Alan Whitehead: the smart grid revolution

Network interviews former shadow energy minister Alan Whitehead on why smart grids are non-negotiable.

Alan Whitehead: the smart grid revolution

[image_library_tag 47e6c6c9-f98f-495a-a9c4-b1a36b484c86 200×200 alt=”ormer shadow energy minister lan hitehead ” width=”200″ border=”0″ ] Former shadow energy minister Alan Whitehead

 

If network operators were looking for a champion to support their transition to smart grids, they have found one in former shadow energy minister Alan Whitehead. Labour has traditionally held some arguably regressive views on energy, such as a desire for renationalisation. But Whitehead, a stalwart of energy policy before a loss of faith in Jeremy Corbyn’s leadership drove him to resign in June, has recognised that energy is a changing world and smart grids are the fundamental building blocks on which its future will be built.

His strength of support has gone as far as to call them “non-negotiable”, adding that they should be considered a “public good investment”. He also questioned the government’s grasp of how key smart grids will be to solving the energy trilemma.

It is clear that although Whitehead cares deeply about all elements of the energy sector, energy networks are a particular area of interest. Network managed to catch Whitehead for a snatched hour one afternoon in Westminster – before the thunderclap of the referendum vote and subsequent political storm forced him out of office.

We can’t go back to a whole pile of central generating plants and yet people are talking as if we could, and are proposing systems as if the thing hadn’t really changed and we could just get on with business as usual and it will all work out.

Delayed by chambers Whilehead wafts away an aide attempting to chivvy him to the next meeting, preferring to take time to discuss the grid challenges which so animate him. Whitehead has firm views on how the energy storage market should develop, the potential benefits of a systems architect, the need for an independent systems operator, and why he thinks the future of gas lies in closer links between the energy and waste sectors rather than looking to shale gas as a saviour.

It was at the Low Carbon Networks and Innovation conference in Liverpool in November last year that Whitehead spoke out on smart grids, calling for greater support for their development. He believes smart grids should be on an even par with other critical infrastructure, such as motorways and railways. But under the Conservative leadership, Whitehead thinks the development of smart grids may already be in real jeopardy at step one: the smart meter rollout.

Smart meter data

The digital revolution due to start in earnest this summer is hailed as the solution to the billing nightmare that continues to plague the energy sector, while also ushering in the promised world of connected home products.

While obviously beneficial to customers, the real significance of the rollout is not lost on Whitehead. He is fully aware that smart meters will unlock a wealth of energy consumption data essential if distribution network operators (DNOs) are ever to accurately map energy flows, reduce losses and utilise the existing network topography to its full potential. Already in Italy, distribution system operator Enel is putting data from 32 million smart meters to work (see more here).

But the government is going about the rollout in completely the wrong way, Whitehead says. It should not have been given to energy suppliers to lead.

“I would not have started from here, but we can’t start again,” he says. The argument that DNOs should lead the rollout is an old one, but the reasoning extends beyond efficiencies of scale and installation. DNOs could have ensured compatibility with their own systems, but under the leadership of suppliers this is not guaranteed, and much of the benefit of the metering programme is at risk of being lost. With merely a month until the programme starts, DNOs will have to make the best of whatever situation they find themselves in.

Energy storage

Another key technology to smart grids is energy storage. A raft of regulatory legacies are holding the burgeoning market back. The government has promised to address these as soon as possible, finally issuing its long-promised call for evidence at the end of June, but one point is proving contentious.

In an oral evidence session to the Energy and Climate Change Committee earlier this year for its Low Carbon Network investigation, Ofgem’s associate partner, energy systems, Andy Burgess, expressed the regulator’s intention to block DNOs from owning energy storage, one of the storage market’s key asks, to allow a competitive market to develop. Despite the regulator’s apparent set position, energy minister Andrea Leadsom assured in a later session that while its flexibility investigation is ongoing, all options are still being considered.

Whitehead is puzzled by Ofgem’s position. There is no such thing as a fully competitive market in the energy sector, he reasons, because of the subsidies and directive regulation attached to them.

“I think having that better licensing arrangement is potentially very important and it is just wrong that Ofgem has rejected it in the way that it has.

“The challenge of some of these new technologies is how you fit that in with that landscape, not invent a new landscape as you might wish it to be for the next period,” he added.

Of particular concern is Ofgem’s willingness to leave the development of the sector to chance by “hoping people just come forward”, Whitehead says.

“Storage will have such a vital impact on all sorts of ways of doing things, suggesting that storage ought to be much better planned onto the system than simply hoping that someone is going to come forward with the right array and the right things.

“I think we just need to get on with it and not hope for an ideal world of perfect competition where people are just going to come into the market in a completely unplanned way.”

Although Whitehead would wish for urgency, a policy update on storage is not expected until the end of the year.

System planning

The issue of system planning has risen to the fore recently as the UK heads towards closer integration between the electricity, gas, heat and transport sectors in the near future.

Many believe that allowing haphazard development of systems without an overall plan is no longer practical. The Future Power Systems Architect Project undertaken by the Energy Systems Catapult and the Institute of Engineering and Technology will publish its findings later this month.

Whitehead says a body able to take a “much more panoptic view of all the various articulated parts of the system is potentially a very attractive proposition” as we enter a period of “bad news and consequences of things we have done or not done previously”.

A systems architect, Whitehead muses, could help decision makers resist the temptation to shoot the UK in the foot in the long term in the pursuit of short-term cost-saving decisions such as cutting support for solar and onshore wind.

I think having that better licensing arrangement is potentially very important and I think it is just wrong that Ofgem have rejected it in the way that they have. The challenge of some of these new technologies is how you fit that in with that landscape, not invent a new landscape as you might wish it to be for the next period.

“We can’t go back to a whole pile of central generating plants,” Whitehead is exasperated, “and yet people are talking as if we could, and are proposing systems as if the thing hadn’t really changed and we could just get on with business as usual and it will all work out.”

Green gas

One area Whitehead says is in dire need of a long-term systemic plan is heat. Heat has been subject to vast swings in policy over recent years, with the once-held vision of the full electrification of heat now largely abandoned in favour of a mixture of electrification, district heating and repurposing the gas grids.

While an architect able to formulate a plan, identify pinch points, but ultimately commit to the long-term vision would be very beneficial, Whitehead says, it would not be without its problems. The body would need to have a high degree of political consensus and agreement on what it looked at, and what was politically immovable as a result.

Whitehead’s own preferred solution to the question of heat is green gas and closer integration of energy and waste.

“I don’t share the confidence of some that there is going to be a fracking bonanza of a whole pile of gas coming into the system from liberating it, with great cost, from rocks,” he says.

He is unconvinced that the UK will be able to follow in the footsteps of America and have a substantial shale gas industry without “pretty much despoiling two parts of the country with fracking wells and pads”. Shale is not a switch solution, he says.

Green gas, such as biomethane and hydrogen, is a more reliable bet, Whitehead reasons, because “by and large people continue to throw their waste away, things continue to grow, and cows continue to do what they do”. Viable sources include farm waste, sewage and forest trimmings.

“Greening the gas system as it is seems a much better proposition and also maintains gas networks, boilers and the system of doing things that people are used to now. It seems a much more accessible way of doing things.”

But at the moment the two sectors are “barely touching” and we are not “remotely near integrating” energy from waste processes into the energy system. First in the queue for attention should be bringing regulation in each sector into line.

This is clearly a subject Whitehead feels passionately about, and he needs little encouragement to voice his thoughts.

If integration could be achieved, Whitehead foresees enormous potential benefits for the UK’s energy security, cutting down the volume of gas imported in the future as our own indigenous North Sea stock begins to run dry.

Gas is expected to play a substantial role in energy generation for a very long time, but will not be able to carry on unabated for very long. Whitehead therefore brands the abandonment of the carbon capture and storage (CCS) project by the government last year as “catastrophic”, in effect ruling out the long-term contribution of gas to the system.

System operation

While support for CCS and other aspects of smart grids may have been lacking from Decc – certainly in Whitehead’s eyes, energy secretary Amber Rudd has set wheels in motion for the governing framework that future will need.

Alongside commissioning the systems architect study, Decc has turned its eyes to National Grid and its role as System Operator.

National Grid wears many hats. As well as being the SO , it administers the capacity market, owns interconnections and runs its gas networks. For some, the potential for conflicts of interest between all these different roles – a topic for speculation for years – has become too great.

National Grid’s ownership of interconnectors in particular is seen be some as prone to manipulation. As the use of interconnectors for system balancing increases, they argue, Grid is bound to end up favouring its own assets.

No wrongdoing by National Grid has been uncovered despite several investigations and Ofgem is still confident any conflicts can be managed ”at the moment”. National Grid itself is adamant it can continue, but opinions on the best future course of action have lately severely diverged.

The National Infrastructure Commission (NIC) was clear in its Smart Power report that creating an independent SO, while preferable in the long term, need not be an immediate priority.

But the Energy and Climate Change Committee (ECCC) thinks differently. In June it left no doubt, saying “the time is now” for an independent SO, stressing that action should take place “as soon as possible” (read its full findings on an independent SO on p10).

The ECCC went as far as to suggest that such conflicts might also arise in distribution system operators in the future, but chair Angus MacNeil told Network that the creation of an ISO would help keep these to a minimum.

Whitehead is complimentary about National Grid’s performance in its SO role, going as far as to credit it as looking after the best interests of the nation with its private work on strategic reserve and balancing reserve “despite the best efforts of the government to mess things up” by bringing in the capacity market.

“I think National Grid has done a pretty good job and has done a lot of innovative work, sometimes despite the best efforts of government to do the opposite in looking at how the systems going to work in the future and what its requirements are.”

Whitehead sits in the void somewhere between the NIC and the ECCC. A more clearly defined SO, able to stand back from a number of processes is important for the UK in the longer term. But it would be a “very good thing” if that SO was still National Grid in some form.

On this the ECCC is in agreement, recommending that the knowledge held within National Grid is retained in any solution that the government proposes. Luckily National Grid is already making moves to create more separation, so a mutually satisfactory agreement should be possible.

And a swift solution would be ideal to ensure the UK is in a position to fully utilise its interconnectors once the current ties with Europe are cut. National Grid has already moved to advocate a Norway-style post-Brexit model as a way to retain influence and the benefits of interconnection from outside the EU.

Whitehead does not share National Grid’s confidence. Voting to leave the EU will leave the UK with little prospect of being able to negotiate the levels of interconnection needed in the future to maintain supply, he has warned since the vote.

But Brexit has also meant the loss of Whitehead. A fervent Remain supporter, Whitehead wrote that leaving the European Union would be a “grievous and self-inflicted wound on our future as a European nation”.

After the vote, Whitehead resigned from his position, telling Labour leader Jeremy Corbyn that it had been a pleasure championing low carbon energy and combating climate change for the party, but he could not support the party’s current leadership.

Whitehead may have been shadow energy minister for only a year, but energy politics benefited from his wisdom gained through six years on the ECCC previously. And now, among this sea of change and revolving door politics, is arguably the time when that wisdom is needed most. 


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