Utility Week

10 | APRIL 2022 | UTILITY WEEK Interview WPD's own regulatory team) is an oppor tunity for regulation to adapt and Wilson urges Ofgem to create an environment where companies are empowered to make the right decisions themselves. He says: "We should all be thinking about safety, reliability, customer service and cost. Col lectively all stakeholders should be setting standards in those areas and it should be up to the companies as to how they deliver. We have to be careful not to overcomplicate the systems we have in place. It's easy to add more complexity and we have to ask whether it's necessary. Is it getting to a point where it's taking away accountability from the companies?" Wilson argues that while Ofgem's remit has expanded, at its core the policy and regulatory struc tures governing the industry are still fundamentally those introduced to handle privatisation. "In the 1990s the background was minimal under lying industry change and a real need to drive efficiency. "Fast forward to today and those efficiency gains have been delivered. Now the overall mission is different – it's net zero. So everyone needs to refocus on that. "Net zero at the lowest possible cost while maintain ing security of supply needs to be the North Star that drives everything." While the three sides of the energy trilemma have been debated for many years now, Wilson believes they are still the key pillars for net zero and, crucially, they are increasingly compatible. Given the current height ened concerns over both the cost of living and where our power is coming from, it has never been more important for the industry to communicate clearly, he says. "We need to reassure people that because of the fall ing costs of renewables, decarbonisation is no longer in tension with security of supply and affordability. "We are no longer asking people to choose between decarbonisation and affordability. Of course we have a largescale storage issue but in terms of megawatthours the cheaper forms of generation are renewable. We need to build confidence in that." Wilson says National Grid has "inherent responsi bilities" as the UK's largest transmission – and now distribution – company, as well as currently owning the Electricity System Operator (ESO), to help build that trust among the public. He says: "We have a leadership responsibility. As a network operator we should be seen as an honest broker. We are agnostic as to where the molecules come from to deliver energy on our system as long as they meet those criteria across the trilemma." While National Grid can be a key influencer, Wilson insists this has to be done in conjunction with policy makers and regulators. One key step would be for the government to fully embrace the ESO's Holistic Network Design (HND) when it is released in the summer. The document will act as a blueprint for a coordinated onshore and offshore net work to support the UK's commitment to deliver 40GW of offshore wind by 2040. Wilson wants the HND to be officially recognised by government and regulator and to be given status so that it can be relied on in the planning process. Building a North Sea grid The challenge of knitting together the web of offshore and onshore assets necessary for net zero will be a key area of focus for Wilson, and once again there is a need look on an international level. He talks about huge potential in the North Sea for partnerships to power a united energy transition. National Grid is looking at multipurpose interconnectors, which would allow clusters of offshore wind farms to connect together as opposed to one by one. The company is also exploring the potential for energy islands, which would add hydrogen electrolysers into collectively connected wind farm clusters. "Put all of this together and you can see how eventu ally you could get to an interconnected North Sea grid." The broader role of hydrogen in the energy transition is also an area of interest, with National Grid involved in the Zero Carbon Humber Partnership and across the Atlantic eyeing a hydrogen hub initiative in New York. Putting aside the debate over hydrogen's future role in heat and transport, Wilson sees significant potential in the midstream. "If you think about how much energy crosses inter national borders in the form of coal, natural gas and oil, in energy terms it's absolutely enormous. How are we going to replace that? We're still going to need big crosscountry transfers of energy. That means a lot of prospective growth for interconnectors but it also creates a really solid use case for hydrogen. It is very reasonable to assume there's going to be a very significant hydrogen midstream industry by 2050 and probably well before that because I don't see how else we can transfer energy across borders." By then, Wilson expects the cost of producing zero carbon "green" hydrogen to have plummeted but sees a role for "blue" hydrogen – produced by reforming methane and capturing emissions – in the interim. He cites the incentives for upstream oil and gas producers in Europe to invest heavily in this area and the "fantastic geology" of the North Sea for carbon capture as drivers for hydrogen production over the next decade. Despite this faith in the future of hydrogen, National Grid remains committed to the disposal of its gas transmission arm and its "pivot to power" following the acquisition of WPD. While Wilson is unable to comment on the sale of the gas business, which is expected to take place this year, he does update on the integration of WPD. The distribution network operator now sits as a separate business unit within National Grid with its own management team. A gradual process of rebranding the business is underway, with WPD vans now carrying a sticker acknowledging they are "a National Grid company". Over the course of this year a wider rebranding will take place to refer to WPD simply as National Grid. Given its move into electricity distribution, could Wilson ever envisage National Grid expanding further – as far as energy retail? Wilson replies by describing the company's strategy as "network plus", adding "the overwhelming core of the business is going to be electricity and gas networks – probably more electricity now". Despite this focus on electricity, Wilson insists National Grid remains technology agnostic and focused on the end goal of emissions reduction. "We're going to need all the tools we can get hold of and keep an open mind. You simply can't have too many options," he says. "We have a leadership responsibility. As a network operator we should be seen as an honest broker." continued from previous page

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