In the second of a series of one-to-one interviews with my fellow Hitachi executives, I spoke to Ian Funnell, UK & Ireland CEO, Hitachi Energy, and Gerhard Salge, CTO, Hitachi Energy, to get the lowdown on the energy transition.
In 1962 John F. Kennedy famously announced his plan to land a man on the moon before 1970. His words were not universally well received but we all know what happened next.
My colleagues Ian Funnell and Gerhard Salge believe this is the kind of vision we need now if we are to accelerate our climate change ambitions. Here’s their view on where we are on the road to net zero:
As we approach the 100 days since COP26 landmark, what are the steps we need to take to accelerate the energy transition in 2022?
IF: There were so many fantastic commitments at COP 26 but, for me, the job now is to follow up on those commitments. From an energy perspective, particularly in the UK, one of the most defining commitments has been ScotWind, the first phase of the concession for offshore wind for the Scottish continental shelf. This programme will help us achieve our ambition of generating at least 25GW of renewable and low-carbon hydrogen by 2045 – to give you an idea of scale, that equates to about a third of the total maximum demand for the UK, so it's enormous.
I've spoken to some of the developers already and they are committed to developing these concessions by 2030. The supply and generation aspects are in good hands but, for me, the challenge now is how we embrace a holistic approach to the entire energy supply chain – not just the infrastructure, but the demand side, too. Now is the moment to focus on the whole supply chain, rather than just parts of it.
GS: If we want to accelerate the energy transition, it’s important to focus on the slowest elements in the chain. At the moment these elements are infrastructure, planning and speed of delivery, so that’s where we should prioritise our efforts. Another significant factor highlighted at COP26 was the need for everyone to come together in a collective effort to support the energy transition – of course, nations, politicians and businesses take the lead but there’s an opportunity for everyone to contribute through their daily behaviour.
Tell us about the role that global transmission networks can play in the future energy mix.
IF: In the UK, the current split between renewables and gas is approximately 50/50, but there will come a time when the energy price should be linked to the price of electricity generation, rather than gas. The sooner we can build more transmission networks and secure additional renewable generation, the better.
GS: These networks are the backbone of the power system and, as the power system is evolving to become the backbone of the total energy system, it's critical that these transmission networks have the capacity to manage both the complexity and the capacity of future needs. The way to do this is to move towards mixed AC and DC systems and to provide the fundamental platform of a digitally controlled total network operation. This combination of digital technologies and power electronics for controlled power flow is the foundation of the future transmission system and therefore the backbone of the total energy system.
IF: If you take Europe as an example, there’s always somewhere where the sun is shining, or the wind is blowing, so one of the keys is how we connect up those sources of renewable energy and deliver effective transmission around the continent so that everyone can enjoy it.
To me, this means more high-voltage DC connections so we can transmit power around, but then you have to consider: What is the role of digital transformation in the energy market? How do you share demand? This introduces a degree of complexity that is beyond the control of just one individual network.
GS: Given total European weather conditions, and assuming a very well interconnected power system, you can consider wind most of the time as a base supply with certain peaks, but with solar there are clear peaks in the middle of the day. So, integrating variable renewables across large regions has huge benefits. In addition, energy storage has a critical role to play too, so it’s important to add that into the considerations, but the key to success is inter-connection across countries. Europe is ahead of the curve here and the collaboration across countries and network operators is creating tremendous value.
Today and during the coming years, the power system development is changing, and we have to accelerate the development of embedded AC-DC systems which combine the best of both worlds. It’s true that pure AC grids have served us well for many years, but what we need to do now is build generation where most effective renewable resource exists, and that is in many cases not close to where the load centres are. For this purpose, AC has its limitations in terms of technology and losses in particular, whereas DC is a much more appropriate technology to move large quantities of electrical energy at long distances.
How do we unlock a smarter, more flexible and more resilient grid?
IF: I was at a workshop recently and the main topic we covered was the importance of a resilient electricity network, given that in the near future more people will rely on electricity than any other single fuel. There are many questions to answer: How do we measure and benchmark our progress? Are we defining the right standards for the future? What technologies should we be studying? What does the grid of the future look like?
We really need to work collaboratively with our supply chain and customers to understand their pain points, not just today but in five, ten, or twenty years’ time given the UK target of a net zero grid by 2035.
It’s all about collaboration on common R&D programmes, working with academia to better engage brilliant scientists to develop the systems, protocols, and technologies we're going to have to deploy in order to deliver that smarter, more flexible, and more resilient grid.
GS: Digitalisation is the key enabling technology – it starts from the signal collection so you really understand what’s going on in your network, your supply side and your demand side; next, you can transfer that data in a secure way to the operator and, after that, armed with this data, you can use world-leading digital technologies such as machine learning to predict many key parameters from weather forecasts to the equipment status and load patterns. With this in place, you can actively manage the power flow within the system with a combination of digital and power electronics, supported by more and more flexible business models. Ultimately you create the flexibility which enables the system resilience by anticipating and reacting to unplanned and unpredictable situations beyond the typical and planned operational boundary conditions.
IF: As we develop the holistic and complex systems we talked about earlier, Artificial Intelligence will become a cornerstone of the whole ecosystem because of the need to manage an increasingly complex system – the days of being able to control this manually are fast disappearing and we’re moving towards more and more autonomy in these technologies.
How can Hitachi act as the catalyst for the grid of the future?
GS: Hitachi is well placed to lead the way here as we’re combining digital technologies and secure communication for mission critical infrastructure with our in-depth expertise and experience in the energy space, all under one roof. Working together with partners and customers, we can really pioneer best-in-class progress and create a fantastic value proposition across the total value chain.
What would you like to see happen in the next year?
IF: There are so many things I'd like to see happen, but, from a UK perspective, what's missing is the holistic commitment to decarbonise everything in the energy sector. By that, I mean there's no system architect looking at the entire energy infrastructure. So, for me, the desired headline would be “AGREEMENT ON ENERGY’S SYSTEM PROTOCOLS”. It is critical that we understand how the whole energy system will develop. As electricity becomes a primary fuel, other energy vectors will also emerge and together, they will form the total energy ecosystem. The protocols and standards that make up that ecosystem can be a blueprint for our Net Zero energy world.
GS: If I can have another headline, it would be the need for urgency and a concrete plan to speed up the infrastructure build up, to support the energy transition. As I said earlier, common actions are required from all stakeholders: governments, regulators and businesses.
IF: The technology to deliver a successful energy transition is already here – in fact, current technology would take us more than halfway to net zero. But in 2022 what we’re missing is the mindset to match the technology.
In 1962, the technological gauntlet thrown down by John F. Kennedy was very challenging, but the common will of the American people went a long way towards powering the success of Apollo 11 seven years later. Today, we are facing a global challenge, but also the reward is a global one: A sustainable, flexible and secure energy system is the foundation for the today’s generations and those to come on our planet.