← Everything Electric Podcast
Everything Electric Podcast
Clean Energy 101: The Future of The Grid | Fully Charged Show Podcast with Ausgrid
00:51:35
In this episode of the Fully Charged Show podcast, host Robert Llewellyn sits down with Marc England, CEO of Ausgrid, to discuss the future of Australia’s electricity grid and its role in the clean energy transition. Ausgrid is one of the largest...
Loading summary
Transcript115 lines
- [00:00]
Robert Llewellyn
Foreign. Welcome to another episode of the Fully Charge show podcast. Coming to you, as you may be able to tell from sunny Queensland in Australia. Quite a warm day today. Not going to mention it again. Okay, today's guest on the podcast is Mark England, who is the CEO of oscrid now. OS Grid control, the grid in the Sydney area, the kind of grid that we all get our electricity from. And so he is very involved in the energy transition. As many of you regular viewers may know, Australia is really at the forefront of rooftop solar producing very substantial percentages of the entire consumption of electricity in that area from the roofs of houses and businesses. It is incredible how, how big an impact this has had and that is one of the things we discuss. And I just want to quickly point out that Mark and other members of his team from Osgood will be appearing at Everything Electric at the Olympic park on the 7th, 8th and 9th of March in this year. So the excitement around the show this year is palpable, I think it's fair to say that, but I'm not going to go on about it again. That's it, really. Please do welcome onto the Fully Charged show podcast, Mark England from OS Grid. Love the Everything Electric show. Then join us live in Sydney in March or London in April, or in Vancouver, Farnborough and Melbourne in September, October and November 2025. So, Mark, thank you very much for finding time to talk to us. I mean, I can imagine you might be quite busy running OS grid. I'm just guessing if you've got quite a lot on your plate.
- [02:00]
Mark England
Yeah. Like a lot of companies, we've got a few balls up in the air. There's a few things going on, but we're, we're pretty excited about this energy transition and the opportunity for distribution. So I'm looking forward to talking about that.
- [02:10]
Robert Llewellyn
Yeah.
- [02:11]
Mark England
And, yeah, it's all about making sure we're, we're making an active and useful contribution to where things are heading.
- [02:18]
Robert Llewellyn
Yeah. I mean, could you, would you mind giving a brief description of the Australian grid? Because, I mean, not our viewers and listeners are all over the world, but there are some peculiarities, I can't even say it of the Australian grid and how different it is from, say, the British or European grid? I mean, is it. Effectively there are two big grids in Australia, one on the east and one on the west.
- [02:43]
Mark England
Yes. Okay. So, I mean, I'd start with the market as a whole. We're very similar to the UK and New Zealand, two other markets I've worked in, in terms of the liberalization that happened 35 years ago. Each country, and they all claim to have been first, but I think all of them looked at each other and got the best of that. So we split wholesale markets from the networks and the physical infrastructure from the retail markets. And generally you have a lot of generator retailers here as you do in the UK markets. But it's a competitive market for them. And the infrastructure in the middle moves the electrons around is obviously regulated, monopoly. And yes, because of the size of Australia, we've got the national electricity market on the east coast, which covers Queensland, New South Wales, Victoria and a little bit in South Australia. And then Western Australia is a completely different network or grid on the other side of the world.
- [03:41]
Robert Llewellyn
Forgive me for not knowing this, but does OS grid run the western grid as well or are you.
- [03:47]
Mark England
Yes, positioning OS grid. We are a subset of New South Wales. We're the largest just by default. We're Sydney, which is a big city.
- [03:55]
Robert Llewellyn
Yeah.
- [03:56]
Mark England
But we cover most of Sydney up into a part of Sydney called Parramatta in the west.
- [04:01]
Robert Llewellyn
Yeah.
- [04:01]
Mark England
And then we go up the central coast which is all the sort of northern beaches and central beaches. And then we end up to Newcastle which is a industrial port. And then we go up into the Hunter Valley which is the wine region, the coal mining region and various other farming.
- [04:16]
Robert Llewellyn
Right.
- [04:17]
Mark England
Trees up there as well. So we're, we're a mixture of urban, suburban and rural network, which is interesting. We also go up to 132 kilovolts. So in some parts of Europe a distributor would only go up to 22 or 50 kilovolts or 60 kilowatts around that we got to 132. So we kind of COVID the. What's known as sub transmission. Right. But we don't, we don't do the interstate high voltage transmission networks. Traditionally the image everyone has in their head of the large pylons that go long distance. We, we tend not to do that. Right.
- [04:54]
Robert Llewellyn
I mean, because actually, is there, just briefly, is there a kind of overall authority then for the entire eastern grid or is it all made up of interconnected sections? Does that make sense? I mean like the national grid in the UK covers the whole nation, as far as I understand it, like the main backbone and then there's, you know, different providers in different areas. Does that make any sense at all?
- [05:21]
Mark England
I think I understood the question. You're breaking up quite a lot. Oh, sorry.
- [05:25]
Robert Llewellyn
Because you're very clear.
- [05:27]
Mark England
Yeah, sorry, I think I heard what you said. There is a company called Transgrid that provides the high voltage transmission network between the states and that's between the states in the national electricity market, which is on the east coast. Again, totally separate to the west coast of Australia. There's just too much distance in between. Yeah, we all, we all used to be state owned businesses, but over time there's been various levels of privatization. Osgood is still partially state owned, but we have infrastructure investors who bought 51% of us sit on our board, etc. So we have private capital, but we have a tie into the state government of New South Wales as well.
- [06:07]
Robert Llewellyn
I mean that, what's really interesting which is happening globally is it's kind of feels like it particularly happening in Australia is that, you know, when you, when you and I first knew about the grid, which is, you know, a few years ago it was big centralized generators that sent power down, wires to end users. So that was the way it worked and that's how it was built to, to deal with that. But now we are, particularly in Australia. I mean the impact of rooftop solar in Australia is very big as far as I understand it. And that, I mean, do you need, what do you need to do to deal with that change and what are you doing to deal with that change?
- [06:53]
Mark England
Yeah, so interesting fact on that. There are three times more solar systems on rooftops in Australia than there are swimming pools, which when you consider how many swimming pools there are in Australia, that's a lot. So we've got a lot of distributed solar or rooftop solar. But yeah, interestingly I think the sector is applying an old paradigm to a new problem in some regards. So despite the fact we've got a high penetration of solar and rooftops already, there's a massive missing capacity that we're not utilizing around CNI rooftops. Often the statistics you hear is the residential rooftop stat, which I've just given you.
- [07:32]
Robert Llewellyn
Right.
- [07:33]
Mark England
And there is a material amount during the middle of the day in New South Wales. It's possible that 50% or more of the power is being delivered through rooftop solar. Obviously demand in the middle of the day is lower, but the supply is high because the sun is up and all the solar panels are producing. So that's pretty, pretty impressive. That's come about over about 15 years starting in the early 2000s. There were a lot of subsidies initially to get the industry going, but you know, the industry really started motoring in the early teens and as a result of a lot of supplies of rooftop solar, the cost, the balance of system costs came down. Obviously the global dynamic of PV cells coming down in cost has also helped and as time has gone on, those subsidies have been pulled out, mostly not fully. And that means the economics of solar really improved for your average household. We looked at this a few years ago and when you get below a sort of seven year payback period, it really starts to take off. And that happened around the mid teens in Australia. But, but, but the paradigm I'm talking about is we're still talking a lot about how do we replace these coal fired power stations with large wind farms or large grid scale solar. And I think we need to turn that on its head instead of looking top down in the sector and thinking about how do we replace a large coal fire power station with large wind farms and lots of transmission network. And we need to look at the other way around and go, well, what's the maximum we could do close to demand? Because the real opportunity that solar offers is to generate the power near where it's being consumed and to not need as much network in order to get it to that demand. And if we, if we looked at that way we might come up with a slightly different answer which is let's maximize that, let's bring the policies in, will maximize that and then focus on what else we need to do to support industry and bigger demands by building more upstream. So we need to start having that debate in Australia in my view. And it's just starting to get going. But today rooftop solar has taken off partly because of subsidies 10 or 15 years ago. The average household loves it. Sometimes it's a reaction to electricity bills, sometimes it's a reaction to a need. People have to want to be self sustainable and have their own power. But it's put us in a pretty good position at the beginning of this energy transition because I mean that's, I.
- [09:53]
Robert Llewellyn
Mean what I'm, you know, have spent many years, you know, supporting and advocating for a shift to renewables. But I would love to, you know, I mean, I think it's incredible how well and how big that shift has happened here. But I mean what are the negatives? Because I mean, I don't want to pretend there aren't any. I mean, I think there must be negatives if you own and run a big coal generating power plant. There's got to be some negatives. I mean the demand for that power has decrease, say from 25 years ago. It's much less now.
- [10:27]
Mark England
Yeah, so I mean the context, most of my background is in generation and retail, so I'm fairly new to networks. I came here to Osgood two years ago. So I'm bringing a bit of that experience that if you like to it. I think if you're a coal powered generator, rooftop solar has been a thorn in your side because it's been heavily subsidized and if you. And it was brought in before we were really talking about climate change in the way we are now and the need to decarbonize the system as a whole. I mean there was obviously conversation going on back then, but it predates the Paris Accord. The key cop that really set the tone for what we all talk about at the moment. I think if you, if you thought about it again, if we could go back in time, we think about how do we manage the transition in an orchestrated way without creating dislocations. And the challenge for those big coal fired power stations is we need them now. We don't want them in the end. But during the middle of the day when there's a lot of solar being produced, I mentioned the more than 50% of the demand can be met with rooftop solar on a sunny day in New South Wales and the rest of the nem, they're not making much money. In fact they're probably making a loss because the wholesale price of electricity is very low. So it has been quite a disruption for the big end of town and we're now having to have the conversations around how do we manage an ordered and measured and low cost transition overall. I mean the other you asked what you know from a network perspective, too much solar can be challenging sometimes, but with enough time to adapt, the network can adapt to that. If you think about an electricity distribution network as just a bunch of pipes and all those pipes are different sizes and the, the smallest pipes are what's going into your house. And as you go upstream in the system, the pipes get bigger. And the only thing that matters in a substation that sort of is the boundary between lots of different level of substations. They're the boundaries between different sized pipes or different voltages for electricity is as long as you're not producing more power downstream and trying to push it back up in the middle of the day than you normally bring from upstream into that distribution network, the system can cope. There are sometimes voltage challenges, but that can be managed and as long as we can monitor system reliability, we're okay. The problem occurs when too much solar in the middle of the day from too many different parts of the network is funneling upstream into the higher voltage networks. And then we start to get real issues and that's what AEMO our market operator are worrying about at the moment. But you know, my, my, my angle on this is we just need more storage. And if, if, if we looked at the distribution network system slightly differently. So for example, it was built to transmit electrons over distance, but if we looked at it as not only transmitting them over distance but transmitting them over time, then and we could hold the surplus power in the lower voltage network for longer and use it when we need it in the evening and overnight, then we wouldn't have some of the challenges. You hear about the power moving upstream and too much surplus power moving up into the high voltage.
- [13:41]
Robert Llewellyn
I mean it's because it's that, I mean it does feel like, you know, one of the solutions that is offered is, you know, huge mega batteries out in the bush somewhere. But I would imagine there are limitations. Well one, there's limitations because of cost, but also because of size. Because what you really need is you need to be able to store almost petawatts of electricity, you know, to run it, to run it smoothly over years. But, but if it's distributed again, it's a similar thing. I've just visited a community just north of Sydney where they have a community battery. So they haven't got individual batteries in the houses, about 128 houses and they all have solar more than they can use. But the excess goes into their one battery which you know, the cost of that was much less for each individual household than buying individual batteries. I mean that's a solution I've heard discussed a lot in Australia.
- [14:34]
Mark England
So we're talking a lot about community batteries. Some people like to call them neighborhood batteries. There's different ways to look at it or distribution connected batteries. The principle is that you share the value across three different groups or three different value pools. The network gets a benefit, the wholesale market can get a benefit and the customer can get a benefit. And so we've developed this product called Energy Storage as a service or ESAS is the acronym. Right, Whereby a network like OS grids can build the batteries in its system at the lowest cost possible. And the cost at the moment for a 10 megawatt hour community battery, we're building eight of them at the moment is about half the cost per kilowatt hour of a home battery. So that's really important from a societal cost perspective. Maybe we'll come back to that point. We then toll that battery or sign a sort of PPA type contract with a wholesale market participant. They trade the battery in the market. The customer who is connected in the network context to that battery gets to store their power during the day and have it back in the evening. And then as a network, because they haven't used the whole system, we give them a lower network charge because they're keeping that power locally. And that lower network charge allows them to get about a $200 saving on their annual electricity bill for the average customer. So it's a really interesting model where the industry is working out that as long as you share the value of that battery between a wholesale market participant, retail customer or a home, and the network, which has some benefits from that too, then you can get a good outcome. But I'll just give you a stat that's quite interesting for us. You know, even though 50% of the power on a hot sunny day in Sydney is, is probably being produced by rooftop solar, there is currently about 20, we estimate about 20 gigawatts of capacity on roofs that has not yet been tapped into.
- [16:28]
Robert Llewellyn
Wow.
- [16:29]
Mark England
And for perspective, the whole of OS grid's network's max capacity and the hottest day of the year in Sydney is about five and a half gigawatts.
- [16:37]
Robert Llewellyn
Oh, wow.
- [16:37]
Mark England
So we've got almost four times that untapped opportunity.
- [16:41]
Robert Llewellyn
Right.
- [16:41]
Mark England
But it's not sitting on mums and dads homes, it's sitting in warehouse roofs and supermarket roofs and shopping malls. And there's, there's a challenge in that. To date, a lot of that hasn't been, hasn't had solar put on the roof. Partly because there's a disconnect between the landlord and the tenant.
- [16:58]
Robert Llewellyn
Yeah.
- [16:58]
Mark England
And so we're working with policymakers in our regulator thinking, how do we solve that problem? Because we can solve that problem. We can get a lot more solar on the roof and if we can then, or downstream, if we can then store it locally to use in the evening, we're using community batteries or other batteries. We won't need these huge grid or not as many huge grid batteries, huge wind farms and huge network build outs. So it's a really interesting dynamic. Back to the point I made earlier. If we can turn this on its head instead of saying how do we replace coal with large wind farms and build all the network to enable that, what can we do close to demand, maximize that opportunity at the lowest cost possible and then make sure we can fulfill the rest of it upstream in the system.
- [17:41]
Robert Llewellyn
Yes. I mean it's.
- [17:42]
Mark England
Does that make sense?
- [17:43]
Robert Llewellyn
Yes. I mean what's great is I've just looked at my questions. You've answered about three in a row, which is fantastic. Thank you. Very much. That's really good. But I mean also that we recently another example of that was a really enormous distribution building just to the south of Sydney we filmed at, which is powering a electric truck battery charging system, which is fascinating, but I mean it's a colossal amount of salt because it's a massive building, you know, it's a brand new huge distribution warehouse and thank goodness they've actually built it with solar on the roof. So I don't know how. It's like a multiple megawatt solar system, but no one can see it. It's not in the way, it's not taking up land, it's on the roof of a building that's already there, you know. So.
- [18:29]
Mark England
Yeah. And the only problem today, the reason more of that hasn't been done is that the tenants often don't have particularly high electricity demand. Yeah. And the landlord hasn't got an incentive to offset the electricity demand anyway. So tenant doesn't know how long they're going to be there for either. So why would they put a solar system on the roof that's going to take 15 or 20 years to. To play out. So there's a. But we need to solve that. It's solvable, but we need to work collaboratively with those businesses and other parts of the sector to make it happen. But if we could make it happen, we could reduce the cost of this transition. Yes.
- [19:04]
Robert Llewellyn
And presumably you would also reduce the cost. I mean that was one of you could reduce the cost of electricity for an individual household or a small business as well. I mean, would that, would that, that be the case?
- [19:16]
Mark England
Possibly. We're considering a pilot. We're talking to our regulator here, the ar, about a local pilot where we test that model in extreme. So where we go into a particular suburb with a particular substation network. So we look at what we call zone substation. So zone substation is the interface, as I said, different size pipes earlier. It's taking a sort of 130 kilovolt or 66 kilovolt network and bringing it down to 11 kilowatts. So it serves a suburb, say 5 to 10,000 homes and businesses. So we're saying can we look downstream of that zone substation and maximize the opportunity for solar, maximize the opportunity for storage, whether it be behind the meter in homes and businesses or in front of the meter on the distribution network. Manage that effectively and efficiently to get the lowest cost system possible. And how much can we reduce the energy bill to those customers by. In that process? And we want to Test that. Because it requires quite a lot of coordination at the moment. The industry is quite fragmented. You've got customers deciding to do this over here, you've got businesses assigned to do that over there. And then the network tends to be. One of our challenges as a distribution network is we tend to come in behind it and go, now how do we make sure the network can enable that? Yeah, I often say, and I remember watching in the UK not long ago, there was a bank holiday weekend and everyone was off on a Friday and there was a whole lot of motorway service station chargers that couldn't be activated. And I often say it's quicker to install 100 high power chargers in a motorway service station than it is to enable the network behind it to fulfill that demand. So we worry in our part of the sector, how do we get in front of this? How do we not make sure end up being behind it and having to catch up? You know, we don't want to look at the bad guys. We want to enable this energy transition. So the pilot I'm talking about is to try and demonstrate that where we maybe take a more active role in where things go and how fast they get in, we might be able to create a lower cost system overall.
- [21:21]
Robert Llewellyn
Right. I mean, I think that's the thing that the general public, the general, you know, I hate the word consumer, but normal people aren't aware of, is that there is a, you know, you switch your light on and you just think where, you might think, where does that power come from? Is it a gas peer plant? Is it a nuclear, is it solar? You, you never, I, I'm talking for myself, I never considered the actual wire that brought it to my house. I never thought, oh yeah, I've got to pay for that too, because it's not there. It's not, you know, it had to be. Yeah, it had to be put in, you know, and you, it is the distribution cost is the thing that, that is often forgotten unless you look carefully or electricity bill and then you see, oh yeah, is in there somewhere.
- [22:02]
Mark England
It's true. But you shouldn't have to worry about it. I mean, I think there are lots of industries where you could say the same, where we don't really know how, don't really know how milk gets on the table, really. We know it comes from cows, but we don't all think about the process of getting it there. But I think supermarkets are a good analogy as well. There's a great, there's a great supermarket analogy. If you want to consider storage in Electricity.
- [22:24]
Robert Llewellyn
Right.
- [22:24]
Mark England
And it's that if we didn't have your local convenience store in the UK concept, the corner shop, if you didn't have that intermediary storing the milk or the fresh produce in your community, then supermarkets would have to be four times the size they are today.
- [22:40]
Robert Llewellyn
Wow.
- [22:40]
Mark England
Because you particularly. We want everything in real time. We want that milk to be fresh, fruit to be fresh, or the product refresh. Electricity is ultimately just a fresh product, it's in real time. So one of our arguments for distribution level storage is we are the convenience stores near homes that can be that intermediary between the upstream network and the home demand. And so it's just thinking through as a sector, what's the right. What's the right distribution of storage through the system is something we've got to do more of. But the supermarket analogy, you know, the complexity that goes into getting that milk. Yeah.
- [23:15]
Robert Llewellyn
Oh, God.
- [23:16]
Mark England
Or that fruit or that product to your supermarket or corner shop or convenience store is huge. But most people don't need to care about it.
- [23:23]
Robert Llewellyn
Yeah, no, no, we don't. I mean, it is one. I've always said it, the curse of adopting an electric vehicle, that when I first did was I started to think about where the electricity came from and then I went. I took a step back and go, well, wait a minute, where did the petrol come from? I'd never considered it. You know, just bought petrol, moaned that it was expensive and never thought about where it came from, what. What we had to do to get it, what, you know, the impact of it. And that's kind of. And then I went, oh. And I couldn't then stop thinking about it. You know, it was really annoying.
- [23:53]
Mark England
Well, but in some ways, did you find when you people who. I tend to find people who put solar on their roof or buy an ev.
- [23:59]
Robert Llewellyn
Yeah. Oh, yeah.
- [24:00]
Mark England
Suddenly become much more cognizant of what's going on in the electricity system and they think about what they do and when they do it.
- [24:05]
Robert Llewellyn
Yeah.
- [24:06]
Mark England
You probably found that that shifted for you because of that.
- [24:08]
Robert Llewellyn
Absolutely. No. Made an enormous impact. Yeah, absolutely. Absolutely. But then. So in the future, one of the things that we've heard discussed a lot while since I've been in Australia this time and it's been in the news, is the potential for using electric vehicles as storage. So V2G, as it's often, or Vita X, I prefer that one in a way because it can go all. In all sorts of places. I mean, your home or the grid or, you know, your neighbor's car, whatever. It is, but that. Is that something that you're discussing and developing and thinking about? Is that something that's, you know, is that a topic at the moment?
- [24:47]
Mark England
Well, it's a topic, but we're not doing anything about it because we, as a regulated monopoly, we can't operate in the home and not a retailer. So, right, we couldn't. We. We don't sell cars, we don't sell EV chargers and we don't connect things behind the meter. So it's not our realm, if you like. But we do care about it. We do. We do see that it is one of the many solutions to what we're talking about here, which is how do you keep the electrons close to where the demand is so they can be used when they're needed? There's obviously a lot of capacity in a car engine. A typical home battery might be 10 kilowatt hours, but a car, Car battery, not engine, sorry, is about 100 kilowatt hours. So you've got about 10 times the capacity in your car. So. So I think it will play a role. I heard you interview with Giles Parkinson, by the way, where he went through all the different lengths of this and I think he articulated quite well why this is complicated and there's so many different parties involved. Obviously, as a network, we'll be supportive as and when it's possible. I think my own personal opinion is the biggest barrier is going to be the car companies. I think all of us that own EVs, know that the biggest fear people have is that the residual value of your car, the second value of your car will deteriorate, the battery deteriorates. And I think most cars, Most people drive EVs know you probably charge your car and not even fully, maybe once, if not twice a week, unless you're on a long journey. So the idea of a car battery providing grid support on a routine daily basis, maybe once or twice a day, it is definitely going to deteriorate the life of that battery. So that technical problem will be solved in time. But my view is that's going to be what slows it down. And I've often said probably it's probably 10 years away before it's ubiquitous, prevalent in our. Yeah, so we've got a lot of problems to solve between now and then. And we can't wait for vehicle to grid. I think vehicle to home might play a role before Vehicle to grid, Robert, but I'm not the expert in it. Yeah, we would welcome it as and when it arrives because we see our role as managing an efficient reliable network but ensuring that customers can get the electrons when they need the electrons and anything we can do to support that the better.
- [26:55]
Robert Llewellyn
Yeah, no, I think you've hit the nail on the head with that. I mean it's something I've been waiting for and it's been discussed for at least 10 years and I've seen examples of it. I mean there are functioning examples of companies running car share cars. So in the Netherlands for example where the cars are by there connected bi directionally to their local city grid and they are, that is what the cars are doing. But they're not privately owned vehicles. They're, they're like car share vehicles but there's enough of them for it to make it. They've now got kind of the data that it's a measurable impact on the city's energy use. You know, the city is partly running on, on static electric cars in the evening which is really, you know, it does work. But I think what is great about those sort of projects is the, we will then see, we will then actually have data on what happens to the batteries in, in real life. You know, whether, you know, I, I.
- [27:54]
Mark England
I think it's a, it's not a technical problem. I think technically it's easily solved. I'm not an expert but I think, I think it's a commercial challenge around the life of the battery, the second hand value of the car.
- [28:03]
Robert Llewellyn
Yeah.
- [28:04]
Mark England
And, and really is it the role of someone's car? It's not the role of someone's car car or an individual in a home to manage grid energy security. So we got, are there lower cost ways of doing that?
- [28:15]
Robert Llewellyn
Yeah.
- [28:16]
Mark England
So one of, one of the things I think we will see more of and spend more time obviously in the next five to 10 years is making sure that where we've got the proliferation of EV charging, how do we down rate those charges in peak load periods, encourage people to charge in low, low demand periods and we soak up the surplus solar in the middle of the day. Yeah. Rather than use it in the evening. And so I think that that's going to have a bigger impact sooner on managing low cost system.
- [28:47]
Robert Llewellyn
I mean that is an interesting habit I've had to change since I've been in Australia. So I'm at my sister in law's house, she's also lent us her electric car and you know, she just left a note. Remember to charge the car during the day, not at night like you do in England. Which is really, really important because I mean I Do I will charge mine during the day in the summer in the uk because I've got, you know, enough solar to make that work. But, you know, generally speaking, my mind is I'll plug the car in at night when electricity is cheap and there's less demand. Well, that isn't the case. Well, there's less demand here, but it isn't cheaper, you know, and she's got a.
- [29:25]
Mark England
There's a large retailer here in Australia that's charging customers less for charging their car at night. Where we're all in the sector, we're wondering why they're doing that and not charging them less during the day. We can't quite understand that because if you're, if you're on a fixed price, you've got to use pricing to drive the customer behavior. Obviously if you're on a variable price, you see that dynamic. But I think a lot of charging will happen more slowly than people think as well. I think the UK already sees, if you're going around London, for example, you can see low power charging sitting in street, street lights. Yeah. And, and you know, when you look at that, you go, well, actually cars are parked most of the time, so they don't need to be charged really quickly. The only time you touch really quickly is on a long journey on a highway when you want to get out of there quickly. You don't want the kids to buy too much food at the shop. So most of the time our cars are in our garages, they're parked on the side of streets and when they charge is not critical to the customer proposition or customer outcome. And so I think as an industry, we can use time of use, tariffs and price signaling and controllable charges to make sure we create a more efficient network. Because just networks are, like I said earlier, the analogy of pipes. The pipe has to be as big as the highest demand on the highest demand day of the year at the peak time of day. So if we can use and you know, the curve of electricity and the end of day peak, if we can use more electricity in the middle of the day and bit at night, in some ways, from a grid perspective, that's almost free because the grid doesn't have to be any bigger. Yeah. So we can, we can get a higher level of utilization and then everyone is paying less per kilowatt hour if we're using the grid more efficiently.
- [31:02]
Robert Llewellyn
Yeah. Because I suppose if you've got a really big fat tube or pipe that can deal with that occasional, you know, spike in demand, that's a really expensive thing to put in for very limited use in that, you know, from that point, point of view, you know, to cover the cost of the big peak, you've got to put in something that can deal with that. And, and, but the rest of the time it's not, it's not, it's not being used fully, I guess. I'm guessing. Is that, would that be correct?
- [31:31]
Mark England
Yeah. And that's the challenge for all networks. And of course the cynics will say, the cynics will say our business models lead us to want to have a bigger peak because then we build a bigger network, we get a regulated return on our asset. But, but the truth is most people I met in the network world are good people who want to do the right thing. We understand this dilemma and we talk a lot about social license and regulatory license and we want to be able to demonstrate that we're creating a more efficient network that is being better utilized at the right times of day. So we need to find both through price signaling, sometimes we're experimenting with dynamic pricing too, that we can do that shift loads away from those peaks to avoid the problem you just described. But don't get me wrong, I've never believed that customers should have to be forced not to use power when they want it. So an individual customer wants to plug in at 6 or 7pm because they urgently need power in their car. They should always be able to do that. But in aggregate, when you look at thousands of customers across the network, the majority won't need to do that all the time. And so you can manage your utilization better.
- [32:40]
Robert Llewellyn
Yeah. And I mean, it is that the example, the example I've seen is in Norway because what you were saying about slower charging, it makes so much sense when you see it en masse. So I went into a big car park just outside Oslo. Huge car, multi story concrete car park. And I noticed that all those, you know, the first row of car spaces I saw all had charge points and with numerous cars plugged in. I mean, obviously Norway's in a very different. Well, but then I asked the people who were operating the garage how many of the spaces, how many spaces there were. And there was 780 or something. I said, well, how many have got charges? 780. They all had them. It was built with them in there. So any space that you park a car, you can charge it while you're not using it. And that makes to me so much more sense than, you know, spending a huge amount of money making, you know, rapid chargers everywhere. We don't need rapid charge as you say. We need them on routes, you know, longer routes. I've just used some between Brisbane and Sydney and I'm very grateful they're there.
- [33:43]
Mark England
Yeah, you need them when you need them.
- [33:45]
Robert Llewellyn
You do need them when you need to work. Yeah, yeah. But the rest of the time you just want to plug it in when you're not using it when it's parked, which is the vast majority of the time.
- [33:52]
Mark England
I, I survived for a year and a half as I moved from New Zealand and I hadn't had, I brought the EV with us but I hadn't put a charger in at home. I was actually renting. We were renting for the first nine months and then we moved into the new house but we hadn't put a charger in for a year and a half. We just plugged it into a 10amp socket and that was plenty for our car. That's because we just used it as a run around town. So yeah, I mean on a long journey we needed fast charging as you say. But most of the time you don't. I think there's that layer. But I think the point of this part of our discussion is quite interesting is when you think about vehicle to grid, the more important dynamic over the next 10 years is going to be as more EVs come in and we start to hopefully head towards where Norway is, we can better utilize the grid. Yeah. There's less of a peak in demand because the demand is spread out more.
- [34:39]
Robert Llewellyn
Yeah.
- [34:40]
Mark England
And that's only made possible by flexible demand. Demand that is discretionary because you go back 20 years before EVs and batteries.
- [34:49]
Robert Llewellyn
Yeah.
- [34:50]
Mark England
And even solar. Then a house just did what a house did when it needed to do it. Lights were on a certain time of day, the ovens are almost same time of the day. Posters popped and went. But you didn't really have much discretion. And what's really interesting about our sector, this energy transition, I often in my head I paint a picture of we're moving from demand being relatively rigid and supply power stations being very flat, flexible to meet that demand shape. So even though it's rigid, it had a shape to it. And we're moving to a world where supply is going to be quite rigid because the wind will only blow when the wind blows. You can't tell the wind to blow. Unlike you can turn on a gas fired power station. So there'll be more rigid supply than there was but demand is going to be much more flexible.
- [35:35]
Robert Llewellyn
Yeah.
- [35:36]
Mark England
And so we'll need that demand to flex to the rigid supply, if that makes sense. So, yeah, it's interesting. It's made possible. But again, back to your point made earlier, we've got to be careful. Consumers shouldn't have to worry about any of that. Yeah. It should just happen behind the scenes.
- [35:49]
Robert Llewellyn
Yeah. But also I think what you're, I think there's a background point that you were making there that I hadn't considered before. But we haven't yet sorted out grid to vehicle. You know, we're talking about vehicle to grid. We need. First of all, let's do grid to vehicle. So once that's sorted, we can then discuss the next step. Maybe.
- [36:06]
Mark England
I think I'll use that framing. I think it's a good way.
- [36:10]
Robert Llewellyn
Yeah, yeah.
- [36:11]
Mark England
We're running before we can walk.
- [36:13]
Robert Llewellyn
Exactly. Yes. Because there's, yes, there's plenty of car park spaces that have no chargers in all in the world. Yeah, yeah. So, yeah. Okay. So the other aspect then is, last aspect really, I would love to talk about is the maintenance of a grid because this is something I've definitely not considered until you get a power cut and then you consider the maintenance of the grid. So in particular, I've spent enough time in America to, in California to know that sometimes everything stops and the lights go out, you know, and we, and where I live in the uk, we're in a fairly remote rural area and we do get power cuts and I have, you know, batteries and gateways and all that stuff, so they don't generally affect me, but my neighbors come round to tell me there's a power cut. But. So that, that grid maintenance, is that a huge challenge in Australia? Is that a bigger challenge for you here than say in New Zealand just due to environmental things?
- [37:15]
Mark England
It's a challenge because it's a trade off between the cost of the system and the reliability or integrity of the system. You know, if you. We had a storm here in late January in New South Wales. We had maximum 110,000 customers at any point, but about 200,000 customers lost power from a period of time.
- [37:35]
Robert Llewellyn
Right.
- [37:35]
Mark England
And I, I, and being fairly new to this by the sector, I'm always fascinated. There's a relatively high tolerance for that, within reason.
- [37:43]
Robert Llewellyn
Yeah.
- [37:43]
Mark England
But if you think about it, the power should probably never go out. But yeah, in a storm when the wind blows and we all like trees, and we like trees down our roads and yeah, the trees interfere and occasionally the trees fall down, the only way to ensure the lights would never go out very rarely would be to put everything Underground.
- [37:59]
Robert Llewellyn
Yeah.
- [38:00]
Mark England
But the cost of putting everything on the ground is prohibitive. It's sort of four or five times the costs of an overhead line. And so in this, in this tension between reliability and ensuring the power doesn't go out and cost, we're trying to find the balance in that as a sector and obviously the regulator plays a role in that too.
- [38:19]
Robert Llewellyn
Right.
- [38:20]
Mark England
And I think as we go forward, and I think as climate change affects weather and storms become more frequent and perhaps more violent, we are going to have to spend more on the network to create more resilience in the network and avoid the power going out or when it does go out, getting it back up and running much faster. And that's going to have a cost. But that's the tension that we're all going to struggle with because we don't want consumers to have to pay more. But consumers also don't want to have to pay more. But it's interesting, we engage our customers in this. We've had community sessions, particularly up and down the central coast, so sort of north of Sydney, between Sydney and Newcastle, where east coast lows can come in. And generally when you talk to individual customers, they all want us to spend the money. When you think about the collective, no one wants to pay more. But if it's their individual street or their individual suburb, they want us to spend the money building that resilience and avoiding the power going out. And you mentioned maintaining the grid. I mean the vast majority of Osgrid people are focused on ensuring that the lights don't go out, that the grid's well maintained and that when they do go out, they get back up and running as fast as possible. So that's the core of our business and it's what most Osgrid people are focused on. So we take it pretty seriously.
- [39:35]
Robert Llewellyn
Yeah, but I mean, is a potential intermediate solution, say if there is like the project you were talking about, where you're going to try, you know, large battery and you know, integrated solar and battery in one suburb, is it potentially possible that that might be a buffer? Say if the, if the grid has gone down to that suburb, but they've got their own, if you like, internal network connected to a battery, is that, is that a potential solution?
- [40:08]
Mark England
Absolutely. So on my point earlier, that networks need to move from just transmitting electrons over distance to also transmitting them over time. If you have storage in the lower voltage part of the network, I mean our network is multi layered voltages, the lower voltage part of the network close to demand, then an outage upstream of that may not affect the homes downstream of the battery because the battery will supply them. And so we do see that future and we do think that's the way we need to go to build some of that resilience. It serves that purpose. It also ensures that surplus solar is absorbed like a sponge in the middle of the day. That we don't get the network integrity issues that we may have talked about earlier. So yeah, absolutely. I think it's going to be about where you put them, putting them in the right place, what the size are. And then back to my commentary earlier. It's how we share the value of those batteries between the wholesale market, retail customers and the network. So you've described a benefit for the network and on the batteries we're installing at the moment and where we're tolling them with generator retailers. We have 40 hours a year where we can as a network call on those batteries so that we building them and we're creating this platform. Right. We're handing over the operation of them to those participating in the wholesale market. We still have the right to call on them for 40 hours of the year. And one of those hours could be just after the storm passes.
- [41:32]
Robert Llewellyn
Right. That is really interesting.
- [41:34]
Mark England
Okay. It is going to be an important part of how the network evolves to be a much more flexible dynamic thing rather than a very rigid. It was built as a rigid, inflexible, electrons flowing one direction system and of course electrons going more than one way and technology evolving. We need it to be much more flexible. More of an accordion. Maybe you now.
- [41:54]
Robert Llewellyn
Right. I mean what, the way you've described what you're working on just sounds very impressive. I'm really, really impressed by that. But are you aware it's like globally, are these sort of ideas and notions being discussed in grids in, you know, countries around the world? I mean is it, is it a topic that's relevant globally?
- [42:18]
Mark England
Yes. So because Australia has one of the highest penetrations of rooftop solar, I think we're facing this problem sooner.
- [42:26]
Robert Llewellyn
Right.
- [42:27]
Mark England
California is, got similar dynamics. So there's a lot more storage per capita battery storage in California today than there is in Australia. But my, my, my assessment is Australia is moving much faster and will overtake California in the next couple of years. Right. Wow. I think what's what we're not, what I'm not seeing anywhere else and we've, we've gone and tested this in other places too. I'm not seeing as much focus on low voltage distribution storage. So the type of storage I'm talking about the community batteries sitting in next to an 11 kilovolt substation. They're about the size of a basketball court. So the one. So the ones done in Australia so far, apart from a few in Queensland, are generally smaller than that. But we're heading towards a kind of basketball size, 5 megawatt, 10 megawatt hour. They're the ones that we can get the cost right down to be about half the cost of a home battery. I'm not seeing the business model I discussed just now with shared benefits being replicated anywhere else.
- [43:20]
Robert Llewellyn
Right.
- [43:22]
Mark England
It may be in other ways. So I think it's really interesting as this transition evolves, we're all going to need to learn off each other. We do quite a lot of benchmarking around the world, but I think every market will evolve slightly differently depending on its specific dynamics.
- [43:36]
Robert Llewellyn
Now it is fascinating, a privilege for me to see. For instance, British Columbia in Canada, you know, is effectively kind of 90% hydro hydroelectric powered and has been for many decades. It's not new. And you just sort of sense the difference in how people view their electricity, how they view how they use it, where it's from, you know, the impacts and the negative sides of, you know, massive hydro. You know, when you go to a really big hydroelectric dam you go, that's had a big impact on the local environment. You know, as it's flooded a valley for like 40 miles. You know, it's really huge, but it produces governmental amounts of electricity. You know, it's a, it's a. There's always.
- [44:19]
Mark England
I'd experience that in New Zealand. New Zealand has about 60 hydro. And you know what's interesting about a hydro dominated wholesale market is you can build wind more easily because you can firm the wind, because when the wind's blowing you can just store the water for a bit longer. I mean they're just big batteries, just energy storage, but just water rather than lithium ion. Yeah. And so I think those, Canada and New Zealand have one advantage in this transition from a, from an overall market perspective, which is they can absorb more wind if they need to. Whereas I think in Australia we've got very little hydro. It's about 6% of the energy system and very expensive to build it now. And so the batteries are going to have to play that role as more wind and more solar is put in. I think another point I make you don't mind is we talk about the missing middle in Osgood. What we mean by that there's a lot of narrative around high voltage transmission lines, large Wind farms. There's a lot of narrative about what happens down at the customer level in the middle. And I mentioned earlier, we go up to 132 kilovolts. We're demonstrating that at that level you can build more network to enable more grid scale wind and solar and a much lower cost at higher voltages. So we were successful in winning a tender with the New South Wales government in December this year to build what's called here the Hunter Central Coast Renewable Energy Zone, which is one of the five. And it's about the cost of building that to enable a gigawatt of wind is about a third of the cost of building a high voltage, much larger network to support the same thing.
- [45:56]
Robert Llewellyn
Right, right.
- [45:57]
Mark England
And there's a number of reasons for that. One is we're using existing infrastructure where we can, so we're reusing that and augmenting where we have to, but we're also using existing easements, which is where the lines are going down avenues in the forest or through communities. And so we're not, we're not asking for farmers to give up a lot of new land in order to build these networks. So we have this saying that if we can do it at a lower cost, if we can do it cheaper, and if we can do it with a less negative consequence to communities, we should be doing it. And so we're trying to make the case here that middle layer in the energy transition, the kind of medium voltage and lower voltage distribution networks, have so much opportunity. Opportunity. And you've heard me talk about some of it today. Yeah, we need to use it more. We need to use it more. And we're not, we're not factoring it enough in the narrative that's.
- [46:50]
Robert Llewellyn
I mean, I'm so glad you brought that up because one of my notes was, what's the missing middle? And I forgot to ask you, but I mean, it is a critically and it's a thing I'm determined to, to discuss when I get back to the UK about them, because it's. So obviously there's. That's the area where you can have an enormous amount of impact, where you can probably have more people involved that under. That want to understand it and also at less cost and massive, you know, what we're. Well, like we're doing in the uk, you know, huge offshore wind, it's proving to be successful, but at the cost of it is. It's substantial and, you know, there might be ways of using that power more effectively, more locally, which is a really interesting argument.
- [47:33]
Mark England
Well, the middle, as we call the missing middle, can't solve everything. But it can definitely de risk, it can definitely de risk the energy transition because it's too much of the mind space. In Australia today, my view has been focused on the high voltage stuff.
- [47:48]
Robert Llewellyn
Yeah.
- [47:49]
Mark England
And some people are struggling to. It's more complex. Not complex sounds arrogant. It's just more complicated. When you get into low voltage network, there's many more distributors, as many more regions. There's differences in how we work and so it's harder to model. That's one of the problems and. But we've, we're all, all of us in distribution land are all saying the same thing, which is there is this opportunity that's going begging both, as I mentioned earlier on warehouse roofs to put much more solar which far exceeds our demand in our networks today. If we could store it and use it at the right time and then what's that? And in fact just on that point, Robert, we estimate some of our areas, all the demand from residential homes and small and medium businesses could probably be fulfilled with rooftop solar as long as we can store it and use it at the right time.
- [48:36]
Robert Llewellyn
Right.
- [48:37]
Mark England
And then that leads you to go large industry needs to be fulfilled by the larger scale renewable projects and high voltage transmission. But anyway, so that's what we talk about here. I think just a point on the uk. I don't know everything about the UK is a while since has there. But I do think the UK has built quite a lot of medium scale solar and you see it driving down the M4, up the M1, see what used to be fields of farmland have now got solar in them. And so it's sort of 10, 20, 30 megawatt solar systems have been put in, which is interesting. We haven't had that here. We've had lots of rooftop solar, sort of 5 kilowatts and then some really large scale 400 megawatt systems out in the bush. We haven't done that middle bit. That's kind of what we're on. But I think in the UK you can test it when you go back, but I think the UK has probably done a bit more in the middle than we have.
- [49:30]
Robert Llewellyn
Yeah, yeah. I mean it's been really fascinating. Mark, thank you so much for. I think we've, you know, I could grill you for another two hours, but I mean that is. But you've done such a brilliant job explaining how, how you're working, what your projects are, what you're doing, the way you see things, it's been genuinely Fascinating. And I mean, I hope we can repeat this in a year's time.
- [49:58]
Mark England
Yeah, sure, we'd be glad to. And well done you, because I think it's hot. This is. These are all fairly complicated, nuanced electricity things, but you're trying to bring it alive for people, so well done. I've listened to a couple of your podcasts and trying to keep it simple has got to be one of the mandates.
- [50:14]
Robert Llewellyn
Well, I always thought that was. In fact, it wasn't me saying this, it was a producer I worked with many years ago on old fashioned television and I said, why do you ask me to do this stuff? I'm not academic, I'm not very bright. And he went, if you can understand it, and believe me, that's a struggle, but if you can understand it, then a 12 year old can. So, you know, that's why, that's why he wanted to use me.
- [50:36]
Mark England
I would take that as a compliment.
- [50:38]
Robert Llewellyn
I will take that as a compliment, but thank you so much, Mike. It's been really fascinating talking to you. Really good stuff and all power to you. Well, I really hope you enjoyed that. I mean, I certainly learned a lot, a lot about the Australian grid and the challenges that it's faced with and I quite like that. I'm going to stick with that. You know, vehicle to grid, really important. But what about grid to vehicle? Can we solve that first? That is just sort of came naturally out of the conversation. That was really good. I'm going to write that one down so I don't forget it. Anyway, that's all. Please do tell your friends about the Fully Charged show podcast. Please do tell them about the Everything Electric Show. Please do tell them about the Fully Charged Show. Our big original company with well over a million subscribers now and still growing. But that's it. As always, if you have been. Thank you for watching.