1 00:00:00,360 --> 00:00:04,440 Speaker 1: Welcome to zero. I am Akshatrati this week the world's 2 00:00:04,640 --> 00:00:20,360 Speaker 1: biggest machine. I often think as a reporter that you know, 3 00:00:21,000 --> 00:00:23,159 Speaker 1: when you think about fossil fuels, people kind of know 4 00:00:23,239 --> 00:00:26,200 Speaker 1: what coal looks like, what oil looks like, you know 5 00:00:26,760 --> 00:00:31,200 Speaker 1: what gas burns like. But electricity is something that people 6 00:00:31,440 --> 00:00:35,479 Speaker 1: don't have a very intuitive grasp on. Yes it comes 7 00:00:35,520 --> 00:00:37,800 Speaker 1: out of a plug, and yes it powers a lot 8 00:00:37,840 --> 00:00:42,080 Speaker 1: of our lives now, But how does it move? How 9 00:00:42,120 --> 00:00:45,400 Speaker 1: do you make it move? How do you manage its movement? 10 00:00:46,040 --> 00:00:50,040 Speaker 1: It is a mysterious form of energy even today, even 11 00:00:50,080 --> 00:00:52,519 Speaker 1: though we've been using it at scale for one hundred 12 00:00:52,680 --> 00:00:58,840 Speaker 1: plus years. I'm just curious. 13 00:00:59,760 --> 00:01:05,840 Speaker 2: Yeah, yeah, I was moved. That was poetic. I think. 14 00:01:06,040 --> 00:01:07,640 Speaker 2: I think you're exactly right. And this is part of 15 00:01:07,640 --> 00:01:10,800 Speaker 2: what drew me to this sector to begin with. It's everywhere, 16 00:01:10,800 --> 00:01:12,840 Speaker 2: all at once, and not to be seen at the 17 00:01:12,840 --> 00:01:16,080 Speaker 2: same time. There's like often it now. 18 00:01:16,319 --> 00:01:19,200 Speaker 1: I don't believe in God, and I'm trying to understand 19 00:01:19,280 --> 00:01:22,040 Speaker 1: why I launched him to a sermon with this week's guest. 20 00:01:22,720 --> 00:01:26,680 Speaker 1: I think it's because I'm obsessed with electricity these days, 21 00:01:26,720 --> 00:01:30,959 Speaker 1: in all its mysterious beauty, and for the next three episodes, 22 00:01:31,160 --> 00:01:34,080 Speaker 1: we are going to bring you conversations about the machine 23 00:01:34,400 --> 00:01:38,839 Speaker 1: that brings you electricity, the world's biggest machine, the grid. 24 00:01:40,000 --> 00:01:43,039 Speaker 1: This week we talked to Sunjit Sanghera, who you just 25 00:01:43,120 --> 00:01:46,440 Speaker 1: heard from. He is now the head of Strategic Futures 26 00:01:46,560 --> 00:01:49,360 Speaker 1: at the National Grid, but I caught up with him 27 00:01:49,360 --> 00:01:52,360 Speaker 1: in his last days at Bloomberg ne EF, where he 28 00:01:52,440 --> 00:01:56,840 Speaker 1: was an expert on grids. Sunjeet is an electrical engineer 29 00:01:57,200 --> 00:02:00,720 Speaker 1: and someone who worked in grid control rooms, and who 30 00:02:00,760 --> 00:02:03,880 Speaker 1: better to help us understand this beast of a machine 31 00:02:04,160 --> 00:02:07,720 Speaker 1: that needs to get bigger and more complex as we 32 00:02:07,760 --> 00:02:24,320 Speaker 1: get to zero emissions. Sanji, Welcome to. 33 00:02:24,280 --> 00:02:26,120 Speaker 2: The show, Hi Action, Thanks for having me. 34 00:02:27,040 --> 00:02:30,240 Speaker 1: Now, when we talk about grids, people probably think of 35 00:02:30,360 --> 00:02:35,560 Speaker 1: big cables and pylons. That's the visual side of grids 36 00:02:35,680 --> 00:02:38,799 Speaker 1: that I think people are aware of. But grids are 37 00:02:38,840 --> 00:02:42,040 Speaker 1: a lot more than just those pylons and cables. What 38 00:02:42,160 --> 00:02:45,240 Speaker 1: are quote unquote invisible parts of the grid. 39 00:02:46,400 --> 00:02:48,799 Speaker 2: Yeah. When I picture the grids, I picture driving on 40 00:02:48,840 --> 00:02:50,720 Speaker 2: a long road trip in Canada. On the side of 41 00:02:50,760 --> 00:02:55,520 Speaker 2: the highway, you'd see these power lines stringing across the countryside, 42 00:02:55,520 --> 00:02:58,400 Speaker 2: and I remember thinking like, we can't possibly be connecting 43 00:02:58,440 --> 00:03:02,200 Speaker 2: everything together with these That is exactly what we're doing, 44 00:03:02,320 --> 00:03:05,519 Speaker 2: is we're connecting everything together with these wires. So I 45 00:03:05,600 --> 00:03:09,200 Speaker 2: think networks really are important, and it may seem a 46 00:03:09,240 --> 00:03:12,560 Speaker 2: bit old school or kind of a legacy thing that 47 00:03:12,600 --> 00:03:15,240 Speaker 2: we're gonna you know, we have aluminum and copper wires 48 00:03:15,760 --> 00:03:18,720 Speaker 2: taking power from where it's being produced ultimately where it's 49 00:03:18,760 --> 00:03:22,720 Speaker 2: being consumed. But like, networks underpin a lot of the 50 00:03:22,720 --> 00:03:25,239 Speaker 2: way that the world works, and it also underpins a 51 00:03:25,280 --> 00:03:27,040 Speaker 2: lot of the transformations that we've had in the world. 52 00:03:27,080 --> 00:03:29,160 Speaker 2: So if we look at like roads or railroads or 53 00:03:29,200 --> 00:03:32,480 Speaker 2: even the internet, there's there's always a network sitting at 54 00:03:32,480 --> 00:03:34,920 Speaker 2: the center. And so in the energy space there are 55 00:03:34,960 --> 00:03:38,440 Speaker 2: networks too, and we have really two segments of networks. 56 00:03:38,560 --> 00:03:42,600 Speaker 2: So we have the transmission grid and the distribution grid, 57 00:03:42,880 --> 00:03:45,920 Speaker 2: and there's a semi arbitrary distinction between them. There's a 58 00:03:45,960 --> 00:03:48,920 Speaker 2: really like technical term of like voltage that distinguishes them. 59 00:03:49,160 --> 00:03:51,360 Speaker 2: But really one is the highway system that moves power 60 00:03:51,520 --> 00:03:54,960 Speaker 2: really far distances, and one is this kind of distribution 61 00:03:55,080 --> 00:03:58,400 Speaker 2: grid that moves power more within communities, and it's a 62 00:03:58,440 --> 00:04:01,520 Speaker 2: crucial part of taking and energy where it ultimately needs 63 00:04:01,520 --> 00:04:04,400 Speaker 2: to be could we get away without a grid? And 64 00:04:04,440 --> 00:04:07,640 Speaker 2: this has been contemplated more so now that we have 65 00:04:07,720 --> 00:04:11,040 Speaker 2: these kind of rooftop photovoltake systems. You can put power 66 00:04:11,200 --> 00:04:13,360 Speaker 2: right on your home and to some extent we can 67 00:04:13,600 --> 00:04:15,720 Speaker 2: get rid of the grid. And this was the fantasy 68 00:04:15,720 --> 00:04:17,919 Speaker 2: that we thought we can maybe partaken, that we maybe 69 00:04:18,200 --> 00:04:23,159 Speaker 2: retire the grid entirely as renewables proliferate. Largely, what we've 70 00:04:23,200 --> 00:04:25,599 Speaker 2: seen is this doesn't happen, so that the markets that 71 00:04:25,640 --> 00:04:29,440 Speaker 2: have gone the furthest in renewable adoption have had to 72 00:04:29,480 --> 00:04:33,040 Speaker 2: actually double down on this infrastructure. So if you look 73 00:04:33,080 --> 00:04:34,760 Speaker 2: at say, for example, Germany, where they have a lot 74 00:04:34,760 --> 00:04:38,239 Speaker 2: of wind energy, you have these highly remote renewable energy 75 00:04:38,320 --> 00:04:41,400 Speaker 2: and you have to pump it into where the cities are. 76 00:04:41,680 --> 00:04:44,000 Speaker 2: Even in cities where you have a lot of solar, 77 00:04:44,480 --> 00:04:48,440 Speaker 2: you end up needing substantial infrastructure to backstop when the 78 00:04:48,440 --> 00:04:52,240 Speaker 2: sun is shining and distribute power. The function of this 79 00:04:52,320 --> 00:04:56,760 Speaker 2: grid has evolved, i would say, from moving power from 80 00:04:56,760 --> 00:04:58,760 Speaker 2: where it's produced to consume to being a bit more 81 00:04:58,800 --> 00:05:01,599 Speaker 2: point to point, kind of more like the internet. But 82 00:05:02,120 --> 00:05:04,279 Speaker 2: this has kind of been an evolution that we've been on. 83 00:05:04,760 --> 00:05:06,960 Speaker 1: And one thing we didn't talk about is the manpower 84 00:05:07,160 --> 00:05:11,480 Speaker 1: the people that are monitoring these substations, maybe trees falling 85 00:05:11,480 --> 00:05:14,240 Speaker 1: on cables. And you mentioned that you worked in a 86 00:05:14,240 --> 00:05:16,520 Speaker 1: control room. What does that work like. 87 00:05:17,000 --> 00:05:20,600 Speaker 2: So the people are actually a crucial part of the 88 00:05:21,320 --> 00:05:24,839 Speaker 2: grid system and they are largely invisible as well. And 89 00:05:24,880 --> 00:05:27,360 Speaker 2: so this is the people who are maintaining these infrastructures 90 00:05:27,400 --> 00:05:30,520 Speaker 2: while so literally climbing the poles and doing maintenance and 91 00:05:30,520 --> 00:05:34,720 Speaker 2: then they're working in the control centers while and they 92 00:05:34,720 --> 00:05:37,680 Speaker 2: play a crucial role making sure the system is operated 93 00:05:37,920 --> 00:05:42,400 Speaker 2: effectively and efficiently. Often have decades of experience doing this 94 00:05:42,520 --> 00:05:46,640 Speaker 2: for a specific market. People are retiring and that expertise 95 00:05:46,720 --> 00:05:50,279 Speaker 2: is leaving. Meanwhile, the challenge of operating the grid is rising, 96 00:05:50,680 --> 00:05:53,680 Speaker 2: and so the workforce challenges here are significant. Even in 97 00:05:54,640 --> 00:05:57,320 Speaker 2: building out the grid, there's a number of skill sets 98 00:05:57,360 --> 00:06:02,440 Speaker 2: around cable splicing, protection control technologists. These are very skilled 99 00:06:02,520 --> 00:06:05,640 Speaker 2: jobs that take a long time to be able to 100 00:06:05,680 --> 00:06:08,679 Speaker 2: acquire the skills for and then we have retirements there. 101 00:06:09,240 --> 00:06:11,640 Speaker 2: When I worked at Utility, there was a particular job 102 00:06:11,680 --> 00:06:15,599 Speaker 2: where you had to shadow under a specialist engineer for 103 00:06:15,640 --> 00:06:17,479 Speaker 2: a decade to be qualified. 104 00:06:18,040 --> 00:06:20,359 Speaker 1: To decade shadowing for a decade. 105 00:06:20,480 --> 00:06:23,640 Speaker 2: Yeah, so it was running these detailed EMTP, these kind 106 00:06:23,640 --> 00:06:27,200 Speaker 2: of transient stability studies, so very technical engineering studies, and 107 00:06:27,240 --> 00:06:29,960 Speaker 2: the complexity of the grid when we talk about it rising, 108 00:06:30,560 --> 00:06:32,479 Speaker 2: this is part of it because the type of things 109 00:06:32,520 --> 00:06:35,520 Speaker 2: that we're connecting are very nonlinear in the way they 110 00:06:35,560 --> 00:06:39,320 Speaker 2: behave And so what does this mean? I think, yes, 111 00:06:39,640 --> 00:06:42,200 Speaker 2: we're going to need people, and people are often the 112 00:06:42,240 --> 00:06:45,160 Speaker 2: center of any transition, and skilled labor will be very 113 00:06:45,160 --> 00:06:46,040 Speaker 2: crucial part of this. 114 00:06:46,880 --> 00:06:49,719 Speaker 1: And there are obviously these two types of grids, the 115 00:06:49,839 --> 00:06:53,359 Speaker 1: transmission grid and the distribution grid, and you said voltage 116 00:06:53,440 --> 00:06:56,400 Speaker 1: is that thing that separates them. And then there are 117 00:06:56,920 --> 00:06:59,920 Speaker 1: perhaps things that people do see, these things called substations 118 00:07:00,000 --> 00:07:03,360 Speaker 1: where these two types of grids are connected, they sort 119 00:07:03,400 --> 00:07:06,920 Speaker 1: of change the voltage. But are there other things that 120 00:07:07,080 --> 00:07:09,720 Speaker 1: you know, either people should be aware of or they 121 00:07:09,840 --> 00:07:13,040 Speaker 1: probably walk by and they don't think about, but are 122 00:07:13,080 --> 00:07:14,320 Speaker 1: also key parts of the grid. 123 00:07:15,040 --> 00:07:17,400 Speaker 2: Yeah, so substations are like the nodes, like where these 124 00:07:17,440 --> 00:07:20,840 Speaker 2: power lines meet. I think the other key attribute is 125 00:07:21,080 --> 00:07:25,080 Speaker 2: there's a whole layer of digital infrastructure that sits and 126 00:07:25,280 --> 00:07:29,720 Speaker 2: monitors the grid and make sure that when something bad happens, 127 00:07:30,000 --> 00:07:32,240 Speaker 2: and so in the grid space of something bad is 128 00:07:32,280 --> 00:07:34,880 Speaker 2: like a branch falling on top of a power line, 129 00:07:34,960 --> 00:07:36,840 Speaker 2: which seems like a mundane thing, but it's a very 130 00:07:36,840 --> 00:07:39,280 Speaker 2: significant thing and it happens all the time, and so 131 00:07:39,320 --> 00:07:41,800 Speaker 2: it needs to be managed. And so there's a layer 132 00:07:41,880 --> 00:07:46,640 Speaker 2: of telecommunication infrastructure that is becoming just as important and 133 00:07:46,960 --> 00:07:50,600 Speaker 2: even more invisible than the power lines themselves, because the 134 00:07:50,600 --> 00:07:54,560 Speaker 2: grid is becoming bidirectional and reliabilities is the top of 135 00:07:54,640 --> 00:07:58,760 Speaker 2: mind as we see the storms and being hammering these 136 00:07:58,760 --> 00:08:02,040 Speaker 2: infrastructure more and more. This is largely linear infrastructure sitting 137 00:08:02,120 --> 00:08:05,840 Speaker 2: highly exposed to the elements, right, and so the digital 138 00:08:05,840 --> 00:08:09,320 Speaker 2: infrastructure is just as important. And maybe the last bit 139 00:08:09,320 --> 00:08:11,920 Speaker 2: I would say that's quite invisible is the control center. 140 00:08:12,360 --> 00:08:14,920 Speaker 2: So this is the heart of a power grid. So 141 00:08:14,960 --> 00:08:18,720 Speaker 2: it's a building usually off in some remote area, and 142 00:08:19,320 --> 00:08:21,480 Speaker 2: you know it's like you usually just have windows, like 143 00:08:21,520 --> 00:08:23,440 Speaker 2: it's kind of a boring building. But this is where 144 00:08:23,600 --> 00:08:27,400 Speaker 2: all of the telecommunication comes back to and decisions are 145 00:08:27,440 --> 00:08:30,400 Speaker 2: being made hour to hour, minute to minute, second to 146 00:08:30,440 --> 00:08:33,760 Speaker 2: second about what should happen on the power system. And 147 00:08:33,840 --> 00:08:36,079 Speaker 2: the role that that control center is having to play 148 00:08:36,280 --> 00:08:41,520 Speaker 2: is changing rapidly as the number of decision points right, 149 00:08:41,559 --> 00:08:43,720 Speaker 2: So if you have you can imagine a power system 150 00:08:43,760 --> 00:08:47,440 Speaker 2: with ten generating coal plants in the old legacy days 151 00:08:47,840 --> 00:08:52,120 Speaker 2: now being tens of thousands of individual operating points. So 152 00:08:52,320 --> 00:08:55,200 Speaker 2: the role of the control center has radically changed. And 153 00:08:55,240 --> 00:08:57,839 Speaker 2: this is just an invisible building in the middle. 154 00:08:57,600 --> 00:09:03,480 Speaker 1: Of nowhere, and are obviously changing as technology changes, And 155 00:09:03,679 --> 00:09:06,400 Speaker 1: regardless of whether we had climate goals or not, there 156 00:09:06,440 --> 00:09:08,720 Speaker 1: would be things that we'll be done to the grid, 157 00:09:08,920 --> 00:09:12,800 Speaker 1: either by external forces or within the industry to change it. 158 00:09:13,360 --> 00:09:17,120 Speaker 1: But let's focus on the climate goals. Because BLOOMERGINIF has 159 00:09:17,160 --> 00:09:21,440 Speaker 1: put out its latest energy outlook and then some of 160 00:09:21,480 --> 00:09:24,400 Speaker 1: the numbers in there are stunning. The world will need 161 00:09:24,720 --> 00:09:27,640 Speaker 1: to nearly double its grid network to one hundred and 162 00:09:27,679 --> 00:09:32,240 Speaker 1: eleven million kilometers. That's a distance that's almost three quarters 163 00:09:32,360 --> 00:09:35,160 Speaker 1: to the Sun, and we have to do that by 164 00:09:35,280 --> 00:09:39,240 Speaker 1: twenty fifty. Now, the first grid was built in eighteen 165 00:09:39,280 --> 00:09:44,080 Speaker 1: eighty two in Manhattan in New York, and so for 166 00:09:44,280 --> 00:09:48,800 Speaker 1: net zero, we have to build as much in twenty 167 00:09:48,840 --> 00:09:51,559 Speaker 1: five years as we have done in the previous one 168 00:09:51,679 --> 00:09:56,520 Speaker 1: hundred and forty years. That seems like a crazy challenge 169 00:09:56,559 --> 00:10:00,440 Speaker 1: to me, but for some reason it feels like the 170 00:10:00,480 --> 00:10:02,520 Speaker 1: grid challenge is underappreciated. 171 00:10:04,400 --> 00:10:07,040 Speaker 2: Yeah, I agree, the challenge is significant. I think we've 172 00:10:07,240 --> 00:10:13,640 Speaker 2: just started to wake up to this challenge building wind 173 00:10:14,160 --> 00:10:18,640 Speaker 2: and solar and electrification. Like, this kind of narrative on 174 00:10:18,920 --> 00:10:22,280 Speaker 2: reaching our climate goals has been talked about for some time. 175 00:10:22,360 --> 00:10:26,160 Speaker 2: It's fairly well established. The power grid is kind of 176 00:10:26,200 --> 00:10:28,720 Speaker 2: this neutral agent, right, because you can use it to 177 00:10:28,760 --> 00:10:31,520 Speaker 2: move electrons from a coal plant or from a wind farm, 178 00:10:31,880 --> 00:10:33,800 Speaker 2: and so as a result, it was a bit more 179 00:10:33,880 --> 00:10:37,720 Speaker 2: muddied in the conversation about what its role actually was. 180 00:10:38,559 --> 00:10:40,480 Speaker 2: And again, like as I was saying before, there was 181 00:10:40,520 --> 00:10:42,920 Speaker 2: this kind of perception that maybe the grid wasn't necessary, 182 00:10:42,960 --> 00:10:46,080 Speaker 2: and that hasn't really borne out. What we're seeing is 183 00:10:46,120 --> 00:10:48,360 Speaker 2: that the network is going to be crucial and we 184 00:10:48,400 --> 00:10:50,760 Speaker 2: will have to build it out. Utilities have woken up, 185 00:10:50,840 --> 00:10:53,520 Speaker 2: governments have woken up. We're seeing this across Europe, the 186 00:10:53,640 --> 00:10:56,600 Speaker 2: US even right, and have started to really focus in 187 00:10:56,640 --> 00:11:00,920 Speaker 2: on this problem of building out the electricity. If you 188 00:11:00,960 --> 00:11:05,240 Speaker 2: look at historically the amount of linear infrastructure we're adding 189 00:11:05,280 --> 00:11:07,360 Speaker 2: to a power grid, you know, we had years where 190 00:11:07,360 --> 00:11:10,800 Speaker 2: it's less than one percent per year growth rates because 191 00:11:11,160 --> 00:11:13,040 Speaker 2: largely what would happen is you'd build out the grid 192 00:11:13,080 --> 00:11:15,400 Speaker 2: and then you maintain the assets. You'd kind of go 193 00:11:15,440 --> 00:11:18,360 Speaker 2: into this care and maintenance era where the grid has 194 00:11:18,400 --> 00:11:20,120 Speaker 2: been built out for the size of the economy that 195 00:11:20,120 --> 00:11:22,160 Speaker 2: we have and we would mostly just take care of it. 196 00:11:23,080 --> 00:11:25,320 Speaker 2: But prior to that was a huge build cycle in 197 00:11:25,400 --> 00:11:28,520 Speaker 2: much of Europe right in the US, and you would 198 00:11:28,520 --> 00:11:32,760 Speaker 2: see these significant outlays of infrastructure happening in short time 199 00:11:33,160 --> 00:11:37,560 Speaker 2: frames where there was political window, the construction resources were rallied, 200 00:11:37,559 --> 00:11:40,360 Speaker 2: and things just got done. So what we're talking about 201 00:11:40,360 --> 00:11:42,240 Speaker 2: here is just a return to that. I don't think 202 00:11:42,280 --> 00:11:44,600 Speaker 2: it's fair to say it's anything more than something that's 203 00:11:44,600 --> 00:11:47,880 Speaker 2: been done before. I think the challenge is many markets 204 00:11:47,920 --> 00:11:51,440 Speaker 2: are doing it simultaneously, right, and that's because there is 205 00:11:51,480 --> 00:11:54,840 Speaker 2: a global nature to why we're all building out the 206 00:11:54,840 --> 00:11:57,319 Speaker 2: grid as opposed to an economic growth cycle that each 207 00:11:57,360 --> 00:12:00,320 Speaker 2: country was doing at a slightly different time. That's going 208 00:12:00,360 --> 00:12:03,160 Speaker 2: to put a constraint on resources, both people and parts 209 00:12:03,200 --> 00:12:06,160 Speaker 2: and metals, and so that's that's a unique challenge. But 210 00:12:06,200 --> 00:12:09,040 Speaker 2: in terms of coming back to what we have to 211 00:12:09,080 --> 00:12:11,200 Speaker 2: do with building a grid, it's something we've done before 212 00:12:11,520 --> 00:12:12,480 Speaker 2: and it's something we need. 213 00:12:12,320 --> 00:12:15,440 Speaker 1: To come back to and we'll look at the regional picture, 214 00:12:15,600 --> 00:12:18,880 Speaker 1: but let's stick with the global figures because the other 215 00:12:19,000 --> 00:12:22,640 Speaker 1: thing about grids is that it will take a lot 216 00:12:22,679 --> 00:12:26,600 Speaker 1: of money. The BNF report said, if we are to 217 00:12:26,600 --> 00:12:29,079 Speaker 1: build a net zero grid, it's going to cost almost 218 00:12:29,160 --> 00:12:32,920 Speaker 1: twenty three trillion dollars by twenty fifty, and that is 219 00:12:33,360 --> 00:12:35,840 Speaker 1: two thirds of the amount that would be spent on 220 00:12:36,040 --> 00:12:40,600 Speaker 1: building out renewables, which again I feel like is not 221 00:12:40,679 --> 00:12:44,320 Speaker 1: appreciated by most people who think about net zero goals. 222 00:12:45,760 --> 00:12:49,320 Speaker 1: And so what specifically about a net zero grid makes 223 00:12:49,360 --> 00:12:53,000 Speaker 1: it more expensive than what would have been a baseline scenario. 224 00:12:54,200 --> 00:12:57,680 Speaker 2: Mostly it's just more, there's more of it needed, the 225 00:12:57,760 --> 00:13:00,600 Speaker 2: amount of renewables, the amount of induist street that you 226 00:13:00,640 --> 00:13:04,680 Speaker 2: actually have to put onto the electricity grid, electrification and 227 00:13:04,720 --> 00:13:08,440 Speaker 2: the buildout of zero carbon power generation is what the 228 00:13:08,480 --> 00:13:11,920 Speaker 2: net zero scenario is effectively doing. So the size of 229 00:13:11,960 --> 00:13:15,920 Speaker 2: this system becomes quite large, and so there's a large 230 00:13:15,960 --> 00:13:18,960 Speaker 2: part of today's economy is not on the electricity grid, 231 00:13:19,160 --> 00:13:21,480 Speaker 2: whether it's you can look at your home, for example, 232 00:13:21,920 --> 00:13:24,080 Speaker 2: your car may not be on the grid, your heating 233 00:13:24,120 --> 00:13:26,160 Speaker 2: may not be on the grid, but yes you're lighting 234 00:13:26,559 --> 00:13:28,880 Speaker 2: and your power use will otherwise be on the grid. 235 00:13:29,040 --> 00:13:31,199 Speaker 2: So that's a third right, and so when you look 236 00:13:31,240 --> 00:13:33,280 Speaker 2: at the size of the grid that has to now 237 00:13:33,600 --> 00:13:35,960 Speaker 2: decarbonize this it's a significant challenge. 238 00:13:36,000 --> 00:13:38,120 Speaker 1: And when we talk about the cost of reaching net 239 00:13:38,240 --> 00:13:42,520 Speaker 1: zero they are significant. Who pays for that twenty three 240 00:13:42,559 --> 00:13:44,480 Speaker 1: trillion dollars rate pairs? 241 00:13:44,559 --> 00:13:46,920 Speaker 2: You know, so the average person is on the hook 242 00:13:46,960 --> 00:13:49,920 Speaker 2: for most of this. That counterfactual I think is actually 243 00:13:49,960 --> 00:13:52,280 Speaker 2: crucial just to dwell on that if you don't build 244 00:13:52,280 --> 00:13:55,160 Speaker 2: the grid, there are going to be costs outside of that. 245 00:13:55,240 --> 00:13:57,160 Speaker 2: So when you look at studies that look at what 246 00:13:57,200 --> 00:14:01,000 Speaker 2: grid development does, it brings value to everyone, right, so 247 00:14:01,040 --> 00:14:03,600 Speaker 2: it'll bring down the cost of the whole system. And 248 00:14:03,640 --> 00:14:05,400 Speaker 2: this is part of why this is so challenging to 249 00:14:05,400 --> 00:14:08,320 Speaker 2: put into context, is because system costs analysis is just 250 00:14:08,360 --> 00:14:11,280 Speaker 2: a complicated thing to do to understand what's the benefit. 251 00:14:11,320 --> 00:14:14,559 Speaker 2: We're talking about tying everything together, and so we've done 252 00:14:14,600 --> 00:14:17,000 Speaker 2: some analysis at B ANDEF to think about what the 253 00:14:17,000 --> 00:14:20,480 Speaker 2: impact to rates could be that first, so that like 254 00:14:20,520 --> 00:14:23,880 Speaker 2: the spin cycle out to twenty fifteen is actually double peaked, right, 255 00:14:23,960 --> 00:14:26,920 Speaker 2: so there's a big rise and spend out to twenty thirty, 256 00:14:27,320 --> 00:14:29,880 Speaker 2: we think it tapers off that tapering off is more 257 00:14:29,880 --> 00:14:32,360 Speaker 2: heavy in Europe than it is in other markets, and 258 00:14:32,360 --> 00:14:35,480 Speaker 2: it's less pronounced even more in Asia. And then it 259 00:14:35,520 --> 00:14:38,680 Speaker 2: picks up to an even higher peak out towards twenty 260 00:14:38,840 --> 00:14:41,160 Speaker 2: forty and then tapers off again. So you have these 261 00:14:41,160 --> 00:14:45,800 Speaker 2: two distinct spend cycles that happen. That first one, especially 262 00:14:45,880 --> 00:14:49,240 Speaker 2: in Europe, happens when there isn't that much electrified load yet, 263 00:14:49,240 --> 00:14:52,120 Speaker 2: because the electrification is a gradual thing that's happening out 264 00:14:52,160 --> 00:14:55,280 Speaker 2: to twenty fifty. So that first spend profile is really 265 00:14:55,360 --> 00:14:58,960 Speaker 2: dictated by building out this clean generation fleet, and so 266 00:14:59,320 --> 00:15:02,240 Speaker 2: there's a huge appital expenditure and there's not as many 267 00:15:02,320 --> 00:15:05,600 Speaker 2: rate pairs to pay against this capital expenditure, so that 268 00:15:05,720 --> 00:15:08,200 Speaker 2: first spend profile is going to be particularly punishing on 269 00:15:08,320 --> 00:15:11,520 Speaker 2: rate pairs. And that second cycle, which even though it's higher, 270 00:15:11,520 --> 00:15:12,640 Speaker 2: we think is going to be a bit of a 271 00:15:12,680 --> 00:15:15,560 Speaker 2: softer spec because there's just more consumers to distribute it over. 272 00:15:19,080 --> 00:15:21,960 Speaker 1: After the break, we'll talk about grids around the world 273 00:15:22,360 --> 00:15:25,880 Speaker 1: and their oddities. Stick with us and take a moment 274 00:15:25,960 --> 00:15:29,040 Speaker 1: to rate and review the show on Apple Podcasts and Spotify. 275 00:15:29,640 --> 00:15:41,960 Speaker 1: That will help others find it. And so now let's 276 00:15:42,000 --> 00:15:47,800 Speaker 1: look at regional challenges because updating grids is being approached 277 00:15:48,400 --> 00:15:51,600 Speaker 1: differently in different parts of the world because the existing 278 00:15:51,640 --> 00:15:55,160 Speaker 1: grid infrastructure is in different stages of development. In the 279 00:15:55,280 --> 00:15:58,280 Speaker 1: US and Europe, you said, the grids are a older 280 00:15:58,360 --> 00:16:02,000 Speaker 1: but also haven't seen that much demand and electricity consumption 281 00:16:02,160 --> 00:16:05,880 Speaker 1: in recent years, whereas in places like India and China 282 00:16:07,400 --> 00:16:10,680 Speaker 1: grids are newer, but also they have been seeing rapid 283 00:16:10,760 --> 00:16:14,400 Speaker 1: rise in electricity consumption. So let's start with the US. 284 00:16:15,120 --> 00:16:18,880 Speaker 1: In the twenty first century, demand has only grown between 285 00:16:18,920 --> 00:16:22,040 Speaker 1: one percent and two percent. That's now starting to change 286 00:16:22,080 --> 00:16:25,760 Speaker 1: with electric cars, with data centers driving AI, as we've 287 00:16:25,760 --> 00:16:29,360 Speaker 1: discussed on the podcast in previous episodes. So how exactly 288 00:16:29,440 --> 00:16:31,720 Speaker 1: is the US addressing this challenge. 289 00:16:33,440 --> 00:16:36,680 Speaker 2: So the US is particularly interesting because they've taken a 290 00:16:36,680 --> 00:16:39,240 Speaker 2: bit of a sharp turn. I would say this year 291 00:16:40,040 --> 00:16:43,360 Speaker 2: the Inflation Reduction Act in the US was lotted with 292 00:16:43,400 --> 00:16:45,960 Speaker 2: a lot of fanfare, but one of the missing pieces 293 00:16:46,000 --> 00:16:49,920 Speaker 2: there was thinking about the electricity grid, the transmission and 294 00:16:49,920 --> 00:16:54,720 Speaker 2: distribution system in any meaningful way. But now we've seen 295 00:16:54,880 --> 00:16:58,720 Speaker 2: a number of measures move forward for Order nineteen twenty 296 00:16:58,760 --> 00:17:02,360 Speaker 2: in particular, are starting to address these issues with building 297 00:17:02,440 --> 00:17:04,320 Speaker 2: up the grid. So in the US, you have a 298 00:17:04,359 --> 00:17:08,840 Speaker 2: fairly piecemeal transmission grid, so you have regional grids that 299 00:17:08,920 --> 00:17:12,520 Speaker 2: are fairly robust, but movement of power between regions has 300 00:17:12,560 --> 00:17:16,600 Speaker 2: been very constrained. And you have three distinct power systems 301 00:17:16,920 --> 00:17:19,600 Speaker 2: in the US, the Western Grid, the Eastern Grid, and 302 00:17:19,640 --> 00:17:24,280 Speaker 2: the Texas Grid that have very very low connections between them. 303 00:17:24,320 --> 00:17:27,760 Speaker 2: But that's not even the entire story. Within those regions, 304 00:17:27,760 --> 00:17:30,640 Speaker 2: there's some pockets that haven't connected well within each other. 305 00:17:31,200 --> 00:17:33,320 Speaker 2: This is starting to turn. They've started to go back 306 00:17:33,359 --> 00:17:36,320 Speaker 2: to I would say, kind of back to basics, honestly, right, 307 00:17:36,640 --> 00:17:38,760 Speaker 2: So long term planning, so instead of doing three to 308 00:17:38,840 --> 00:17:41,359 Speaker 2: five years, you're looking out to twenty years. Now some 309 00:17:41,400 --> 00:17:44,000 Speaker 2: places we're already doing this, but long term planning is 310 00:17:44,040 --> 00:17:46,919 Speaker 2: the underpinning of making good decisions because you then know 311 00:17:47,880 --> 00:17:52,399 Speaker 2: does this project help me today or does it also 312 00:17:52,640 --> 00:17:55,879 Speaker 2: the building block of a much larger project down the 313 00:17:55,960 --> 00:17:59,399 Speaker 2: road if all these other things happen. They're also starting 314 00:17:59,440 --> 00:18:02,840 Speaker 2: to look at other technologies other than building transmission lines. 315 00:18:02,920 --> 00:18:07,000 Speaker 2: There's a portfolio of technologies out there called grid enhancing technologies, 316 00:18:07,560 --> 00:18:11,760 Speaker 2: and that can avoid building a transmission line and often 317 00:18:11,920 --> 00:18:15,760 Speaker 2: is complementary to building a transmission line utilities are very 318 00:18:15,840 --> 00:18:19,160 Speaker 2: risk averse and they've had a hard time moving forward 319 00:18:19,240 --> 00:18:22,080 Speaker 2: with these projects out of pilot stage into more commercial 320 00:18:22,119 --> 00:18:26,040 Speaker 2: scale deployments. In our modeling, this stuff is crucial, right, 321 00:18:26,080 --> 00:18:28,560 Speaker 2: we need more of it. Most of the business cases 322 00:18:28,600 --> 00:18:32,640 Speaker 2: for these types of technologies is a slam dung, honestly. 323 00:18:32,640 --> 00:18:35,000 Speaker 1: So I wanted to talk about other regions, but let's 324 00:18:35,040 --> 00:18:38,640 Speaker 1: stick with the grid enhancing technologies because I'm curious about them. 325 00:18:39,000 --> 00:18:41,399 Speaker 1: I know of some of them. For example, there's a 326 00:18:41,440 --> 00:18:44,399 Speaker 1: startup called ts Conductor which wants to replace that type 327 00:18:44,400 --> 00:18:46,600 Speaker 1: of cable that exists and that will allow you to 328 00:18:46,640 --> 00:18:50,400 Speaker 1: carry more power through the same connections than you used 329 00:18:50,440 --> 00:18:52,520 Speaker 1: to be able to do in the past. What other types 330 00:18:52,520 --> 00:18:56,040 Speaker 1: of grid enhancing technologies are there, Yeah. 331 00:18:55,800 --> 00:18:58,439 Speaker 2: So that's a great one. Advanced conductors allows you to 332 00:18:58,480 --> 00:19:00,840 Speaker 2: just move more power through an existing transmission line. Often 333 00:19:00,880 --> 00:19:03,080 Speaker 2: you don't have to change the towers. You just change 334 00:19:03,080 --> 00:19:06,040 Speaker 2: out the wire and you can get more capacity, which 335 00:19:06,080 --> 00:19:09,199 Speaker 2: means that you don't need to expand the footprint of 336 00:19:09,240 --> 00:19:12,920 Speaker 2: the corridor at all. Another one is dynamic line ratings, 337 00:19:13,400 --> 00:19:16,840 Speaker 2: and this is really just about transmission line often has 338 00:19:16,840 --> 00:19:20,439 Speaker 2: a static rating, meaning that this transmission line is one 339 00:19:20,520 --> 00:19:24,240 Speaker 2: hundred megawatts, it's one hundred megawats all year round. With 340 00:19:24,400 --> 00:19:27,440 Speaker 2: dynamic line ratings, you are able to change the rating 341 00:19:27,520 --> 00:19:30,400 Speaker 2: of the transmission line hour to hour. And the reality 342 00:19:30,520 --> 00:19:32,560 Speaker 2: is that the rating of a transmission line does vary 343 00:19:32,800 --> 00:19:35,359 Speaker 2: because it varies based on weather for the most part, 344 00:19:35,600 --> 00:19:37,360 Speaker 2: where the sun is in the sky, how much wind. 345 00:19:37,400 --> 00:19:40,439 Speaker 2: There is a bunch of environmental variables, and if you 346 00:19:40,520 --> 00:19:43,399 Speaker 2: know them, you can actually push more power through these lines. 347 00:19:43,520 --> 00:19:46,080 Speaker 1: So in winter you could have a higher rating, and 348 00:19:46,160 --> 00:19:47,560 Speaker 1: in summer you could have a lower rating. 349 00:19:47,720 --> 00:19:50,720 Speaker 2: Absolutely yeah, And it can be quite notable, like thirty 350 00:19:50,720 --> 00:19:54,480 Speaker 2: percent differences between wow yeah. And so if you can 351 00:19:54,520 --> 00:19:56,840 Speaker 2: exploit this, then you can make better use of it. 352 00:19:57,080 --> 00:20:00,040 Speaker 2: Beyond that, like batteries have a role to play, and 353 00:20:00,080 --> 00:20:03,880 Speaker 2: inside flexibility is a portfolio of technologies where we talk 354 00:20:03,920 --> 00:20:06,600 Speaker 2: about like a smart charging of electric vehicles. But you 355 00:20:06,640 --> 00:20:08,439 Speaker 2: can do this in a way if you have the 356 00:20:08,560 --> 00:20:11,800 Speaker 2: situational knowledge of what's going on on a power system, 357 00:20:12,119 --> 00:20:16,560 Speaker 2: you can tactically change consumption so that you don't create constraints, 358 00:20:16,560 --> 00:20:19,520 Speaker 2: and you might even mitigate constraints that would happen for 359 00:20:19,560 --> 00:20:23,879 Speaker 2: other reasons by ramping up charging at specific times, and 360 00:20:23,920 --> 00:20:27,240 Speaker 2: so there's a lot of opportunity there. I think, in fact, 361 00:20:27,520 --> 00:20:31,040 Speaker 2: the single largest value that digitalization of the power system 362 00:20:31,080 --> 00:20:35,679 Speaker 2: will provide is through the provision of flexibility on the system, 363 00:20:35,760 --> 00:20:37,640 Speaker 2: rather than what we've seen so far, which has really 364 00:20:37,680 --> 00:20:39,679 Speaker 2: just been incremental efficiency gains. 365 00:20:40,160 --> 00:20:42,480 Speaker 1: Yeah. I mean, and this reminds me of the conversation 366 00:20:42,560 --> 00:20:45,360 Speaker 1: we had about AI and the grids, because what you're 367 00:20:45,400 --> 00:20:49,040 Speaker 1: describing is the number of decisions that will need to 368 00:20:49,040 --> 00:20:53,800 Speaker 1: be made grow. The conclusion that Priodante came to was 369 00:20:54,000 --> 00:20:57,280 Speaker 1: there is just no way that future grids can operate 370 00:20:57,640 --> 00:21:01,800 Speaker 1: well enough without AI. Thing AI can help reduce the 371 00:21:01,840 --> 00:21:03,840 Speaker 1: cost of managing those grades a lot. 372 00:21:04,800 --> 00:21:09,400 Speaker 2: Interesting statement, Yeah, I think so. I used to work 373 00:21:09,400 --> 00:21:11,359 Speaker 2: in a control room, and I think there'll be some 374 00:21:11,440 --> 00:21:16,520 Speaker 2: hesitation to introducing algorithms that we don't know the outcomes 375 00:21:16,560 --> 00:21:22,600 Speaker 2: of into a system where you have hospitals connected, airports connected, 376 00:21:22,720 --> 00:21:26,200 Speaker 2: and so the reliability and the security of the system 377 00:21:26,280 --> 00:21:29,520 Speaker 2: is the thing that we hold the most paramount in 378 00:21:29,520 --> 00:21:32,400 Speaker 2: a control center. I think you're right. I think that 379 00:21:32,640 --> 00:21:35,840 Speaker 2: the complexity of the task is rising, and they're already 380 00:21:35,880 --> 00:21:38,160 Speaker 2: seeing this in the control room with having to increase 381 00:21:38,160 --> 00:21:40,960 Speaker 2: staff and so at some point you're going to have 382 00:21:40,960 --> 00:21:44,840 Speaker 2: to make a decision around do we simplify the complexity 383 00:21:44,880 --> 00:21:49,239 Speaker 2: and as a result we might have certain optimization and 384 00:21:49,240 --> 00:21:53,760 Speaker 2: efficiency gains lost that we just don't realize, or do 385 00:21:53,800 --> 00:21:57,240 Speaker 2: we introduce more complex algorithms. But I think there's a 386 00:21:57,280 --> 00:22:00,840 Speaker 2: real risk around having algorithms where we don't have known outcomes, 387 00:22:01,440 --> 00:22:04,720 Speaker 2: rather than more deterministic algorithms which are already in control 388 00:22:04,800 --> 00:22:07,800 Speaker 2: rooms and quite complex. And so I think there's a 389 00:22:07,800 --> 00:22:09,439 Speaker 2: trade off to be made here. I'm not sure, and 390 00:22:09,560 --> 00:22:12,240 Speaker 2: it's possible that different markets will land at different places. 391 00:22:12,320 --> 00:22:13,520 Speaker 2: We'll get to see this play. 392 00:22:13,280 --> 00:22:15,880 Speaker 1: Out a bit. And so going back to the regional 393 00:22:15,920 --> 00:22:20,440 Speaker 1: spread in Europe is the same situation like the US 394 00:22:20,480 --> 00:22:22,840 Speaker 1: to some extent that demand wasn't growing very much, but 395 00:22:22,920 --> 00:22:26,280 Speaker 1: now it's starting to grow, except Europe is a lot 396 00:22:26,320 --> 00:22:30,480 Speaker 1: more interconnected despite having a lot more nation states, and 397 00:22:30,560 --> 00:22:33,640 Speaker 1: so are there challenges for Europe that are different from 398 00:22:33,680 --> 00:22:35,240 Speaker 1: the ones that are there in the US. 399 00:22:36,240 --> 00:22:38,520 Speaker 2: So I would say the European grid is further along. 400 00:22:39,040 --> 00:22:43,520 Speaker 2: In Europe they are building systems, and up until recently, 401 00:22:44,320 --> 00:22:48,280 Speaker 2: the US was still building projects and that's part of 402 00:22:48,280 --> 00:22:50,720 Speaker 2: why they've ended up in this kind of piecemeal grid 403 00:22:50,800 --> 00:22:55,119 Speaker 2: system in the US, whereas the European continental grid system 404 00:22:55,240 --> 00:22:58,159 Speaker 2: is this bohemoth system that's very meshed together. They have 405 00:22:58,280 --> 00:23:02,080 Speaker 2: targets set for how much inter connection between countries needs 406 00:23:02,080 --> 00:23:05,119 Speaker 2: to be delivered, and they move along these targets quite quickly, 407 00:23:05,119 --> 00:23:08,600 Speaker 2: and so they are building a coherent system. This demand 408 00:23:08,600 --> 00:23:12,359 Speaker 2: growth narrative isn't as prominent in Europe as it is 409 00:23:12,400 --> 00:23:14,600 Speaker 2: in the US. In the US we hear about it 410 00:23:14,640 --> 00:23:17,320 Speaker 2: a lot, and as a result, I don't think they're 411 00:23:17,320 --> 00:23:20,040 Speaker 2: concerned about the financing question of the grid because they 412 00:23:20,080 --> 00:23:23,919 Speaker 2: see this load growth really kind of early on, whereas 413 00:23:23,960 --> 00:23:26,840 Speaker 2: in Europe the load growth is more of a later 414 00:23:26,880 --> 00:23:29,639 Speaker 2: stage thing. And it seems this way and as a result, 415 00:23:29,640 --> 00:23:33,040 Speaker 2: the financing question of who will pay for this and 416 00:23:33,080 --> 00:23:37,119 Speaker 2: the raid impacts of the transition are more prominent feature 417 00:23:37,160 --> 00:23:38,920 Speaker 2: in Europe rather than the US. 418 00:23:39,200 --> 00:23:44,119 Speaker 1: And what about China, where the deployment of renewables is 419 00:23:44,240 --> 00:23:47,480 Speaker 1: just stunning, Right, So China last year built as much 420 00:23:47,520 --> 00:23:51,399 Speaker 1: solar as the rest of the world combined, or China 421 00:23:51,400 --> 00:23:54,000 Speaker 1: built as much solar in one year as the US 422 00:23:54,040 --> 00:23:56,560 Speaker 1: has done in its history. And China is also known 423 00:23:56,680 --> 00:23:59,280 Speaker 1: to have done a lot on the grid through its 424 00:23:59,320 --> 00:24:02,520 Speaker 1: State Grid Company, which is fully state owned. It has 425 00:24:02,560 --> 00:24:06,000 Speaker 1: been building some of the largest high voltage DC cables 426 00:24:06,000 --> 00:24:09,800 Speaker 1: that carry renewables from the rest of the country to 427 00:24:09,840 --> 00:24:13,800 Speaker 1: the east where the population is. And so China knows 428 00:24:13,840 --> 00:24:16,560 Speaker 1: how to build, and it's building in an era where 429 00:24:16,600 --> 00:24:20,600 Speaker 1: electricity demand is rising. But are there challenges that China 430 00:24:20,640 --> 00:24:22,240 Speaker 1: faces that we don't appreciate. 431 00:24:23,440 --> 00:24:24,919 Speaker 2: So I would say that China does have a bit 432 00:24:24,960 --> 00:24:28,920 Speaker 2: of an easier task. Yeah, I like this grid infrastructure 433 00:24:28,920 --> 00:24:33,520 Speaker 2: buildout is easier when you have a centralized system set up, 434 00:24:33,640 --> 00:24:36,960 Speaker 2: and they've built out a grid system that is truly impressive. 435 00:24:37,640 --> 00:24:39,920 Speaker 2: So when we talk about these voltages on the grid, 436 00:24:40,320 --> 00:24:42,399 Speaker 2: we talk about high voltage, which is the start of 437 00:24:42,440 --> 00:24:45,480 Speaker 2: the transmission grid. Higher than that we have something called 438 00:24:45,560 --> 00:24:49,320 Speaker 2: extra high voltage. And then even higher still is something 439 00:24:49,359 --> 00:24:52,359 Speaker 2: called ultra high voltage. These are technical terms. You can 440 00:24:52,400 --> 00:24:56,720 Speaker 2: find them in scholarly publications. And so ultra high voltage 441 00:24:56,840 --> 00:24:58,719 Speaker 2: is a grid system there's not that much of but 442 00:24:58,720 --> 00:25:01,600 Speaker 2: if you go to China, there's an entire ultra high 443 00:25:01,680 --> 00:25:06,160 Speaker 2: voltage backbone that covers most of the grid system there. 444 00:25:06,359 --> 00:25:09,280 Speaker 1: And what voltage is are we talking in these three steps. 445 00:25:09,600 --> 00:25:12,640 Speaker 2: So this is eight hundred thousand volts plus for ultra 446 00:25:12,720 --> 00:25:17,760 Speaker 2: high voltage. Extra high voltage is usually three hundred thousand 447 00:25:17,840 --> 00:25:21,240 Speaker 2: volts plus and so and high voltage can be one 448 00:25:21,280 --> 00:25:22,320 Speaker 2: hundred thousand volts. 449 00:25:22,480 --> 00:25:25,360 Speaker 1: And obviously we get in plugs here in the UK 450 00:25:25,480 --> 00:25:27,880 Speaker 1: two hundred and forty volts, in the US one hundred 451 00:25:27,920 --> 00:25:28,520 Speaker 1: and ten volts. 452 00:25:28,760 --> 00:25:32,600 Speaker 2: Yeah, and so you know, it's quite incredible. And then 453 00:25:32,640 --> 00:25:35,879 Speaker 2: they're able to move power extreme distances. China as a 454 00:25:35,920 --> 00:25:39,000 Speaker 2: large country and they have this backbone that they've built 455 00:25:39,480 --> 00:25:39,959 Speaker 2: to do that. 456 00:25:40,600 --> 00:25:42,560 Speaker 1: And then let's come to India, because I feel like 457 00:25:42,720 --> 00:25:45,800 Speaker 1: when we look at the energy transition, to me, these 458 00:25:45,840 --> 00:25:50,000 Speaker 1: four regions US, Europe, China, and India are in very 459 00:25:50,040 --> 00:25:54,560 Speaker 1: different places, have very different economic thefts, and what happens 460 00:25:54,600 --> 00:25:57,400 Speaker 1: in these regions typically tells you a lot about what 461 00:25:57,480 --> 00:26:00,800 Speaker 1: might happen in other places. And so India is of 462 00:26:00,840 --> 00:26:03,800 Speaker 1: course very far away from the sorts of goals that 463 00:26:03,920 --> 00:26:07,280 Speaker 1: China is trying to be right now or even being 464 00:26:07,280 --> 00:26:09,919 Speaker 1: able to spend a lot like the US or Europe 465 00:26:09,960 --> 00:26:12,400 Speaker 1: is able to on the grid. What does the Indian 466 00:26:12,520 --> 00:26:16,240 Speaker 1: grid need right now that would really allow it to 467 00:26:16,400 --> 00:26:19,280 Speaker 1: deploy more renewables, which is the number one thing it 468 00:26:19,320 --> 00:26:20,240 Speaker 1: needs to do right now. 469 00:26:22,040 --> 00:26:26,439 Speaker 2: I think the opportunity in India rests in digitalization. So 470 00:26:26,520 --> 00:26:30,119 Speaker 2: much of the Indian grid system can be built greenfield 471 00:26:30,359 --> 00:26:33,480 Speaker 2: and has been built greenfield because there was less of 472 00:26:33,480 --> 00:26:35,119 Speaker 2: it there to begin with. And so you're on this 473 00:26:35,240 --> 00:26:39,359 Speaker 2: kind of initial buildout, if you will. And you've seen 474 00:26:39,400 --> 00:26:42,520 Speaker 2: this in the telecom space right where there's markets in 475 00:26:42,520 --> 00:26:45,800 Speaker 2: India itself where they didn't bother putting in copper and 476 00:26:45,840 --> 00:26:48,040 Speaker 2: they went straight to microwave. You can leap frog a 477 00:26:48,119 --> 00:26:51,560 Speaker 2: technology and it allows you to move more quickly. So 478 00:26:51,600 --> 00:26:54,160 Speaker 2: what's the leapfrog for grids? We still got to build 479 00:26:54,160 --> 00:26:57,000 Speaker 2: out this infrastructure. Unfortunately, still do need to put aluminium 480 00:26:57,119 --> 00:27:01,159 Speaker 2: copper to move power. But along the way digitalizing is 481 00:27:01,200 --> 00:27:05,240 Speaker 2: important and retrofitting afterwards can be challenging because ultimately it 482 00:27:05,240 --> 00:27:08,840 Speaker 2: allows you to get more capacity out of every ounce 483 00:27:08,840 --> 00:27:11,000 Speaker 2: of copper and animnum you put into the ground or 484 00:27:11,000 --> 00:27:13,879 Speaker 2: in the air. So building out these substations, getting the 485 00:27:13,960 --> 00:27:17,040 Speaker 2: land upfront that has the ability to put in these 486 00:27:17,080 --> 00:27:21,480 Speaker 2: types of control devices that allows them to digitalize earlier 487 00:27:21,520 --> 00:27:25,280 Speaker 2: on in the trajectory rather than later on. And we're 488 00:27:25,280 --> 00:27:27,600 Speaker 2: starting to see some of this. In talking to some 489 00:27:27,720 --> 00:27:31,200 Speaker 2: of the companies that are deploying this, they're finding that 490 00:27:31,440 --> 00:27:34,760 Speaker 2: India is moving more quickly on the digitalization front than 491 00:27:34,800 --> 00:27:37,280 Speaker 2: you would expect more mature markets to because they can 492 00:27:37,320 --> 00:27:39,040 Speaker 2: do that early on, because they can plan it in 493 00:27:39,119 --> 00:27:41,600 Speaker 2: from the outset, as opposed to a brown field project, 494 00:27:42,000 --> 00:27:45,120 Speaker 2: which can be even in the digital space, quite complicated 495 00:27:45,160 --> 00:27:45,399 Speaker 2: to do. 496 00:27:46,720 --> 00:27:49,000 Speaker 1: We can't go through every country, but to me, the 497 00:27:49,040 --> 00:27:51,760 Speaker 1: African challenge is an interesting one. You know, we talk 498 00:27:51,840 --> 00:27:55,480 Speaker 1: about the continent that has contributed the least to the 499 00:27:55,520 --> 00:27:57,600 Speaker 1: climate problem, but it is likely to suffer the most 500 00:27:57,640 --> 00:28:00,399 Speaker 1: from the climate problem, but also the continent that has 501 00:28:00,560 --> 00:28:04,080 Speaker 1: a ton of resources on renewables that it could a 502 00:28:04,240 --> 00:28:09,320 Speaker 1: use for itself, but also for export industries. However, we've 503 00:28:09,359 --> 00:28:13,840 Speaker 1: also treated African countries as followers of the energy transition. 504 00:28:14,200 --> 00:28:16,479 Speaker 1: They typically look at what India is doing or what 505 00:28:16,560 --> 00:28:18,960 Speaker 1: China is doing, and then try and figure out what 506 00:28:19,119 --> 00:28:24,840 Speaker 1: they could do domestically. That's happened in electric two wheelers, 507 00:28:24,920 --> 00:28:27,560 Speaker 1: it's happening to some extent in the renewables built out. 508 00:28:28,760 --> 00:28:30,359 Speaker 1: Is it the same story on the grid. 509 00:28:31,760 --> 00:28:34,920 Speaker 2: There is an interesting African context here. So we have 510 00:28:34,960 --> 00:28:39,520 Speaker 2: markets across Africa that have underdeveloped grid systems, and like 511 00:28:39,560 --> 00:28:42,160 Speaker 2: the one that comes to mind is South Africa, which 512 00:28:42,160 --> 00:28:45,920 Speaker 2: has had rotating blackouts and a number of challenges with 513 00:28:46,000 --> 00:28:51,640 Speaker 2: their utility as well. But fundamentally, you have energy being 514 00:28:51,680 --> 00:28:54,320 Speaker 2: produced in regions where you can't get it to consumers 515 00:28:54,680 --> 00:28:56,240 Speaker 2: and so the grid has been a challenge there and 516 00:28:56,280 --> 00:28:58,200 Speaker 2: building out the grid will be part of the solution 517 00:28:58,400 --> 00:29:03,280 Speaker 2: for South Africa. Financing is also a challenge, but these assets, 518 00:29:03,320 --> 00:29:06,920 Speaker 2: like the transmission grid assets are often highly strategic and 519 00:29:07,120 --> 00:29:10,960 Speaker 2: not necessarily something that a government in Africa would want 520 00:29:11,240 --> 00:29:14,680 Speaker 2: to have foreign investment fund, and so there's a need 521 00:29:14,800 --> 00:29:19,600 Speaker 2: for an investment vehicle that preserves the desires of the 522 00:29:19,640 --> 00:29:22,560 Speaker 2: South Africa or what have you, but allows private capital 523 00:29:22,640 --> 00:29:24,920 Speaker 2: to still come in. And so we are seeing a 524 00:29:25,000 --> 00:29:28,560 Speaker 2: model emerge in there called this kind of independent transmission 525 00:29:28,680 --> 00:29:31,720 Speaker 2: project model, and it's kind of similar to maybe a 526 00:29:31,720 --> 00:29:34,480 Speaker 2: PPA and what that has done for the generation side, 527 00:29:34,640 --> 00:29:37,400 Speaker 2: but a model that can be used for a country 528 00:29:37,480 --> 00:29:40,880 Speaker 2: to the tract capital but then still preserve the strategic 529 00:29:40,960 --> 00:29:43,280 Speaker 2: nature of that project. There's countries that have toyed with this, 530 00:29:43,400 --> 00:29:46,520 Speaker 2: including Brazil has done auctions using these type of model 531 00:29:46,880 --> 00:29:49,320 Speaker 2: It's been talked about in Vietnam as well, but it 532 00:29:49,360 --> 00:29:52,040 Speaker 2: is being discussed in South Africa, and I think this 533 00:29:52,160 --> 00:29:55,360 Speaker 2: type of model could pan out across Africa and actually 534 00:29:55,400 --> 00:29:58,240 Speaker 2: be a substantial way of this infrastructure being built. 535 00:29:58,440 --> 00:30:03,280 Speaker 1: We've been talking about massive investment, about resources, about engineering planning, 536 00:30:04,040 --> 00:30:07,280 Speaker 1: But what happens if the grid isn't updated at the 537 00:30:07,320 --> 00:30:08,000 Speaker 1: scale needed? 538 00:30:11,440 --> 00:30:13,720 Speaker 2: Yeah, I think that there's an outcome where the grid 539 00:30:13,760 --> 00:30:16,680 Speaker 2: isn't upgraded but we still achieve net zero. I'm not 540 00:30:16,720 --> 00:30:19,440 Speaker 2: sure what year that will be in, but let's put 541 00:30:19,440 --> 00:30:22,920 Speaker 2: that aside. So I don't think a substantial upgrade to 542 00:30:22,960 --> 00:30:27,120 Speaker 2: the grid is a prerequisite to building a net zo system. 543 00:30:27,480 --> 00:30:30,360 Speaker 2: I think it's part of the optimal system though. So 544 00:30:30,440 --> 00:30:33,080 Speaker 2: you can't build an energy system that has a much 545 00:30:33,320 --> 00:30:37,240 Speaker 2: smaller power grid, but it's just suboptimal, and so you 546 00:30:37,320 --> 00:30:41,560 Speaker 2: end up with much more distributed energy resources and more 547 00:30:41,600 --> 00:30:45,440 Speaker 2: localized systems rather than moving power where it's cheap to 548 00:30:45,440 --> 00:30:50,080 Speaker 2: be produced and then consumed accordingly. So I would say 549 00:30:50,120 --> 00:30:53,800 Speaker 2: that is a potential failure. It's not necessarily, you know, 550 00:30:53,840 --> 00:30:56,680 Speaker 2: a world ending problem. But this is where the US 551 00:30:56,760 --> 00:30:59,240 Speaker 2: I felt was heading initially, that you'd end up with 552 00:30:59,240 --> 00:31:02,200 Speaker 2: a much more decent centralized grid system. And some of 553 00:31:02,200 --> 00:31:05,440 Speaker 2: this will make sense for certain markets because the terrain 554 00:31:05,560 --> 00:31:07,880 Speaker 2: the geography is so challenging. In fact, that is the 555 00:31:07,920 --> 00:31:11,560 Speaker 2: optimal solution. But by and large most markets can benefit 556 00:31:11,680 --> 00:31:14,560 Speaker 2: from significant grid build out. And so if we can't 557 00:31:14,600 --> 00:31:16,320 Speaker 2: build out the grid, what we're going to end up 558 00:31:16,360 --> 00:31:18,960 Speaker 2: with is a much more decentralized world. We're going to 559 00:31:19,000 --> 00:31:22,000 Speaker 2: end up with a lot less wind energy and more 560 00:31:22,040 --> 00:31:25,920 Speaker 2: solar energy. And this is what we're seeing already honestly happen. 561 00:31:26,200 --> 00:31:28,760 Speaker 2: And that's partly because the grid is behind. So when 562 00:31:28,720 --> 00:31:31,640 Speaker 2: we look at what our net zero scenario at BENIF shows, 563 00:31:32,000 --> 00:31:34,440 Speaker 2: it wants to build a lot more wind more quickly 564 00:31:34,480 --> 00:31:37,320 Speaker 2: than what we actually see is happening. And so that's 565 00:31:37,320 --> 00:31:38,880 Speaker 2: part of how we know that the grid is a 566 00:31:38,880 --> 00:31:42,760 Speaker 2: bottleneck at present. So this could be one possible failure outcome. 567 00:31:43,440 --> 00:31:46,360 Speaker 2: Another challenging thing that I think about is that we 568 00:31:46,400 --> 00:31:50,040 Speaker 2: do start building out this grid right now, and there's 569 00:31:50,040 --> 00:31:53,240 Speaker 2: a rat impact associated with that, and as a result, 570 00:31:53,280 --> 00:31:55,960 Speaker 2: this second wave of grid build out, which is supposed 571 00:31:55,960 --> 00:32:01,120 Speaker 2: to enable electrification, becomes constrained because now rates are higher 572 00:32:01,560 --> 00:32:06,880 Speaker 2: and so electrification becomes more expensive. A proposition, and so 573 00:32:07,120 --> 00:32:11,240 Speaker 2: the rates of electrification slowed down, and so this is 574 00:32:11,240 --> 00:32:13,920 Speaker 2: a potential risk as well. A lot of things have 575 00:32:13,960 --> 00:32:17,360 Speaker 2: to come together here across the economy to make a 576 00:32:17,440 --> 00:32:21,000 Speaker 2: transition unfold, and the grid is going to bring everything 577 00:32:21,040 --> 00:32:21,760 Speaker 2: into the center. 578 00:32:22,760 --> 00:32:30,080 Speaker 1: Thank you, Sanji, Thank you, Thank you for listening to Zero. 579 00:32:30,600 --> 00:32:33,840 Speaker 1: Share this episode with a friend or someone who hugs 580 00:32:33,840 --> 00:32:38,200 Speaker 1: a pylon. Next week, more on the grid, you'll hear 581 00:32:38,240 --> 00:32:40,680 Speaker 1: from Scottish Power CEO Keith Anderson. 582 00:32:41,080 --> 00:32:44,560 Speaker 2: People have woken up to the importance of the grid, 583 00:32:45,320 --> 00:32:47,240 Speaker 2: walking up to the importance. 584 00:32:46,680 --> 00:32:49,680 Speaker 1: Of how is it we get power to people's homes, 585 00:32:50,280 --> 00:32:50,720 Speaker 1: How is. 586 00:32:50,640 --> 00:32:54,880 Speaker 2: It reconfigure, redesigned the grid system from modern society. 587 00:32:55,760 --> 00:32:58,560 Speaker 1: Keith shares how he's thinking about that question when it 588 00:32:58,600 --> 00:33:01,640 Speaker 1: comes to the four and a half million households here 589 00:33:01,640 --> 00:33:04,760 Speaker 1: in the UK who rely on his company, Scottish Power. 590 00:33:05,600 --> 00:33:09,560 Speaker 1: That's next week on zero Now for those who wait 591 00:33:09,680 --> 00:33:18,400 Speaker 1: till the end the sound of the week, electricity comes 592 00:33:18,400 --> 00:33:21,200 Speaker 1: to our homes in silence, but it does make a 593 00:33:21,200 --> 00:33:24,160 Speaker 1: bunch of sounds on the way. That was the hum 594 00:33:24,360 --> 00:33:27,720 Speaker 1: of a power station transformer that steps up the voltage 595 00:33:27,880 --> 00:33:33,480 Speaker 1: to ready power to travel over long distances. If you 596 00:33:33,560 --> 00:33:35,640 Speaker 1: like this episode, please take a moment to rate or 597 00:33:35,680 --> 00:33:39,120 Speaker 1: review the show on Apple Podcasts and Spotify. You can 598 00:33:39,160 --> 00:33:41,880 Speaker 1: get in touch at zero pod at bloomberg dot net. 599 00:33:42,520 --> 00:33:46,240 Speaker 1: Zero's producer is Mighty le Raw. Bloomberg's Head of podcast 600 00:33:46,280 --> 00:33:50,360 Speaker 1: is Sage Bowman. Head of Talk is Brendan Youno. Our 601 00:33:50,440 --> 00:33:53,800 Speaker 1: theme music is composed by Wonderly Special thanks to Kirra 602 00:33:53,840 --> 00:34:01,880 Speaker 1: Bindrim and Matthew Griffin. I am Shatrati. Back soon means