Interview: Peter Jones, technology strategy manager, ABB
Image credit: Nick Smith
Today’s increase in renewable energy production means the way electricity is generated, transmitted and distributed is changing from a traditional centralised model to a more distributed localised way of doing things. Peter Jones, technology strategy manager at ABB, explains.
“What we’re looking at is the idea of ‘distributed energy resource’,” says ABB’s Peter Jones. He explains the term has been coined to accommodate the fact that there are contributing factors beyond renewables that go into today’s power generation, transmission and distribution mix. “If photovoltaics (PV) or onshore wind is part of that, then so be it, but what is really important is that we are moving away from large-scale centralised generation. That’s the main issue.”
Renewables are only part of a mix covered by the term, which also includes combined heat and power (CHP) and energy storage. “One of the challenges is to operate systems that have these elements within it.” It’s a Brave New World where conventional national grids are making way for a future that includes localised micro power grids.
“Because I’ve worked with ABB for 17 years, and because I’ve come from a utilities background, I understand network planning,” says Jones. In the course of those 17 years, he has been involved in “pretty much all of the main grid technology that ABB is involved with in operational roles: high voltage DC, wind farms, energy storage, network control systems and so on. I’ve been hands-on.”
Three years ago, ABB asked Jones to review the characteristics of a changing marketplace, “and based on the toolkit of technology that we have, start clarifying what was happening specifically in the UK” with a view to analysing what technologies needed to be prioritised in response to the prevailing economic conditions. This was to further ensure the company wasn’t pushing technology “into an arena that wasn’t really ready for it. Rather, it was to understand what the market requirements were and then build a case for putting it in place.” He says that, as technology strategy manager, his brief was to look at trends and identify business cases while structuring opportunities for the application of the emerging technical innovations he understands so well.
Having spent “30-plus years in the industry”, Jones spent his early career working in areas such as centralised planning and design standards at a time when the market was dominated by fossil fuels and nuclear power. “But in the past decade, there’s been this gradual change that started with wind power,” which he describes as originally being a ‘contained’ market event. Yet, as the reduction in the price of renewables had an impact on the network, it presented a challenge to the traditional areas of centralised generation, transmission and distribution. “Looking at today’s network, we are seeing a higher penetration of renewables, while advances in technology are challenging the topology of these networks. Which means that people like me are now faced with how we are going to deal with this.”
The big questions on everyone’s lips are: “How are we going to deal with power flows going in the wrong direction? How are we going to deal with generation being in the wrong location? How are we going to deal with demand that isn’t in the right place? How are we going to deal with a lack of centralised generation?” Jones sums up the position by explaining that once “there would have been a great big power station with a couple of power lines and people taking what they were given. Now we have a situation that is much more dynamic. We also have a situation where third parties are starting to come into the mix as well, and that is really quite exciting.” In the power game, he says, new players are slowly displacing the traditional players “who are looking to deliver new business models. To say this is a challenge is to understate the position, because the technology involved is considerable.”
‘‘Alternative’ energy has gone beyond a societal wish. It now makes economic sense to look at decentralisation and distributed energy.’
Jones says the uptake in renewables was ‘obviously’ driven by the climate agenda, while admitting that his personal view is that “nobody really thought that it would take off to the extent that it has done”. Neither does he think we predicted adequately just how readily society would accept renewable energy. But “what people really underestimated was the price drop in the technology”. He refers to the Non Fossil Fuel Obligation (NFFO), the government’s primary instruments of renewable energy policy, in which emerging forms of energy supply were labelled ‘alternative’: a landscape that was regarded as either fringe or ‘nice’. Yet gradually, factors related to the decentralisation of generation “mean that renewables has gathered its own momentum, particularly with PV”.
While outliers of the movement were either visionaries or those simply on the lookout for subsidies, there was a middle ground of suppliers with a desire to provide an economically viable source of renewable energy that could contribute in a significant way to the national power mix.
In cases such as this, Jones says you’ve got to look at what is the main driver. While it is tempting to think the desire to appear ‘green’ was a strong candidate, “the main driver was the cost. In the early years, this was clearly subsidy-driven with a lot of emphasis on climate change.” Yet in the UK, “we took the approach that we would enable society’s wishes while fundamentally observing the real issue, which was cost. Our regulator has put a lot in place to enable low carbon, but it is primarily about cost. If you can put forward a solution that has carbon saving within it – which is difficult to put a value on – there is still always the question of the deliverable cost-saving to the customer.”
Today, says Jones, ‘alternative’ energy is self-sustaining, and “it can’t be stopped. This is because it has gone beyond a societal wish. It now makes economic sense to look at decentralisation and distributed energy.” The consensus in the market, he says, is that distributed energy will probably come in at a lower cost. “It is this cost argument now, rather than green credentials, that is a much more solid way of bringing this transition from centralised to distributed power into place. The early governmental subsidies for renewables were very brave. But they were always there to prime the pump for a future of distributed energy resource.”
Jones says that as a force in the power generation, transmission and distribution market, ABB provides technology to the industry “whichever way it goes”.
He means that as technologists, the company follows the market. “If it was for centralised generation and long-distance transmission, then ABB has that portfolio. If the market was for decentralised digitalisation and high levels of control ‘behind the meter’, then we have that too.
“We have the technology, but our brief is to look at what the drivers are. What we are seeing globally is that the trends are the same as in the UK,” which is a move away from large centralised generation plant that the industry is starting to view as ‘not bankable’. This implication that it makes more financial sense to work on a distributed basis can be seen “practically everywhere,” says Jones. It’s not so much that centralisation is “yesterday thinking”, as he carefully points out. “I would say that the market economics of big investments in centralised plants are less attractive in the current climate.”
At the same time, the economics of decentralisation are becoming more attractive. “At one time it was simply not thought feasible that it would be better to provide energy locally. It was always felt that the best way was to apply to a utility to get a connection. Yet now people are responding to a market pull, driven by a growing interest in available technology. They are looking to combine technologies and optimise use.”
As an example, Jones cites the Cheshire Energy Hub: “a group of customers that produces power and consumes large amounts of it”. One of its members is Peel, which has developed a 51MW onshore wind farm and through its Protos development, a 21MW biomass plant “right next to a science park. What Peel has asked is, if they were to optimise their resources locally, would that be a lower-cost solution than connecting to a traditional network?”
What’s important about this example, says Jones, is that “there are a number of people starting to think like that”. He says that where ABB comes in to a discussion like this, it isn’t to help them run the figures, but to deliver the appropriate technology to see the project through. “We can monitor and control a CHP plant and we can monitor, measure and control a biomass plant and collectively look right over the top of all this (because we have the software systems to do so), and provide data for the best solution.
“We’re speaking to customers asking us to tell them about micro-grids,” essentially investigating the feasibility of “operating as an island, only calling on the grid network when we need it. Is it possible to mix gas and electricity to reduce our energy costs? There are also third-party financial institutions looking into whether they can provide capacity into large cities.” What this means for Jones is that there are clients “asking us to show that this technology exists”.
However, it has to work financially. “The main thing about centralised power generation in the past was that it was well-proved that economies of scale were a huge factor. Yet it was never considered that a localised approach may be cost-effective too, while also allowing for the accommodation of more renewables.” Of course, it is more complex than that, because, as Jones says, “there are many, many strands running in parallel here. There are the economies of digitisation, which now make it possible to control and monitor so many pieces of equipment.” There is also the consideration that while it is possible for centralised generation providers to accommodate renewables – and Jones states that there are providers doing a good job in this area – “there are also those that have hit the limit. For example, centralised systems in the south-west with high inclusion of PV are experiencing big constraints. During the peak in summer, there’s a large amount of power trying to flow back up transmission systems that were never designed to take that sort of flow.”
What this means is that decentralisation, with optimised digitisation and control, allows for better movement of power into areas “where it could be used, which in turn would allow you to put more renewables on the network. You get a double win: if you’re using more renewables, then you’re simply getting more from renewables. But you’re also avoiding a large amount of network reinforcement costs.”
With distributed energy, “what we are starting to see are multi-stranded benefits. It’s not straightforward or simple, but it is starting to appear.” Jones then cites the case of China – “which we think of as having large centralised coal-fired plants with large renewables up in the mountains” – that is committed to high PV and wind targets. “Because these targets are eye-wateringly high, they cannot absorb all of that renewable power into their transmission system because they can’t shift it about, and they too are running into problems. So they have a two-stranded approach. First, you put as much as you economically can onto the general system, while then having local distribution accommodated within the network. When you start talking about accommodating large amounts of renewable energy cost-effectively on a network, you’re talking distribution level, where the economics start to swing in your favour.”
What this example shows, says Jones, is that distributed energy resource isn’t just driven by the British market or the green agenda, but by engineering principles, which are, in a nutshell: “If you can’t use it, try and get it to where it’s going to be used. If you can’t use it at the right time, look to see if you can find a technology that will allow you to manage that. That’s what we are seeing globally, it’s what the market is telling us locally, and we’re seeing customer groups that are coming to us asking us if there is another way.” This ‘other way’ finds itself in that Brave New World, aligned to a cusp of technology change driven by market economic forces and, to an extent, green values targets.
What’s going to happen next? “From what I can see, the future is not going to follow the rules. There are an awful lot of network assets out there and they are not easy to change because of the money involved. So we are finding ourselves constrained by them. However, market pull is really testing this situation by demanding innovation. It’s extremely early days. Yet who would have thought that changes we have seen in other technological spheres would have happened?”