 Okay, so do I, okay, thank you. So just about the Royal Irish Academy, it's not my idea. I know that you guys have the queen as your head of state, but we don't. But it's a throw over to the past. It's sort of, it is our National Science Academy and you have to join. And I was gonna try and, I proposed to change its name, but I don't have time to fight that battle. But it is, all my friends in Europe always like me about it, it's the Royal Irish Academy. Okay, so I'll start off just by just making some introductory remarks. This topic, which is supply, demand, balance, and integrate areas is the role of demand and storage. It's a very complicated area. It's a very complex issue, many different technologies, many different applications. I've shown here a picture of a battery in a, I think that's a, it's some sort of air conditioning device that is supposed to represent storage and demand. Renewables are tied to storage and demand, but not in a fundamental way. One of the things that's going on is with a lot of renewables coming onto the system, people are sort of equating the two things together. There's no fundamental link between them. Cost trend and batteries are definitely coming down, mainly because of mobile iPhones and also electric vehicles, et cetera. The regulatory and policy framework is very important. You know, you can get a situation where technology is good enough, but there's rules against it, et cetera. It's very system specific though. What works in one system may not work in another. And it has much to do with the regular, you know, the rules and regulations, et cetera, et cetera. So you can't take the fact that it's working in one system to say it'll transfer. Because the system, the energy system is not just an engineering and economic system, it's an engineering and economic system. It's got a lot of history in it. You know, as I was discussing with the students today, a lot of the history of New Zealand actually is still present in the current market because of historical reasons. And the same is true in every country in the world. So it's a very emotive subject. Because a lot of people are believers. You know, they actually, they believe in demands of management, they believe in storage. And it's extremely difficult to make definitive statements because of all these things. It's very difficult for me to say, this is true, this is false, because every system is different, every circumstance is different. Before I go on though, one of the things Diana brought me today to see you have a visiting fellow. What's he called? What's he called? What's he called? Hood. The Hood Fellow, yeah? So I Googled him. And I'm in competition with him because he's on to see me at six o'clock. So he put me head to head against a cartoonist. So, you know, and I think he's actually, I would have liked to come to myself because I think he's quite good. So I'm in competition with a cartoonist tonight, which just shows you the level of respect that you give me. So in order to compete with the cartoonist though, I decided to do a few cartoon things myself. So if you look, if you go on, I'm a great believer in Google. Not that I believe anything that's on it. It's all, a lot of it's nonsense, but it's interesting to go on Google and just put in a few words. So batteries that will save the planet. I mean, this is in Newsweek, you know, Newsweek is not a, as Mr. Trump would say, it's not fake news. Well, it might be, but, you know, Newsweek is a respectable magazine of some description. And they have a headline that says batteries will save the planet. So this is why it's a motive, okay? This is even far worse though. This is one of our commissioners. Europe is a federation, essentially. The commissioners are effectively cabinet ministers in a federation if you want, okay? They're not elected though. This is a man called Marcus. I can never pronounce his second name. And he states that smart grids balancing intermittent solar and wind energy will flex the power of the man. Could do for Europe what shale gas is done for the United States. More nonsense statement you couldn't make in your entire life. It's rubbish. Mind you, it was said on the 1st of April, which I have to wonder was it an April fool's joke. I had lunch with the guy. He actually believes this, which is a real shame. But then again, you get some people saying really stupid things, you know? Eddie Jones, how England would beat the All Blacks. So that's nonsense too. But then Ireland did beat them a few weeks later. So, and then you could go talk about Mr. Trump, et cetera. Anyway, stuff happens. So, my research involvement in this, in the area of storage and demand side, is actually, I mean, I don't want to sound negative. I've got involved in it not because I'm a believer, but because it's something that people talk about and therefore I think people like me have to define exactly how good or bad it is. My main claim to fame is renewable integration and I've done a lot of that. And I got involved in storage and demand side. Not because I believe it's fundamentally a big item. I just, so many people are interested in it. It's time to do some work and to try and bring some objectivity to it. So, somebody met me yesterday and said you've published papers in demand side. I have. But if you look at them, I'm not exactly saying it's gonna solve everything. So I'm not a believer. I'm just an objective, okay? At least I hope so. So, the two things that are, the two major things that have been involved in the last couple of years that are relevant to storage and demand side are the European Academy of Sciences. So it's all the science academies of Europe come together. They have this European Academy of Sciences energy panel. I'm a member of it. And I chaired a group that's doing a study on storage. ESAC Electricity Storage Study, Value and Dedicated Storage and Electricity Grids. It's not actually published yet. It'll be published sometimes in mid-2017. We spent two or three years doing this report. So, I mean, I've gained a lot of experience from that. I've also made some very good electrochemists and people who are into technology. And then, this study from the Department of Energy in the United States, we did in 2011, it's Demand Response and Energy Storage Integration Study. So, these are two, a European study and a US study. I was a scientific advisor and the one on the right and the one on the left and the chairman. So, I'm just trying to make the point that I have very broad, I'm not an expert in a lot of these things, but very broad experience that I bring to this. So, let's talk about storage. I'll deal with storage, then I'll deal with demand side and then I'll try. They are very similar. Does everyone know why they're similar? Does everyone know why they're similar? Why is storage and demand side similar? Yeah, well, you mean storage, dedicated storage is I put energy into something, I take it back. Demand side, to some extent, is that you delay using the energy and give it, so you shift the energy around. So, to some extent, they're similar, but they're not the same. They are similar, though. And they're both very topical at the moment. So, you can deal with them together, but you must know that they are different. So, if you look at electricity storage technology, the main, oh yeah, this is the first time I've ever given a talk where wine is served beforehand. So, I don't think you should serve wine to an Irish man on the day before St. Patrick's Day. And it's Pinot Noir, which I really like. I really like Pinot Noir, so it's my favorite wine. So, if you look at electricity storage technologies in the world today, most of the storage technologies is PumTiger storage, PHS, which is here in the blue. Like it's 95% of the install capacity is PumTiger. The rest of it, then, is in batteries, flywheels, et cetera, over here. So, pretty much, this is the bulk of it, okay? If you look at the history of it, though, of PumTiger storage, the picture on the left shows two lakes, one high, one low. That's actually Pum Storage Station in Ireland. The station itself is inside the mountain, okay? But the lake on the bottom was natural. The lake on the top was built by a bunch of civil engineers who dug a big hole. And if you take the data, so this data comes from the IEA. The IEA asked me and some of my colleagues to do a little bit of work on storage. And we asked them for the OECD data on nuclear build and storage, PumTiger storage build in the world. And we plotted them. And, you know, there's the plots. They are the real... I'm not saying cause and effect, yeah? I'm not saying cause and effect. But in fact, if you talk to some of the engineers who were in GE or Westinghouse or some of those people who were now retired, they will tell you that largely speaking that PumTiger storage was being built while nuclear was being built because nuclear was very inflexible, base loaded plant, okay? And they sort of felt they couldn't turn it off. You know, nuclear's not exactly flexible. You don't want to mess with it. And they sort of said, well, maybe we should store the energy during the night when we're not using it. And also at the peak, right? It was generally oiled. So you had nuclear at the base, oil at the peak, the price spread was enormous. Now, I'm not saying that's a generality for the whole world, but that's effectively what was happening in the United States and Europe. So you had base loaded nuclear at night, peak oil, and the price spread was nearly five times. I mean, oil generation is very expensive. So in fact, the driver behind PumTiger storage was essentially nuclear, and then with oil at the peak. They then flattened out around the 19, what is it? Yeah, the 1990s come along, 1980s. And what happens is that we suddenly realized all this gas that we're flaring off in the atmosphere, you could actually use it for something useful. People invented combined cycle gas turbines, and all of a sudden there was a dash for gas. If you look at most, again, this is generality, but if you look at most systems in the world today, the large ones, the base, what sets the price at night and what sets the price today is largely gas and gas. Largely, but not always. So the price spread has collapsed. Therefore, there's no economic reason for PumTiger storage. Now, that is, I'm not saying we've done a rigorous study on it. That's the data. These are the stories I've been told by my colleagues who are retired, and I think it makes a lot of sense. So that's why there's an awful lot of PumTiger on the system to start with. So you can discount it now because the reason for building it is gone. And in fact, nobody I know in the world is currently building a PumTiger station. I've heard people say they're building it, but I've never actually heard anyone say they've finished one. So there's all sorts of stories about it. If anyone finds someone, build them one, let me know. I think in China, they might be building one. Then again, in China, they build all sorts of things. If you go to island applications, the gentleman with the jeans and the check shirt is a man called Nick Miller, when he was very much younger than he is now. He's a friend of mine in GE. And he installed, it's actually on the mainland in Alaska, but it's an island system in terms of electricity because it's so remote. And it's called, I can't remember, it's meta. I can never pronounce it, but any, you can see it there. It's some small community in Alaska. It's almost down beside Canada. And if you are generating electricity there, how are you doing it? You're actually sending fuel oil from Alaska down by a pipeline to the U.S. They refine it and then they send it up by ship to generate electricity. So it's enormously expensive. Like electricity there is four or five, six times what it is on the mainland, so to speak. So it's very expensive. So in very expensive, very remote areas, batteries do make sense. They do make sense. And in fact, that set of batteries was replaced recently. So there are business cases where it does work, but in general it doesn't. So recently, Nick Miller and some of his colleagues wrote this article in 2012. And it said, look before you leap the role of energy storage in the grid. And they actually use this as a case study. They say, look, you can put it on islands, but it doesn't make sense generally. And the answer is no, economically, it does not make sense generally. Then you have, I'm gonna talk mainly about winds, because wind is the area I know best, but solar is similar if you want, okay? So this is an article in the IEEE Power and Energy magazine. Again, you can actually see Nick Miller's name there, my name there. So we wrote this article, wind power midst debunked. There's lots of myths about wind power, you know? I don't know, there's lots of myths about it anyway. It doesn't have any capacity value. One of the myths is that wind needs storage. That's completely and absolutely untrue. And yet people keep saying it. It does not need storage. It'd be nice to have it, but it doesn't need it. It doesn't need it at all. So if you look at storage and demand response together, we'd wind them solar. The things that wind, that storage and demand response can do, you know, with an intermittent source like wind or solar is that, you know, energy arbitrage. So, you know, sometimes you have to dump the wind. Sometimes you've got too much of it. Sometimes you've got too much solar. So you can do arbitrage. You can store it for later time. That's one application. Ancillary services, you can produce reserves, et cetera, with storage and wind generally needs more ancillary services and solar does too. Capacity value. So the capacity value effectively, it's not as special as always. All I say is that it's a value, it's a quantification of the, yeah, it's a quantification of the amount of extra customers you can serve and maintain the same level of reliability with a generator. So if I have a 100 megawatt generator and it's capacity value is 80%, it means you can serve 80 megawatts more load continuously during the year, maintain the same level of reliability. It can never be greater than 100%, obviously. And the reason it's below 100% is because of maintenance and because sometimes it breaks down, okay? So the capacity value, so storage can produce capacity value. Network investment deferral. Some people say that, you know, if you wanna build a new piece of network, you can avoid it by putting in storage or demand side. These are all the application areas, okay? And they are, you know, storage and demand side are good compatible fit with these things. But the question is, is it worth it, you know? Because storage is very expensive, yeah? I mean, battery storage, pumped hydro are extremely expensive. In fact, if you do the numbers on it, a storage device will always be more, well, I could get shot for this someday, but I've said it many times around the world, no one has ever told me I'm wrong, so I'll say it here now. Storage device is always more expensive than its equivalent generator. And the reason is, is because you have to have a generator plus some sort of storage device, civil engineering works, chemicals, whatever. And so effectively, you sort of say to yourself, you know, combined cycle gas turbine of 500 megawatts, storage device of 500 megawatts, the storage device will always be more expensive because you have to go, you know, drill a hole in the mountain or something like that. So generally speaking, they're more expensive. And also they've round trip efficiency losses. What goes in does not come out. And those losses, although people will quote them at 90% and 80%, generally speaking, in real operation, they're much lower, much, much lower. They always, it's like the car salesman sells you the car and says that he gets 75 miles per gallon. But that's only if you're a 70 year old lady driving on the motorway, it's a perfect weather, et cetera. You're not like me trying to rush to something, you get 60. So generally speaking, they have round trip efficiencies, they're far less than 70% or 70% or less. So the question is, is are they worth it? So let's talk about the place I'm from Ireland. So we do have a pump storage station, there it is there, it's called Turla Kill. It's a 292 megawatt station and has six hours worth of storage. So here's a question for you. And I'm not gonna go on unless somebody answers it. The total energy that's stored in that device would last for how long in the Irish system if you display the entire energy system from it? Quick calculation, it's 290 megawatts last for six hours. How much energy, if I was to take that energy and say I couldn't, I only could use that energy for the country on average, how long would it last? No? Who said 10 minutes? Anyone else? What about six hours? Huh? Six hours? Six hours? Yeah. Is that bottle for me, is it? Is it? You want a bottle of wine, because they're gonna give me a bottle of wine after this. And I can't bring it. 20 minutes. There you go. Thank you. I hope it was for me, was it? Given a man who's gonna travel on an airplane and a bottle of wine is not a sensible idea. You can ship it to me, though. It lasts 20 minutes, okay? So there's not a lot of energy storage under certain support. If you look at these pictures, though, this is us visiting Turley Hill, these are some students. It's a great site to visit. It's literally, they dug a tunnel into it, they dug a big, or they put a big drill, the big hole, et cetera. It was a big civil engineering project. And the interesting thing is that this lady here, there, is called Neve O'Connell, and this is 2005. And this is Neve's PhD thesis in 2015. And she worked in demand response, and I was a co-supervisor in DTU. So that's Pump Storage in Ireland. We do have one, and I'm gonna say some more about it later. If you look at Wind in Ireland here, here it is over the past 16 or 17 years. We currently guess, well, this is 2017. This year we're probably gonna get 26% of all our electricity from wind, okay? 86% per seat, a quarter of it. Yeah. Ireland has the highest penetration of wind power in the world of any synchronous power system. There's no water system, that's a synchronous power system it has. So, 26%, if you look at 2011 there, in 2011, the Pump Storage Station we had was out on maintenance. Well, actually, one of them went out on maintenance and they found a crack in it, and it turns out all four of them had it. It was one of those systemic, put in mind that these are 40 years old. So they took the entire station out of action. The system still ran fine. It's a little bit more expensive because of ancillary services, but nonetheless the system survived. And the interconnector was down as well with the UK. So for a whole year we survived with nearly 18% wind, no problems whatsoever running the system, okay? We were asked then in 2008, we did a study for the Irish government to see how far we could go. And they set a target of 40% on the base of our study. And we're going to 40% by 2020. And in the study, we did not include storage. And the reason we didn't include storage is because me and a PhD student sat down one day, looked at it, and in 20 minutes on the back of an envelope we decided it's too expensive. I mean, engineers can do calculations like that, yeah? It's easy, it's very easy. But then we were asked, well, you know, the public doesn't believe you, blah, blah, blah. So we had to go off and do the numbers, right? And we did the numbers. And this shows you the net savings with storage on the Irish system. Now, I won't go into the whole details of this study, but fundamentally if you look at anything that's above the line, it turns out there's a net saving below the line, it does a net loss, okay? So it passes through the line at 51%. So once you go over 51% wind in our system and average energy, it turns out that the economics of storage may actually make sense. However, here's the fundamental question. We didn't compare it with anything else. We didn't say it was an option to build more transmission. We didn't, you know, we didn't compare it. We just said that's the only thing you can do when does it make sense. Before that, before 50%, you wouldn't build it. If you built it before 50%, it would be a poor investment, right? If you build it after 50%, be good investment. But we did not compare it with other options. And if you compare it with other options, it loses. So that is the best case scenario, 50%. So storage applications and its competitors. So this is this IEA study that we did. We did a table. The thing about storage is it has, so which one is the storage? The sumo wrestler or the kid? It's the kid. It has no chance because it's storage, is there any, okay, does this system, the New Zealand, does it have any, now I know it has a lot of hydro. That's not what I'm talking about. Does it have any dedicated storage where you take electricity, convert it into some other form and take it back? The answer is no. Correct? There's a four letter word with a U at the end of it. I would say, come on. Tesla. It's not the other one. It's a substation at Greeninus. All right. A one megawatt job. An area scheme. Okay. But it's a demo. Well, they're talking. Yeah. It turns out it's very similar. Yeah. Okay. It's much more detailed. Right, okay, so you have a little bit of storage, but it doesn't, I'll put it this way. You didn't buy it commercially, did you? Ilan must gave it to you because he's off to Mars and he left it to you or something like that. Simple fact of matter is it doesn't make any economic sense. But there's nothing storage can do. Okay, so you have some here, but you didn't have it. There's nothing, this system worked fine without it and can't. There's nothing storage can do that's fundamentally new. Nothing. Zero. Because I take the account of the phone system on at least a lot of cylinders. Yep. Yeah, yeah. Now, so first of all, I'm talking about dedicated storage here. Electricity in, electricity out, so that's not the same thing. But also, you didn't need that. You could have bought more generation or whatever, yeah? So the point I'm trying to make is it doesn't bring anything fundamental to the system. A generator, a wind plant turns wind into electricity. It's pretty fundamental, yeah? So they're pretty fundamentally needed. You need wind, solar, hydro, whatever. Transmission lines are needed because you're not gonna live beside the generation to get at that customer. They're pretty fundamental. And you're gonna have to reconvert electricity into some of the useful forms, so various motors are needed. So those three components are needed. Transformers, they're not fundamental, but they make the economics better. So they all have fundamental roles that cannot be replaced. Storage has no fundamental role. It's a nice to have, but not necessary. And there's nothing it can do that something else can't do. And generally, nothing it can do that something else can't do, cheaper as well. So that's one of the problems with storage. It has no fundamental sort of niche in the market. If you look at flexibility as a, people talk about flexibility in the power system. This slide, sorry, the bottom's cut off. I use a lot of slides from my colleagues around the world and I usually put their names at the bottom and I have done here, but you can't see it. So this is Yuha Kiviluma. He's from VTT in Finland. So he did an analysis of all the different flexibility options and you can question how he did the study. But nonetheless, you can see there that storage, which is up here, actually is negative value and maybe a little bit of positive value depending. This is sort of storage as it is in batteries now. Batteries 50% cheaper than they are currently now. They might start making a bit of sense. But look at this, transmission is much cheaper. These are heat pumps, and heat pumps are not cheap, but they're better than storage. So you get a situation where storage is essentially not a great competitor against all these things. Then you talk about things that are not sort of physical things. You say wind forecasting. So if you say to yourself, I need storage because I don't know what the wind is gonna do. That's a reasonable thing to say because if you don't know what the wind is gonna do, you might end up with too much wind, too little, et cetera. So forecasting is a technology. It's sort of a service that you can put in instead. In the same study that I showed that the line costs a true 50%, we did the numbers on this. Now it's a complicated graph, but if you look at stochastic means we're taking into account wind forecast. We have a wind forecast, okay? Perfect means that we have, we're saying we can perfectly forecast the wind, okay? And there's no storage, and with and without storage. If you look at it, if you compare them, if you just take, so take, if you compare stochastic to perfect, which is the red to the green, the red to the green, and in the other cases, the blue to the purple, right? And then if you take the difference between them in storage and no storage, which is between there and there and there and there, you suddenly realize that the gap between perfect forecasting and regular forecasting is actually bigger than it is between storage and non-storage. Now I'm not saying this is quantitatively true, but the point I'm trying to make is, you're probably better off spending the money on improving the forecast, you probably get more bang for your book than you would for storage. That's what the graph is basically trying to tell you. So there's all sorts of different ways, so not only are technologies able to compete against it, but having better information, better forecasting can also compete against it as well. So this study was there, this is the one that was done by the US, by the DOE that came out a couple of years ago that I was a scientific advisor on. If you look at it, there's low value in declines rapidly. So one of the things about storage is that it eats its own lunch. If you think about it, buy low, sell high. Well, what happens eventually if you buy low and sell enough high, all of a sudden you have a situation where the price is the same. So it actually eats into its own market very quickly. So this is showing you the system value. Now if you look at the system value here, this is euros per kilowatt of storage capacity, and that's per kilowatt, right? This is dollars. You look at these numbers here and you look at the values of storage. The values of storage are, they do not justify this type of storage. You will not be able to buy it for this type of value that you get out of it. The reason there's two there is that one is looking at the market value and one is looking at the system value and one is looking at the incremental. But basically what happens is storage, the more and more you put in the system it becomes less valuable very rapidly. Let's look at emissions. One of the things people say that's, it's really funny, they say that storage is a green technology, yeah? That's a laughable, very laughable, particularly batteries. Do you ever see the stuff that goes into batteries? Yeah? Where do they make them? In countries where there's probably no environmental regulations of any sort and you have no idea what damage it's doing to the environment. And also batteries are quite intensive in terms of energy that goes into them. But even from a system point of view we looked at it in the same study that I've showed several graphs from. And that shows you that until you get to 11 and a half gigawatts of wind, and let me be clear about it, that's 80% energy on our system. Until you get to 11 and a half gigawatts of wind storage on our system is actually damaging for CO2. And the reason is very simple because in the case that we did here we're connected to the UK. Now it depends on which scenarios you run. But in this particular case we're connected to the UK and what would happen is is that we have gas, a lot of gas. And basically what was happening was that cheap coal in the UK was when we run at night we were storing it in our storage system and then we were displacing the gas. So from a carbon point of view we were displacing gas and replacing the coal in the UK. Ergo CO2 was going up. And that's just the short-term economics. And if people said, oh you shouldn't do that. I mean it's a classic case of people saying oh you shouldn't do that. You have an asset on the system. What are you going to do? You're going to optimize it in the short term and that's what happens. And people say oh you shouldn't do that. Well you know welcome to the real world. The chief scientist of Ireland was one of those people. He was a cow chemist and he was trying to educate him one day and he said he didn't understand the concept of capital. You have to pay it back. So when you have people like that you can't get anywhere. So there's no doubt about it in other systems this is not true but it depends on the fuel mix you have. So if the fuel mix was very carbon you know if the fuel mix was different these results were different. But there are cases where storage actually makes carbon dioxide increase not decrease. No not all megawatts are created equal. So this is a paper given by a guy in the Scott Baker area. So storage is actually working. So I've not been, you know I've been a little bit negative about storage but storage does work in certain markets. So in the PGM market today there are batteries, 10 megawatt batteries making money in the PGM market and commercial, yeah. Absolutely no problems, yeah. And the reason is the PGM market has a certain structure da-da-da-da-da and you go through the whole thing. It also has a pay performance criteria as well. So pay for performance essentially. If you look at this you have, this is normalized output and this is traditional control signal and the resource response. They're actually paying for performance. Batteries can perform much faster, much quicker. And in the PGM market they actually pay it for regulation in terms of how fast you can do it and batteries have that capability. Other markets don't have that because they don't think they need it and in that case you wouldn't make money. So it depends on what the system's asking for. Then you could argue that one is more reliable than the other but it's all, you know, it's a little bit hairy as to what's the best thing to do. PGM batteries are in the money making money but they're not making an arbitrage, they're making an incillary services. And it's only in PGM and PGM is a very special market and if you want to, I'll tell you later why it's a very special market. But you know, so it does make money. And then if you look at our friend down here, this is Nick Miller again, you know, so you can, there's island systems, people are, so you can deploy them, you can make money out of them but they're pretty niche to be honest with you. So storage play that went wrong. So this is, that's me in the funny hat. This is the opening of Beacon Power and they were in the incillary services market. And I just said PGM incillary services market, they're making money. This is a flight wheel, it's not a battery. Beacon Power got 50, I think it's 40 or 50 million dollars off the US Department of Energy from the same fund that Cylindra was funded from. Everyone remember Cylindra? Cylindra was the so-called scandal in the Department of Energy in the United States where 500 million odd dollars were given to a solar company and it went bust. And it was a big, you know, Obama was in trouble, the Republicans were having to go with him. They never had to go with this, there was only small money, 50 million. But this got money from the DOE. It's a wonderful engineering technology. Flight wheelers, for engineers, flight wheels are really interesting. Power electronics, very fast. Engineers love them. But anyway, they put flight wheels, they actually buried them in the ground. The reason they buried, these are all the little silos, they're like missile silos, they're in the ground. The reason they're in the ground is because if the bearings break, the thing can, yeah, if it wasn't in the ground, people get killed. Anyway, it's a 20 megawatt and it provided ancillary services. And you say to yourself, why is it not making money? And the answer is, is that, first of all, it's a more expensive technology than batteries, but also, when I went to the opening of this in New York, I sat down beside a gentleman called Rick Gonzalez. He's the CTO of New York ISO. And he was very surprised to see me first of all because, you know, I'm from Ireland and it ended up in New York. The reason I did was because I was up in Cornell for a few weeks. And he said to me, he says, what are you doing here? I says, yeah, yeah. And he says to me, he says, these guys are not long for this world. And I says, why? He said, and his CEO was giving a talk at the time. He says, why? And he says, when they were building this and doing the business case on it, regulation was selling at $60 a megawatt hour. And I said, yeah. And he says, and today? Well, today, it's six. That was July 11th, 2011, I'm sorry, July 11th, 2011, yeah? They last until the first of November. Actually, Rick taught they make it to August when he was wrong and they made it to November. They then sold it for $1. Yeah? And the people who are running it now are making money. Why? No capital, yeah? So therefore, it's running and it's fine and it's in the market but they have no capital to pay back. Batteries, this is your battery question about this. Now, you know, people, I'm not a battery expert but I know battery experts as they say. So this graph was agreed to by an Oxford professor in electrochemistry and MIT professor and various other people. So, you know, people will argue of what the costs really are. And this is showing the lithium ion cost trends, okay? And they're getting lower and lower and lower and lower and lower, okay? But, you know, the magic number, most people accept that the magic number has to be below 100. And they might by 2030 make it and they won't even make it below 100. But the magic number is around about 100. Once you get below 100, you start in a situation where it might start making sense. And then you go at this situation, going off the grid. So now you have people who say battery backup power. So you put yourself, I mean, anyone who'd put a small wind turbine in the house is completely insane but that's, you know, because everyone knows why. You can't hear, wouldn't you do it behind the nose of the areas? No, no, that's, so don't worry about that. It's a V, it's a V cubed or squared problem, yeah? Velocity, velocity cubed and radius squared. So therefore, big makes a lot of sense. The economy's a scale. And even for big wind turbines, wind is still pretty expensive. For these things, it's incredibly expensive. So wind turbines only make economic sense when you make them at scale. PV is different because it's just, it's a linear law. Anyway, forget about it, they put them in. So you generally spine people putting solar on the roof and then they decide to put some batteries in, okay? And this is a trend that's happening, isn't it? They want to go off to grid, so to speak, okay? This is data from Germany and if you look at it, it shows you electricity price for households, electricity cost for PV, electricity cost for PV plus battery. And what it appears to say is that there's a point in 2017 in Germany where if you decide to put a PV in battery in your house, you're in the money, yeah? It's cheaper than buying from the grid. That's what it says. However, if you look at this, what is the price of electricity? That's 30 Euro cents, yeah? Mind you, you're pretty expensive, you're 30 New Zealand cents, are you? Yes, you're pretty, yeah, you're pretty expensive guys that have to say, but that's just my own comment. One of the reasons that this is going up in Germany is why this price here has a subsidy for the solar in it, yeah? And the taxes. So in fact, all that's happening here is interesting is that this money here is subsidizing this technology, yeah? And what's happening at this point here is that this is a tax avoidance scheme. The simple fact of the matter is that it makes sense because the cost of domestic electricity has so many levies and subsidies, you're paying for the PV. So here's the case. Put PV in my roof, I buy a battery, they're both subsidized by my neighbor if he doesn't put PV on a battery in his roof, yeah? And it's essentially a tax avoidance scheme for the rich. Then you get to this thing, the so-called spiral of debt which this gentleman has mentioned it. So you get this situation where solar PV, you put it on your roof and you can do it with batteries as well. And then all of a sudden, most networks in the world are paid by a kilowatt hour basis. So the network charge is paid in a kilowatt hour basis. Your 30 cents or 25 cents or whatever it is here. The market price is only 70, isn't it? So it's only seven cents. So only one quarter of your domestic bill is paying for the actual wholesale price of energy, isn't it? The rest is network charges, taxes, da-da-da-da-da-da. So people put solar on the roof, right? For whatever reason, subsidy or the richer, they just wanna do it. It produces less volume. Less volume for the network owner means they've got less revenue. The network still has to be maintained because most of these people are still connected to grid. They still need the same amount of investment. What happens then is that the utility goes to the regular and says, hey, I need more cash. So the price electricity goes up, encourages more people to go off to grid. It's a so-called spiral of debt, okay? And it has to stop because it can't continue because if people say, oh, well, we're gonna become independent and the network operator is gonna become redundant. Well, that's complete nonsense. I mean, I'm sorry, apologies. Numbers from Australia, what can I say? You're also in the English, you in the Australians, is that it, yeah? Anyway, let's assume they're real. I don't know, but they'll do. But if you look at it, this is from Sydney. This is a network charge for energy. This is it if you're off grid with 95% reliability. How many people have 95% reliability electricity? Very few. It's more like 99.9%, doesn't it? So if you go to 99.9%, you have to buy so much PV and so many batteries to do it. That's approximately six times the cost. So going off grid is economic suicide. So why is it, after all I said, did Ireland build this pump storage station? Because we don't have nuclear. Five minutes, I know you're gonna finish. We don't, that's good, it's fine. We don't have nuclear, right? We don't have nuclear, but we built it. And one of the reasons we built it was because a little bit of storage is a good thing, right? There's no doubt about it. 290 megawatts for six hours is a lot, right? In my opinion, humble as it is, this was built because a bunch of engineers who were in the utility owned by a state just said to the government, gotta build it, and the government said, sure. Plenty of jobs were created for a long period of time and engineers had great fun digging tunnels and building a great piece of engineering. And that is one of the reasons that that was built. So if it was a 50 megawatt, two hour job, it probably would have been enough for us because a little bit of storage is a good thing. I think they probably went over the top here. Consumer and demand management. I'm talking about the consumer now. I'm not talking about big, like there's no doubt about it, big smelters and big companies can do demand side response and it's a very valuable thing to do when they get paid for it. But there is talk that the consumer will be, this is the talk that says every consumer will be flexible. This is the sort of thing I'm trying to talk about. So it's consumer demand response. Let's just take this. These are thermal storage heaters. This is the grid. This is the project that we're involved in. These are electric thermal storage heaters. If you look at the capacity value of this, so the capacity value before I mentioned is if I put something in, if I put one megawatt of something in and it's got a capacity value of 0.8, it means I can serve 0.8 of megawatt of load across the entire year and maintain the same level of reliability of the system. That's the capacity value. You put in thermal storage heating, you can shift load, yeah? Therefore, you're shifting away from the peak. Therefore, you should be able to supply more demand over the whole year and still maintain the same level of reliability. Agreed? So you put this in, okay? And you say to yourself, what's this capacity value? Now, one of the things is about thermal storage heating or any use of consumer electricity is the consumer is consuming a service, yeah? And that service is to keep you warm, keep you cold, cook your toast, do your whatever, okay? The consumer has requirements. So you must obey those requirements. So if you have to obey those requirements, there's a constraint, okay? And you have to take that into account. A lot of people have done the calculations on this and just said, I can do it and I want with it. You can't. The consumer has to actually, you know, get their level of comfort, et cetera. Second thing is, if you look at it in terms of short term, remember I mentioned about the storage device, once you put it in, you operate it on a short term. You know, you build it for one reason but you operate it on a short term basis. If you operate it on a short term basis, the system marginal price or the price, whatever, and reliability, yeah, they're correlated. High prices, you know, are usually cases where the adequacy is low, et cetera, but not always. Therefore, what's happening here, it's shifting it but it's not always shifting it in a way that's helping reliability. And then if you take the base case, which you're comparing it to, if you just had dumb storage, okay? The end of the situation where you have the capacity value that's quite low. The point is, is that these devices the consumer has constraints, the system has constraints, and when you do the numbers on it, the capacity value is actually quite low. Then you have to aggregate them together, do all the messing around with dealing with millions. Well, what's the worst, what's the, you talk to anyone, it's much better off to sell a 100 million dollar piece of equipment to one person than it is to try and sell 1 million, 100 dollar piece of equipment. In fact, it costs twice as much. So, making money is all about selling it to one person at scale. Dealing with customers, it's a nightmare. How many of you here deal with customers, yeah? They don't pay, they don't do this, they don't do that. So it's very expensive to do it. So the demand side in terms of what it can produce is actually quite low. And if you look at other work, so these are two papers, I'll leave these slides. If you look at other work that's been done around the world, and this is not always the case, but generally is true. And I'm talking about customers, I'm not talking about you and me and, you know, small, I'm not talking about big aluminium smelters. If you look at it and you say, I give control of my entire load over to Vector or whoever, yeah? You give it to them, they might, they might buy you two pints of beer a month as a reward. That's roughly how much you get, you know? I give total control to the utility two pints of beer. That's Guinness, that's good beer. You know, that's 10 quid, that's about 15 dollars, scale it up 161, say that's the type of money people get for the total control. Most people say, I'm not giving control of my electricity for two pints of beer a month, I'm just not gonna do it. So, there's just not enough money in it, there's no business case at all. If you look at this then, you look at, people say market and policy barriers, there's no doubt about it that if you look at the demand side, there are barriers to it. There's absolutely no doubt about it that there are rules and regulations that stop it from happening, right? But if you were to remove them, the two pints of beer is still the ultimate barrier, okay? And there's no doubt about it, people have said there's barriers and that's why it's not working. I guarantee you when you remove all the barriers it won't work because two pints of beer is not enough. And also, when you find people who say the business model isn't there, I usually say you mean the subsidy's not there. Though, you'd be careful of people who say business models because generally what they're saying is I want a subsidy. Demand side in Ireland, this is the growth of demand side in Ireland so I've just contradicted myself, look at it, it's dramatic, isn't it? Now, these are generally speaking commercial people but nonetheless, it's growing dramatically. The reason is very simple, we have a capacity market, yeah? Pay for capacity, we had an economic crash. The capacity market was designed to attract capacity in, they didn't think about getting rid of capacity and all of a sudden the demand side realized if I'm responsive, I'll never be called because there's bundles of capacity but yeah, I get some money. This is a complete and utter fraud. That's what it is. Not one of these ever been asked or called. So, I'll finish on this one. This is my view of the future, okay? They're designed to demand side to be flexible. So, the demand side is definitely worth looking at because it's not an extra capital expense, right? It's not like storage, you don't have to buy it, it's not an additional capital cost but the problem with it is is that the customer is very inflexible and that's the basic problem you have. This is wind and load over the year 2010 scaled up on a monthly basis so as the wind is equal to the load. Now, if you were going to supply, this is a case for a monthly basis but you can do it for hourly, yearly, whatever you want. You think for one minute that the demand side is going to be able to help this. In other words, am I going to be able to charge up my electric car during the winter and drive it all summer? No, you're not. It's not gonna happen. The demand side can't actually address the fundamental problems we have but if you design society around the concept that you need to look like this, so one of the reasons that you, so take the water system. The water system is an incredible pumping water that is an incredibly potentially flexible thing to do. If you design the water system in a way that you are expecting this type of future, then the demand side become extremely valuable. In other words, you don't design it to just service the customer. You design it to service the customer and to be flexible at the start. Then the demand side can make a lot of sense but at the moment it was designed to serve you and I as a customer. It wasn't designed to produce services to the grid. So demand side is incredibly important but it's at a planning stage. It's not at the sort of operational stage. I think I better stop there because I'm gonna get in trouble. So this is it. I can't read those. So storage and demand management, many potential roles. In electricity though, dedicated storage is expensive and unless someone brings it down by a factor of two or three, it's not, and they might, they might. It might happen. I'm not saying it won't happen. It's declining in cost but will it decline fast enough? The problem with the demand side is on the consumer side is that the consumer has constraints and you need to get rid of those to enable it. The value proposition of the consumer is very low, the two points of beer and then designing the system from the very start is actually the key to the demand side. Actually design the entire, so have factories that during times of energy that's free or ubiquitous, you generate a certain product that requires a lot of energy but the same factory can generate a product that requires less energy. Things like that, sort of planning, thinking about it in advance. It is related to wind but it's not fundamentally related to it. Great research topic and sound scientific vie for policy makers. So this is one of your politicians. Do you recognize her? No? She wanna get her profile open. I think she wants to be a minister in the next government. Her name is what's her name? Megan Woods. Megan Woods, she's from Christchurch. We met her yesterday anyway. Nice lady. But she immediately said, what about batteries? So you need to maybe go down there and give her a little bit of education. Okay, so there you go. This is acknowledgments of these people. This says what? Gurev, me and Mahogod. It means thank you very much in Gaelic and since tomorrow is St. Patrick's Day, you all fail aporic. That's happy St. Patrick's Day in Irish. Okay, thank you. Thank you.