Working towards a 21st century power grid: The world’s largest power grid operators meet to share common challenges at GO15

AEMO

Energy Source and Distribution met with the governing board of GO15, a voluntary initiative of the world’s 16 largest power grid operators – representing more than 70 per cent of the world’s electricity demand – to discuss the changing nature of today’s grid and what transmission and distribution bodies can do to ensure the lights stay on for years to come.

In March, the Australian Energy Market Operator (AEMO) hosted GO15 – the Reliable and Sustainable Power Grids Governing Board. The meeting saw the top tier of the world’s transmission and distribution companies assemble in Sydney to progress strategic issues facing large power grids and their operators.

With an overarching objective to develop, maintain and operate reliable, safe and cost-effective power grids, roundtable discussions focused on the integration of renewable energy generation. The reliability and resilience of grid infrastructure – both now and into the future – was also a key concern, along with the economic integration of renewables and IT and communication efficiencies.

Of course, being from a range of countries, the operators involved with GO15 experience different kinds of regulation, power systems, energy mixes and histories. Nonetheless, there are certainly central concerns that are shared by most, if not all, members. The forum, therefore, is a space for the electricity industry’s chief executive officers to come together and share their own nuanced experiences of operating power grids under increasingly challenging circumstances – changing regulatory frameworks, price hikes, ageing infrastructure and severe weather events among the most common.

For AEMO executive general manager corporate development David Swift, the roundtable discussions that come out of GO15 present phenomenal opportunities for all members, including the Australian representation, to tap into international expertise.

“From AEMO’s point of view, the interesting thing is we hear very senior people from around the world discussing many of the same issues we face here in Australia. They may have some nuances, but basically, grids from around the world are facing very similar challenges. How are our economics going to change with the integration of large amounts of renewables, largely wind? How do we ensure reliability of grid infrastructure, especially in light of extreme weather events?” he says.

“We need to work together in these kind of international working groups to share the information we have each obtained.”

With Australia and New Zealand hosting some of the most sophisticated power systems in the world, Belgium-based 50Hertz GmbH president Daniel Dobbeni says the knowledge sharing is, “a two-way street”.

“Many of our members are also learning from Australia. In fact, the basic principles of the Australian and New Zealand market are shared with the US, so there is much to exchange,” he says.

“The fact CEOs get to meet and talk at a face-to-face level is unique in this industry. And, the fact we’re not too big either, means we can generate real and meaningful discussion about best practice, regulation and so on.”

The association certainly has the power to become a strong voice for large grid operators globally. Its 16 members represent more than 70 per cent of the electricity demand in the world, provide electricity to more than 3 billion consumers and are responsible for integration of 527,000MW of renewable generation into the grid, constituting 21 per cent of their total generation capacity. Members operate 2 million kilometres of electricity transmission lines and serve more than 10,000 terawatts hours of electricity load, annually.

Formally named VLPGO (Very Large Grid Operators Association), GO15 was created in 2004 following several blackouts across the world to investigate fundamental issues of common interest to its members and to develop joint action plans addressing the improvement of power system security.

In 2009, VLPGO became a formal organisation. Today, the GO15 members are KPX (South Korea), MISO and PJM (US), National Grid (UK), ONS (Brazil), PGCIL (India), RTE (France), SGCC (China), CSG (China), SO UPS (Russia), TEPCO (Japan), TERNA (Italy), ESKOM (South Africa), REE (Spain), ELIA Group (Belgium), AEMO (Australia).

With a vision to be a catalyst in the transition of the electric power industry to the power grid of the 21st century, the group acts on behalf of both consumers and industry to ensure quality while minimising costs and recognising economic and societal dependence on electricity. As interlocutors with power exchanges, regulators and governments, the group also provides technical leadership in planning, designing and managing power systems and serves as an interface among direct users of the transmission grid: generators, market participants and distributors.

The group has also recognised a need for a framework for mutual assistance, and today, members have access to a co-ordinated database outlining a network of power grid operators who can help in the event of an electricity crisis. The initiative was started the day after the Japanese tsunami in 2011, when the group found it wanted to offer assistance to the Japanese power grid operators, but didn’t know the best way to go about it.

“We talk about the nuclear power plant being affected by the tsunami, but the transmission network and distribution network was tremendously hit. When you’re faced with a major incident of that size you just don’t know what to do when people call you saying, ‘I’m ready to help’,” GO15 secretary general and utility software executive Alain Steven says.

“You know you’d love to receive support, but you don’t know how to make it feasible to move equipment or people to your location. And, if you don’t prepare the help coming from outside, it’s completely useless.”

In response, members strategised the best ways to co-ordinate international support in the event of an electricity crisis, including ways to overcome language and logistical difficulties.

“We had a major storm in Belgium at one point and absolutely needed some support, in fact we needed a 380kV transformer. Someone had it, but to move it from one place in France to where we needed it in Belgium was a nightmare, even if it was Europe. Then we had to bring it back. So we finally decided to buy it because it was more complicated and expensive to send it back,” Daniel says.

“But now, if there is an event, there is a network of people in our system. I know who to call and who is expecting what and so on.”

Since GO15 was conceived a decade ago, members have brought a number of different concerns to the table – and in 2014, the key topic is definitely resilience. And, with a series of major weather-related incidents occurring in the past few years, particularly in the US and in Australia, it’s not surprising the concept of grid durability is ripe for discussion.

Terry Boston, president and CEO of PJM – a transmission organisation that co-ordinates the movement of wholesale electricity in the US – agrees.

“Resilience was not really an issue in the US before the last three years, but with the severe weather – the hurricanes and so on – we’ve started asking, ‘should we go ahead with a centralised system and increase the meshing, for example, the capabilities for the system to withstand major weather induced problems, or should we evolve towards more decentralised systems as was the case in the past?” he says.

“It’s become a priority at the government level in the US, in terms of policy and regulation, and when it came to us we says, ‘yes indeed, this is very good and topical information for all other countries. Let’s discuss what it means for us. What are the consequences? How we can prepare for this? Should we contribute to it? How do we as companies consider the issue of resilience?’”

Indeed, transmission is an evolving business and industry’s discussions need to move with the times.

“The power systems on this planet are changing faster than has been the case for the past 100 years all across the planet,” Alain says.

“As stated in our Declaration on Power Grid Investments, a document put together by the CEO members of the GO15 members in New York in 2013 we do recognise the current rate of change in the electricity is unprecedented and presents many emerging challenges driven – challenges driven by the transition of lower emissions generation and a changing fuel mix, as well as changes in technology, economic factors and consumer behaviour.

“We understand such challenges require power grids to be strengthened and expanded in many regions of the world and that major investment will be necessary to upgrade grid infrastructure and to expand interconnections between power systems.”

The 2013 declaration also recognises investment is needed to develop the information technology systems and smart IT systems required for the monitoring and control of power flows under increasingly complex operational conditions.

Of course, as the top-down energy model of the last 100 years moves towards a more consumer-driven paradigm, CEOs are having to completely change the way they view the electricity industry – a challenge the group is quick to discuss.

“The grid is fundamentally changing. Active generation is going to be more and more embedded into distribution. Electronic vehicles can be a big load at one time and an energy generation at another time,” Alain says.

“In Brussels, we started talking to the association of European Distribution Operators about the future of the grid and what it will look like, including the network of micro grids,” David adds.

“We are participating in an international group looking at modelling of grids and understanding how they operate with storage and EVs and so on, which has been very useful for a lot of people across the organisation.

“The relationship between distribution system operators and transmission system operators is going to change tremendously in the next few years. We see this happening all over Europe. How to tackle this from a company perspective, how to promote this evolution, how to handle it – this is the reason we try to also co-operate with the association of distribution systems.”

Despite being 10 years old, in the scheme of international associations, GO15 is still a relatively young initiative. The group’s leaders acknowledge it is not yet well known enough to truly influence many regulatory frameworks. In an effort to boost its profile on a global level, the group has recently been very active in creating partnerships with several autonomous organisations that work to ensure reliable, secure and affordable energy, including the International Energy Agency. The association is also in the process of distributing its first brochure, explaining its goals to further power grids and develop supporting infrastructure.

“An important step was to form a partnership with the World Association of Regulators because regulators are our normal partners, in terms of the distribution of electricity being a regulated business,” Alain says.

“Knowing our members are in charge of 70 per cent of the world’s electricity demand, I think we really can help governments and regulators think of the electricity system in a different way. I think we are doing a good job, as an independent group of experts.”

“As a CEO, I’ve realised you can’t impose trust on people. You may write a paper and say, ‘from tomorrow we will trust each other’, but that will not work. People need to exchange emails, to talk to each other, to earn each others trust.

“There is trust today amongst the industry and that’s fundamental if we want to exchange information and to improve best practices.”