WEBVTT - The unstoppable march toward electrification: The Grid Series 0:00:00.480 --> 0:00:04.200 Welcome to Zero. I am Kshatrati. This week the future 0:00:04.280 --> 0:00:19.799 of the grid. Today we have part two of the 0:00:19.800 --> 0:00:23.400 grid series for Zero and if you got last week's episode, 0:00:23.720 --> 0:00:26.720 you heard from Sunjeet Sanghera, a grid expert who used 0:00:26.760 --> 0:00:29.200 to work for Bloomberg NEF and recently moved to the 0:00:29.280 --> 0:00:29.880 National Grid. 0:00:30.200 --> 0:00:32.280 When I picture the grids, I picture driving on a 0:00:32.320 --> 0:00:34.640 long road trip in Canada. On the side of the highway, 0:00:35.000 --> 0:00:38.839 you'd see these power lines stringing across the countryside, and 0:00:39.240 --> 0:00:42.040 I remember thinking like, we can't possibly be connecting everything 0:00:42.080 --> 0:00:45.520 together with these wires. That is exactly what we're doing. 0:00:46.360 --> 0:00:49.839 The question of grid readiness is fundamental to the energy transition, 0:00:50.720 --> 0:00:53.920 Why we need to update it, how we update it, 0:00:54.120 --> 0:00:57.560 and who is leading the way. This week we talked 0:00:57.600 --> 0:01:01.200 to Keith Anderson, the CEO of Scottish Power, a utility 0:01:01.400 --> 0:01:06.080 here in the UK, facing these questions as the UK 0:01:06.240 --> 0:01:09.160 ushers in a new government, one which is pledged to 0:01:09.200 --> 0:01:13.080 create a new entity called gb Energy that's supposed to 0:01:13.120 --> 0:01:15.640 give the state a more hands on approach to the 0:01:15.760 --> 0:01:19.920 energy transition. Keith has a few ideas about how to 0:01:20.000 --> 0:01:40.559 get the UK back on track from meeting its climate goals. Keith, 0:01:40.600 --> 0:01:41.360 welcome to the show. 0:01:42.160 --> 0:01:45.240 Thank you. It's great pleasure to be here now. 0:01:45.400 --> 0:01:48.320 As the CEO of Scottish Power, you're responsible for supplying 0:01:48.560 --> 0:01:52.120 electricity to four point six million households around the UK. 0:01:53.160 --> 0:01:54.840 And one of the things we are going to get 0:01:54.880 --> 0:01:58.720 into is what you want to see from the UK government. 0:01:58.880 --> 0:02:01.720 But before we do that, I wanted to ask some 0:02:01.800 --> 0:02:07.000 broader questions around the grid, around utilities. If you look 0:02:07.040 --> 0:02:10.320 at someone in a role like yours, whether it's here 0:02:10.360 --> 0:02:13.040 in the UK, or in Indonesia, or in Mexico or 0:02:13.080 --> 0:02:18.600 in Croatia, there is something different about being a CEO 0:02:18.840 --> 0:02:22.679 of a utility company in twenty twenty four. This is 0:02:22.720 --> 0:02:26.359 a very different job from say ten or twenty years ago. 0:02:27.440 --> 0:02:28.280 How different is it? 0:02:28.800 --> 0:02:33.160 Well, A lot has changed over the last five ten 0:02:33.240 --> 0:02:36.600 years in particular, and I think one of the biggest 0:02:36.639 --> 0:02:41.240 things that's changed is people have kind of woken up 0:02:41.320 --> 0:02:44.400 to the importance of the grid, woken up to the 0:02:44.440 --> 0:02:48.200 importance of how is it we get power to people's homes, 0:02:48.760 --> 0:02:52.280 how is it we reconfigure, redesign the grid system for 0:02:52.440 --> 0:02:56.160 modern society, and how is it we reinvest in a 0:02:56.200 --> 0:02:58.919 grid that was built a long time ago to make 0:02:58.960 --> 0:03:01.440 it fit for the future. And I think one of 0:03:01.440 --> 0:03:06.360 the biggest things that has changed that debate is this 0:03:06.560 --> 0:03:10.160 march towards electrification. If you think about everything that's going 0:03:10.200 --> 0:03:15.240 on in modern society, whether it's eves, whether it's the 0:03:15.280 --> 0:03:21.600 electrication of heat, data centers, AI, digital technology, everything is 0:03:21.639 --> 0:03:26.359 about electrification. And that's why one of the constant phrases 0:03:26.360 --> 0:03:29.680 that we use when we're speaking to politicians to governments 0:03:29.880 --> 0:03:34.520 is now we're saying to everybody, electrification is unstoppable, because 0:03:34.600 --> 0:03:37.280 that's the way we're going. And so the more and 0:03:37.360 --> 0:03:40.000 more you realize that, the more and more you realize 0:03:40.040 --> 0:03:43.400 how important the grid system is. The other great analogy 0:03:43.480 --> 0:03:47.040 we use. It's wonderful having an iPhone, and no point 0:03:47.080 --> 0:03:48.800 in having an iPhone if you don't have a charger. 0:03:49.360 --> 0:03:52.280 It's the same with an EV it's the same with 0:03:52.320 --> 0:03:54.560 a wind farm. If you don't have that grid system, 0:03:54.960 --> 0:03:57.080 and you don't have the grid system ready and capable 0:03:57.080 --> 0:03:59.440 of dealing with all of that, then none of this works. 0:04:00.240 --> 0:04:04.040 But if we look at the grid, electricity has been 0:04:04.200 --> 0:04:07.920 the biggest form of energy being consumed in developed countries 0:04:08.240 --> 0:04:12.040 for more than thirty years now, so it's not like 0:04:12.280 --> 0:04:18.120 electricity or electrification is new. It's the rate of growth 0:04:18.279 --> 0:04:22.920 of electricity use that is new. So is it just that, 0:04:23.080 --> 0:04:27.400 you know, developed countries have kind of forgotten how to 0:04:27.520 --> 0:04:31.599 build a grid, and now that electrification is causing demand 0:04:31.640 --> 0:04:34.800 to grow much faster than it has over the past 0:04:34.839 --> 0:04:38.120 few decades, you're facing these new challenges. 0:04:39.160 --> 0:04:41.960 Well, I said, it's a good question and a good challenge. 0:04:42.600 --> 0:04:44.479 I think there's a couple of things going on. I 0:04:44.480 --> 0:04:47.760 think in a lot of developed countries, whether it was 0:04:47.760 --> 0:04:52.240 an established grid system built your forty fifty, sixty seventy 0:04:52.320 --> 0:04:56.440 years ago, there's been a little bit of a maintaining 0:04:56.480 --> 0:04:59.760 the assets, if you like, sweating the assets, getting the 0:04:59.760 --> 0:05:02.440 best value for money out of those assets, and continuing 0:05:02.480 --> 0:05:06.680 to use the assets. What what's then happened is the 0:05:06.760 --> 0:05:11.120 generation feeding into them has started to change quite dramatically. 0:05:11.800 --> 0:05:14.359 We were most of us reliant on systems where we 0:05:14.400 --> 0:05:18.000 had big centralized power stations, and we're moving to a 0:05:18.080 --> 0:05:22.359 system now of much more distributed generation. So that starts 0:05:22.400 --> 0:05:25.760 to create challenges on the grid and the way the 0:05:25.800 --> 0:05:29.440 grid system works. The other thing that has gone on 0:05:30.560 --> 0:05:36.600 is switching from carbon fuels fossil fuels to renewable energy. 0:05:37.080 --> 0:05:39.919 And again that changes the way the entire system works 0:05:39.920 --> 0:05:42.760 and the entire system functions because you have to start 0:05:42.800 --> 0:05:45.920 balancing in a different way. You need more interconnection, so 0:05:45.960 --> 0:05:48.479 you need to start developing your grid. And then the 0:05:48.520 --> 0:05:51.440 third bit of it is the electrification. You know, if 0:05:51.480 --> 0:05:55.240 you take a country like the UK, UK is quite 0:05:55.279 --> 0:05:59.160 often held out quite rightly as being a leader in decarbonization, 0:06:00.120 --> 0:06:04.880 but we are not a leader in electrification. With quite 0:06:04.920 --> 0:06:08.800 rightly and very importantly focused on decarbonizing the electricity system. 0:06:09.320 --> 0:06:12.160 But what we now need to focus on is electrifying 0:06:12.240 --> 0:06:15.480 the economy because all of these new technologies and new 0:06:15.520 --> 0:06:21.679 industries will look for electricity, data center investors, electrical connection. 0:06:22.200 --> 0:06:26.280 And at the same time you've got older industries, more 0:06:26.360 --> 0:06:29.400 established industries, and you've got things like the transport system 0:06:29.839 --> 0:06:34.200 moving from carbon to non carbon and electrification as well. 0:06:34.440 --> 0:06:36.920 But if we go back to the point you were making, 0:06:36.960 --> 0:06:41.120 which is that because of the distributed nature of electricity 0:06:41.360 --> 0:06:46.200 generation today and also the variable nature of electricity generation, 0:06:46.520 --> 0:06:49.599 the challenges are different. But you know, about a decade 0:06:49.640 --> 0:06:53.560 ago when renewables became cheap enough to start to replace 0:06:53.880 --> 0:06:57.240 for sol fuel power, either through subsidies or through natural 0:06:57.240 --> 0:07:01.520 cost declines. There was this fear that how are we 0:07:01.560 --> 0:07:05.400 going to handle thirty forty percent renewables on a grid 0:07:05.560 --> 0:07:08.880 that is variable? And now there are days when the 0:07:08.920 --> 0:07:12.600 grid is completely powered by renewables. So was that fear 0:07:12.680 --> 0:07:19.040 mongering overblown? Was the fear just not rightly placed? 0:07:19.720 --> 0:07:22.640 You always have a when you're moving for one system 0:07:22.680 --> 0:07:24.720 to another, you're about to have a bit of uncertainty 0:07:24.720 --> 0:07:26.320 and a bit of concern about how do you deal 0:07:26.360 --> 0:07:28.440 with that? How do you manage that? I mean, I 0:07:28.480 --> 0:07:30.840 can remember back to when people were getting worried about 0:07:30.840 --> 0:07:33.640 ten percent renewables in the system or fifteen percent renewables 0:07:33.640 --> 0:07:36.400 in the system. But grid technology moves on as well. 0:07:37.640 --> 0:07:39.840 The technology, the way you build the grid, the way 0:07:39.880 --> 0:07:42.119 you manage the grid, the way you utilize the grid, 0:07:42.640 --> 0:07:44.640 the way you design the grid is all changing at 0:07:44.680 --> 0:07:47.480 the same time. And also what you've seen lots of 0:07:47.480 --> 0:07:51.200 countries do is more and more interconnection, so making the 0:07:51.240 --> 0:07:54.120 grid system much much more flexible, allowing you to shift 0:07:54.160 --> 0:07:58.560 and move power about. You've also seen the rapid growth 0:07:58.560 --> 0:08:01.280 in some countries like the UK offshore wind which helps 0:08:01.320 --> 0:08:03.720 to balance off some of the intermittency of onshore when 0:08:03.800 --> 0:08:06.040 you've seen the growth of solar, which again helps to 0:08:06.080 --> 0:08:09.400 balance that off. So all of these technologies are coming through. 0:08:09.640 --> 0:08:13.239 We're seeing a huge growth and battery technology again helping 0:08:13.280 --> 0:08:16.720 to balance and manage fluctuations in the system and voltage 0:08:16.720 --> 0:08:20.520 control issues in the system. So all those technologies, all 0:08:20.560 --> 0:08:24.000 the variability of the technology, all of that investment interconnections 0:08:24.120 --> 0:08:27.160 just making it more and more possible and easier and 0:08:27.200 --> 0:08:29.480 easier to up the level of renewables in the system 0:08:29.560 --> 0:08:32.440 and manage a system in that way. So now you 0:08:33.120 --> 0:08:37.160 rarely hear people talk about the concern of what will 0:08:37.200 --> 0:08:39.959 happen if the wind doesn't blow one day because the 0:08:40.000 --> 0:08:42.440 system is run in such a different way. And that's 0:08:42.480 --> 0:08:45.440 been part of the big, big investment program that's going on, 0:08:45.679 --> 0:08:48.080 and part of the big investment program that still needs 0:08:48.080 --> 0:08:49.040 to come on the grid. 0:08:49.960 --> 0:08:53.040 Now let's come to Great British Energy. This is a 0:08:53.120 --> 0:08:56.640 pledge that the Labor Party has made about what it 0:08:56.679 --> 0:08:59.360 wants to do in energy. Now, the Labor Party has 0:08:59.440 --> 0:09:02.880 been quite veig about what exactly GB energy is going 0:09:02.920 --> 0:09:06.199 to be. But from what you know, is this a 0:09:06.280 --> 0:09:07.280 welcome development. 0:09:07.640 --> 0:09:10.400 The concept of Great British Energy is fine. I have 0:09:10.440 --> 0:09:12.800 absolutely no issue with it at all. In fact, it's 0:09:12.840 --> 0:09:16.200 great to have anything being set up or created that 0:09:16.360 --> 0:09:19.920 brings a bigger focus on the future of energy and 0:09:19.960 --> 0:09:22.880 what energy can do to drive the future of economic 0:09:22.880 --> 0:09:25.760 growth in the country. Is a really positive good thing. 0:09:25.960 --> 0:09:27.920 So that's brilliant. 0:09:27.960 --> 0:09:30.280 I'm very much focused on electricity, not all that. 0:09:30.760 --> 0:09:33.400 Absolutely, and that's the critical thing. Again, it goes back 0:09:33.440 --> 0:09:37.920 to the conversation about electrification. Electrification is unstoppable, okay, So 0:09:37.960 --> 0:09:41.120 that's great and brilliant. It's now just about where does 0:09:41.160 --> 0:09:46.480 it add greatest value and in which processes, And that's 0:09:46.520 --> 0:09:49.600 the debate we need to have and get into the 0:09:49.640 --> 0:09:53.160 detail of okay. And that's where the expression comes about. 0:09:53.559 --> 0:09:55.280 And I'm not suggesting this is what it is. But 0:09:55.840 --> 0:09:58.959 if all it ended up becoming was a bank, then 0:09:58.960 --> 0:10:01.199 I'm kind of sitting here, Well, you know what, there's 0:10:01.200 --> 0:10:04.000 a hundred banks out there already. I don't need another bank. 0:10:04.640 --> 0:10:07.920 If it's involved in looking at policy, if it's involved 0:10:07.920 --> 0:10:10.720 in looking at how do we set up the mechanisms 0:10:10.760 --> 0:10:13.600 to deliver the hydrogen economy, How do we set up 0:10:13.679 --> 0:10:17.160 and encourage the transfer from gas boilers to heat pumps, 0:10:17.520 --> 0:10:20.240 How do we make sure there's a better effective rollout 0:10:20.280 --> 0:10:23.640 of ev charging and changing ev charging. How do we 0:10:23.800 --> 0:10:28.319 use existing schemes like the energy efficiency scheme to direct 0:10:28.360 --> 0:10:32.000 the money more to heat pump conversion, etc. Then those 0:10:32.000 --> 0:10:34.640 things start to add a huge amount of value. They 0:10:34.720 --> 0:10:38.600 start to unlock a huge amount of investment. Right now, 0:10:39.040 --> 0:10:42.920 if what the program did was buy shares and offshore 0:10:42.960 --> 0:10:46.040 wind farms or take stakes and offshore wind farms, fine, 0:10:46.200 --> 0:10:48.200 that's not going to build them any faster. It's not 0:10:48.240 --> 0:10:51.000 going to deliver them any faster. So it's really about 0:10:51.040 --> 0:10:54.120 where you add best value and the kind of amounts 0:10:54.120 --> 0:10:56.280 of money that are being talked about being made available 0:10:56.280 --> 0:10:58.280 to bridge energy. Then it's about how do you focus 0:10:58.360 --> 0:11:02.679 that And I think innovation and research and development policy 0:11:03.120 --> 0:11:06.760 creating the correct mechanisms, creating the right incentives right now, 0:11:06.800 --> 0:11:10.320 I think that is where any government coming into power 0:11:10.600 --> 0:11:13.480 could add a huge amount of weight and a huge 0:11:13.480 --> 0:11:14.880 amount of speed to what we want. 0:11:15.000 --> 0:11:18.200 Well, that doesn't sound like gb Energy Corporation's job. That 0:11:18.280 --> 0:11:21.240 just sounds like the government's job. Now, Labor has promised 0:11:21.240 --> 0:11:23.760 to decarbonize the grid by twenty thirty. 0:11:24.920 --> 0:11:28.400 Is that realistic targets get set all the time? Okay, 0:11:28.720 --> 0:11:32.400 and different governments. Different parties bring along different targets. The 0:11:32.440 --> 0:11:34.840 government and the run up to the election had targets. 0:11:34.880 --> 0:11:37.960 It changed targets, It made some targets more ambitious, it 0:11:38.040 --> 0:11:42.599 chopped others. I generally don't get overly excited about targets 0:11:42.640 --> 0:11:47.040 and dates. Having ambitious targets is good. If somebody sets 0:11:47.040 --> 0:11:50.480 a target of decarbonizing the grid by twenty thirty or 0:11:50.520 --> 0:11:53.600 somebody says there's a target of having fifty gigawats of 0:11:53.600 --> 0:11:56.440 offshow win by twenty thirty five, if we end up 0:11:56.440 --> 0:11:58.840 with forty eight gigawatts, is that a disaster. 0:11:59.240 --> 0:11:59.400 No. 0:12:00.160 --> 0:12:02.920 If we end up decarbonizing the system by ninety five 0:12:02.960 --> 0:12:05.559 percent instead of one hundred percent, is that a disaster. 0:12:05.720 --> 0:12:08.560 It's great to have big ambition. It's great to show 0:12:08.600 --> 0:12:11.680 the industry, to show the supply chain, to show investors 0:12:11.960 --> 0:12:14.960 we are absolutely serious about this and we will put 0:12:14.960 --> 0:12:17.480 in place the policies and the mechanisms to allow you 0:12:17.520 --> 0:12:20.920 to invest to deliver it. We will focus on speeding 0:12:20.960 --> 0:12:23.240 up the planning system and the clarity of the planning 0:12:23.240 --> 0:12:26.360 system to allow your projects to come through, to allow 0:12:26.360 --> 0:12:28.839 you to push harder and go faster. That's what we 0:12:28.880 --> 0:12:31.920 want that's what we like to see. Whether the targets 0:12:31.960 --> 0:12:35.600 twenty thirty or twenty thirty three doesn't make much difference 0:12:35.600 --> 0:12:38.720 to me as long as I have that ambition, that clarity, 0:12:38.760 --> 0:12:40.080 and the policies to back it up. 0:12:40.480 --> 0:12:44.319 Now, there are things that are just called natural monopolies 0:12:44.400 --> 0:12:48.480 because of the way in which a particular asset operates. 0:12:48.679 --> 0:12:54.440 Typically utilities which are building cables or utilities that are 0:12:54.440 --> 0:12:58.320 building pipes, so water or electricity tend to be natural 0:12:58.360 --> 0:13:02.600 monopolies that it is all only worth having one set 0:13:02.640 --> 0:13:05.400 of pipes and one set of cables to do the job. 0:13:06.440 --> 0:13:11.560 But natural monopolies should not exist in a proper capitalist 0:13:11.640 --> 0:13:15.400 market where there is competition and that drives prices down 0:13:15.440 --> 0:13:19.240 and helps the consumer as well as helps innovation. So 0:13:19.360 --> 0:13:22.840 one way around the whole existence of natural monopolies is 0:13:22.880 --> 0:13:27.240 to regulate them, and regulate them well. In this country, 0:13:27.840 --> 0:13:32.520 poor regulation of water utilities has meant they're now dumping 0:13:32.559 --> 0:13:35.960 sewage at scale and have been doing that for years 0:13:35.960 --> 0:13:42.360 into rivers into sea utility regulation has been running okay 0:13:42.400 --> 0:13:45.320 so far, But what do you think the governments could 0:13:45.320 --> 0:13:50.960 do better in regulating your business that would enable the 0:13:51.000 --> 0:13:52.120 transition to go faster? 0:13:53.280 --> 0:13:54.920 I think one of the things when we look at 0:13:54.960 --> 0:13:58.920 the UK economy and the balance of competition and regulated 0:13:58.960 --> 0:14:01.880 our sets, you need to think very very carefully about 0:14:01.920 --> 0:14:05.240 which model works best for what kind of investment. I 0:14:05.240 --> 0:14:08.600 think the regulated model for grid investment, the way it's 0:14:08.640 --> 0:14:11.960 working now with the real system, the five year cycle 0:14:12.000 --> 0:14:15.600 of investment is actually encouraging all of the right level 0:14:15.640 --> 0:14:18.720 of investment to come through. The system are also built 0:14:18.760 --> 0:14:23.240 into that mechanism. There's actually a huge amount of competition, okay, 0:14:23.280 --> 0:14:25.560 because if you look at the way all of the 0:14:25.600 --> 0:14:29.240 work is procured and the tendering process, there's a massive 0:14:29.240 --> 0:14:32.200 amount of competition, and tendering goes on feeding through to 0:14:32.280 --> 0:14:35.960 make sure the price that's being paid is market driven 0:14:36.440 --> 0:14:40.640 and incredibly efficient and effective, and that feeds into that system. 0:14:40.920 --> 0:14:43.880 If you look at the regulator's job, they're managing that 0:14:44.000 --> 0:14:47.640 balance between creating the incentive for companies to come forward 0:14:47.680 --> 0:14:51.480 invest but managing the scale of that investment and the 0:14:51.520 --> 0:14:54.160 impact and the end customer and the fact that we've 0:14:54.160 --> 0:14:57.440 got a model that then stretches that out over forty years. 0:14:58.200 --> 0:15:01.000 So when you hear people talking about the billions of 0:15:01.040 --> 0:15:03.240 pounds we need to invest in the grid that sounds 0:15:03.320 --> 0:15:06.680 quite scary to the public about what's that going to 0:15:06.720 --> 0:15:09.960 cost me? Well, you start spreading that out over forty years, 0:15:09.960 --> 0:15:13.640 you minimize that impact on individuals, and again that's a 0:15:13.680 --> 0:15:16.000 great model. And then what you also need to do 0:15:16.720 --> 0:15:19.600 with other parts of the market is look at would 0:15:19.640 --> 0:15:23.200 competition be a better answer or the correct answer? In 0:15:23.240 --> 0:15:26.240 some cases yes and in other cases no. If I 0:15:26.280 --> 0:15:29.320 give you a couple of examples, you look at smart 0:15:29.360 --> 0:15:33.080 metering or meeting and a decision was made several years 0:15:33.120 --> 0:15:36.120 ago in the UK to do that as a competitive process. 0:15:37.040 --> 0:15:39.480 I think most people now would look at that and go, 0:15:39.800 --> 0:15:44.080 you know what, we made a mistake in the UK. Actually, 0:15:44.280 --> 0:15:47.480 if ever there was an asset investment program and a 0:15:47.600 --> 0:15:51.560 rollout program that was suited to regulated market, it was 0:15:51.600 --> 0:15:54.560 that and would have been far more successful and far 0:15:54.600 --> 0:15:57.520 faster at doing it. Where we started the build out 0:15:57.520 --> 0:16:01.280 of offshore wind the regulator looked at creating the off 0:16:01.400 --> 0:16:04.760 or the offshore transmission market and putting that those assets 0:16:04.800 --> 0:16:09.520 out to a competitive process. It's not been bad. It works, 0:16:10.000 --> 0:16:13.040 but the question is what benefit has it brought. It's 0:16:13.040 --> 0:16:16.200 a lot more complicated, it's a lot more difficult to 0:16:16.240 --> 0:16:18.800 do into marriage and I'm not too sure that there's 0:16:18.840 --> 0:16:22.000 been a massive upside or a massive benefit. So yeah, 0:16:22.320 --> 0:16:25.680 what I always say in conversations with the regulators, don't 0:16:25.720 --> 0:16:29.880 do competition for the sake of competition. There has to 0:16:29.920 --> 0:16:34.040 be a clear, identifiable benefit in terms right now, when 0:16:34.040 --> 0:16:36.760 I look at the future of the grid and what 0:16:36.800 --> 0:16:39.000 we're going through in the grid, and if I look 0:16:39.040 --> 0:16:40.960 at the future of offshore wind and what we need 0:16:41.000 --> 0:16:43.360 to do on offshore wind, the other thing you need 0:16:43.400 --> 0:16:47.160 to take into account is we need such a huge 0:16:47.320 --> 0:16:52.840 uplift and investment. We're mapping out massive projects both in 0:16:52.880 --> 0:16:57.320 the grid and an offshore. Is that a good time 0:16:57.400 --> 0:17:01.360 to fundamentally change the model you're using. I would suggest no. 0:17:01.960 --> 0:17:05.040 What you need more than anything else right now for 0:17:05.200 --> 0:17:09.240 investors and for that kind of pace of growth is stability, 0:17:10.359 --> 0:17:14.640 transparency and sensible management of the costs and the returns. 0:17:15.800 --> 0:17:18.560 And that I think is more critical right now than 0:17:18.640 --> 0:17:21.760 worrying about whether it's regulated or whether it's competitive. 0:17:25.400 --> 0:17:28.240 After the break, it's not just about the grid, it's 0:17:28.280 --> 0:17:31.400 also about the people who work on it. Keith explains 0:17:31.440 --> 0:17:35.280 why the UK needs more engineers and by the way, 0:17:35.400 --> 0:17:37.560 if you like this episode, please take a moment to 0:17:37.680 --> 0:17:41.040 rate and review the show on Apple and Spotify. It 0:17:41.119 --> 0:17:50.560 will help others find the show. Now. You recently said 0:17:50.600 --> 0:17:53.200 that when it comes to the UK making strides and 0:17:53.280 --> 0:17:57.080 clean energy, there are easy answers which don't cost money, 0:17:57.280 --> 0:17:59.960 and that it frustrates you when those avenues are now 0:18:00.200 --> 0:18:03.199 being used. What were you referring to. 0:18:03.720 --> 0:18:07.000 That's it in the context of a conversation about how 0:18:07.080 --> 0:18:09.280 much money does the government need to put into this 0:18:09.440 --> 0:18:12.560 and into the future? Okay, And you know what I 0:18:12.560 --> 0:18:14.199 would say is, you know, if you look at the 0:18:14.280 --> 0:18:18.840 UK specifically, what is quite clear is that fiscally there 0:18:18.880 --> 0:18:21.879 are constraints in terms of where our economy sits and 0:18:21.920 --> 0:18:24.240 therefore how much money the government can put forward into 0:18:24.240 --> 0:18:28.240 the economy. Okay, in terms of what's called Great British Energy. 0:18:28.520 --> 0:18:31.679 I don't need or want another bank, so I'm not 0:18:31.800 --> 0:18:35.080 chasing this government looking for money. Okay. There are good 0:18:35.119 --> 0:18:38.840 regulatory mechanisms in the UK that encourage and allow investment 0:18:38.920 --> 0:18:41.560 to flow through the grid. There are some great market 0:18:41.640 --> 0:18:45.320 mechanisms like the CFD that encourage and allow money to 0:18:45.359 --> 0:18:48.520 flow through to allow the buildout of onshore wind, offshore 0:18:48.560 --> 0:18:52.000 wind and solar. So those mechanisms are great. What is 0:18:52.040 --> 0:18:53.920 it we need now is we need to look at 0:18:54.480 --> 0:18:56.920 what other blockages are in the system. If I look 0:18:56.920 --> 0:19:00.200 at this from the perspective of my company of Scottish Power, 0:19:00.320 --> 0:19:03.119 we're part of the a Bodrolla Group. Right now I 0:19:03.160 --> 0:19:05.560 can attract twenty to twenty five percent of the air 0:19:05.560 --> 0:19:09.040 Bodrolla Group's capital into the UK to invest in the 0:19:09.119 --> 0:19:11.520 UK system. I should be able to attract even more 0:19:11.560 --> 0:19:15.200 of that. What's the constraint speed? What the speed come 0:19:15.240 --> 0:19:17.399 down to? More often than not, it comes down to 0:19:17.400 --> 0:19:21.760 things like the planning system. So let's invest in modernizing 0:19:21.880 --> 0:19:25.280 the planning system. We've talked about modernization of the grid, 0:19:25.760 --> 0:19:30.600 We've talked about modernization of the generation system. What's not 0:19:30.680 --> 0:19:33.760 being modernized as the planning system. We're still operating the 0:19:33.800 --> 0:19:36.520 same system of all was operated. We need to get 0:19:36.560 --> 0:19:40.200 faster at getting things through that planning system. Now. Part 0:19:40.240 --> 0:19:44.200 of that is more resource in the planning system. Part 0:19:44.240 --> 0:19:46.640 of it's the coordination of the planning system with other 0:19:46.720 --> 0:19:50.479 bodies and other stakeholders. Part of it's not running it 0:19:50.560 --> 0:19:53.760 as a serial process, run it as a parallel process. 0:19:54.080 --> 0:19:55.520 There are a whole load of things like that that 0:19:55.600 --> 0:19:59.199 can be massively improved. That will allow decisions to be 0:19:59.320 --> 0:20:03.359 much clearer, decisions to be made much faster, and allow 0:20:03.440 --> 0:20:06.080 projects to get up and be running much much quicker. 0:20:06.200 --> 0:20:09.800 So those things you do not need hundreds of millions 0:20:09.840 --> 0:20:13.040 of pounds to resolve those kinds of issues. Okay, they're 0:20:13.040 --> 0:20:15.760 also things like new technologies coming into the market, and 0:20:15.760 --> 0:20:19.560 that's where governments can really help is how do you 0:20:19.760 --> 0:20:23.639 create the right policy framework and policy environment. How do 0:20:23.680 --> 0:20:27.600 you create the right incentives to start allowing things like 0:20:27.640 --> 0:20:30.199 the rollout of ev charging. How do you do the 0:20:30.240 --> 0:20:33.280 same thing for the rollout of heat pumps to shift 0:20:33.280 --> 0:20:36.840 away from gas boilers to the electrification of heating. How 0:20:36.880 --> 0:20:39.480 do you look at and encourage the growth and the 0:20:39.520 --> 0:20:44.040 development of the hydrogen sector. Again, from that perspective, we're 0:20:44.040 --> 0:20:46.119 not looking for huge amounts of money. A lot of 0:20:46.160 --> 0:20:51.399 that is about policy frameworks, market incentives, obligations to start 0:20:52.320 --> 0:20:55.800 invigorating those markets and encouraging investment in those markets. 0:20:57.040 --> 0:21:01.760 Another missing piece that you've pointed out is skills. Now, 0:21:01.880 --> 0:21:05.920 skills can mean lots of different things, and getting those 0:21:05.960 --> 0:21:08.840 skills can also mean lots of different things. It could 0:21:08.880 --> 0:21:12.920 be universities, it could be companies taking on reskilling programs, 0:21:13.480 --> 0:21:18.360 but specifically, what skills are missing from the workforce right 0:21:18.400 --> 0:21:23.040 now and who are the actors that can help bridge 0:21:23.040 --> 0:21:23.520 that gap. 0:21:23.960 --> 0:21:27.600 Yeah, people, skills, jobs is a massive part of this 0:21:27.720 --> 0:21:31.239 conundrum and of the challenge and the opportunity. So what 0:21:31.280 --> 0:21:35.520 do we mean by that? This is about getting people engineers. 0:21:36.720 --> 0:21:40.399 That covers a multitude of sins or opportunities. But that 0:21:40.560 --> 0:21:45.639 is from people who will be outfitting smart meters. It 0:21:45.680 --> 0:21:50.080 will be people jointing cables. It will be people stringing gridlines. 0:21:50.560 --> 0:21:53.800 It will be people designing and building wind turbines. It 0:21:53.840 --> 0:21:57.000 will be people designing and building foundations. It will be 0:21:57.040 --> 0:22:00.399 people designing and building converter stations. In HVD we see 0:22:00.400 --> 0:22:04.240 subse cables, Okay. It covers a massive range of skills 0:22:04.520 --> 0:22:06.800 what we see when we look at the growth even 0:22:06.840 --> 0:22:10.399 if you just take the grid Okay. National Grid have 0:22:10.480 --> 0:22:14.720 announced a sixty billion pound investment program. We've announced out 0:22:14.720 --> 0:22:18.080 to twenty twenty six, a twelve to fifteen billion pound 0:22:18.119 --> 0:22:22.359 investment program. There are massive programs of investment out there, 0:22:22.800 --> 0:22:25.800 and one of the main parts we need the physical material. 0:22:26.160 --> 0:22:28.520 The other bit is the people to do the work. 0:22:28.800 --> 0:22:31.080 And there aren't enough of them right now, and there 0:22:31.080 --> 0:22:34.439 aren't enough of them at the trainee level, and there 0:22:34.440 --> 0:22:38.120 aren't enough of them at the fully skilled experienced level. Okay, 0:22:38.280 --> 0:22:41.439 so what do we need to do? We as an 0:22:41.440 --> 0:22:44.679 individual company, we have a big role to play in that. 0:22:45.040 --> 0:22:48.800 So we run an apprenticeship scheme, we're on graduate training schemes, 0:22:49.240 --> 0:22:51.879 we go out and do employment schemes, we do gray training, 0:22:52.200 --> 0:22:54.320 and every company can look at doing that, but on 0:22:54.359 --> 0:22:58.399 its own that's not going to be enough. So we 0:22:58.440 --> 0:23:03.800 need a coordinated approach with the government. Local colleges. Colleges 0:23:03.840 --> 0:23:06.200 play a massive part of this. You know, this isn't 0:23:06.280 --> 0:23:11.359 just about universities, schools and universities, and we need to 0:23:11.400 --> 0:23:15.199 look at the concept of setting up training academies, shared 0:23:15.280 --> 0:23:19.080 training academies. Okay, because right now I'm looking to employ 0:23:19.760 --> 0:23:24.960 another thousand engineers. My counterparts at SSEE are looking to 0:23:24.960 --> 0:23:28.679 employ on other thousand engineers, and my counterparts on National 0:23:28.720 --> 0:23:32.560 Grid are looking to employ another thousand engineers. In fact, 0:23:32.600 --> 0:23:35.680 I think right now in and around central Scotland we're 0:23:35.680 --> 0:23:38.119 all looking for about two and a half thousand engineers. 0:23:38.760 --> 0:23:41.360 There are not two and a half thousand unemployed engineers 0:23:41.359 --> 0:23:44.480 in Central Scotland. So if we don't do anything differently, 0:23:45.000 --> 0:23:48.080 we'll just run around stealing staff from each other. You 0:23:48.119 --> 0:23:50.520