Utility Week

UTILITY WEEK | APRIL 2021 | 29 Operational Excellence and trial new reserve services for batteries, initially with the so ware company as the sole participant. The third and nal phase of the trial – covering 20 days in September – included one battery operated by Arenko and two by Habitat Energy, with combined import and export capacities of 110MW and 106MW respectively. A fourth battery operated by Flexitricity with an import/export capacity of 49MW also joined for the nal three days. According to the results published by National Grid, the batteries were able to provide reserve at a lower cost in 80 per cent of settlements periods, saving a total of £680,000. Arenko says this represents a 40 per cent reduction when compared with business as usual. The ESO says the third phase of the trial saw "a wide range of operational and market conditions" but cau- tions that "linear scaling of the savings would not be truly representative". However, Newland says that, assuming a reserve requirement of 2GW, this suggests potential savings of around £195 million a year, adding that September was "a pretty reasonable average" for a full year. "Over the summer there was a huge requirement for reserve, which had kind of settled down by the time September came around." An alternative to turbines He says the service provided by the batteries was "directly comparable" to the gas turbines usually used and that "we could basically just do it cheaper and more e" ectively". By managing their state of charge, they were able to provide the service "for ve or six hours at a time". "Most of the time with reserve you're on standby," he notes. The ESO says it will now consult with industry to "consider the next steps in realising these savings for the end consumer on an enduring basis". Newland says the company now wants the chance to compete against gas turbines outside of trials: "We want to be up against everyone. We think one of the key ben- e ts of this is that it drives competition in the industry. That's very positive for consumers and we believe that batteries are the very best thing to be able to provide this service." He says: "This type of service is right at the centre of the grid; it's right at the centre of providing a pathway to a zero-carbon grid importantly; it's of huge value to the consumer; and it represents a very large new market for batteries to operate in." Newland says the market could o" er a "solid return" for batteries "and could spur signi cant investment into the sector". He notes that reserve can be stacked with other services and markets, something they did through- out the trial, rst o" ering a price to the ESO and then looking elsewhere if it wasn't accepted. "The key is having really sophisticated so ware," he says. "That ultimately determines the returns for batter- ies in any of these markets and the ability to be able to stack and move between markets is crucial." Tom Grimwood, energy editor T here are four key ingredients to successfully delivering megaprojects: transformational leadership; transformational governance; sharing risk and rewards; and commitment-based management. Transformational leadership The budget holder must take on the role of a strong, heroic leader ghting to change the way megaproject work is achieved, and develop leadership skills in partners. They will make it clear to all that they are willing to make signi cant sacri ces to work in a new way that makes the project come in on time and on budget with all the promised bene ts. Transformational governance This begins by establishing a policy organisation, modelled on a board of directors. At least half of its membership should consist of people outside the project execution teams. Include likely antagonists. Any compensation this group receives should be directly tied to the project hitting its goals. The sharing of risks and rewards The key points here are as follows: • Award contracts to suppliers on the basis of experience and skill, not on the basis of projected cost. • Only engage in agreeing contractual terms once the accountants on the budget holder and supplier sides believe they are seeing genuinely open costs and books. • Align all the parties to a common structure of goals such that all pro ts come out of savings made on the project as a whole, not individual parts. • Create healthy incentives to reduce costs and innovate without jeopardising shared rewards. • Get real about managing risk. Accept that, in one way or another, the budget holder will pay when things go wrong. Set up the agreement so that suppliers make pro ts when things do not go wrong or when they make up for losses with savings elsewhere. Commitment-based management Commitment-based management is modelled on the way agile, entrepreneurial startup teams work. At its heart its about all team members making commitments to each other for results for which the members are then responsible. It means really listening and not just hearing what you expect to hear. It also means making each commitment speci c and being con dent enough to decline requests you cannot ful l. When members of a team encounter unhappy surprises, they say so, so they can be dealt with and learnt from. Why the x works Megaprojects put us in a very di" erent world from other projects, where achieving and working with clear causal chains and role de nitions usually solves problems. They require a completely di" erent approach from conventional project and factory management. Our approach, combining integrated project delivery with commitment-based management, draws on the way we act as members of a community, and the way that communities manage complexity and role integration. You can download a pdf of the full report How to Fix Megaprojects at https://utilityweek.co.uk/how-to- x-megaprojects-and-all-capital- projects-that-matter. VISION is an international organisation that helps businesses transform their operational practices, leadership, and culture for the long term – a combination that is essential for organisations managing capital projects of signi cant scale. EXPERT VIEW VISION CONSULTING In our last column, we explained why you don't need to be resigned to cost overruns on megaprojects. This month, we outline the key factors in maintaining control.

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