Should we talk about cheap power?

In recent months, political opposition towards renewable energy policies in the UK has been on a steady rise, as commitment to deliver "cheaper power" starts to overtake the ambition to have "clean power". Energy affordability is firmly back on the agenda.

In the drive to deliver green targets have politicians overhyped the implications of a move to a decarbonized power system? Is free power for all a realistic or even feasible concept? If not, how can consumers be incentivised to use electricity when it’s cheap and not when it’s expensive? What are the real consequences?

In this episode, Richard sits down with Afry Director, Stephen Woodhouse, at Montel's Energy Day in London to talk about whether the push for “clean power by 2030” can deliver cheap power, what changes are needed to deliver more private investment and how political and geopolitical shifts have reshaped costs and policy objectives.

Host: Richard Sverrisson - Editor-in-Chief, Montel News
Contributor: Laurence Walker - Deputy Editor-in-Chief, Montel News

Guest: Stephen Woodhouse - Director, Afry

Editor: Bled Maliqi
Producer: Sarah Knowles

Transcript

Richard Sverrisson - Editor-in-Chief, Montel News: 0:05

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. In this week's episode, we're in the UK where political criticism of clean and green energy policy is ever on the rise. There is a growing backlash against the energy transition. In October, the UK opposition Party, the conservatives pledged to scrap the 2008 Climate Change Act if reelected and replace it for cheap energy and economic growth. Does the UK want clean or cheap energy? Is cheap energy even possible? Can we only have one or the other? And what does this reality check of the UK's position say about the wider energy transition and Europe weaning off gas? I'm joined by Laurence Walker, deputy Chief at Montel News, A warm welcome, Laurence.

Laurence Walker - Deputy Editor-in-Chief, Montel News: 0:55

Thank you, Richard.

Richard Sverrisson - Editor-in-Chief, Montel News: 0:55

Yeah. Could you summarize the political and public opinion towards the green energy transition in the UK as it currently stands?

Laurence Walker - Deputy Editor-in-Chief, Montel News: 1:02

I mean, certainly I think most of the mainstream parties do still accept the sort of broader goal of eventually reaching net zero, but obviously the roots and the technologies preferred by each party do differ. I think for example as you mentioned, there has been, you know, great intention about the use of fossil fuels and to what extent gas should be playing a role in terms of sourcing, in terms of usage. And then obviously there are, growing concerns about certain technologies within the renewables field as well. You know, whether we should be having more offshore onshore wind, how that. Where people live how it affects prices and all these sort of things. So yes the main goal I think is still eventually to, to reach net zero. But yeah, there are sort of conflicts about how it's gonna go.

Richard Sverrisson - Editor-in-Chief, Montel News: 1:51

Absolutely. There, there's a lot of talk about, cheap or affordable energy. What, is there a disconnect between wholesale and retail prices? Where are wholesale prices been at? Where are they at the moment?

Laurence Walker - Deputy Editor-in-Chief, Montel News: 2:03

Wholesale prices have been relatively stable. Recently, if we look the year to date, we're about sort of 82 pounds, a megawatt hour on average for front month prices, which is actually a bit from 2024, but it's down from over a hundred twenty, twenty three. I think what's, there are things we will maybe feed into this. Obviously there's issues regarding, renewables, the intermittency of renewables the costs behind it. The costs of rolling out renewables. These sort of things I think are what people are concerned about to have.

Richard Sverrisson - Editor-in-Chief, Montel News: 2:32

Absolutely and maintaining that stable keeping system security. How does the issue of curtailment play into the arguments against renewables?

Laurence Walker - Deputy Editor-in-Chief, Montel News: 2:41

Yeah, it's obviously offers an easy narrative for those against renewables and it's, the likes of some of the fringe parties. So for example, the Reform UK for example, these sort of things, if you're saying, oh, we're paying to turn off wind, then it's obviously it looks bad. I think ultimately, I think most analysts generally agree. It's more a simpson of under investments in the grid, more so in infrastructure than it is, renewables themselves to blame. I think it's more yeah

Richard Sverrisson - Editor-in-Chief, Montel News: 3:07

The wider infrastructure issue.

Laurence Walker - Deputy Editor-in-Chief, Montel News: 3:08

Exactly.

Richard Sverrisson - Editor-in-Chief, Montel News: 3:09

Thanks very much, Laurie. So what are the real implications of the move to a renewable energy system? Earlier this week at Montel's Energy Day in London, I sat down with UK Energy expert, Stephen Woodhouse, where I put this question and many more to him. Welcome to a live episode of Plugged In - The Energy News Podcast on this beautiful autumn Day in London. I'm delighted to be joined by a good friend of the podcast, Stephen Woodhouse director at Energy Consultancy from Afry. So a warm welcome to you, Stephen, and welcome back to the podcast and this fireside chat.

Stephen Woodhouse - Director, Afry: 3:46

Thank you, Richard.

Richard Sverrisson - Editor-in-Chief, Montel News: 3:47

Let's start talking generally about the energy transition, and I think a lot has been made of clean power by 2030. Does that also mean cheap power by 2030? Stephen?

Stephen Woodhouse - Director, Afry: 4:00

I'm not sure I think that it will. We started off when I came into the industry too many years ago with kind of two objectives, and we had an independent regulator to deliver two objectives, and they were security of supply and issues to do with efficiency. And the environmental objective was originally a secondary objective. And. It moved to being a primary objective, and we've been talking about the trilemma. We've had political consensus around the trilemma for quite a few years, and it's not so long ago. I was going around to conferences saying the fundamental problem with electricity is that it's too cheap. It's a pound a day. For most people, that's not enough. We need some transformation, but we actually need people to wake up and be conscious of how they use electricity and when they use it, and when it's that cheap. We're not gonna get the transformation we need. I can't say that anymore, of course. But I do wonder, the sustainability issue is being taken off the political agenda. The geopolitical instability is challenging that long run objective. We're still focusing on security of supply, but we're forgetting the last time we have a crisis. So that's already being considered a medium per term problem. And we've got this very short term political agenda item of affordability and getting 300 pounds off domestic bills by 2030. And I'm not sure that's very good for the industry and the long-term investment prospects.

Richard Sverrisson - Editor-in-Chief, Montel News: 5:26

So if we think about those three objectives, the sustainability, security of supply, affordability, which of them would you say is being prioritized by the government and industry at the moment? And how you mentioned geopolitical uncertainty. How is that reshaping those priorities?

Stephen Woodhouse - Director, Afry: 5:42

The irony was, we know the trigger in Ukraine for the current kind of uncertainty, but it manifested in a gas price spike and all things being equal. You would've thought that would've led to a wholesale move towards renewables and away from fossil. But actually, instability economically doesn't stop there. I'm a microeconomic expert. Macroeconomics always felt a bit like a domino topple to me. You could line up the dominoes in a circle and start it in one direction and prove the causality, but you could equally flip them in the opposite direction and prove the opposite causality. So I have to say macroeconomics is a bit of a black box to me, but nothing happens in isolation. So the gas price crisis led to an inflation crisis. So the cost of renewables was also shooting up. It led to a cost of capital crisis. So it isn't obvious that we've really moving towards a cheaper renewable future. So we're, we are focusing on affordability primarily now, probably at the expense of the long run economics of our system.

Richard Sverrisson - Editor-in-Chief, Montel News: 6:47

If we think about, let's think, digitalization, decarbonization, do you think these parts of the system are moving the same direction and at the same pace?

Stephen Woodhouse - Director, Afry: 6:58

So there are three Ds in that, so there's the decarbonization, the digitalization, and the de and the decentralization. The decarbonization will continue to happen at some pace. But it is very contingent on government support. Whatever we say about renewables being cheap, they're cheap to produce with the profile that they have. They're not cheap to produce a profile that consumers wish to consume. And there's a lot of need for some flexibility on the customer side to bridge that gap. Decentralization, it was, I remember Laszlo Varro, who was then the chief economist of IEA saying this. We are past the peak of decentralization of generation. We're not building very small scale renewables anymore. We're building giga scale offshore wind, but it's the sources of flexibility, which we're decentralizing and that's really interesting. So digitalization will continue to transform. Quick poll, how many people in this room have got an electric car? How many of you don't do some kind of smart charging? Okay. Most do though, if you've got an electric car, you know how easy it is for that stuff to be automated and whether you do it yourself or hand over the keys to. I won't name a supplier, but there are some out there that will manage your car automatically for you. The digitalization will just happen. The decentralization is really interesting. So we heard earlier Niso is not getting nodal pricing and co-op optimization. They're not getting zonal pricing. And the government said a year ago they were minded not to do central dispatch. But I wonder if NISO has given up on that idea. And I've just reviewed a paper from Entso-e about how they intend to tackle the challenge of re-dispatch costs and their evaluation seems very tilted in favor of central control, central dispatch, nodal pricing. So it's not just here that the system operators are enviously eyeing the US model where they never fully let go of the controls of the power plants. Now, how the hell that works when it's millions of cars we're dispatching rather than tens of big thermal units? I'm not sure anybody knows. But I think the decentralization is still a battleground.

Richard Sverrisson - Editor-in-Chief, Montel News: 9:25

Absolutely. So if we're talking about the three Ds, there's also, I've coined the three Cs, which is when we're talking about re renewables in particular, so curtailment, congestion and cannibalization. Now I think these are some of the downsides of renewable. Renewables penetration. How have, has, have these effects been over hyped or are they still something that we have to overcome in order to reach the 2030 and even the 2040 objectives? Stephen,

Stephen Woodhouse - Director, Afry: 9:52

and so your three Cs are curtailment, congestion, and cannibalization. And I have phrased these slightly differently in the work I've done, but it amounts to the same thing. So we've said that as you decarbonize, and as you electrify, it places three challenges to the operation of the power system. So one of them relates to location. One of them relates to balancing and stability, and one of them relates to I would say volume risk, that's the primary one. So location, we are putting lots of resources in places where they weren't before. From offshore winds to distributed generation to, here today maybe we're gonna reuse the site at will for modular nuclear reactors. But generally new connections are in new places. And the new loads that we're putting on the system, whether it's EV chargers at the bottom end of the grid or large data centers. Firstly, it puts pressure on the connections process and the need to build a lot of grid, and we've gotta spend billions upgrading the grids, but it also brings us into congestion management, right the way down to the distribution level, which changes our distribution operators plan and operate their system. So the congestion stuff is real and will be with us for a long time. The balancing and stability is also interesting. So we've got balancing problems all the way from instantaneous inertia, right the way through to the seasonal problem of using. In Norway it's the rainfall that freezes the, that melts in the spring, but your heating is in the winter. You've got that seasonal issue in Norway, we're gonna get it in Europe as well where we use solar energy in the summer to heat our homes in the winter, at least in the northern parts of Europe. In the old days, certainly in the GB power system, all of those timescales and the points in between the firm capacity for the peak and the intraday ramping, you did all of that with fossil plants and a gas pipeline or a coal stock. As we take those out of the equation, we having to build dedicated resources for each of the different services. So you know, we're building synchronous condensers and batteries with grid forming for the inertia. We haven't solved the seasonal storage problem yet, frankly. I'm looking at an EastWest interconnector to go across the Atlantic. That might have some advantage there, but it won't be tens of gigawatts. And we are having actually to procure dedicated assets for the short term stuff'cause we have a single buyer for those services. And the bid in the middle is where the volatility lives. And then we get to my third challenge, which, so my challenge was the location balancing and stability, and then finally, risk. How many people here trade base, load products? I'm trying to get some audience engagement. Yeah. And how many trade non base load products. Okay. Okay. But the liquidity is still with the base load. If you look at all of the cross-border hedging. The transmission rights are one year products for a base load shape. Base load doesn't really exist anymore. So we're not able to hedge the risks that market participants are actually facing, which is one of the reasons why zonal pricing in this country would've been a bad idea. I dunno if you want to get into the Rema debate, but our work was used in the argument very strongly against zonal pricing. But if you read what we actually said. We said if zonal pricing is to work, there are some preconditions which are all about putting in place the right hedging protocols, the right grandfathering arrangements using those hedging products and the future proofing about next time we do the zoning. And that's the way you need to get zoning. And if you don't get that you've gotta do it through some other way. If you can't hedge the risk to investors. Zoning is a bad idea. Not a good idea.

Richard Sverrisson - Editor-in-Chief, Montel News: 13:44

No. Absolutely. You've raised a number of complex issues there Stephen. But if we are going back to the points that you mentioned, so go, let's go back to location. How can the grid handle new storage and demand and generation, which is required to meet the 2030 targets? What, what could be done? What are the solutions here?

Stephen Woodhouse - Director, Afry: 14:02

We need to make use of all of the resources we've got. So even if we've got zonal pricing, it wouldn't change the amount of wind that can run in Scotland. When there's good grid constraints, it changes the pricing and who pays the compensation? It doesn't change the physics. So we need to find ways of turning up demand in Scotland. Maybe that's through the local constraints market that Niso is now getting working, finally. We need to find ways that the interconnectors being more flexible. So the Norwegian Interconnector, I think currently is fixed day ahead. There now will be some change to allow an intraday auction, but not just in Norway. All of the interconnectors. We need to find ways of allowing those interconnectors to be part of the re-dispatch. So we're dispatching interconnection rather than wind. There's a series of tools that we can use, but we've gotta make use of the physical resources that we've got connected to the system. And if it can't be done through the spot market with a single national price area, then we find need to find some creative tools to get at those resources in other ways.

Richard Sverrisson - Editor-in-Chief, Montel News: 15:04

Within the intraday, or, if you the second point you meant of balancing stability. So what is replacing traditional providers of backup services? Stephen, at the moment.

Stephen Woodhouse - Director, Afry: 15:15

I mentioned kind of the grid forming and the synchronous condensers. Niso has got the stability products. We actually did a review of the design a couple of years ago and recommended they have a year ahead and a day ahead procurement for that. And they're important, but they're not commercially hugely important. It's the range of reserve and response services that we have that drives a lot of that, as well as intraday volatility. So the rest of continental Europe is now moving to 15 minutes. Other markets are at five minutes already. It's one of the things that's still on the table within the REMA discussion actually to shorten the settlement interval perhaps to 15 or five minutes. And the beauty of kind of fine-tuning the traded product is you make that flexibility more of a problem for the market and less of the problem for the system services. That's the direction of travel I, I would be advocating.

Richard Sverrisson - Editor-in-Chief, Montel News: 16:09

Absolutely. And what you also mentioned about volatility and risks. So where are the, what are the new risks that you've highlighted or that you'd like to highlight? And, is a capacity mechanism, essential in terms of the system stability and the functioning of the market as a whole?

Stephen Woodhouse - Director, Afry: 16:23

The new risk, I would say is volume risk, and it's obviously not very new, but it's a risk that we haven't really developed trading products to help us hedge. And, talking to different people in the trading community, whether you could do that and whether you could ever get real liquidity in those products, I think is an open question. But for sure, I think people are looking at creating products that will allow batteries to hedge forward. So quite the nature of those products, I don't know. But volume risk is the critical part of it. And the technologies that are being used to fill that hole are, clearly batteries. And the big gap, if you look at the spectrum of needs, the big gap we've got is not for very short duration storage, but for much longer duration storage. We did a study, some of my colleagues did a study for Niso a couple of years ago, and the average duration of a scarcity event now is a four or five hours. So a two hour battery has, a 40 or 50% contribution to that, but it's a meaningful contribution. By 2035 ish, at least in one of the scenarios we looked at, the average duration of a scarcity event is nearly 50 hours, so a two hour battery, it has a 5% contribution, not a 50% or 4% contribution. So the role of batteries for the future system needs, I think is quite questionable. So suddenly you ask about capacity mechanisms and I was never a fan. I loved working in the Nordic countries where they were resolutely in favor of, the energy only market. And the mantra for capacity mechanisms was simplistic. And I think over simplistic, you just create a market for megawatts, it's easy. And if there's no missing money, the price will be zero. And it won't interfere with the operation of the spot market because it's a separate product and it doesn't determine dispatch. And then you realize you can't just say all megawatts are the same. You have to de-rate them according to their reliability, their forced outage in the old world. But now we realize the problem is not the megawatts, it's the megawatts hours of duration. And it's not a simple product anymore, and there are no simple answers here to define. A technology neutral capacity payment. And we've actually just done a piece of work for Nordic Energy research looking at the form of capacity or flexibility mechanism. So in recent years, both Finland and Sweden had announced an intention to move to a market-wide capacity mechanism. I think both countries are basically deciding not to do that because of the cost. You pay a lot of money to not change behavior from a lot of participants. To change a bit at the edge, so it's a very costly solution. Britain now is, I'm not sure if this is a decision or a consultation, but I think it's gonna happen. They are trying to create a separate price for the new build capacity from the existing capacity, because there's not much appetite to pay everybody the new build price. Now that the price cap of 75 pounds a kilowatt is likely to be exceeded. So a lot of markets are now trying to find ways to not pay everybody for the megawatts. And I don't think there are any good answers or any clear answers. But it does take us into a slightly different place. When I came into the industry, we thought we had markets for efficient dispatch, but we'd also have market led investments. And of course. The renewable support has grown and hasn't gone away, and I don't see it going away anytime soon. But we're actually now moving to support for lots of different technologies. But again, it's not on a technology neutral basis. The de-rating factors that we use to calculate who gets paid what. In a capacity market? It's a bit of a black box. I don't think you really call it technology neutral despite the protestations, but we're now saying that model doesn't even fit. We'll have a separate mechanism for long duration energy storage. We're talking now, the connections reform process is about first ready, first serve, but that includes an element of most suitable for the grid first served. And we're about to basically subsidize everything that gets connected to the grid in the next 10 years. We've got this central planning, the strategic energy plan that Niso is doing. I think it's inevitable that the government in one way or another, we'll be shaping what gets built where and when.

Richard Sverrisson - Editor-in-Chief, Montel News: 20:58

So where's the market? In the market?

Stephen Woodhouse - Director, Afry: 20:59

Yeah. And if we're, if what we end up with is a spot market for efficient dispatch, but really all of the investment decisions are back in the central planning box. It's probably time for me to retire 'cause my work here has failed. But

Richard Sverrisson - Editor-in-Chief, Montel News: 21:13

Stephen, if we can continue on flexibility and the role of flexibility how do transport and heat fit in here?

Stephen Woodhouse - Director, Afry: 21:20

I got really excited about this when I first realized the potential for kind of heat and transport to be the glue that holds a renewable energy system together.'cause the truth is, there's been a lot of over-hyping about how cheap renewables are, and I'm a passionate advocate for a renewable energy system, and I think decarbonization is absolutely essential, and it should be the top priority, not the bottom one, even now. I'm no apologist for the, for the coal fossil fuel lobby, but the renewables lobby were too successful in getting people to believe the hype, so low marginal cost it doesn't necessarily mean low prices and the concept of a low levelized cost of energy. I think, I don't think anybody should be allowed to use that term 'cause it's just so misleading. It's very cheap to consume energy if you take it at the profile it's produced at. But if you want to consume a profile that the consumer wants, it's no longer so cheap. And the bridge to that is adding new types of load, which are flexible. So the solution to the decarbonization and the affordability agenda is that you consume energy when it's cheap and abundant, and you do not consume energy when it's expensive and scarce.

Richard Sverrisson - Editor-in-Chief, Montel News: 22:41

And how do,

Stephen Woodhouse - Director, Afry: 22:42

and something goes for the grid.

Richard Sverrisson - Editor-in-Chief, Montel News: 22:43

And how do you do that? How?

Stephen Woodhouse - Director, Afry: 22:45

My car, I'm an average driver. I do 10 or 12,000 miles a year. I need 10 hours of electricity anytime of the week. I don't care. Absolutely don't care. Very few days do I really need my car to be above 30%, maybe 20% charge. So I've got total freedom with, 60 odd kilowatt hours of battery that I could use even for vehicle to grid. And vehicle to grid is definitely coming. So I think cars really easy to capture flexibility from. Niso's Clean Power 2030 plan suggested that there'd be 900 megawatts of vehicle to grid on the GB system by 2030. And if you read the small print, they mentioned that by 2050 it was 32 gigawatts, and by 2040 it was 28 gigawatts. So pick that number. 2028 gigawatts by 2040 sounds like an utterly unbelievable number, right? That's half of our peak power. Is only 4 million cars. We've probably got 25 million cars. In terms of the number of cars, it's actually not that unbelievable at all. So I think the potential for transport to be flexible and private cars are especially good. I think we've got access to driveways and off street parking for about between 60, basically two thirds of our cars, not all of them. And they sit idle for 95% of the time. So cars are an absolutely no brainer way of getting that flexibility

Richard Sverrisson - Editor-in-Chief, Montel News: 24:14

and the massive battery as well in potentially

Stephen Woodhouse - Director, Afry: 24:17

Exactly. Yeah. 80% of the cells that get produced go on wheels. And I might argue the other 20% are a wasted resource. So we should be capturing the flexibility of the 80%, not building dedicated infrastructure that then in the end, the consumers will have to pay for. So I do think there is a future out there where the flexibility comes from customer owned assets. Heating is a bit harder. You can build flexibility into a heat pump system, but it probably requires you to put a thermal store in. And most people are not doing that. And we're still obsessing a gap about, again, like the LCOE metric, we obsess about energy efficiency and COP, the coefficient of performance for heat pumps. And the basic fallacy in all of those calculations is that it assumes every kilowatt hour is the same and electricity is the most volatile commodity on the planet, right? You can go from minus several hundred pounds a megawatt hour to plus several thousand a megawatt hour in a day or two. We were just talking to Ercot recently and there's a lot of crypto mining in Texas, and the system operator gets about 700 or 800 megawatts of demand response from the crypto mining. And they actually used to bid into Ercot, but they weren't accurate enough and they kept getting penalized. So now they just respond to the prices. But Ercot can predict that because relative to electricity, cryptocurrency is very stable in its price. So they know exactly the price points at which all of this crypto mining is gonna switch off. So the heating though, we need to capture ways of getting flexibility in the heating, and it means looking at measures of energy effectiveness, not energy efficiency. So it's no good just assuming all of the kilowatt hours are the same. They're radically different both in price and in carbon content and that's what we need to build going forward. And flexibility on the cooling loads of data centers as well. If everybody puts new heating and cooling loads that are contributing to the system peak, the cost implications of that both for grids and the reliable generation capacity that we need to support it. That's what makes a renewable energy system really expensive. So we need to find ways of baking that flexibility into the new things that haven't yet been designed or built.

Richard Sverrisson - Editor-in-Chief, Montel News: 26:48

I'd like to talk about some of the bigger issues that you've raised here as well Stephen, during this chat, and, one of them is so can we ever return to the market based investment?

Stephen Woodhouse - Director, Afry: 26:59

There's a real dilemma there because on the one hand, I went round conferences 10 years ago saying, okay, generation as an investment is dead. I said, I was looking at Statt Trust model in Germany and they'd signed up 20 odd gigawatts of wind. I forget the numbers. They didn't own a kilowatt. And what I said is, you are competing with me now as a generator. My marginal mortgage rate was 1.25% at the time, and I couldn't just put solar panels on my roof. I could also put a battery in my basement. I could have dispatchable controllable power, and my hurdle rate was 1.5 or 1.25% if I considered it a commercial investment. And it was zero if I considered it a lifestyle choice. So I said, none of you in the industry can ever compete with domestic consumers for generation as an investment class. So what I was saying was the future is that you need access to a flexible portfolio. You don't need to own it. There are management fads about whether you outsource production or insource production, but generation is a commodity. You just need access to a flexible portfolio. I said the critical bit that holds all of that together is brilliant skills in trading and risk management.'cause the world is becoming a much more volatile place. And I said, and the third element of it is that you need an excellent relationship with the customer because in future, the value will be the strength of the relationship with the customer. And I had in mind the kind of Amazon model. People have tried it, there are people trying it now in this country. I don't think they're making money on retail yet. In fact, half the retailers in this country went bust in between me saying that and now so I was definitely wrong. But the irony is I underestimated the ability of the industry to go and lobby for large sums of money. So we transformed the renewable subsidies from the RO to the CFD, and I see no sign of it declining. Massive lobbying for support for capacity payments. The real irony and for long duration energy storage, we're gonna be building a lot of grids. So the industry has successfully lobbied to get money thrown at it. But the interesting bit is a lot of the future assets for the industry are gonna be on the customer side, and that's never gonna be centrally procured.

Richard Sverrisson - Editor-in-Chief, Montel News: 29:24

Absolutely. So what's your message for investors then, in the sector? Stephen,

Stephen Woodhouse - Director, Afry: 29:28

Main message is, don't bet against the economics. If you think that the current tariff regime looks too good to be true. Maybe it is. I think you can bet on long-term government contracts. Still, I don't think the government is minded to retrospectively change terms and conditions, although I do hear that looking at changing RPI to CPI on the old RO contracts. I personally think that would be a bad move 'cause it'll pop up on the cost of capital for the next round of CFD options. But, make sure you know what the real economics are. Not just what on the page when you're making an investment, there's a huge future out there for demand side flexibility, and I think that's the natural enemy of batteries. So make sure there's a real basis for the investment you are making based on system need, not just on what looks attractive in the near term.

Richard Sverrisson - Editor-in-Chief, Montel News: 30:22

I think that's a very clear message. And I'd like to round off there, Stephen. Thank you very much. As always fascinating to chat to you about these issues. Your expertise and knowledge is immense. So thank you very much for the chat and for being a guest on the Plugged In podcast team.

Stephen Woodhouse - Director, Afry: 30:35

Thank you. Thank you, Richard.