The company is spending £2 billion in 2019 on clean technologies, as part of its £6 billion investment from 2018 to 2022, and, says Anderson, will this year be creating 300 extra green collar jobs, 150 of which will be for recent graduates and apprentices. Also on the agenda are plans to invest in battery storage and solar power, on new sites or land around the wind farms. “It helps to balance the mix of renewable energy, and it helps to balance the system,” he says.
Going 100 per cent renewable wasn’t a Eureka moment. “It’s about a realisation of climate change and that we need to deal with this. It will provide cheaper energy and, besides, the public are demanding it.”
The interview took place after school children had been striking to get governments to do more to tackle climate change. Anderson picks up on the youth sentiment. “Youngsters are saying ‘this is our future, it’s about us, not you’ and we need to listen to them. I’ve got four daughters, and that’s what they want as well. That’s what we need to be out there delivering. It’s not about our future, it’s about our children and the next generations.”
The move to 100 per cent renewables has played well with customers, he asserts. When Scottish Power announced its results in February 2019, the big six supplier’s profits from its retail operations were up 187 per cent to £271.8 million for 2018, and it had held the total number of gas and electricity customers stable at just above five million. This followed a customer exodus in 2017 triggered by aggressive competition from smaller rivals. For Q1 of 2019, retail has not fared so well, hit by the price cap and a mild winter.
“The question we always get asked is ‘can we go 100 per cent renewables for the whole of the UK today?’ The honest answer is probably no. We need more innovation coming through, and part of that is about storage, and the way we use storage in the system. And right now, the best technology for that is batteries. That’s the next part of the process for us.”
A recent report from EDF Energy claimed that reconfiguring Scotland’s electricity system so that it could run purely on renewable energy would require £56 billion-worth of battery capacity, making an argument perhaps against those like Anderson who point to the low cost of wind, compared with nuclear.
Anderson, for his part, claims that as well as storage it’s also about optimising how the system works.
The Iberdrola-owned group is still a vertically integrated operation, with retail, generation, and distribution networks. It is also the transmission owner for the south of Scotland. Full integration gives it a huge advantage in tackling climate change, Anderson believes. “People often look at our sector and say: ‘Oh, you’re one of those big old-fashioned integrated utilities, there’s no future for you.’ We’ve currently got two of the big six energy companies who have basically said ‘we no longer want a retail business.’ And they’ve tried to put them up for sale. You have a number of others in the sector saying: ‘Our future is either just in customers or it’s just in infrastructure.’ Our view is that doesn’t actually make you fit for purpose, it doesn’t make you deliver what’s needed in the future, and it doesn’t help you deal with the future market.”
Having a hand in the whole system puts Scottish Power in the driving seat to nurture innovation and efficiency says Anderson, from controlling the level of output from a turbine – and managing the grid in a smart way – to installing charging points at the consumer end for EVs and helping users optimise cost with time-of-use tariffs.
He says the old-fashioned model was to just built a wind farm and connect it to the grid. The system operator could then tell you to switch it off if the power wasn’t needed. That model is changing. “What we’re now seeing is the capability to move away from that model and say ‘actually, if you hand over the minute-by-minute monitoring of the wind farm and its output to the distribution system, we will manage the project on and off’. That means the owner of the wind farm is getting to connect to the system constantly, and is constantly getting a degree of output as opposed to being switched off the system.”
He says greater interconnection with other countries developing in the North Sea also provides a means of capturing more of the renewable energy, so generation capacity is not wasted. “Soon you’re getting to a point where projects being built by the UK, in the UK’s part of the southern North Sea, are nearing the borders of projects being built by Germany, by Holland and Denmark. And then you can start to move towards having an integrated system and start feeding the power in all directions."
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