42 - Modo Selects - Battery energy storage and wind generation with Bridgit Hartland-Johnson (System Integration Manager @ Ørsted)

Energy storage is perfect or has perfect characteristics to be able to deal with this. As an industry we're not working closely enough together to understand what those technical benefits could be. It's a gold rush, isn't it, for frequency regulation, ancillary reserves, balancing mechanism.

Hello, everybody. Quentin here. And this week, we're going to revisit one of my favorite episodes, which is all about wind. So those of you who have listened to all of our episodes will know that a year ago we had Bridgit Hartland-Johnson on for an awesome conversation about the role that batteries can play in supporting wind and renewable generators.

And the year is 2023. And lo and behold, it's been really windy this year so far. And wind is already displacing a load of other generation types. So we do hope you enjoy this episode. And don't forget to like, subscribe, and do all the good stuff. It really makes a difference.

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Hi, guys. Quentin here from Modo. I'm here with Bridgit from Orsted, someone who I've worked with in the industry for--

we figured about seven years, maybe a bit longer.

And we're here to talk about energy storage and wind and what's changed over the last few years and how energy storage can be a big value add for wind assets. So let's do it. Bridgit, thanks for coming in.

Thank you for inviting me.

We've moved back a couple of weeks because of COVID and whatnot. And it's great to have you in finally to talk about what you know so much about. So before we get started, what's your experience in energy storage?

We met I think at the House of Parliament in 2014, APPG a long time ago, maybe in a pub after. And what's changed since then? You've been involved for a while now.

I've been involved for even longer than that actually. So I think I first started to work on energy storage projects perhaps in 2011, 2012--

QUENTIN SCRIMSHIRE: Wow.

I used to work as a project evaluator for the European Commission. And at that time, it was very much energy storage was in the R&D type space where people were just looking at technologies. It wasn't sure whether short duration, domestic storage, utility scale, which was going to go first. There was no incentives for anything. We just kind of knew that we needed it but not really for what or how it would be used.

And now we've got--

well, in the UK, 1.4 gigawatts of operational energy storage supporting the grid on an hour-by-hour basis. It's been talked about in policy levels.

And it's been talked about in policy levels in terms of removing barriers to enable more storage to be put on the grid. So sometimes I just can't believe how quickly we've achieved this. But it did go slow for a really long time.

It did. It did. So a lot of people are turning up now and think this is an exciting new game in town. There's some folks who have been slaving away at this for a long time. So I guess energy storage is getting bigger. But we talked just before we came on air, if you like, that it's still pretty small, right?

You come from a real power systems background with wind and big assets. So I guess 1.4 gigawatts in the UK, as you said, that's a--

is that a small wind farm, a medium wind farm, a large wind farm? What's that like?

So typically wind farms in the UK that are going into production now this year, that's how big they are--

1.4 gigawatts.

QUENTIN SCRIMSHIRE: Wow.

And the projects that are in development now are more than two gigawatts. So the scale is just getting bigger and bigger. And that's as a result of maturing technology in the offshore wind turbine space, what we can do, transmission systems. So yeah, they're getting pretty big.

The whole energy storage industry is smaller than a new offshore wind farm coming on today.

Yeah.

Do you want to just talk for a second about what's Orsted doing and also the last few years? What have you seen happen in the industry, before we get stuck down the rabbit hole of wind and storage?

Yeah.

So my job's system integration. So I look at projects in development. So that means that we've got a lease on the seabed, and we're developing it to prepare it to bid and to be built. And so I think our job ends when we hand it over to the construction team to start building it.

Developing wind?

Yeah, offshore wind. Yeah. And then my--

Offshore wind farms? Do we still call them wind farms? We

do still call them offshore wind farms. Yeah. And so my job is to look at system integration. And that's things like new routes to market, technologies, energy storage, hydrogen. I work quite a lot with talking to the interconnector people as well, so other opportunities.

There's been so much change in the offshore wind industry in terms of how subsidies are structured and how we interact with the grid that we really do need to look at how we can better interact with the grid, how we can better interact with the market going forward to make sure that we can continue to build out and hit the targets that we've got.

OK. So excuse me because I'm certainly not a wind expert, although I did spend a year working out at Grimsby offshore for a while. But that was climbing turbines in the North Sea. So wind--

Maybe it was one of ours.

Yeah, it was Lynn and Inner Dowsing and Lincs, which are very [INAUDIBLE]--

Oh, Lincs. Yeah, yeah.

I said Siemens like 120s.

Still a big turbine.

They're kind of small now, in the grand scheme of things. But they were--

yeah, anyway, so 3.6 megawatt turbines.

So wind gets developed and wind gets built historically based on a subsidy system with contracts for difference or whatever. And is that changing, or are you looking to tap into additional streams on top of that? How has that changed over time?

I mean, it's still the base case requirement. You're looking at many billions in CapEx to build one of these projects in a really long development phase, anything up to 10 years. And it's getting longer and longer because of the consenting challenges we're having, the cumulative environmental impacts of such a massive scale of offshore wind build out.

But it's also getting more competitive in every space as well. I mean, we're going further offshore. The wind farms are bigger. But there's not so many suppliers of wind turbines. There's not so many suppliers of transmission infrastructure. And then at the same time, we're seeing massive erosion in the CFD price.

And I don't know if you know the CFD works. But we get topped up to the CFD price. And then we get anything above the CFD, we have to pay back.

And typically the wind capture price runs below the wholesale price for electricity.

But it does bring those long-term contracted income into the projects, which helps you to make those big CapEx investments. But that's coming down.

And then also the government, they're constantly focusing.

They have to drive the best value to the consumer. So that subsidy mechanism is constantly being reviewed.

And the big change that happened last year was the next AR4 subsidy round that's coming. They removed what was called the negative price cap.

AR4. Is that what people call round four, right?

So you've got like round four--

That's separate.

--leasing round on the seabed, which is LR4. And then AR4 is the allocation round. So this is a fourth round of the CFD auction.

So the government consults on it beforehand to see, is it still working? Is it still fit for purpose? Does it need to change in any way?

And in 2019--

you probably know it very well--

we saw the first big market triggers in terms of negative prices in day-ahead, intra-day, balancing market. And this was a big wake-up call for the whole industry I think to say, actually, things are getting a bit bumpy. We have too much production on the system. We can't just keep paying renewable generators to produce even though the market's saturated and doesn't need it.

So through that consultation, the government removed the negative price cap. And whilst, as developers would, we moaned about it quite a lot, maybe cried a little bit and said, it's not fair. There isn't technology that's ready to help us mitigate that impact, the government very nicely said to us, well, actually, the industry will deliver.

Those developers that want to mitigate this risk will take more time to invest in alternatives technology. And they specifically said things like energy storage, hydrogen, new routes to market. So this is why we're thinking about it.

The way to get around it. Just go back a second because there's some folks--

a lot of our audience is energy storage people. And CFDs are obviously like magic to us.

So go back a step. I think you explained it pretty well.

If you're developing a wind farm and you want to build a wind farm, what you're saying is you get a contract from the government where, let's say the energy price is 50 pounds a megawatt hour and it's really windy.

And you get a contract for 30 pounds a megawatt hour. That means you're going to pay the government back the 20 Because this is important because people talk about subsidies but it's both ways, right?

No, exactly. And listen, we're giving back. And this is one of the things you don't see now. So the fact that the price volatility we've had over the past quarter--

well, since September really--

we're giving back.

Giving that--

you're getting that into the market and giving

Yeah, so that's going back. That's going back into the CFD mechanism, which is enabling funding of future projects. So whilst we get that contracted income that we really need to make such massive capital investments, we're also supporting the future industry as well.

Yeah. OK. And so the other side of it is if energy prices are 5 pounds and you've got 30 pounds, the government will top you up. So you're always guaranteed to get whatever you need in the spreadsheet that you put together when you decide to build a wind farm.

But when it's 1,000 pounds--

Yeah. When it's 1,000 pounds, you got a lot of money coming in and a lot of money going out.

Oh, we have to switch off.

Oh, you have to switch off. Right.

Oh, wow. OK. But the negative price mechanism, or the negative price cap, what did that do before and what does that mean now?

OK. So before if the wholesale market was negative for up to six hours, we were still paid the CFD.

But now we're not. And I think it's fair because it--

Six hours in duration like a--

Yeah.

Yeah, so on the seventh hour, we would lose it. But up until that--

and it's totally fair because that causes distortion in the market. And there was therefore no incentive to be more flexible in how we--

QUENTIN SCRIMSHIRE: [INAUDIBLE]

--or no encouragement for us to do anything really.

So now if the price goes negative, you've got to cover that. So it's a position, isn't it, basically?

Yeah. Yeah, absolutely. Or we curtail or we try and find new routes to market that don't involve sending power to shore.

OK. And that's why we're here today talking about this because the world's changed for wind. And wind farms--

they're actually quite flexible assets anyway because they're inverter connected.

Yeah, totally.

But wind farm developers and owners are now looking at other things they can do with that power at times where prices go negative or things get a bit funny in the market. And so you're looking at energy storage and other stuff. So do you want to just talk a little bit about energy storage and how that works with wind.

Yeah.

So the way I'm looking at it on our projects at the moment is just--

I tried to see if we could--

originally, when I started looking at this, I was trying to see if there was a way, if there was any technology that could help us to mitigate either low production times or high price times. But the scale of it is just--

it's huge. So you could potentially be curtailing a two-gigawatt wind farm for five, six, seven hours.

Oh, so you need like 10 gigawatt hours of batteries.

Yeah. Yeah.

So at the time--

and it was a shame, because there are some really nice long duration storage technologies that are developing. But they need a lot of space, and they aren't really mature enough considering where we are with having to make decisions in our projects. So still I think today battery storage does offer and it is offering a natural hedge towards some of the--

it can mitigate some of the revenue risk associated with market volatility. But it's a very small part.

But we can learn a lot from this. And it's inversely correlated. So if wind prices are low, system prices--

if there's no wind production, wholesale prices are high. So energy storage would be exporting and making profit for that.

And opposite to that, if there is too much wind, prices will be really low and energy storage would be importing. So it is really nicely correlated from that aspect.

OK. So it's like a way of de-risking it a little bit.

One thing you mentioned there, I was just thinking--

so two-gigawatt offshore wind farm you're developing. And you might need to store the power from that wind farm for five hours. I guess it won't be producing two gigawatts, but if that's the [INAUDIBLE]

No. Yeah. I mean, the newer wind farms are exceeding 50% load factor.

QUENTIN SCRIMSHIRE: OK.

So in the winter, full production, peak production.

Yeah, so you still need like five gigawatt hours of batteries, which is a lot. And there's like two in the UK. So like 2 and 1/2 times all the batteries in the UK for one wind farm to make this thing work.

Yeah.

All right. It's important we talk about the scale here.

You can see my headache. Right.

Yeah, this is big. And then CapEx wise, what is 5 gigawatt hours of energy storage cost you? I don't know. Probably it's a few billion, right?

BRIDGIT HARTLAND-JOHNSON: Yeah. Yeah.

Right. So there's a lot of money.

Yeah. And this is the thing as well. The business models that need to be there long duration energy storage probably aren't the same business models that are there for flexibility services because it needs to be that big workhorse, like Dinorwig.

And also if you're going to be running an energy storage system to capture five hours, you need to have a battery that's got a thermal capability of being able to charge that long. And many of them can't do longer than half an hour or an hour, right?

Well, yeah. You know what they say.

Yeah, yeah, yeah. Well, some of them can't even do that.

OK. Cool. So storage is a way of de-risking some of these wind projects.

And so where does the storage go? I've seen some pictures of wind turbines with batteries on them. Is this nonsense or is this real?

It's complicated. It's really complicated. I mean, if you think of an offshore environment as well, we're trying to get as much weight out of everything as we possibly can because the amount of steel we need for the turbines and the foundations we need to hold the bigger turbines. So we're constantly trying to drive out weight, to drive out cost in the offshore environment.

So sticking an energy storage facility on a turbine offshore is just totally bonkers.

And then if we do it onshore, we still, I think--

there's a lot going on at the moment to make it happen. But we've got the complexity that we build those transmission assets.

And then as part of the rules around the electricity act and licensing, we're not allowed to own that transmission system. So we divest it.

OFTOs.

Yeah, and in come the OFTO.

OFTOs, by the way, are offshore--

I'll let you explain it.

Offshore transmission operators.

These are a weird thing that loads of people don't even know exist.

Well, we shouldn't call them weird.

Oh, no, no, no. No, I'm not. No, I don't mean--

no, no, no. I take that back.

I'll get told off.

OFTOs aren't weird, just the concept.

The concept of it is a little bit counterintuitive, I think, to folks who are--

even to me. I've been around in this industry for a while. But yeah, so an OFTO--

that's a company, right?

Yeah. Yeah. So they're a licensed entity.

They're generally set up as a licensed entity of a generally financed house that pulls together other funds just to manage the transmission assets. It's nice, safe, contracted income. But it serves a really important purpose when offshore wind was really in its development phase in that--

you might not be familiar with what's happened in Germany or other countries.

But if somebody else builds a transmission asset for us, there is a very big risk that we'll build a wind farm and we've got nothing to connect it to or it's constrained.

When we say transmission asset, we mean cables and transformers--

The cable from--

yeah.

--from offshore to onshore, right?

Yeah.

Just to be clear.

Sorry.

It's all right.

Yeah. So it served a purpose in that it derisked- so as soon as we switch the wind farm on we know that we can transport it to the onshore transmission system and we can export our power. The challenge we've got now is the volume of projects that are being built and connecting those.

It's designed on a radial system, point to point. It's a single user for that part of the transmission system.

And it's causing a lot of challenges with bringing that onshore and stakeholders that are disrupted by the construction phase because it's huge infrastructure construction. A typical cable trench onshore is like 80 meters wide.

QUENTIN SCRIMSHIRE: Wow.

It's massive.

When you think about planning permission for wind, you think about being allowed to have wind turbines offshore, right?

But it's so much more than that. You've got to think of these massive--

I say massive. You've got to put these big cables in. It's big infrastructure, right?

It's big. We get the same rights as HS2 to build these projects--

QUENTIN SCRIMSHIRE: Wow.

--from the Secretary of State.

But yeah, so there's a lot of coordination going on now. So there's the offshore transmission network review, which was launched by the government after they committed to provide support for 50 gigawatts build out by 2050 and 40 by 2030. So they've done a review of the whole industry to see if it's fit for purpose. Will our transmission system cope or will it fall over?

And will it?

Things have got to change. One of these is coordination in terms of how we connect but also how we use the transmission system. And therefore, I think having energy storage co-located with an onshore infrastructure of an offshore wind farm is a very real thing. And it's something that the policy, that all of the movement in the policy space now is enabling that to happen. There's a lot of will to enable us to use that infrastructure better.

So there is things that we'll be able to do to be able to say that that onshore energy storage is effectively co-located with an offshore wind farm. Because they are together before they hit their point of interconnection with the main transmission system so--

Almost behind the--

well, it's not behind

Almost--

--it's not behind the meter, but it's behind the meter, right?

Yeah, and our meters are offshore.

Oh, OK.

Yeah. But--

[INAUDIBLE]

the different company who owns the transmission systems between offshore and onshore.

There's usually a platform of something out there with transformers on it. And then you guys, Orsted or whatever, will build the actual wind farm connected to that. And then the other company owns that bit, and you'll be metered at that bit, right?

Yeah, and they have the obligation to maintain the transmission system to maximize availability for us in that transmission license.

But there are things you can do in metering as well. I mean, you should know about metering in your business and certainly from your previous days. There's a lot of magic you can do with metering to kind of--

All aboveboard.

Yeah, all aboveboard. But to simulate these different metering arrangements that enable you to effectively say that something's co-located or behind the meter.

Something's just come into my head. So what about--

if I remember correctly, when I worked in wind, power quality was a big issue with wind operationally. Is there a way that energy storage can provide other services on top of just charging and discharging to support voltage or power quality or any of these other issues?

Oh, absolutely. And our constraints--

and not just because there's too much wind blowing when we don't need it. It's also thermal constraints on the grid.

And if you see where so many wind farms are connecting to substations, you would have had something--

this transmission system was designed for big centralized power plants and load centers in certain areas. And now we're connecting with variable generation all over the place.

And there are very, very significant loss of inertia or rate of change of frequency--

big challenge. And we're seeing stability pathfinders coming from National Grid. Energy storage is perfect or has perfect characteristics to be able to deal with this. But I think we're not understanding--

as an industry, we're not working closely enough together to understand what those technical benefits could be. It's a gold rush, isn't it, for frequency regulation, ancillary reserves, balancing mechanism.

But I think we do need to think bigger, and some of these pathfinder projects should do that because these stability issues are just going to get worse and worse and worse and the constraints. And you'll find anybody now trying to apply for a grid connection, they're likely to get a non-firm grid connection, which means the old days of being paid to curtail are going. You're just going to have to back down and not be compensated.

You're right. There should be more collab. We should get our people to call your people. The energy storage people should be calling the wind people.

And there's so much more we could do together on this. But does wind take part in ancillary services? I know there were some ODFM contracts a while ago in the summer of 2020 when everything sort of fell over--

it didn't fall over. Actually, National Grid did a great job. Almost fell over. How are wind operators thinking about ancillary services now?

It's challenging. I mean, on some of the assets that we've got closer to shore where we don't have an OFTO, we do deliver ancillary services. But more often than not, we're just responding to controls from--

well, for instructions from the control room just to manage the system according to our MSA, which is part of our connection agreement.

MSA, which means what? Sorry.

Mandatory services agreement. So it's part of our ability to be able to connect to the grid. We have to be able to provide certain services at the request of the control room.

And that's an obligation in the grid code. So we generally tend to be more of that, that we're compliant with grid code rather than actively pursuing ancillary services.

And it's quite difficult as well because if you think, wind turbines have the amazing ability to deliver reactive power. But they're 70, 80 kilometers offshore. So therefore, the OFTO then is responsible for what happens at the interface with the grid.

You have long inductive lines as well. Been a while since I've done any of that math, but yeah.

Yeah. Yeah. So it's challenging because we're so far offshore. But I think these points of interface with the transmission system is going to be more and more challenging to operate. And therefore, I think this is where energy storage is going to be able to deliver much more than balancing services, especially some of the long duration synchronized technologies that are coming through.

Well, can we talk about long duration for a second? Because you guys must be looking at it. We had Ed Porter on from Invinity, who is--

BRIDGIT HARTLAND-JOHNSON: I know Ed.

--knows all there is to know, I think, about flow batteries. What do you guys think of that technology?

I mean, again, a flow technology is really, really promising. And we've looked at it on a couple of--

because in other countries as well, there's almost an obligation, a point score, an obligation when you bid for a wind farm lease that you have to include technology innovation, system integration, things like this.

And the flow technology is really promising. Again, it just doesn't scale up. It's just not big enough yet. I mean, what's Ed's project in Oxford?

What? 5 megawatts, 12 megawatt hours, something like that. And it's just the scale of what we need, the beast that we're dealing with--

--and needing it now because we've got to make decisions on our projects now.

And I need to ask you questions about policy. There's a lot happening in policy at the moment that's really supportive of wind because they've got to move things. So you mentioned earlier barriers to entry coming down. What does that look like, and what do you see changing in the next couple of years?

Yeah. So the base Smart Flexibility Plan specifically sees energy storage and interconnectors as real flexible assets that are critical to achieving net zero and being able to build out such large volumes of renewable energy. And they listed specific barriers that they would work to try and resolve to enable. I think the realization is we need to do this faster.

If you look at the National Grid--

do you look at the FES?

Yeah, oh, we love the FES. Every year.

I love the FES as well. It's the highlight of the year. But you see more and more now every year, the storage volumes, the need for storage--

By the way, FES, for anyone who's listening, is The Future Energy Scenarios Report that comes out from National Grid where they have shared loads of awesome graphs of four scenarios usually about what might happen in the future for any of us who are energy nerds. It's very exciting because this is National Grid saying what they think is going to happen, which is just--

they're the big dogs.

I'm sorry. What were you saying?

No, I was just thinking how sad we are loving the FES so much.

No. And it's bloody long. It's like 100 pages.

It is.

They also make all the data freely available online. You should check it out. We'll put the link in the comments.

[INAUDIBLE]

carry on.

No, but you see the FES every year. And every year, the estimates in terms of the volumes of energy storage that we require are getting bigger and bigger and bigger. I think in the past National Grid perhaps weren't so confident that it was able to deliver. But now they've got proof in the control room where it's supporting, doing stuff every single day, every hour of every day.

And they're starting to feel very comfortable with it and now believe that it can provide solutions to big future problems. So I'm always--

but then I think, where is it going to come from?

The wind projects that you guys are working on--

so you already have operational wind. Can we just talk through briefly what that looks like, and then we can move on from there--

Orsted.

Yeah.

I mean, we're still the market leader in terms of our global portfolio.

We have assets on the West Coast. Some of the really older assets we have on the West Coast.

And then our focus at the moment is very much on the East Coast. So we have the Hornsea area. Hornsea 1 is in operation, 1.2 gigawatts. Hornsea 2 will go into operation this year at 1.4 gigawatts.

QUENTIN SCRIMSHIRE: Oh, jeez.

Hornsea 3 has secured its planning approval. That's up to 2.4 gigawatts. Hornsea 4 is submitting its planning application. That's another potentially 2.4, 2.6-gigawatt wind farm.

Very windy in Hornsea then, it would seem. This is offshore in the North Sea, right?

Yeah.

And whereabouts? Does it hit the north bit, the south bit.

So if you think where Grimsby--

It's pretty much opposite to Grimsby. Our operations base is there. And then we've just secured a lease round, our first floating offshore round, in Scotland. And Scotland's got a whole host of other grid problems that are going to require a lot of really good technology to be able to stabilize that.

So excuse my ignorance. How does a floating wind turbine work? We're going off topic now, but I got to know. So is it on a big boat thing, on a vessel?

They can be.

Has it got an anchor, I assume?

Well, mainly they've got these--

yeah, they've got anchors.

That's a good start.

So rather than [INAUDIBLE],, we pile massive foundations into the seabed. But you can only do that up to a certain water depth.

So now as we're going further and further offshore, you can't do that anymore. So if you've got a turbine height of, I don't know, 100 meters and 55 of it is below the sea and then blades lengths are now 90 meters, you haven't got a lot of room to play with.

Yeah, so floating becomes so you can have much deeper waters. And literally, you've just got anchors coming off them to secure them.

You must have a really--

I'm not a nautical person. I grew in Birmingham. We've got canals. But they must have a really long thing.

Is it a ballast I think underneath to stop

I'm not a turbine expert either. Yeah, so I don't want to start saying wrong things.

But the cables must move around a lot as it floats.

I mean, they got massive lateral stresses anyway with the waves, the wind, and everything offshore. They're pretty sophisticated [INAUDIBLE]..

Oh, it's incredible. And so the North Sea, Hornsea--

did you say 1, 2, 3, 4, which is like five gigawatts in total?

BRIDGIT HARTLAND-JOHNSON: Yeah.

Is that the one where they're doing an offshore--

they're building an island for it? Is it--

No.

This is the project that we're working in Denmark. It's a project where the Danish government is investigating, I think--

I don't know the full details, but really investigating how an offshore island could connect to offshore wind, could potentially produce hydrogen, could have full integration into power system, into chemical industry, into everything. So that's really interesting to keep an eye on, but literally building an island that could house all of the substation equipment for many wind farms and then just bring single cables into shore.

That's incredible, the scale that we're talking about now.

I think it needs to be though. We can't just keep doing these point-to-point connections. And there's a lot of industry that needs decarbonizing, and I think integrating it all--

and it seems of policy direction is encouraging us to do that as well now.

QUENTIN SCRIMSHIRE: To dream really, really big.

Yeah. Yeah.

And these--

I just want to come back to developing these sites because a lot of the folks who--

customers at Modo or people who watch this video, they're involved in developing energy storage assets. And there's been some big changes in energy storage, which mean that you don't have to go through the two-year period for over 50 megawatts anymore.

Wonderful.

--I won't say rush it through, but you can go faster. But the kind of assets that you're looking at, these are big. And so what does that involve? Do you still have to go through a--

what? a DCO?

A DCO, yeah.

--which stands for--

I'll let you.

Development Consent Order.

What is that, right?

So it's a DCO.

All of our wind farms have to go through this process, and it's the same as what HS2 and all of these massive infrastructure projects have to go through. Its Development Consent Order. It's given by the Secretary of State, and it's only for projects that are deemed to be nationally significant infrastructure projects, so basically critical to the UK continuing to operate.

So offshore wind is categorized in that. Interconnectors are now moving into that.

And in the past, energy storage above 50 megawatts slipped from the local planning regime, which was governed by the Town and Country Planning Act, into this DCO. So you're talking like perhaps, I don't know, a few 100,000 pounds to consent a big project in the TCPA route or a few millions or more--

Wow.

--if you go into the DCO route and with a much longer planning duration. So that was a big step to removing barriers.

Which is why we got so many 49.9s, right?

If anyone [INAUDIBLE]

Exactly.

Why are there so many 49.9 megawatts sites out there?

BRIDGIT HARTLAND-JOHNSON: Not anymore.

[INAUDIBLE]

all sorts. Yeah, not anymore. And so now you can build bigger storage faster and cheaper, which is great because we need a shedload, a lot more of it, that you've mentioned. One thing that we've talked about today I just want to comment on is we often get asked at Modo the biggest question is, how deep is the balancing mechanism?

I want to build storage, but how deep is the BM? I'm worried about the BM.

Storage has a place in the energy system so much bigger than just trading the BM. You've got behind-the-meter support of businesses. That's been pretty much done. That's pretty well developed as a part of this infrastructure world that we work in.

You've got wind assets that need behind-the-meter support too. We're talking about gigawatts and gigawatts. And then you've got just straight up transmission support with voltage regulation and whatnot. There is so much more to be done. But of course, the thing that's on everyone's mind right now is the BM, which I sort of get.

But this has really broadened my horizons on it. ED Porter talks a lot about energy storage supporting businesses and users to make the best of the grid connections. Because if grid connections is really the bottleneck right now, then storage will help you use that better. Yeah, just a comment, which is just this thing is so much bigger than the BM.

It is. But look how agile the energy storage industry has been. So you'll remember the gold rush in 2016 for EFR. And everybody thought that was it. It was only EFR, then nothing. Then everybody jumped into FFR.

And everybody raced for the BM. And the BM will get deeper because it's proportional to the generation and the demand on the system at any point in time anyway.

But then the wholesale market as well--

I mean, look how bumpy things are in the wholesale market now. And that market is so much bigger than the BM. And now you've got storage technologies that are better at longer durations. Then that's where that's going to be.

But we still need something bigger as well to deal with these long periods of stress on the system.

And I think the business models for those probably have to be a little bit different. I mean, I don't know how I would persuade my bosses to invest a few billions in an energy storage project that's not part of our core business. I think we might like to buy those services in the future or have access to those services or have offtake arrangements with those service providers.

But then how do you get those service providers to be able to invest in that kind of level--

what have we been talking about CapEx these days? A few hundred millions maybe compared to where we need to go.

Probably a bill. Probably a bill in total. And we've got a lot more than that to do. I just want to get one more question in before--

I know we're going to run out of time. But I want to get your thoughts on where you think the future energy system is headed. What really excites you, and where does energy storage fit into that? We've talked about a few things today.

But what are the big problems that energy storage needs to solve, and what can we do as an industry to get this thing moving faster?

Yeah. I have this really nice job where I am looking at whole system integration, and there is work going on in this space with the government as well. All the government regulators from different industry sectors are working together and--

total flexibility. I don't know if it'll happen before I retire, but total system flexibility where you're producing electricity according to the weather pattern that's required, and there's a demand for something on the system.

And that demand could be for electricity. It could be for heating. It could be for molecules, for efuels or something like that. But you're totally able to flex in real time what you do with your production. And that's going to require a lot of storage in all areas, whether it's electrical energy, whether it's hydrogen storage, whether it's heat storage. We're going to need some form of storage for everything to be able to provide that flexibility so we've got on-demand access to resources according to how they're being produced.

And for me, that's kind of like my nirvana. And I feel like I'm right on the very beginning of that journey, and I probably will never see a full system integrated. But that's the way we've got to go.

I completely agree. It's funny because the language you're talking about there, which really excites me as well, it's the same thing that we were talking about DSR in the 2010s. And no disrespect to DSR, but it just didn't really turn out that way. And so it's the assets or the technology or the infrastructure or the metering or whatever.

We didn't end up with the 20 gigawatts of DSR that we need, and it wasn't fast enough. And it wasn't reliable enough.

There's some great DSR out there. Don't get me wrong. But it just didn't happen in the same way. And that's not because anyone didn't try hard enough and--

I used to work at Kiwi Power. I get it. But now it feels like we've got this new asset class for energy storage, which can deliver on those things that we were promising ourselves in the DSR world. And so maybe the nirvana is possible.

We're going a bit crazy here, but we just need to do it with big batteries or lots of little ones or whatever. Anyway, so--

I think so.

I've got on too long.

I just want to say thank you, Bridgit, for coming on. It's been awesome chatting to you. You clearly really know your stuff and just thanks for being a friend of Modo. And we're looking forward to having you on again soon.

Thank you too.

Thanks very much. Cheers.

Cheers.

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