Talking New Energy: Clean Power in action

[00:00:02.960] - Jon Slowe

Welcome to Talking New Energy, a podcast from LCP Delta. I'm Jon Slowe.

[00:00:07.770] - Charmaine Coutinho

And I'm Charmaine Coutinho. Together we're exploring how the energy transition is unfolding across Europe through conversations with guests at the leading edge.

[00:00:16.720] - Charmaine Coutinho

And I'm very pleased to be Talking about the UK's policy environment and particularly how we're going to address some of the kind of real challenges around the UK's Clean. Clean Power 2030 policy that's kind of come out in the last year or two. For those of our listeners are not familiar with that, it's kind of big swathe of policy from the change in government in last June, which is kind of rapidly setting the scene for the next decade or so in the GB power market. So, I'm very pleased to be joined by our guest today, Declan Burke, who's the Group Strategy Director of SSE. Hello, Declan.

[00:00:47.590] - Declan Burke

Hi there. Good to be here.

[00:00:49.470] - Charmaine Coutinho

And with Sam Hollister, who heads up our economics, policy and power research here at LCP Delta.

[00:00:56.500] - Sam Hollister

Hi, nice to see you, Charmaine. Nice to see you, Declan.

[00:00:59.260] - Charmaine Coutinho

Great. So, we are going to kind of jump straight into it. I think we, some of our listeners might be familiar. We did a bit of a scene setting podcast on Clean Power 2030, or back at the end of the summer, actually looking at kind of the first couple of months of the new Labour government and what they had kind of announced and all that kind of stuff. And quite a lot has happened. Well, I think quite a lot has happened, so I might actually say not a lot has happened. But we did some research recently on Clean Power 2030. It's a good place for you to give the listeners a bit about kind of what that first nine months of this Clean Power 2030 policy has kind of really stood out for you when we did that research.

[00:01:37.120] - Sam Hollister

Yeah, thanks very much, Charmaine. We published a report just before Christmas looking at Clean Power 2030 and what that kind of meant for the UK and how kind of the UK was on track or not for meeting its clean power targets. The report was sponsored by SSE. So, thank you to Declan and his team. That allowed us to kind of take a deep dive into that research. People may not be aware that the Labour government, upon coming into government, had made this ambition for Clean Power 2030 and asked the National Energy System Operator (NESO) to kind of come forward with a plan about exactly, kind of what needs to be on the system, how much wind, how much solar, what kind of network infrastructure requirements would be. And we then kind of wanted to put our own voice into that as well. The report kind of compares national grids plans, also the government's plans, and our own kind of clean power target. We all make slightly different assumptions around demand or modelling and business and pieces. It becomes quite technical. But what's quite interesting is that the plans are relatively similar. We know that offshore wind is going to be kind of the backbone of the power system.

[00:03:01.060] - Sam Hollister

We know that we're going to be deploying solar because it's one of the cheapest forms of power. And we know that we need some batteries to kind of back that up. So, almost the reports in my mind we can argue a few gigawatts here or there depending on how much offshore wind you think is going to get built. But what I think is really interesting is the kind of the, the other kind of emerging parts of the power system that's probably less kind of well developed. So, things like carbon capture and storage (CCS) or hydrogen to power or even perhaps longer duration energy storage, which I think is probably less, less clear how those sorts of things get built at the moment. But what our report and the government's reports and national grids kind of make clear is, you know, there is no kind of clean power system without those technologies coming forward.

[00:03:58.570] - Charmaine Coutinho

Sam, stop you there because for some of our listeners who might not be familiar with long duration energy storage, can you just describe it a little bit for them, what it actually means?

[00:04:07.630] - Sam Hollister

Yeah, well, probably this is one for Declan. In assembly there are some forms of kind of longer duration storage which have been around for decades, if not 100 years or so, which is around pumped hydro, for example, which is large reservoirs of water that you can then kind of release the water in order to generate power and they can provide power for 8, 10, 12 hours, if not longer. Whereas typically when people talk about storage at the moment we're thinking about batteries and that's kind of one or two hours or perhaps even up to four hours. So, we're kind of talking for those kind of longer periods and perhaps a statistic that's that I think is quite interesting is that within 2030 we believe that actually we're going to have too much clean power around two thirds of the time. So we're going to have too many renewables and too much nuclear on the system around about two thirds of the time. And actually, the length of those periods where we have too much power are going to be half of those periods are going to be for longer than a day. So, half of those periods we're going to have too much power, too much clean power for more than a day.

[00:05:16.930] - Sam Hollister

So, it's kind of what do we do with that? And conversely that means a third of the time actually we're not going to have enough clean power. And you know, again, half of those periods are going to be for more than a day or so where we're going to be perhaps relying on gas or interconnection or flexibility. But I mean we all hope that we'll be able to perhaps store the clean power for four times later on where we can then release that power and kind of manage a greener grid. So, particularly those are kind of the things from the report that stood out to me was less around the kind of the how many gigawatts of offshore wind or how many gigawatts of solar but more around the kind of the backup system, I suppose flexibility of that system.

[00:06:01.350] - Charmaine Coutinho

Yeah. So, Declan, actually interesting to kind of bring SSE's take in on that bit. I mean obviously you kind of worked with us on the report. What was kind of your perspective coming out of that bit of research?

[00:06:12.150] - Declan Burke

Yeah, really, really interesting report and great to work together on it. And I suppose, you know, first of all on the 2030 plan, you know, it's a very galvanising target to have and the new government's hit the ground with kind of real energy, which was great to see but clearly, it's a challenging plan as well. So, definitely agree with Sam. There's an established pathway Runway on renewables and the grid reinforcement we need in the expansion. I suppose I'd call out; I wouldn't underestimate the challenges of getting all that done. So, making sure that the delivery arrangements, we've got our next CfD allocation round coming forward, for example, making sure that's a real success. There's a lot going on around the price control for the transmission build out, for example. So, I think just need to. I'm sure they are moving in from target setting to kind of the real delivery mechanisms around that. That's going to be incredibly important. But then yeah, as you're saying Sam, that kind of mid merit long duration storage. So you know, you're famous, the wind isn't blowing and the sun's not shining, Dunkelflout and all that sort of stuff.

[00:07:11.430] - Declan Burke

Before joining SSE, I used to work in the Energy Department and that was probably one of the harder nuts to crack. So, you're right, you got your batteries, you got your pumped hydro and we can build more of that. We have a project up in Scotland called Corie Glas. We're keen to kind of crack on with. But we are looking at things like carbon capture and hydrogen plants as well. So, we've got projects on the low-carbon thermal side up in Scotland at Peterhead, one down in Kirkby in the Humber and we think those are going to be really important to just balance that line of low-carbon system in the most efficient and cost-effective way. And I think things are progressing. So, you know, if you look at, CSS, government made a big announcement just pre-Christmas that project at Teesside. So, you've got the Matsuura power plant being up and running, meeting some of the bankers who were kind of financing that. And I think there's now a bit of an investable proposition. This dispatchable power agreement you guys are probably familiar with; you're building out these clusters which seems quite a good way of doing it.

[00:08:05.420] - Jon Slowe

So, that's probably an example of a bit like the CfD (Contract for Difference), you remember the offshore wind, you just need to pump prime these industries a bit. That worked really well on the offshore wind side. Having done a CCS cluster, we now need that kind of forward visibility of more of them because that's when you get the supply chain and the learnings and we've got one in Scotland particular from Peterhead, we think we're ready to crack on it quickly. So, you drop down from your 2030 high level plans to this forward visibility pathway. And I definitely agree that mid merit long duration storage is an area we need to be really focused on.

[00:08:39.250] - Charmaine Coutinho

So, it's interesting you to talk a little bit about those clusters. So, for those of you who are familiar with. We do some work in hydrogen generally actually LCP Delta and I remember when hydrogen first came as an alternative, and this is probably about eight years ago and someone asked us a question about can we use hydrogen for heating and gas boiling is like. I think mouth, you guys are asking the wrong question. So, not that kind of. That kind of thinking but more in the sense of talked about hydrant clusters. But a CCS cluster I don't know so much about. So, a bit about that would be really helpful.

[00:09:06.680] - Jon Slowe

Yeah, so I think the government's got four of them in mind. So, you've got kind of Teesside, you've got over on the west coast, high net up in Scotland, Peterhead and then Kirkby. And the idea, which I think is a good one, you have an investment in the transport and storage infrastructure. So, you're going to gather up the CO², take it offshore, bury it either and disused gas fields, aquifer, that sort of thing. So, you're investing in the infrastructure in an area we've got a concentration of emitters who are going to make use of it and that could straddle, you know, power. So, with CSS, you know, hydrogen on the blue side, industrial capture, you can imagine somewhere like Humber you'll need a solution for those guys and maybe even things like negative emissions as well. So, that kind of cluster-based approach, you know, seems, seems a good efficient way and then you can get it to shipping and other things after that to make maximum use of the infrastructure and could be really important. For example, you know up in Scotland you can kind of think about pipelines down to Grangemouth, which is a kind of a big area of focus around kind of a life for that after the refinery and you've got big petrochemical industry there as well.

[00:10:05.180] - Jon Slowe

So, it provides a bit of a decarbonisation pathway. So, it's a really interesting area, I guess. Let's see as we kind of work our way through the spending review. But we think it's an area where there's real bang for buck, not just on the power side but I guess some of the things we touched on there, if you think about the carbon budgets and decarbonising the economy more generally, some of that industrial activity, these clusters are going to play a really important role.

[00:10:28.700] - Charmaine Coutinho

Yeah, I mean I think we've definitely noticed that people talking about industrial decarbonisation hand in hand with what do you do with industries. So, industries that were not were, you know, very prominent and useful for the country's economy and how they transition from a net zero perspective. And I'm thinking about that. I used to do some work on kind of training and upskilling around the energy transition and through that, although it wasn't something we did, there was a big. I read all the reports about how you transition all of the UK's oil and gas sector into the net zero jobs and how easy or hard or difficult that is trying to do it in that cluster approach where you're reusing the infrastructure, we're upgrading the infrastructure I think makes a lot of sense. And what do you think the kind of restrictions are kind of holding that back really apart from just loads of money.

[00:11:15.670] - Declan Burke

I suppose the money was always an important bit of the equation. But I just touch on, I think the economic opportunity there you mentioned is an important one. Like if you're an industrial global concern and you're thinking about where can I put a big facility which has got a lot of CapEx and it's going to be future proof for a decarbonisation world. I think it can be a big draw into these regions as well. And you're probably seeing some of that already on Teesside, for example, so we can be doing loads more of that. So, I think some of it probably is going to be bound up a little bit on the spending review, but hopefully the treasury seem to make the right noises. Where are you doing things that kind of link into that kind of growth agenda, which feels like really the top focus for the government? And I think that that would be an example of an investment that it'll hit your clear power agenda, but it'll definitely hit your growth in lots of different ways as well. And you touched briefly on hydrogen. One of the other things we're trying to do is just get ready for that world.

[00:12:05.640] - Declan Burke

So, we're doing some joint work with Siemens, for example, around kind of hydrogen ready turbines. And we've got a Pathfinder in Aldborough where you kind of look at, you know, creating the hydrogen, storing the hydrogen, using the hydrogen, and I think figuring out how all that works together is something where we're in close contact with government, because then that'll. That'll help us kind of accelerate, get ready to put this stuff into the real world.

[00:12:29.200] - Charmaine Coutinho

Sam, did we touch on much in hydrogen in that report? I'm interested in kind of your thoughts on what Declan's just kind of over.

[00:12:36.510] - Sam Hollister

Yeah, I'm. Yeah. And I was actually going to throw a question back at Declan as well, actually just around that.

[00:12:41.740] - Sam Hollister

Yes, I mean, for us, what's interesting is the role of gas. Right. And at the moment, the kind of, the, the way that the UK operates is obviously kind of gas is a significant part of our energy mix. And as you kind of move towards 2030 and this kind of clean power target, the role of gas becomes more and more important. Important. You know, I think it's interesting that even clean power doesn't kind of exclude the role of gas, just because of the way that the definition is set up. 95% of your generation mix is clean, which does leave gas kind of providing 5% of your generation mix in 2030, which actually our modelling is therefore kind of said that actually it means that you're using gas in around about a third of all hours in 2030, you're still having a role for gas on the system. Obviously that role is fairly minimal, but actually it is still providing that flexibility on the system. And then it becomes kind of important then kind of. Yeah. How do you sort of slowly wean yourself off that gas by using things like hydrogen to power or carbon capture and storage?

[00:13:57.180] - Sam Hollister

But I think also we kind of, even by 2050 we probably still expect some unabated gas on a system. So, by unabated I just mean that we're not capturing the emissions so it's emitting. Just because I think the economics doesn't stack up to kind of clean every single kind of gas turbine even if it's just running kind of a few hours a year for example, it doesn't make sense to put some very capital capex intensive facilities on the side of it to capture those emissions. So, that kind of role of gas I think is very, very important. And yeah, whether it's hydrogen's power, gas, CCS, I think it's probably the market and the economics will kind of play which one is the more dominant role in that space which I think took me too almost. I'd be quite interested to get Declan's thoughts on both of those technologies. I think from a pure energy nerd perspective you kind of look at it and go well if we're going to do clean power this is what we need. I think for other people you get challenges around well you know, is the technology ready? You know, what's, is it expensive, is it, is it worth it?

[00:15:03.820] - Sam Hollister

I suppose and I'd just be quite interested to kind of get your thoughts Declan on I mean we joked earlier that one of the challenges is money, but I think actually kind of is the technology or the sites or the kind of the support mechanisms. What's your thoughts as we kind of move into the2030s and the role for those technologies? And I don't want to use the word naysayers but people that have doubts around.

[00:15:25.920] - Declan Burke

Yeah, really interesting question and you're right, gas is definitely playing a really important role in the system, and I think never forgetting that the trilemma does absolutely exist. Security, supply and the affordability, the overall proposition as well as Decarbon... I think that's going to be front and centre in policymakers’ minds for sure. I was down in our Kirkby facility for example in Humber just before Christmas. Kirkby is probably one of the newer gas plants in the system and you know it runs quite a lot and down there we've got plans to build a kind of a hydrogen plant and I mentioned, you know, the work we're doing with Siemens around kind of hydrogen ready turbines. I think the international dimension is probably a bit of an important one here. So, like you know, I think you're probably aware Germany's been kind of pushing forward with some hydrogen ready plans kind of slightly fell away and we'll see where it gets picked up post-election. But I don't think the UK is going to be ploughing its furrow solely. You know, you're going to be looking at, you know, what's the supply chain doing, what are other countries doing as well, bringing down costs.

[00:16:22.720] - Declan Burke

But CCS would be a good example, I think of, you know, we've now taken as a country one project forward that the BP plant side. So, you'll get the supply chain, you'll get all the kind of learnings from that one, you know, not that CCS does, but in previous role I used to work on nuclear. One of the big kind of things that doesn't work is you do one project; there's a bit of uncertainty and a gap and then you kind of do another one. And if you get the kind of confidence in the supply chain, you know, to build these things, we've got projects coming through our development pipeline having the visibility to kind of invest and support those and you're moving the supply chain from one to the other. And on things like CCS and the UK has got a pretty good advantage. We talked about clusters, so we just have kind of offshore storage, for example, in the way that not every country does. We've got advantages around kind of hydrogen, whether it's green or blue. So, these are, again, if you kind of anchor back into that kind of growth agenda, if we give the certainty and pump, prime the market, like I think we did really well on offshore wind, I think we could make either technology work and clearly, I think the UK at the moment is looking for a mix of both.

[00:17:25.490] - Declan Burke

But yeah, the last thing I suppose I would say is just plugging into what's going on internationally is important as well. We work with Equinor, for example, our Norwegian partners, and they've got a lot of activity in this space as well.

[00:17:36.110] - Charmaine Coutinho

Yeah, it's a really good point actually, because we talk about. We've done two or three podcasts around Clean Power 2030 and actually you realise very quickly the conversation needs to be about how this integrates and interfaces with all the kind of global supply chains, particularly when you're talking about that kind of, I was going to call them edge technologies. They're not edge technologies, but the ones that aren't so established and, you know, they're not cheaper to produce, not talking about solar and wind. And I think that is a really important point for sure.

[00:18:04.740] - Declan Burke

And you're competing for the kind of supply chain as well, I guess, globally, aren't you? One of the other massive themes I guess we've all been looking at is kind of AI and tech and the energy growth demand we're kind of seeing coming out of there as well. So, some of these supply chain guys are kind of pretty busy as they sort of see growth popping up in different areas.

[00:18:21.510] - Charmaine Coutinho

Well, it's interesting you said about that, because I don't know what everyone else's LinkedIn feeds like, but mine is all about data centres.

[00:18:28.140] - Declan Burke

Yeah, yeah.

[00:18:28.830] - Charmaine Coutinho

And there was one post yesterday/last week, about this is going to be a neat segue around zonal pricing and preferences, or non-preferences for zonal pricing when it comes to data centres. The reason I mentioned that is because obviously we're waiting for various different things to be announced in the UK around the move to potentially a different way of pricing mechanisms. And so, Declan, I'm going to ask you about zonal pricing.

[00:19:00.020] - Declan Burke

Our topic of the day, isn't it? Everyone loves it and something we spend a lot of time talking about. I think maybe there's multiple dimensions to it, isn't it? One is around the kind of the 2030 ambition, for example, as well. So, there's kind of many ways into that discussion and I guess if you zoom out, like what I think all people in the debate want is you build the infrastructure you need to kind of decarbonise the economy and you do it in a way that kind of works for consumers and is affordable. So, I think people kind of agree what we're trying to achieve and maybe there's obviously different views on how to get there in terms of kind of zonal. So, from our perspective, we think some of the actions governments taking absolutely support building out the system in a way that's going to work at least cost for cost. So, that's all the kind of grid upgrades that we're doing. And essentially when I was in the department, grid had less of an emphasis. Now it's got a real plan, big bit of our business, this ASTI framework, we've got this strategic spatial planning going on as well and you've got lots of interesting discussions around targeted reforms you could make to things like the CfD.

[00:20:01.380] - Declan Burke

So, we think there's absolutely a combination and a solution you could make to address some of the issues people want around where you put generation, demand and all those sorts of things. If, on the other hand, speaking as someone who spent 10 years in the Energy Department, you were trying to hit 2030 and you were radically and fundamentally changing how the system was priced and being put together. I don't think the benefits. If you talk about all the things that have been done to address the issues. So, things I talked about transmission planning, that gets you pretty much to where you need to be anyway. So, if you cause a lot of uncertainty by changing the underpinnings of the market while you're trying to build all this infrastructure, I think the complexity probably kind of collapses back in on itself.

[00:20:44.700] - Charmaine Coutinho

It is a little bit. It ends up being kind of like a chapter from Hitchhiker's Guide to a Galaxy, isn't it? The. That how everything contradicts each other and naturally you're. There's lots of hypothetical what if, what if, what ifs. I don't really think about it from that perspective before, actually, especially as we realise that 2030 is quite soon, it's.

[00:21:05.520] - Declan Burke

Around the corner, it's literally years away and there's no point creating a lot of uncertainty just the other side of 2030 either. So, I think there's a really clear, bold ambition, like we've talked about all the things that kind of needs to happen and I think that comes at the cost of a more expensive system. I think you can absolutely put in place a sequence of measures which government's already making pretty good progress on, actually, that address some of the issues like let's take the power down to where it's needed, build out the grid infrastructure, which should have been built sooner, arguably. So, I don't think it's an either or. I think you can achieve the kind of benefits you're trying to do. You can get a kind of a… A set of solutions to target that which, you know, Sam, you're all over and there's been loads of work done between the two of us and, you know, you will introduce, you know, such risk to achieving the 2030 targets, I think because we need to mobilise capital and attract it. I was at a... There was some sort of transition finance review thing in the city yesterday evening and, you know, we are competing for global capital in the transition.

[00:21:58.110] - Declan Burke

If you think about what all the other countries are doing as well, and in the world, we are after growth, mobilising investment into industry. This would, you know, if you do something that doesn't quite work here, you'll be very much kind of providing a headwind rather than a tailwind.

[00:22:12.940] - Charmaine Coutinho

Yeah, it's a good point, actually, that kind of reducing uncertainty. Sorry, Sam.

[00:22:16.310] - Sam Hollister

No, I was going to say, I was listening to another senior industry figure and they work for, like, a large multinational organisation and I kind of reflected on their comment where they were saying, yeah, that they're there to kind of fight for the UK voice to get investment into the UK and, you know, they're going to their kind of, you know, their board and asking for, you know, to allocate funds and investment into the UK and then can't legitimately, hand on the heart, tell them what the price they're going to receive for their investment is going to be for the next five. And I was like, actually, it's a very real practical comment on actually how this kind of. We hear about kind of investor uncertainty. Actually, that was kind of quite a clear indication of, like. Actually, that's a really good point. And, yeah, LCP, our day job is to advise clients on investing in the UK energy system, whether that be batteries or offshore wind or any technology. And obviously the conversation that a lot of people come to us about is going to be, well, what would the impact of location and marginal pricing be on my investment?

[00:23:22.690] - Sam Hollister

So, you know, it's at the forefront of everybody's mind and I can understand how that uncertainty plays through. We did the modelling for the UK government that supported its REMA publication, and I think we came out with, you know, there was a, you know, assuming, you know, no cost of capital impacts or whatever, you know, there was a net benefit to society. However, those benefits were quite quickly eradicated, depending on what your assumptions. So, you know, I do feel for the government in this respect, and I sometimes tease the modelling team that put this report together, that I think the benefits were something between 5 and 15 billion over the next 20 years. It's like, well, unfortunately, the benefits or the costs weren't 500 billion and therefore it wouldn't have been a debate or a conversation. It's. It's a marginal discussion.

[00:24:10.770] - Declan Burke

Yeah, yeah, exactly. It's super marginal, as you say. And then you've introduced. You can model some of the other things that are being done which will make it even more marginal, possibly the other way. Capital and investment is sort of the fuel of the transition, isn't it? The things you're investing in, it's kind of renewables and grid, so every basis point will matter enormously to how much consumers will pay.

[00:24:34.520] - Charmaine Coutinho

Yeah, I mean, I think that's why we keep returning to it as a theme, because going back to one thing, Declan Simon, I've been trying to talk to this. Whenever we talk about partial pricing or zonal, everything is always trying to bring it back to the consumer and actually what is, what are they getting out for it? And the only way you can really talk about is like this is going to be 5 pence or 10 pence or if we're in different country, Eurocents onto everyone's bills. But actually, what does that really feel like to the consumer? And it's quite a difficult thing to actually communicate to people. So that.

[00:25:04.470] - Declan Burke

Yeah, that's work in progress. Yeah. And maybe one last point on that. You know what, consumers there, I guess industrial consumers is another one as well. So, you'll have these different zones, but no one will know kind of which ones they're in for quite a while. So, whether you're a retail consumer, seeing your bills potentially going up or your energy intensive, concern that you're going to be paying, not necessarily somebody you can't move a steel plant or a refinery to where the cheaper zone might be. So, if that growth agenda is top of government's plans, there's a real risk that industrial activity, this could cause quite a lot of concern in that community.

[00:25:40.060] - Charmaine Coutinho

Yeah. Because it's not as simple as just, you know, sorting yourself out a nice little corporate PPA (Power Purchase Agreement), is it?

[00:25:45.600] - Sam Hollister

So, the report, I think the, one of the parts of the location of marginal pricing report that we did actually kind of split out what the difference would be between the zones. And I think in on average it was around you know, even 20, 30, 20, 40, 20, 50, it's around about £10 megawatt (mW) hour depending on zones. If you're a domestic customer on three, three and a half megawatt hours per annum, it's kind of 30 or 40 pounds on, on the bill. It's been a while since I worked in retail, but you know, there's already kind of differences depending on where you live and your kind of your charges. And probably 30- or 40-pounds people are used to. So, it's not really going to impact the residential customers. But Declan, you're, you're right, it's the industrial and commercial. Suddenly 10 pound a megawatt hour is a real impact depending on where you, where you're located. And then you get into a discussion around, well, how mobile is that industrial demand?

[00:26:44.290] - Charmaine Coutinho

Yeah, I think it is mobile. Okay, sorry, that's super interesting. We are, we're going to have to come to a close for the moment. Although, unless Sam, Declan, something you want to add on either of those two points.

[00:26:55.480] - Sam Hollister

I would like to get Declan's thoughts just briefly, you know, one part of your Business obviously is around networks and the kind of the, the importance I suppose in networks, in these considerations, you know. And I guess on the flip side, on one side you've got this kind of, if we don't get this right, constraint costs and you know, the kind of the. I can see there's a world where this becomes a real media story where suddenly people are having to pay quite a lot of money on constraint costs, and we haven't kind of optimised this system. Whereas on the other side, you know, there's a, there's a way where we build the right network infrastructure, we maximise our resources, we can, you know, there's a, there's a jobs and an investment angle there as well. But I'd just like to get your kind of views on this, which is an area that I've got to be honest, you know, it doesn't always come forward into this debate.

[00:27:49.350] - Declan Burke

Yeah, yeah, no, it's a great point Sam. And a super important part of the equation. I was sort of saying when I was kind of the government side, I worked in the Energy Wide Paper like whenever that was 2021. And to my regret, I don't think we spent enough time talking about networks. We're talking about generation a lot and that's the different pathways. And I think something that has worked really well from the policy side is on the transmission looking across multiple price controls and taking a longer-term view. So, this kind of, this more strategic approach to transmission and thinking about what programme of activity you want across multiple price control periods. So, to your point Sam, you've got the network ready when the generation is going to plug in. So, you kind of, you've got the right level, you'll always have a bit of constraints because you should have an inefficient system but you're getting that coordination, right, which goes to having a more strategic plan system which I think is the direction of travel anyway to set some of the concerns within the previous discussion and it's got all sorts of other side benefits.

[00:28:41.510] - Declan Burke

So, Sumitomo, for example, the cable, which is a really hot part of the energy sector or opening up a factory in Scotland because you've got that forward visibility that could be expanded to all sorts of other areas. The other thing I'd say is it's allowed us to have really good relationships and discussions with the supply chain for things which are in hot demand. So, you look at some continental countries which have got huge grid upgrade plans and now they're having to kind of go out into the Supply chain market. It's a pretty contested world. It's a really important part. I think distribution is a really interesting part of the business as well. So as well kind of the big transmission, high voltage getting into that distribution level as you know, more things electrify. So, I know our colleagues here are excited about having a similar sort of multi price control, strategic investment to the network. So, it's there when you need it. So, I think that's probably, you know, a bow wave to come on the network side. But yeah, super, super important part of the equation, the network side.

[00:29:32.230] - Charmaine Coutinho

Yeah, it's really interesting actually I was going to ask you, but what some of our listeners will be familiar with is what we finish up, which is a crystal ball question. I was going to ask you about networks, but Sam already did that and then I was going to ask you about zonal pricing, but then that's a bit cheeky so I'm going to say ask you about CTs and in 2035 looking into our crystal ball. Declan, Sam, you're not allowed to answer this question. Where do you think? What will CCS be doing for us as a nation?

[00:30:00.940] - Declan Burke

What will it be doing? Yeah, that's a really interesting question. I think we'll have developed the clusters that we kind of talked about earlier on. You know, one that's close to my own heart is the one up in Peterhead in Scotland. And I think they will be seen not just as places where you've got a dispatchable power, which is a key bit of that equipment equation we were talking about to balance off an intermittent system, but they will have attracted kind of low-carbon energies of the future. So, chemicals, refineries, all the things that are really hard to abate, I think regions. And this is a huge opportunity for Scotland that have invested to bring in that industry. I think glass half full. I think you'll see thriving sort of low economy industries in those areas and as we sort of see things like carbon border taxes and mechanisms and all that sort of stuff, these will be an attractive place to locate your business, especially if you've got access to low-carbon power, which I'm sure will be kind of important as well. So yeah, centre of gravity for low-carbon, high value manufacturing industry.

[00:30:59.880] - Declan Burke

My hopeful and optimistic view of what's going to happen on that side, that.

[00:31:04.300] - Charmaine Coutinho

Is actually a really lovely place to sit. So, thank you. I think what really stood out for me is that final point really is like a bit of forward visibility from some of these big ideas, kind of big plans, big, big targets giving you that kind of very localised growth, low-carbon growth on a regional basis, which I think all countries could do with. I think so. Thank you very much, Sam, and thank you very much, Declan. Really appreciate and hope everyone listening enjoyed it. We are. We'll be back talking you, Andrew will be back next week with another episode, but as always, please rate a listen and actually send in suggestions if you've got anything that you want us to talk about. Thanks very much. Thanks for tuning in.

[00:31:46.890] - Jon Slowe

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[00:31:55.200] - Charmaine Coutinho

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