of demand side flex technologies. But I think one bit that we feel isn't really spoken about that much is, how do you build trust and confidence with consumers and bring them on the journey? Like you said, there's so much polemic narrative out there on how expensive these technologies are. But how do companies, policy groups, and people in the third sector really work together to bring consumers on that journey and tell them what DemandSide Flex is and and give them the power and the confidence to use it?

And so it it's it's almost like it should read as a playbook for those countries which are starting the transformation, not yet sure where the kind of pain points are, but you can kinda call out what we've seen in Europe, in GB, in US, Australia. You can say, look. These these are the things that we know are coming in your direction. Right?

So grid connection issues. You've got the the people who can actually work on these sites, the electrically electrically qualified people. You have problems on inverters, transformers. Like, these are gonna be the things that are gonna that are gonna snare you up and sort of put you back ten years.

Yeah. The bit that I really like about your Chilean example is this kind of concept that if you can bring forward the retirement of very fossil fuel heavy things by, say, ten years, it's gonna be far cheaper to do that than it is to try and do this in the other direction, which is to take that carbon back out of the atmosphere in two thousand and fifty to two thousand and sixty. That is gonna be much more painful to do. And so the sort of faster you can move at the decarbonizing sooner, the the the the better the cost will be for consumers.

Totally. And I think also just having that clarity is super helpful on what your system need is. I think one of the in addition to those five things I just mentioned, the kind of overarching it's called a I call it a Greek pillar system. The overarching roof on the Greek pillar system is that total system planning.

And I think we can see that the market really craves to understand how much storage or how much generation is sought to be added to the system, just to get some general signposts. We shouldn't, you know, system plan it to the point where it's in in exact locations, and we should allow the market to decide what happens. But I think just having that general clarity, from government and from national transmission grids, really, we've seen the market react to that in a really positive way. And so we're hoping with the report that collectively all those enablers, as you've kind of said, signpost to some of those countries earlier on in the journey.

This is what is coming ahead. But it's also meant to say, here are here's kind of when you should be worrying about it in different stages.

So But equally for countries who are facing the kind of Yeah.

Some of those challenges today. Yeah. You know, how we might be able to overcome some of them.

And It's Trying to map the learnings basically across those different countries. And we also do spotlight, you know, this isn't a Western Hemisphere solo success story. There are amazing innovations going on in, you know, for Demand Fed Flex, I looked at Nigeria, Kenya. There's brilliant stuff going on there to ease some of the pains that consumers are facing with the grid. So it's also just trying to spotlight the innovations going on globally that sometimes are missed in the kind of dominant narrative.

Yeah. I mean, things like, the solar influx into Pakistan over the last few years is kind of that classic case, right, of Yeah. Everyone's kinda going, where are solar panels going? Yeah. And then all of a sudden you take a look, and it's like, oh, okay. Right. This is this makes a lot of sense.

Yeah. Exactly.

They're very good. Okay. Well, that brings me to, a sort of final two questions, around, is there anything you'd like to plug? And maybe, Phoebe, you'd like to go first?

Yes. Demand so flex, I think I've said about twenty times, but, Eleanor led on some brilliant work, that was a demand so flex ladder. Okay. So we basically scoped out what are the demand so flex tech in the world, but let's rank them in the sense of what's the lowest cost, low barrier solutions first that we should definitely be doing. So a lot of that is around kind of your home appliances, your heating and your cooling. And then it goes down to the ones which are kind of higher cost, shouldn't really be used for that short duration flexibility.

It's based off of Michael Liebrecht's hydrogen ladders. Everybody will be aware of what that means, and I would just plug everyone to look at it and come back to us. If you disagree with anything, let us know, and we'd love to have a conversation.

I mean, that's kind of the key part of the hydrogen ladder, right, is that it's in in v five, v six. So so it's had a lot of things thrown at it. Yeah. But like all things, that's that that is kind of the end goal is something that actually helps people make decisions.

Right? So, the the the consumer flex or DSR ladder, I will check it out. Elena, coming to you. What would you what would you like to plug?

I would just say watch this space. Our next work coming up in the kind of clean power work stream at the ETC is all about nuclear and geothermal.

And so looking at the role that these technologies might be able to play in in, clean power systems and in some geographies.

So, yeah, we're kicking that off. And, yeah.

I have to ask. Nuclear, we're now seeing sort of perhaps very high costs coming through for nuclear in GB, potentially something like thirty eight billion, which is a really sort of chunky number. And the kind of the classic case in nuclear is that it kind of runs over time over budget, Flamenville being another example, but nearly every sort of nuclear site that you look at, outside of China is kind of going through these problems.

That surely must be something you're thinking about. Do you think that kind of nuclear will be sort of that bedrock of future systems, or or do you kinda see it playing a sort of more diminishing role and just kind of squeeze out what you've got type thing?

Yeah. I think when we look at kind of net zero scenarios, all of them converge on around ten percent of nuclear as percentage of global power generation by two thousand and fifty. And that does still mean increasing quite significantly from where we are today. So I think the question there is what's the different role that it can play in different countries?

In some countries, we are seeing, that sort of cost trajectory that you spoke of actually being a little bit more, contained in terms of, of the increase. And then also considerations around innovation, development, the advanced reactors, SMRs, what might be the potential there. So it's definitely, all the areas that we're planning to look into again to to kind of unpack, the different cost pieces and, how those might might look going forward. And then also considering it really from the system value perspective.

So when we think about the needs of a power system from going well beyond LCOE into balancing needs, grid stability, grid expansion, so to try and frame it, against scenarios with more renewables and different systems.

So this is things like if you had ten percent of nuclear on every single, power system globally, you would have quite a few solutions to things like the inertia or something that could, provide reactive base.

Is that what you mean by You could have a little bit more of that inbuilt with nuclear, and so that might be a cost saving versus an additional provision of that on top of a more wind and solar based system.

Although, I doubt that that would actually, you know, make up necessarily for the higher cost that you'd be paying it for nuclear generation. But those are all the kind of pieces that we're gonna plant.

Okay. Fascinating. And, when like, one thing we've seen in markets recently is how sort of flexible the kind of historically nonflexible French nuclear fleet has been at times when you've had lots of solar wind coming through. So maybe maybe an example to look at. Yeah. I mean, you can't miss it. Right?

If you're gonna look at nuclear, you have to look at France.

Yes. Okay. Good. And then, Elena, coming back to you, what's a control and view that you hold?

Going back to the sun belt, I think when we, what really comes out of our analysis is the fact that solar and batteries can get us most of the the way there, which means long duration storage in many geographies of the world in that sun belt is something to deprioritize.

I think that's a great contrarian view.

Sorry to follow on from that one.

Sorry, Phoebe. Yeah. A little stage up. Yeah. Yeah. Phoebe, coming to you. What's your contrarian view?

By contrast, I think deep diving into that ultra long and that cost structure, if we look at those technologies, that hydrogen storage and, storage and the burning in a gas turbine is just the most expensive cost. And I think, again, it's that pragmatic question around, what are you gonna choose, and what's the impact gonna be from that system level rather than, like, your technology focus.

So so if you were to package it up and sort of give it to a policymaker on this, what would you say to them?

I would say look at particularly what the use case is gonna be and your costs on your system. And if your system costs are already incredibly high, let's go with a lower cost option there for the ultra long if you need it in the system space.

Okay. So we might not necessarily be, say, burning hydrogen to sort of fully decarbonize some of these systems. Actually, there might be a sort of a more pragmatic approach near to middle term for some of those locations. Yeah.

Okay. Brilliant. I've I really like both. I really like both contrary views, which is, I feel like I have to say that now.

Very good. Well, thank you both for coming on. It's been a really insightful conversation covering so much of the globe, so many technologies. I think the way you frame it in terms of wind belt and sun belt and then sort of the additional costs from the balancing side will help a lot of people who are both new to it but also have been in this space for a long time. So, yeah. Thank you both for coming on.

Thank you so much.

Thanks so much.