Utility Week

UTILITY WEEK | JUNE 2021 | 41 Certainty vs uncertainty Debating the merits of anticipatory invest- ment inevitably leads to a discussion of uncertainty and the risk of stranded assets. One industry boss stressed that with a doubling of clean energy needed by 2050, the risk of stranded assets was "very low indeed". They added: "The challenge for policy- makers is to make sure we don't end up spending so long analysing a risk that is very low that it really impacts pace." The CEO pointed out that there are sev- eral areas where there is little question that investment is needed and these at least should be fast-tracked. "These projects can take a long time and require work with planning authorities and suppliers. It's not a case of just ƒ icking a switch and we're ready to go. The longer we have to plan, the better the plan. The more we see in our baseline, the more e„ cient we tend to be delivering that." Another senior industry † gure made the point that there can be as much of a stranded asset risk from underinvesting in infrastruc- ture as potentially overinvesting, saying: "If you invest conservatively and then † nd † ve years down the line it's not † t for purpose, that either becomes a stranded asset or it's potentially more disruption for that com- munity when we could have planned ahead. You need to look at that long-term picture. "Our stakeholders are telling us we don't want you coming back three times in a dec- ade. We want you to come in once and do it‰right." Reform of the planning system In order to take that long-term view and invest ahead of need, wider reform of the associated processes is needed, the group agreed. Most notably, the planning system must be † t for purpose. As one participant put it: "There is no way we can deliver what we need to, at the pace we need to, with the current planning regime. "Interaction between planning and regu- latory regimes needs to be aligned. They have to go hand in hand. There is no point us going for planning then having to wait for regulatory consent then having to go back to planning because we have to change our‰view." The current system remains far too short- sighted, according to another industry † gure, who said: "There is a real tendency to keep tackling this problem from an evolutionary point of view, despite net zero. What's the next step, how can we do it a bit better? It needs to be more strategic than a project-by- project basis. Network planning has always been there, it's the spatial aspect that hasn't been in the past." Another CEO said the issue was o' en not ideological but a question of boots on the ground, with understa" ed planning depart- ments o' en unwittingly becoming a bottle- neck. They gave an example of actually o" ering sta„ ng support to planning consent teams in their area to ease the pressure. System architect Ian Funnell, chief executive UK & Ireland of Hitachi ABB Power Grids, posed the question as to whether a body is required to enable all these disparate plans to † t together "in a much more complex environment than we've ever had before". One participant welcomed this idea of a "system architect", saying "if your aim was just to get to a place where we have a zero- carbon world, you'd want some architecting that". However, they enjoined against stiƒ ing innovation. Another industry executive said the risk of a central body dictating the pace of net zero was that local considerations would get lost. They said: "I wonder who knows my network and my customers better than me and if some central architect could plan that better? Having collaboration and trans- parency and making sure we're sharing that knowledge so that we can work together to architect that problem together has a lot of merit as opposed to an omnipotent power." An expert on renewables development stressed that whether it is done by one cen- tral body or not, there is a need for ambi- tions across di" erent net-zero strategies to be aligned. As an example, they pointed to the need to incorporate future carbon, capture and storage scenarios in plans for o" shore networks. They also cited the need for hydro- gen strategies to entwine with renewables development. "We used to turn up with our own man- dates and work out why something else is going to upset what we're trying to achieve. Net zero has created a common agenda and we're just in this growing pains stage now of how do we make sure those are properly aligned corporate strategies that play out in the stu" we're trying to do day to day." They added: "We need to be looking at whether we need an architect or one collabo- ration of people coming to the table to give us that wider view. "It's about a guiding mind – but that doesn't have to be one mind." Competition A policy expert mentioned the prospect of competition in the building, ownership and operation of onshore electricity networks as having the potential to accelerate the pace of change. They said opening up network inno- vation funding to third parties could also act as a catalyst. This prompted mixed reactions. Some participants agreed that early competition could play an important role in making infra- structure rollout more rapid and bringing down costs. A network CEO insisted "we're not scared of competition". However, another cautioned that intro- ducing competition can add an extra layer of complexity and therefore delay to projects. A separate industry leader said: "You don't have to wait for competition to be e„ - cient. We can absolutely work with our sup- ply chain to do that." Meanwhile, a network boss warned that however e„ cient it becomes, the private sec- tor cannot enable net zero on its own. "The market has a big part to play in this but the market isn't the only solution. There may be some lessons from the broadband rollout. Communities didn't have those ser- vices because the market didn't go there. It cherry picks. "We can't cherry pick with net zero. It has to be a process that reaches everyone. So what else do we have in the toolbox for areas where the market isn't participating?" Funnell summed up the debate by saying it showed why the UK was considered one of the most advanced regions in its net zero thinking. He added: "We all have the same vision in mind. Whether we're talking about a sys- tem architect or about the industry shaping itself and making itself † t for purpose, it's all about collaborating for the same outcome. "If we can deliver half of the things we talked about then we're going to put our- selves as best in class, if we're not already there." James Wallin, digital editor in association with "Whether we're talking about a system architect or about the industry shaping itself and making itself fi t for purpose, it's all about collaborating for the same outcome." Ian Funnell, chief executive UK & Ireland of Hitachi ABB Power Grids "Whether we're talking about a system architect or for purpose, it's all about collaborating for the same outcome."

• Cover