Welcome to episode 268 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. I recently read a fascinating interview with Gerhard Zalga, chief technology officer for Hitachi Energy, about flexibility and power grids. And here's an excerpt. Quote, ensuring the timely build out of power grid infrastructure will be a key enabler in accelerating the global energy transition.
The urgent transformation will ensure effective integration of renewables and drive resiliency and flexibility of the power system, end quote. Many listeners will know that Canada, especially a few provinces like Alberta, have been questioning the integration of renewable energy into their grids. I've invited Gerhardt into onto energy talks to tell us how renewables, storage, and new digital technologies may actually help grids become better. So welcome to the interview, Gerhard.
Thank you very much, Markham, for having me. It's a pleasure to be here today.
Well, as I was saying before we started, I'm excited about this because this is a really critical question. I know it's a bit technical, and and, we won't get too deep into the weeds. But the question of how grids need to change over time as we move to new sources of generation, how we distribute them and reuse them, absolutely critical to the energy transition. I fully agree with that. I wanna frame our conversation by by describing a PowerPoint presentation I ran into a few months ago by the International Energy Agency.
And the IEA says that integrating more wind and solar or any kind of variable, energy source into power grids has 6 phases. In the first two phases, it's very low penetration of renewables in the grid, and system operators can simply adjust their forecasting and so on to deal with that. But once you get into phase 3, which is actually where Alberta is now, it has 14% wind and solar, you have to begin to, in the IEA's words, reengineer the grid. And and as you get into the higher phases and more renewable energy, you need more and more reengineering of the grid. And as I was reading your interview, it's that was what I was thinking about.
And I'm wondering, is that a good way for us to understand this issue?
Yeah. It's, definitely here, the the IEA is describing that in a very good way. And, maybe to to illustrate that, that a little bit more, what's happening and why. 1st, the first point is it's very important, that we are talking really here about the variable renewables, wind and solar. This is different for hydropower, which, of course, in in North America and Canada is a very important element of the energy transition as well.
Because, linked to the hydropower, there is then, rotating machines which are operating, inside the power system in the well established way. So we are really talking the variable renewables, wind, and solar. And why are they different? Maybe, one minute on that one. Because they don't come with a rotating mass behind, which is providing one of those elements which need to be managed, which is inertia.
I come in a minute to that. So what the OIE has in mind, like all technical experts around the world, is a stepwise, approach of changes, which is coming by this change from rotating machines to the variable frequency devices like wind turbines, which obviously have changes in rotational speed, or even solar PV, which is coming then as a as a DC without any rotational element at all. And, when you look into how this stacks up in, when when you come to higher shares of these variable renewables, you are entering, technical challenges, which we can name, very clearly and then later on explain also in this, in this chat here. The first one you enter usually is you need to take care that you do not have grid congestions. The second one is that you need to have always good and balanced supply and demand, and then, of course, the storage and the grid play into that.
You need to take care that you are having the right voltage level, voltage quality, there. And then finally, what we call in the technical community, inertia, which, as the name is saying, is helping you to prevent too fast changes in the power system. Let's get back to that. And finally, when you have really, really high shares of those variable renewables, you also need to take care that in fault cases, you still have enough short circuit currents. So let's let's dive in in the next 10, 20, 30 minutes into that detail.
Okay. Perhaps the way to address this is is to compare how power grids, are currently set up, with to accommodate all of the variables that you talked about, voltage and inertia and so on, and then how that changes once we introduce variable renewable energy sources into the grid. Yes.
Let's let's really start from there. So why are these rotational machines with the moving masses so, good in the management of the power system. First reason is because, if the rotational speed of such a machine, which is then driven by either a a thermal process or the water power. Then, what what is linked physically to the rotational speed of such a machine is the frequency of the system. So the 60 hertz or the 50 hertz depending on where you are in the world, that is physically linked to the speed of the machine.
So as long as you keep the rotational speed constant, you have your frequency constant, which is one of the key parameters of the power system. Now, on top of that, if, you have any changes in load, which in an electrical system, in a power system system always means you have a change request also on your generation side, then those machines work automatically against that because this rotating mass wants not to change, and that keeps your frequency stable. But still, if you force a change by higher and higher load, this machine, you drive the thermal process or you pump more water into the turbine. And by that you keep the frequency stable. And in the same way, you can manage all or in a similar way, you can also manage relatively straightforward with such a machine always to have the same voltage level by, then, tuning the machine to the right parameters, with auxiliary devices.
And by that, you can keep voltage quality and, frequency, which are key parameters for a power system always stable. And this dramatically changes when you don't have these rotating masses anymore as a majority or later on in a in a change of the power systems less and less.
So if I just as some background, Gerhard, my father worked for Manitoba Hydro, and he was the maintenance supervisor at one of the the first dams on the Nelson River in in Canada. And as a as a child in the seventies, I used to go to the the dam all the time with him, and we would you know, if there was a I think it had 12 turbines. And, one of them would be down for maintenance, and we'd go inside the turbine hall. It was huge. I mean, as a a child, I remember it was ginormous.
And I under using that example to illustrate the importance of inertia, these big turbines don't ramp up and down really quickly. And I see it's the same is true of thermal plants, whether it's coal or whether it's natural gas. So stability in the system seems in the power grid, seems to be ideal from an operator's point of view. Keeps everything stable and and working correctly. How does that change once you get you introduce a significant amount or a growing amount, let's call it, of variable renewable resources into that system.
Right. That's that's a very good point. And, let me let me turn this a little bit around because what is not under discussion for us and our customers, who are operating the, the networks is that the quality can be compromised, which means the stability cannot get compromised. Customers, users of electricity must have a stable, reliable, and resilient power system. That's out of question.
The question is only how we change the technology to still guarantee that with less machines. So and that means those functionalities which we discussed a few minutes ago, we need to substitute by other new technologies, and those technologies are power electronics and digital control based. And one, key example on how we do that is by using a power electronics technology which we call grid forming converters. That name is already a little bit self explanatory with the with this grid forming, that that should and it is really describing that this converter is not just connected. And a converter is something which can, create this or or have this 50 or 60 hertz frequency and then connect it on the other side to something which is DC or any other frequency, like we said before with the wind and the solar.
So this grid forming capability is already telling you that it can always form this frequency, really create it. And that is an emulation from software together with the power electronics to make that possible. And it is possible by injecting energy into that converter in the way that we are creating practically a virtual machine. Yeah? And actually that name also exists in the technology space.
We are creating virtual machine functionality by using power electronics, by using control, digital control, and in combination with energy storage elements.
So if I understand this correctly, Gerhard, and that you know, for a number of years now, I've heard about how the power sector was being revolutionized by these new technologies. And and I wondered, you know, what exactly new technologies we were talking about, and it turns out some of them are power electronics. And, so you create the inertia that was created by rotating mass in hydro dams or thermal plants now gets created digitally, virtually, by software and and these other technologies you're talking about. And and that keeps the grid stable, and it can adjust to the variability of your generation. Have I got that more or less right?
One element you are missing, which is the storage element. And the store because you need to inject also some energy, obviously, because in a rotating mass, there is energy stored. Yeah? So you need to replace this energy storage now by other storage that can be capacitors, that can be supercapacitors, that can be batteries depending on what exactly you want to achieve. So you are combining exactly as you said the power electronics with the digital control plus another storage element, which is not a mechanically rotating mass.
Where are we at globally? But I guess more specifically, nor in North America. Where are we at with this transformation from the old grid that relied on on these, you know, hydro and and thermal and so on, to the to this new grid. Are we in transformation? Are we are we in in the midst of a change?
Absolutely. And, there are different areas in in North America because there is not one comprehensive, North American grid. It's, it's only loosely connected in between those, those different areas, but still, there is pretty high shares of variable renewables already achieved also in many parts of the North American grid today. And, when what what we look at from the from the technical side is not necessarily how much energy over the year is produced by, variable renewables. What is for this nondiscussable, security of supply important is the most difficult minute or hour in the year where you have the highest relative share of wind and solar compared to the momentary load.
And those moments in year 23, for example, in some of the North American grids, for example, in the CAISO or SWPP or also ERCOT, we're reaching already levels which are above a momentary, percentage of 60%. And, obviously, the grids could manage, could handle that. And, so we can see that also in North America, and that is fortunately valid for many area, regions of the world, there is over time already a lot of these new technologies coming in with each and every upgrade or new installation. Of course, the grid operators are investing, future oriented, and they are looking forward to install really future fit, equipment, system solutions, and also digital management, which is supporting to manage that. So that security of supply is taken care of in all stepwise, approaches towards more and more variable renewables.
I I wanna ask a specific question about the Western Canadian grid because it's a bit unique in that, of the 4 Western Canadian provinces. So you have British Columbia and the West, and then you have Alberta and then Saskatchewan and Manitoba. Manitoba and BC are both hydro provinces. They get almost 100% of their power from hydro. The 2 Prairie provinces in the middle, have traditionally relied upon coal, and now they've replaced a lot of that coal with gas.
And they're but they have excellent wind and solar resources. The problem well, one of the solutions that's been proposed is there's very little east west trade of electricity between those four provinces, And the argument is that if you had if you built out the wind and solar capacity in Alberta and Saskatchewan and and had interties with the 2 hydro provinces, Manitoba and BC, you could then use those hydro dams as storage, essentially, big batteries for the the wind and solar from the from the prairies. And given the conversation we're having now about about inertia and load and keeping the things balanced, Is is that a good argument or is there a good argument for connecting all 4 of the provincial grids like that with a combination of and maybe an increasing percentage of wind and solar with the hydro dams?
Yes. Absolutely. An interconnection of the North American grid would enable a fantastic additional potential in managing the challenges, towards the the future. And, that that is very, very well also worked out and and demonstrated by, studies from NREL, where where this is very, very, clearly demonstrated and the technology is there to do it. The the technology is available in different, types of technologies.
We can do that in what we call HVDC, high voltage, direct current. We can also do it with AC connections as per today where, then we can add power electronics also to stabilize here the, the long distances. And, so this exchange what's possible in North America over variety of power generation sources, storage, potential, and then also a time zone shifts in demand with different demand patterns is exactly what is extremely beneficial in order to manage these future challenges. And we see that in other regions of the world really, moving forward and showing a lot of benefit.
Maybe you could explain in a little more detail the time zone change because I've heard Americans talk about this in particular that as the sun moves from the east to the west, then solar power declines at different times, in different areas of the country, and that has a is actually a a big advantage if you're trading if you're able to trade electricity between those markets.
Right. Absolutely. So, it's obvious that the solar power, is is dependent, on the on the time of the day, yeah, when the sun's going up and going down. And, so that means, either as the electrical system always needs to be in balance in between supply and demand, or you need to put it into storage that either, when you have the solar generation, you are using it exactly at the point when it is generated or you are able to put it into a storage, which then, of course, is has all come so coming with a cost, or you need to contain curtail it, and that's the worst thing to do because then you have the installation and you are not using it. Yeah?
So, that's why if you have then the the solar peak over the day and you can use it across various time zones, which in US is 5 to 6 time zones you could could think about. And then or in in North America, of course, also in Canada in the same way. Then, you have it, really that you have the supply distributed over a much longer time. But also demand, as we know, comes over the time of the day in different variations, sometimes higher, sometimes lower, depending also on the season of the year, depending if you need air condition or if you have electrical heating or so so that you get complementary profiles. And that's not only valid for the sun.
That's actually, in many areas, also valid for wind, where you have also profiles of wind, which have a day night shift or which have a seasonal shift. And the more complementarity you can achieve in a total electrical system on all the elements, on the 4 elements, on, the supply side, on the demand side, on the storage, and then connected by a well controllable system, the more you have that as a balanced setup, the better is your security of electricity supply.
Gerhard, the Alberta, premier has been claiming, recently in public comments that for every megawatt of wind or solar generating capacity, you have to add a megawatt of, of, backup generation capacity, whether it's wind or maybe it's coal, maybe it's gas. And my takeaway from your comments and from the interview that I read is that a flex it's it's it's the flexibility of the system that allows operators to balance it, and in fact, you don't you need storage, yes, But in it's the flexibility that makes the backup unnecessary, perhaps. Is that a fair way of looking at it?
Yeah. Absolutely. It's it's absolutely in the right direction. You you can illustrate that quite nicely when you look into the extremes. The smaller the system, the more you have to back up because you have to manage then in an isolated way all the potential situations.
So if you go on a small island, then you you have really the the most difficult conditions because, you you go with a very small system through all the extremes of the year, of the day, of the year, and so on. But and that, on the other hand, shows already the potential of what we just discussed on the North American continent where it's large, where it's complementary in terms of all the sources and the the potential. And the more of this complementary to you can you can introduce, the better you are usually already balanced and the better you can then also share backup power, but also you need less of it because you are already complementary as a natural consequence of your setup. That's why this expansion of the power system to, such a size, with a good interconnection makes a lot of sense, and the most modern technology today now allows it also with these HVDC connections, for example, to have really the controllability. In the past, there was a pure AC system where then the controllability was relatively low because the laws of physics define how your energy is is, flowing.
In an HVDC, connected system today, that has changed. You can control and force power flow That was not possible in the past. So we have technologies in our hand today, which give us tools to actively manage this energy transition, and that is making a big difference.
And we should point out, as we often do on this podcast that as we electrify the economy, modelers say that we're going to need 2 to 3 times as much electricity by 2050 as, we currently consume. We have electric cars and we have heat pumps and electric industrial processes. All of that will require more power, which means a bigger grid, different generation. So the question, Gerhard, is is wind a system that has an increasing amount of variable generation, so primarily wind and solar, is it a lower cost or a higher cost system than what we have had in the past?
That is, of course, a very complex question. And, but but let me let me start in in also giving an example, which is an important one and has to be considered in any of those cost calculations, and that is energy efficiency. Now when you take the example we which which you took on the mobility, when you are looking into what you need to put into a combustion car as a primary energy in terms of the of the fuel and, what arrives really at the wheel in terms of, of motion, then, you end up in in something which is, significantly quite significantly below 30%. Depending, of course, on the car and on the chain, but for sure, you will you will not go go higher than that one. Now when you go into a fully electric chain from, let's say, a solar PV or a wind tower into into an electric vehicle, you end up with at least 3 times better energy efficiency.
So that means, your energy system, which you look at, is much more efficient than, the one you have been starting from. That, of course, needs to be taken into consideration also for for cost calculation. Yeah. So you should not set the wrong boundary conditions for any of those cost calculations. When you also look, into power generation also electricity side, today from a power generation perspective, solar power is not only the one with the lowest carbon footprint, it's also the one today with the lowest cost per kilowatt hour already.
It's quite some time in the meantime. And, that means to utilize as much as we can this direct electrification from the variable renewable source to the end use in a straightforward way is giving us, first of all, a great efficiency and therefore also cost advantage. But then, of course, you need to be fair and also calculate what do we need to do in order to strengthen the system and build the system. Nevertheless, don't forget that also in your benchmark system, you need to take upgrades. You need to take investments.
You need to do, then then and invest. So you need to put the right boundary conditions in order to make really an appropriate cost comparison.
Speaking of cost calculations, couple of years ago, we had a heat pump installed in our home, and I'm we're thrilled with it. I mean, it's it's a wonderful technology. It uses very little electricity to heat and cool our home. Comfortable, all of those things. But yeah, I mean, I kind of ride this hobby horse, and my audience has heard me say this on a number of occasions.
But my the I wanna get I'm leading into a question about efficiency, and that is for every unit of energy you use for oil, coal, or gas, you don't have to to then create another unit of energy to replace it because electricity is so much more efficient. And so when you look at the primary energy demand at a global level and say, well, 80% of it comes from fossil fuels, as we replace that fossil fuel energy, whatever number of units and petajoules, exajoules, however it's it's it's measured, we don't need as much energy to do the same work once we electrify. Is that fair?
You are totally correct here, Malcolm, and I love that example. That's actually yours. The second example, like, the the mobility which I'm also usually using to explain, It's exactly that heat pump heating. And here, again, you have an efficiency gain of more than a factor 3. And and the reason is you really change the paradigm of the of the system in a way that you are not using the electricity for the heating, like what you do with the gas, but you're using the electricity to make the heat from the environment outside environment of your house usable for the house by compressing it.
Yeah. So you are changing and expanding the total system where you source the energy from, and and that is a fantastic thing, and and most modern heat pumps are extremely energy efficient. And I can tell you you you have, when when we started the discussion today, you came with the example from the IEA. It's not by chance that the the latest COP and also the IEA came with the targets, on the 2030 by building out the renewables, 3 times by 2030 in combination with energy efficiency by factor 2. And these are examples which exactly are underlining what you said in the in the question, that we are having to put into the future energy system less energy into the system compared to what we use finally at, at the user side.
Now given your role within Hitachi, Gerhard, I'm assuming that you have conversations with system controllers, policy makers, around the world. And everybody has, you know, given their different circumstances and the different condition of their grid and and the history of it and so on, they all have different issues. But is it fair to say that the world has agreed, countries, particularly, advanced economies like Canada and the US, have agreed that this is the system we're moving towards, that it will be different than the one we've had in the past. Our grids will be different. Our sources of generation will be different.
We'll integrate old ones. But as we expand, we're going to be adopting mostly the the variable, the wind and and solar, resources. And is there a consensus about this?
Yes. And this consensus is going far beyond the, well established and mature economies. It's also in the in the growing economies. And, and and so that understanding is there, the commitment is there. But, of course, the pathway to get there is different for the different regions and countries of the world.
And, but but the good news really is the technology to start that journey and do it fast and scale it up is available. And what's missing is something we can develop while we are ramping up. This ramping up, this pathway will not be a sprint. It will be a longer journey. And, we have to develop technologies while we are on that journey.
We do that. We are committed. Other technology supply, providers are committed, but also, the the all the parties which you mentioned are committed. But we need to find the right and appropriate pathways for the various countries and regions of this world. But one thing is clear, what we just discussed now in in, this podcast here, this, creating complementary electrical power systems, which, which go and really consider in a comprehensive way these dimensions of supply, of demand, of storage, and a controllable system using the most modern technologies, this common denominator is valid everywhere.
My we'll wrap up the interview this way, Gerhard. My takeaway from our conversation is that on the generation side, we have the new technologies. It's low cost, and it's clean, and and so we have wind and solar. I mean, I saw a quote the other day. I think it was from Wood Mackenzie that, Chinese, solar panel manufacturers are now down to, like, 12¢ a watt.
I mean, it's getting incredibly cheap and forecast to become cheaper. We've got that we've got the generation technology. My I think you've made a pretty clear case that we have the cyst we have the new technologies. We have to transform the grids to handle this variable, resource. The the bottleneck here, I'm guessing, would be policy policy frameworks, regulations, from, well, from from governments and and, I suppose, from maybe from utilities.
Is is that a is policy and regulation a bottleneck in this process?
Again, there is not the the one answer for the world, obviously. Yeah? Be, but we need unprecedented collaboration really among all stakeholders, really in a 3 60 degree because, of course, we need acceleration in permission, but we need also, really a commitment of the societies of the the people in the countries to support this and, to be an active part of it. Yeah. To to put your solar rooftop, to you make use of the new patterns, to have the flexibility also maybe to charge your car overnight and not just when you plug in in the first half hour.
Yeah? And, and and these kind of of things. So we need the commitment of all stakeholders from the policy makers to the regulators to the TSOs, the operators, the technology providers, but the people also, really. Yeah? Everyone needs to, to drive this in his or her environment and and make it moving forward in a collaborative approach to be convinced because it is the only way to come to what we are all striving for as sustainable energy future for.
One final, comment, and I'll get you to reply. And that is, I did my graduate work 40 years ago on the changeover from horses and steam to tractors and and combines in Western Canadian agriculture. And the one of the points that was made during a 100 years ago, there was a debate going on in the farm community about how this new technology would change the way farming was was done and how and the social structure of the community. And some people thought it was a good idea, and some people thought it was a bad idea. And so they had this very vigorous debate because they were moving from a an economy based on on animals and and coal to one based on the internal combustion engine and petroleum.
And they intuitively understood that that was a different different society. And over time, the debate got resolved, and they agreed that they were that that was power farming was a good thing. It became the foundation of modern agriculture in Canada and other places like the United States and Europe and and so on. That's well understood. But my takeaway from our conversation, when you say that people the stakeholders have to buy in, we all have to agree and and have to collaborate.
I see the same kind of process going on today. People are debating. What does it mean to be an electric society? If we if we switch from fossil fuels, we switch away from gasoline, and we have electric vehicles, what does that all mean? How are we how is my life going to change?
How are my children's lives going to change down the road? And and do I buy do I give the political permission? Do I buy into that and give direction to policy makers so that they can make the changes that are required to enable that electric society. Is that is the transition that we're going in maybe analogous to the one we went through a 100 years ago where it's not just build the power system. I mean, we're really talking about a different way of living, a different way of doing things.
Yeah. Absolutely. I mean, the that's the the storyline of of human, humans overall and mankind is is a permanent change. Yeah? And and and, of course, we are also doing that.
And, I, I want to cite one statement which I, I I was listening to earlier this week when we were celebrating, actually, the 50th anniversary of IEA in, in Paris, one of the, of the the ministers there, of the leaders, really said, I don't even want to think about what it will cost us if we don't do it. And, that that is sometimes a bit forgotten also in all the argumentations. There is no planet b, and we need to we need to do the, the decarbonization, but we need to do also the energy security, and we need to do the energy efficiency. We have, the technologies in our hand to do it to provide also, sustainable, reliable energy to those people who do not have access to electricity today. We have to take care of those people also.
And, of course, we need to see that we drive a change, which is affordable and which is also acceptable really for all the people who have already today access to electricity. So that's the big challenge, but again, that's why we are also there on the technology side. We are doing really our utmost to make this transition possible. And, I can just repeat again, we can do it today if we are committed, if we are collaborating. Technology to start to accelerate is there.
Well, on that note, we'll wrap up. Gerhard, thank you very much for this. I think this is one of the most, insightful interviews I've ever done, but also one of the most hopeful ones because you answered a question that many people have, which is, is the technology ready? And my takeaway from your comments is that, yes. It is.
And we have the we have not just the technology, we have the technical expertise. We have the technical capacity. What we need we need to do with some work in other areas, around agreements and and political consensus, social consensus. Thank you very much for this, Gerhard. Really appreciate it.
Thank you, Mark, and it was a pleasure to be here today.