Plugged In: the energy news podcast
Coming from the heart of the Montel newsroom, Editor-in-Chief, Snjolfur Richard Sverrisson and his team of journalists explore the news headlines in the energy sector, bringing you in depth analysis of the industry’s leading stories each week.
Richard speaks to experts, analysts, regulators, and senior business leaders to the examine not just the what, but the why behind the decisions directing the markets and shaping the global transition to a green economy.
New episodes are available every Friday.
Plugged In: the energy news podcast
Iberia’s blackout: a wake up call?
Since parts of Spain, Portugal, and France temporarily lost power on Monday 28th April, TSOs and policy makers across Europe have been quick to try and assess how much their own networks are at risk of a similar blackout.
Whilst we await conclusions from Entso-e’s investigations as to the cause of the outage, in this week’s episode Richard speaks to the Secretary General of Eurelectric and Rystad Energy about what this incident tells us about the reliability of Europe’s grid and our increasing dependency on electricity. What does the outage tell us about the need for flexibility and storage in an increasingly green power system?
Presenter: Richard Sverrisson - Editor-in-Chief, Montel News
Contributor: Pablo Bronte - Editor, Montel Iberia
Guests:
Kristian Ruby - Secretary General, Eurelectric
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy
Editor: Bled Maliqi
Producer: Sarah Knowles
Hello listeners and welcome to Plugged In - the energy news podcast from Montel, where we bring you the latest news issues and changes happening in the energy sector. Since parts of Spain, Portugal, as well as France temporarily lost power nearly two weeks ago, we've seen a wave of speculation and finger pointing as companies, regulators, and policy makers across Europe scramble to understand what happened. Was an oversupply of solar and wind power, or Spain's lack of sufficient energy storage that brought large areas of the Iberian Peninsula to a standstill on that Monday lunchtime. Has the grid kept pace with a rapid change in the power sector? Could the huge outage be a knockback for the green transition? The blackouts raises many questions, but while we wait for the conclusions, the final conclusions from the TSO and from the ENTSO-E, the TSO Body, the priority for Spain's neighbors has been to reassure the rest of Europe as well as their own populations, that the risk of a blackout within their territories is much lower. But what are the wider implications of the outage? I'm going to be speaking to the Secretary General of Eurelectric Rystad Energy's Iberian analyst. But first, I'm joined by our correspondent in Madrid, Pablo Bronte, a warm welcome to you, Pablo.
Pablo Bronte - Editor, Montel Iberia:Hello, Richard.
Richard Sverrisson - Editor-in-Chief, Montel News:So Pablo, describe to us where you were when the lights went out and what was happening on the ground. What did it feel like?
Pablo Bronte - Editor, Montel Iberia:I was working from home, so at first my thought was that my internet connection just went down. It was a sunny day, so I had the lights off, so I didn't have a clear way to tell it was a total blackout, but, you know, after a few seconds I started to realize that it was some sort of blackout and yeah a few minutes later I realized that it was really massive. So I got in touch with my colleagues in London to get support with the coverage of the news because I just thought that I was going to lose my mobile connection very soon. That eventually happened a few hours later and I also lost contact with some colleagues here in Spain covering the blackout.
Richard Sverrisson - Editor-in-Chief, Montel News:No, it was a very impressive work that you and your colleagues did. So Pablo, can you tell us a little bit about the other types of disruption that people experienced across Spain and Portugal? What were the kinda stories that were coming out ab about the blackouts.
Pablo Bronte - Editor, Montel Iberia:So thousands of people were caught in the middle of nowhere in Spain after trains stopped. This had massive repercussions on transportation. People were stuck on traffic for hours. Instead of, you know, trips that could be done in minutes turned into a nightmare, especially inside the cities. And then of course we had no online banking, no card payments. Telecommunications also failed. So it was a very complex situation. And we also had. People trapped in lifts. We had surgeries that could be completed thanks to emergency generators. But then, the whole situation had to be disrupted in hospitals. So it was a massive blackout and you actually realized how important electricity is for for the whole country.
Richard Sverrisson - Editor-in-Chief, Montel News:That is it. It shows our vulnerabilities here as well, but very much the over reliance on electricity for sure. What's happened since then? The repercussions. Has there been finger pointing? Obviously there's lots of speculation, but what have we learned? Anything more about what actually caused the outage?
Pablo Bronte - Editor, Montel Iberia:Well, there is no official course, but the blame game has already started. The official line is that the root of the blackout is still unknown. And the closest thing that we have to an explanation comes from red electrica from our grid operator and from the government. So they say. There was some kind of outages in the southwest of Spain at
12:33 that day, and the system managed to stabilize briefly after a first disruption. But then there was another drop just 1.5 seconds later. And that's, that was too much for the grid. So Spain disconnected from France right after that. And from what we've been hearing that made the grided even more unstable. Generations started tripping massively and the whole country went down. It was like a ripple effect, a domino effect through the power system. So now we still don't know exactly the cause of the initial failure, but the energy ministry mentioned that there were some plant outages around 19 seconds prior to the first event that led to the blackout. So that's pretty much what we know.
Richard Sverrisson - Editor-in-Chief, Montel News:And I think it was, quite impressive how, how it basically recovered from the blackouts how generation came back online and how by the evening things were starting to function again. But Pablo what is, when do we expect the investigation to close or the final results to be made public?
Pablo Bronte - Editor, Montel Iberia:It could take weeks, months yeah, we're expecting a report from the European Commission in six months. That's a lot of time, but since this is a very technical issue it's probably worth waiting before blaming anyone. So Spanish authorities, they think they could have some more information before that, but it's going to be probably a long time until we know who's to blame.
Richard Sverrisson - Editor-in-Chief, Montel News:Pablo, thank you very much for talking to us. Is there an increased risk of blackouts with the growth of renewables? With the electrification of Europe? Is the Iberian outage an isolated instant? Or a wake up call for policymakers, regulators, grid operators, and the wider energy sector. To help me answer these crucial questions, i'm pleased to be joined by Pratheeksha Ramdas, senior new energies analyst, at Rystad Energy. A warm welcome to you, Pratheeksha.
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:Thank you. Thank you so much.
Richard Sverrisson - Editor-in-Chief, Montel News:Before we get into what the incident reveals about Spain and its infrastructure why is this event so significant, do you think?
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:That's a big question. What we have seen last week is the major black blackout it has now seen before in the Western Europe. This is actually quite significant because we are now on the path to the energy transition. That means we are increasing, most of the European countries are growing in terms of installing the solar and wind which have all the grid storage with high renew generation. That means create some more vulnerable for more disturbances and leading to the grid instability because of the less inertia. As renewable generators like solar and wind doesn't contribute. They have less inertia. And that means even with the slightest of disturbance that can happen, can trigger the huge blackouts in the future. And when it comes to a Ethiopian countries, like bigger countries like Germany and Italy or Poland, and they're all leading with more renewables at the moment. And that means there is a need for more grid infrastructure improvements because the current grid infrastructure is quite old and there needs to be more investments on modernizing the grid. And that's why this is more significant, I would say.
Richard Sverrisson - Editor-in-Chief, Montel News:Excellent. Before we go further, I know you listeners out there are very experts in your field, but could you explain to those listeners who aren't aware of what inertia is on its importance for the electricity system Pratheeksha?
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:Yes. Absolutely. The traditional grid that rely on in our share, that means mostly the spinning generators. Tend to keep the old age and the frequency stable. What happens with renewables, especially the solar pv, there is little physical inertia. That means most of the generation are, they cannot be controlled and that is where there, because there is no rotating turbines present in the solar pv panels. So that's, that leads to less inertia. But in terms of the traditional plants where we have the spinning generators, they keep the voltage and frequency stable because they produce the inertia, whereas and that, that is actually the most important factor when it comes to maintaining the grid quite stable, let's say.
Richard Sverrisson - Editor-in-Chief, Montel News:And when you are, it is either off or on. There's nothing that's keeping the frequency going, which is important to keep the grid stable, if, is that a way of putting it. Yeah. So, do you think the blackout in Spain, the, the phenomenal pictures we saw people, stuck on trains in tunnels traffic, chaos, the lights going off. Is this a warning sign? The markets with a huge rollouts o of renewables.
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:So currently what is happening in the Spanish market is that they don't have like enough storage requirement. That means during the days when there is more generation come, coming from the solar or the wind. It has, there is no enough storage to be stored, so it has to be supplied. But what it, in terms of the countries where we have like more storage or the batteries or the pump hydro in place the energy can be balanced by storing the. And oversupply of this generation and then release it when there is enough demand. And also certain markets where the grid coordination is not balanced because we have certain parts of the region where we have more demand. And so other parts of the region where we have less demand this is not quite really balanced and this is really impacting or it is affecting the stable supply of the power at the moment.
Richard Sverrisson - Editor-in-Chief, Montel News:So what does the incident, what is it exposed about Spain and the state of its power grid? I mean, the onset of the massive rollout of wind and solar requires quite a modern, very reactive grid. Is that an aspect here that the grid modernization hasn't kept up with the pace of renewables built basically?
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:Absolutely. I would say that one example I would talk, we like to talk about is the UK's initiative from the National Grid apparatus, and that it had sanctioned now three 23 million GBP of investments going into this building or synchronous condensers and grid forming batteries. So one advantage of having the grid forming batteries is that they are advanced battery storage system that can independently stabilize and support the electricity system and they set their own frequency and old, unlike the traditional batteries and unlocking new opportunities to future residents of this electricity network. But when it comes to Spain Spanish grid, they have just 1.8 gigawatt of batteries. When we talk about storage, it's not just related to batteries, it's always that. Pumped hydro as well. And also another important factor about the barrier market is that they have less interconnection capacity. During this blackouts, it takes long hours for the country to restore the power because they couldn't import most of the power from other European countries as they have currently the interconnection with France, Portugal, and Dora. And this is just contributing to almost three to 4% of the interconnection capacity, which is really far below then what you has set as a target to achieve 50% of this generation has to be imported and exported. That means there is a huge scope for the country to increase the interconnection capacity within European grids. Of course that. The Spanish government have plans that they want to increase the interconnection capacity. Currently, there is a project which is a bisque Gulf interconnector between France and Spain, and the plan is to increase this capacity to five gigawatt by 2027 and further increase it to eight gigawatts that, that really help or benefit the country in balancing the power in the future.
Richard Sverrisson - Editor-in-Chief, Montel News:I think. Some of my colleagues at Montel Analytics have coined a phrase or called the Spanish system, a lollipop grid, if you like, because it's, it only has one interconnector outta the country to France. Is that a core of the issue here, that had there been more interconnection the problems would not have been so severe? This is of course getting into the territory of speculation. We haven't seen the full findings yet, but would more integration, do you think? Would a grid integration have helped?
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:Yeah, absolutely. I would agree with that. Like having more interconnection is quite advantageous because during, it also will help in balancing the power prices as well. Because currently there is another one big challenge for the Spanish renewable market is that. They have the market is currently facing with the cannibalization impact, which is actually a the profit of the solar developers is going down because of the more negative, how our power prices has been seen over the last few years. And we have seen that. The capture rate for the P week going down almost 60%, and we expect that in the few next few years as well. This capture rate going to be remaining the same. So this is gonna impact your revenue. That means there is a need for more connected, great infrastructures and also need more storage and that would help reduce this impact.
Richard Sverrisson - Editor-in-Chief, Montel News:So basically the more grid interconnection and more storage. But that's easier said than done. I think you know, Spain and France have been talking about more interconnectors, more power links for many years now, maybe even decades. It hasn't happened yet. It's quite hard. You've got the Pyrenees as well, so you have to maybe go around the Pyrenees and go through, through subsea cables. In terms of rolling out storage, in some markets it's quite a boom era, isn't it? And certainly you see that in Germany in terms of the pipeline of applications is vast. What, why is Spain different here? Why has it been so slow in rolling out the, storage and battery systems more generally?
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:That's a good question. I would say it has been really tough. Even previously Germany had this issue with permitting procedures because they have this long permitting procedures like starting from applying for the connection request till the project get the construction permit. It almost takes five years for when project to get approved in Spain at the moment. I think it was also the similar situation in Italy and Germany, what we have seen. I would say that this has been addressed and we have seen last year Germany announcing that they reduced this permitting procedure and almost like 15 gigawatt of projects got approved. That's a brilliant sign. But when it comes to Spain, because of the lack of administration people to look after these huge number of applications, that has been taken more time for them to process and. That had led to slow progress over there. I think the main focus for the Spanish government is to reduce this timeline of this permitting procedure or because as of now where Spain they have they, if a pro, if a developer has to develop a project in Spain, let's say a 50 megawatt solar PV plant, then it has to undergo so many steps. Starting from the connection request peer administrative authorization the construction permit, the environmental impact assessment permits, and also the connection o operating permits. So this is taking huge time and that has to be one step solution, or it should reduce from five years to two years, can only help. Promote the growth of the renewables and when it comes to batteries, it was starting last year that we have seen that the Spanish Carmen is now incentivizing all the battery projects, which are co-located with the solar and wind. So that's a great initiative and by providing 40% of the CapEx costs, so this is also good incentives. But what is currently lagging is the capacity market auctions, which the country is applying to launch sooner this year. Maybe that is all launched, will definitely help drive the battery installations as well.
Richard Sverrisson - Editor-in-Chief, Montel News:I think that's a clear message. Modernize, digitalize and build more, some more storage. Yeah. And Pratheeksha, Thank you very much for being a guest on the Montel Plugged In podcast.
Pratheeksha Ramdas - Senior New Energies Analyst, Rystad Energy:Thank you so much.
Richard Sverrisson - Editor-in-Chief, Montel News:So we heard from Pratheeksha there about what the outage tells us about Spain's infrastructure and energy storage. As we turn to the question of how the blackout raised concerns about the reliability of Europe's grid and the flexibility of the continent's energy system, I'm pleased to be joined by Kristian Ruby, secretary General of Eurelectric to discuss this further. A warm welcome and great to have you back, Kristian.
Kristian Ruby - Secretary General, Eurelectric:Thank you very much.
Richard Sverrisson - Editor-in-Chief, Montel News:The vast blackout in Spain and on the Iberian Peninsula also hitting France. Does it raise questions about energy security and reliance on electricity as a main power supply.
Kristian Ruby - Secretary General, Eurelectric:Well, I think it it naturally does but I turn it around and say that, as we are now on, on this journey to decarbonize and electrify our societies this means that more and more so society will rely on electricity in the future. That, in turn means. That of course electricity needs to be reliable and exactly. Therefore, I think it's important that we get to the bottom of exactly what happened here and take the right remedial measures in order to ensure that, that this does not happen again, not in Spain, not in Portugal, or anywhere else for that matter.
Richard Sverrisson - Editor-in-Chief, Montel News:Absolutely. And I think it's early days. We haven't seen any conclusions yet. The investigations are still ongoing. I'm sure they'll be keep going for weeks and months. But there is an element of finger pointing here, isn't it? They're saying, saying, oh it's the green transition, it's the onset of renewables. It's it's by, that's a natural result of exiting, exiting. Nuclear or it's a lack of modernization of the grids. I mean, how would you react to these kind of this kind of scapegoating or finger pointing at this early stage Kristian?
Kristian Ruby - Secretary General, Eurelectric:Yeah, I think it's in interesting to see how how almost by magic this blackout has fit in perfectly in pretty much any storyline around the energy transition. There were some people that were fast to blame renewables that were, some people that were very fast to to shout hydrogen is needed. There were some people that were very fast to focus on the grid angle, and I think what's really important here is to be a bit cautious to begin with. Find out exactly what's happened and then have a grownup conversation about what are the actual implications of what we find here. Because it's a bit too important what happened just to stick to your default storyline. You need to be willing to explore this with a certain level of curiosity and find out what's, what went down and what do we need to fix it.
Richard Sverrisson - Editor-in-Chief, Montel News:And leave your prejudices behind maybe, or
Kristian Ruby - Secretary General, Eurelectric:Exactly. Yeah.
Richard Sverrisson - Editor-in-Chief, Montel News:But what would you say the blackout has raised about how we assess risks for the grid?
Kristian Ruby - Secretary General, Eurelectric:I think it's again if we zoom out from the particular incident and say in general the landscape that we're now moving into, what does that imply for the grid situation that we have in Europe? I'd say two things. Regardless of what exactly caused this situation in Spain, we know that we're moving into a more complex territory when it comes to security supply and electricity. That has to do with a few things. First of all, the overarching Energy Security Sea I was alluding to before, which is we want to get out of gas, we want to be less dependent on any. Foreign supplier of energy for Europe, and we want to have our own energy for our own industry and our own citizens. That means we need. To double down more on electricity. So that's the first piece. The second piece is that the world as it's evolved in the last three to four years is one that's becoming more complex for societies to operate in and also for the operators of critical infrastructure. We are seeing hot wars on the European continent. We are seeing, active acts of sabotage, hybrid war strategies being carried out. We're seeing cyber attacks on the rise. We're seeing extreme weather on the rise, et cetera, et cetera. And all this is. Having a direct impact on the grids as such and on the energy systems as some of these attacks are directly targeted towards our energy systems. So security supply is not just a technical optimization exercise anymore. It's really one that deserves proper political attention because there's some mega issues at play, frankly.
Richard Sverrisson - Editor-in-Chief, Montel News:One of the issues here, or one of the key questions that need to be raised is the modernization of Europe's grids and networks isn't keeping pace with a rapid rollout of renewables.
Kristian Ruby - Secretary General, Eurelectric:I think there's definitely something about that. If you look at the last seven years of policymaking in Brussels, we've had several revisions of the renewable energy directed, the targets, the volumes of the rollout, et cetera, et cetera. And full disclosure, I've been an ardent proponent of that. I strongly believe in the renewable. Energy as a key element in the future power system. But we also have to be honest and clear and say we've not had the same focus on developing the rest of the system. We've not had a sufficient focus on modernizing the distribution grids that has. Part to do with the fact that this is mainly national competence. And I think it's also true to say that we've not had sufficient focus on ensuring that the system is adequately equipped to to respond to to difficult situations where you have the supply dropping very fast. So the whole. Flexibility theme is one that really needs some attention now because this will be key in a future with more weather dependent renewables and more let's say active movements on the demand side, and not least in a more complex world where an individual critical asset can be taken out because of extreme weather or because of a targeted attack from a state back act or whatever it is.
Richard Sverrisson - Editor-in-Chief, Montel News:Absolutely. I do think that some systems. Talking, we've had some island grids, if you like. Spain is one. Maybe there are others in other parts of Europe where there is limited interconnection with neighbors. That's part of the European project is to make these the continent very much inter interconnected, which means that when one country has a problem, others can come in and help in whatever way they, they can. But are these island grids, if you like, more vulnerable, to these kind of incidents?
Kristian Ruby - Secretary General, Eurelectric:I'd say two things here. First of all, if we had more and better interconnections between France and Spain, that would be a good thing in my view. So that there is a bigger opportunity in future to draw on dispatchable assets from another geography. Second, I think on the one hand, yes I get the idea that the Iberian peninsula is is relatively speaking or in a certain sense an island. But on the other hand, it's also. A very big island. We have a population of more than 50 million just in Spain. So it is a huge area and such a big area should also be able to to, to basically balance, supply and demand. And and this is why we need to look into what exactly happened.
Richard Sverrisson - Editor-in-Chief, Montel News:Before we can reach any conclusions. What are some of the concerns that you're hearing from your members here, Kristian?
Kristian Ruby - Secretary General, Eurelectric:I think, on this particular incident, we are, we're hearing a couple of different things. First of all, we're hearing that there were on that particular day, some disturbances in the voltage levels between the transmission grid and the distribution grid. We don't know what was the cause of these disturbances, but these can have part of the reason why ultimately some of the big solar parks in southern Spain were disconnected from the grid. If you have two big disturbances and variations in the voltage level at some point you risk that the equipment starts seeing damage and actually technical rules in the network codes for when you need to shut off your equipment under certain circumstances. This is something we know and that sort of points back to how the system was planned and operated. And and these are two key elements that we are concerned with when we look at the future of this system. With all the challenges I've been, drawing up in relation to operating the system with the increased electrification that's coming and the bigger share renewables. It is really crucial that we take a new approach to how we plan the system, how we operate the system, and how we invest in the system. And these are some of the key conclusions also from the recent study that we did on security of supply.
Richard Sverrisson - Editor-in-Chief, Montel News:There have been past blackouts in Europe, 2006 in Germany, we had seen in Italy, in the Balkans. These were quite major events. What lessons were learned there and do you think what lessons can be learned from this blackouts?
Kristian Ruby - Secretary General, Eurelectric:I think the lessons that can be learned from this one I like it to be very different than the lessons from the previous ones because we are operating now in a different situation with a different sort of backdrop more complex backdrop. And we are operating a system that has much bigger shares of renewables and that consequently needs a different type of planning and operation around it. But again, let's not draw preliminary or premature conclusions here. Let's wait and see exactly what the investigators find on what happened and then we can discuss exactly what we can learn from this.
Richard Sverrisson - Editor-in-Chief, Montel News:Absolutely. I think that's a very important question. I think it's, to the, to avoid speculating before we have all the facts on the table or talking about the conclusions before we have the facts on the table. I, you mentioned potential malevolent state or non-state actors who are looking, who are already attacking key European infrastructure. We've seen very clearly what happens when, when the grid fails, when you have no power, you know the, some of the pictures have been quite dramatic. Do you think what can be done now to, to safeguard the safeguard the network, the power supply in such events? What should governments be doing? Because, you can imagine, state actors or unsafe actors rubbing their hands with glee, saying Now we see of vulnerability in the system. That's what we can go and we can shut down major European economies.
Kristian Ruby - Secretary General, Eurelectric:Yeah. I think it, it really comes down to three things. It's about how we plan the system, invest in the system, and operate the system. When it comes to the planning, we need to move into a different type of mindset. We need to acknowledge that the world has changed fundamentally, and therefore we need to plan to a bigger extent for the unexpected. For the extreme, we're seeing the amount and frequency of extreme weather really rise very significantly. We're seeing those targeted attacks on the civilian infrastructures and we have to take this into account. When we plan the system, we need to take a different approach where we where we plan for more redundancy, where we avoid single points of failure. And that comes with a cost, but it's a cost we need to acknowledge because the electricity system is becoming so crucial for our. Total societal energy supply that we really needed to be reliable. So that's on the planning side. On the investment side, we need to invest more actively in a robust system, in a resilience system, in a system that is sufficiently flexible to to. To basically act quickly and and compensate for incidents like the one we saw in Spain. Specifically that points to the need for for more backup capacity, more flexible capacity, more storage capacity on the grid. And it's thought provoking that there's only some 60 megawatts of of batteries on Spanish grid. That's not a lot comparing to how big the system is in total. So we need, a different combination of flexible capacities on the grid. And of course, we also need the system operators then to make sure that they are ready to deploy this activate these capacities. Should something happen, should voltage levels start to be become funny or other aspects of the system?
Richard Sverrisson - Editor-in-Chief, Montel News:Kristian? Thank you very much for being a guest on the Plugged In podcast. It's always a pleasure. We will wait with bated breath to see what the conclusions of those investigations are. In the meantime, thanks very much. It's been an excellent and insightful discussion. I hope you agree, listeners, and thank you for tuning in to this episode. Our podcast episodes are released every Friday. For the latest news from Montel, please visit montelnews.com and you can follow us on LinkedIn, Bluesky, and other social media channels. See you next time.
