Anders Lindberg: 0:03

If you build a complete system with renewables and battery only, versus one with renewables, battery and flexible engine, there's a difference of 17 billion dollars in investment in only Chile between these two systems. So it's a substantial difference. On energy security and sustainability, they will come to the same level but it's a substantial difference in cost.

Tom Raftery: 0:30

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast, the number one podcast showcasing best practices in climate emission reductions and removals. And I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi, everyone. Welcome to episode 203 of the climate confident podcast. My name is Tom Raftery. And before we kick off today's show, I want to take a moment to express my sincere gratitude to all of this podcast. Amazing supporters. Your support has been instrumental in keeping this podcast going, and I'm really grateful for each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like-minded individuals who are passionate about climate. Supporting the podcast is easy and affordable with options starting as low as just three euros. That's less than the cost of a cup of coffee and your support will make a huge difference in helping me keep this show going strong. To become a supporter you simply click on the support link in the show notes of this, or any episode or visit. Tiny url.com/climate pod. Now in today's episode, I'm talking to Anders Lindberg, who is president of Wärtsilä Energy. And in the upcoming episodes, I'll be talking to. Angelo campus, CEO of Box Power. Ollie Burch CEO of Among Equals, Thom Norman CEO of Farm Kind And professor Annalisa Bracco from Georgia Tech. So some excellent episodes coming up. So as I say, in radio land, Don't touch that dial. But back to today's show. As I mentioned today, I'm talking to Anders. Anders welcome to the podcast. Would you like to introduce yourself?

Anders Lindberg: 2:20

Yes, my name is Anders Lindberg and I'm in Wärtsilä. Wärtsilä is a company of approximately 18,000 people and 6 billion in turnover. Two businesses, marine and energy. And I'm responsible for the energy business in Wärtsilä.

Tom Raftery: 2:40

Great. And could you give me a little bit of your background, Anders? How did you get to be president of Wärtsilä Energy?

Anders Lindberg: 2:50

So my background is that I'm an electrical engineer from the beginning, and I worked with product businesses my whole life in basically in rail with trains, and the other one is in energy where I've both worked in a renewable company doing offshore wind, being responsible for all the products and EPC in that company, and now I'm working for Wärtsilä since one and a half year, being responsible for the energy business.

Tom Raftery: 3:19

Okay. And in all that time, what would you say has surprised you most in your journey to where you are today?

Anders Lindberg: 3:28

I think that what is the biggest surprise compared to when I started is the complexity of a big projects that has therefore encouraged me to stay in the product business and the understanding of products today, which I didn't have when I started.

Tom Raftery: 3:46

Okay.

Anders Lindberg: 3:47

It's the collaboration of all stakeholders, but also the internal work, bringing a lot of different functions together. So that I found exciting and, that has been part of my own journey to work with big projects.

Tom Raftery: 4:02

Interesting. And would you say it's more the people side of these big projects or the technology side of these projects that's the most challenging?

Anders Lindberg: 4:14

I think that the most surprising was the people side of it. When I started as an engineer, you're prepared for the engineering challenges, but to realize that actually most of the challenges are maybe on the people side on customer relations of the supplier and you relating to your suppliers and bringing everyone together because these are huge products that spans over many years and a lot of money. So, It is fairly complex and it's the people issue.

Tom Raftery: 4:45

Okay, good, very good. And we're here today to talk about the energy transition, which is obviously a massive global effort. Wärtsilä has experience with over 200 power systems, more or less around the world. Can you give us a broad view of what's working well in moving towards renewables and where then on the other side, the major stumbling blocks or challenges are?

Anders Lindberg: 5:11

Yeah. So, as you mentioned, we have a group that is doing power system analysis and we have done studies of 200 systems around the world But I think that what is going really well is that many of these markets around the world have started to increase the amount of renewables and renewables have become so low in cost, if you look on solar PV and also onshore wind and also offshore wind has really come down in cost and therefore being deployed. However, what we see when we do these studies is that when you get up to a certain level of amount of renewables in the system, unless you fix the flexibility in the system, because all traditional systems have a lot of generation that is highly inflexible. And when you then add intermittent renewables, you end up with a lot of curtailment, since you cannot turn on and off the inflexible power plants. So what we see in this analysis, that we have done on these markets is that you need to increase the flexibility, and we have from Wärtsilä's side two products to do that. One is of course, the battery storage, which helps with the flexibility, but only on milliseconds, seconds, and maybe up to hours. While we have the engine power plants that are very good in minutes, hours and weeks and seasons to help with the flexibility of the system. And this is really the key that we see when we're looking to different markets that have started to increase the amount of renewables.

Tom Raftery: 6:51

Okay, and just for people listening who might not be aware, curtailment is when on a grid system, there's too much generation for the amount of demand that's there. And so something has to be turned off. And as you said, because a lot of the larger, older thermal often plants can't easily be turned on and off the renewables can. And of course, if you're turning off renewables, that makes them less financially attractive to the projects, you know, for rolling out more wind farms, more solar farms. If they're likely to be curtailed, then they're not going to make their investment back in time. Is that a fair comment?

Anders Lindberg: 7:33

That's absolutely fair comment that we have seen this happening in markets, which invest a lot of in renewables. And the other thing is, of course, that you continue to burn coal or other fossil fuel, which is also not good for the environment. So these power plants stay on because they have minimum on times and you cannot turn them on and off with the sun or with the wind. So it's also not good for the environment, besides that it is destroying the business cases for the renewables. So it's two bad things,

Tom Raftery: 8:09

Sure, you mentioned, that your grid balancing engines can help avoid curtailment. Can they avoid other things like, I don't know, price hikes or emissions spikes, or can you give us a real world example where they have overcome these issues?

Anders Lindberg: 8:24

So we have markets where we see that our grid balancing engines are turning on and off a thousand times a year. So it means many times per day. So it means that you can really use them when you have peaks in the system that you need to cover or when the sun sets in the evening and you need to cope with the demand, which is usually quite high when people come home from work. These are 2 examples of when we see that our grid balancing engines can go in and help the system. Then another example is that here in the Nordics, for example, we have a lot of wind, not so much solar and usually in the winter time you have a week or two with high pressure where you have very cold weather minus 10 or 20 degrees Celsius and no wind. You have these weeks every winter one or two weeks where you have these extreme conditions with very cold weather, where there is a lot of need of power and at the same time you have no wind at all. And then it's an excellent opportunity for our grid balancing engines to fill that need, during that time.

Tom Raftery: 9:35

Sure. And. For, I mean, if you're using batteries, as you mentioned, they're typically kind of seconds, minutes, hours sometimes. And these grid balancing engines can go longer. But what about the emissions associated with the grid balancing engines? Because the batteries obviously don't have emissions associated with them when they're discharging energy. But I can imagine the grid balancing engines may do if they're using a fuel.

Anders Lindberg: 10:03

Yeah, absolutely. So today we see very much natural gas as a good fuel for the transition. So it's a transitional fuel. In the future when the hydrogen and other zero carbon or carbon neutral fuels are available, then we see that the engines can change over to these new fuels. So it would not be an issue when those fuels will become available. But of course, today it is very much natural gas that is the option. However, I would like to point out that by enabling more renewables in the system, from the total system point of view, it is still reducing the CO2 emissions. So by having a small amount of grid balancing engines, you can enable more renewables into the system, and therefore the total CO2 emissions will go down. So I say to people that are not into power system analysis, if you make a comparison, when you bake bread, you add a little bit of yeast to get a good loaf of bread and you can see the yeast being the same as our grid balancing engines, a little bit what makes a good bread.

Tom Raftery: 11:22

Okay. And talk to me a little bit about hydrogen because there's a lot of talk about hydrogen. It is today. I think the numbers are north of 95% hydrogen is not green hydrogen. So it's created by steam fracturing methane, and that, of course, has emissions associated with it. And I think if I remember correctly, depending on where hydrogen is created, the emissions associated with the generation of hydrogen are between 10 and 20 kilos of CO2 per kilo of hydrogen. So, there isn't really yet a significant amount of green hydrogen. Is that something that's going to change?

Anders Lindberg: 12:12

First of all, I don't see hydrogen that is not green as a potential fuel for grid balancing engines. You should only do that when you have green hydrogen. Otherwise, use the transitional fuel natural gas in the meantime, so to say. We do see that green hydrogen will become available in the future. But I think we're not talking in the next years. I think it will take up until 2030, 35. Maybe even 40 until you have abundant supply of green hydrogen. And I also think that there are many different sectors that will compete for the green hydrogen in the beginning. So you have like making green steel and others where you need also the molecule from fertilisers and other things where you need the molecule. And I think that probably will be prioritised. So I think it will take time before we have abundant supply of green hydrogen for, for using as a fuel to engines.

Tom Raftery: 13:11

Yeah, I tend to agree.

Anders Lindberg: 13:13

What I think is important though, is that from us as a supplier, we want to have the technology ready so the customers can trust that they can actually invest today in something that we can convert to run on green hydrogen in the future. And therefore we as the world first launched a hundred percent hydrogen ready engine power plant this year. So we proved that we have the technology and we have the engines that can run on 100% green hydrogen in the future. And thereby we can convert the engines that today run on natural gas to hydrogen when that becomes available. So the customer don't need to take the risk, so to say, to sit with stranded assets that I think is important.

Tom Raftery: 14:03

There's also a lot of skepticism around the scalability and the cost effectiveness of hydrogen and its efficiency as well. From your perspective, what will it take to make hydrogen mainstream?

Anders Lindberg: 14:15

Yeah, I think it will take a lot of renewables. So we have a lot of overcapacity on renewables. So basically the electricity kilowatt hours are very low and thereby you can afford to make the hydrogen because we have losses when you produce the hydrogen. And then you of course have losses when you turn back the hydrogen into electricity again in the engine. So it's clear as long as you can use electricity firsthand, you should always do that. And I only see hydrogen for balancing applications where you run relatively few hours in the future. So as base load, I don't think we will see hydrogen because it will be too expensive considering the losses you have in the conversions.

Tom Raftery: 15:02

Sure, and in that scenario, is hydrogen a sort of solution for the curtailment issue that we spoke of earlier?

Anders Lindberg: 16:25

I think that again, coming back to short term, long term, I think in the short term it's not an answer to the curtailment issue because it's not available and not to the right cost level. So I think today we will see natural gas as the good fuel for the balancing. And in the long term, I see that, yes, to come to 100% renewable system. Also, the balancing power has to be done on sustainable fuels. And then I do see that hydrogen will be available in the long term future. But we're talking 2035 timeframe. So it's 10 years from now.

Tom Raftery: 17:01

Sure, no what I was referring to there was, I was saying rather than curtailing the renewables, when there's an excess of supply over demand, divert the energy from the renewables instead of turning them off, divert it into generating hydrogen.

Anders Lindberg: 17:18

Yes, and that's when you will have what I also try to refer to as very low cost on the energy because when they are curtailed, they're curtailed because there is enough electricity in the system.

Tom Raftery: 17:33

You mentioned earlier that Wärtsilä has analyzed the power systems in over 190 or 200 countries, I think, and regions are there, any common universal truths about the transition to a hundred percent renewable energy, or does each country's pathway look very different?

Anders Lindberg: 17:51

No when we have done this analysis, we can actually see that all countries and all markets are following same steps. And I will describe those steps. Of course, saying at the same time, all countries starts from a different point and the time to go through these deep steps will therefore be different in different countries and markets, but they all go through the same steps. And let me take those steps. So the first step is always to start adding solar PV and wind meaning adding renewables. That's always the first step. But when you have done that and you come up to a certain level, you will see that you have the need of balancing and flexibility in the system in order to avoid what we discussed with the curtailments. And then it's important to add battery storage, but also flexible engines to balance the system. So that's the step number two. And this is where most countries are that have come furthest today. And then the step number three, when you have done that, so you have added more renewables, you have the balancing, then you can go to step number three, which is actually to start shutting down inflexible coal power plants and high fossil fuel plants, oil plants, and other things. So that's step number three to stop the inflexible power plants. And then you have a system which is living to a high degree on renewables already. But then the step number four is then to convert to sustainable fuels also for the balancing grid engines in the system. So you start converting those to sustainable fuels. And when you have done that, then you have a hundred percent sustainable system because then you have everything without fossil fuels.

Tom Raftery: 19:45

And are there any model countries or regions that have followed those five steps to their completion.

Anders Lindberg: 19:53

No, not to the completion. You're normally on step number two and three in countries that have, or between number two and three in countries that have come furthest. And to give you some examples on markets that have come very far, so you can go to Australia and look at Southern Australia. So not the whole of Australia, but southern Australia, they come very far in adding renewables and also flexibility into the system. Another one maybe surprisingly knowing that Texas in the US is a state of fossil fuels or they produce a lot of fossil fuels, but they have actually a very high degree of renewables in their system. And this is, again, maybe not because of sustainability issues that they have that high degree of renewables. It's actually more that it is the cheapest form of energy. So they have a lot of solar and also a lot of wind in their system. So they have also added a lot of balancing engines and also a lot of batteries to the system. So they have come quite far and I will say that they are on step number three already. Another country is, of course, UK here in Europe, which also have added a lot of renewables, and they are somewhere between, I will say, step number two and three. And then you can take Chile in South America that have a lot of solar in the north part of Chile and a lot of wind in the south part. And now the challenge is to do the balancing. So I would say that they are on, they have started on step number two adding a lot of storage, but they also need the flexibility on the engine side in order to complete step number two. I was actually last week in Chile and Brazil and talked with the customers and also planning departments there. So it's quite interesting to follow these countries that have come far but also see some of these challenges with the balancing of the system.

Tom Raftery: 21:53

Okay, and what about the likes of interconnects as well with other countries or regions? Because quite famously last year, I think it was Texas had a massive outage, which was caused in part by lack of weatherisation and a failure of some power plants. And the Texas energy system is an island. It's not interconnected with its neighboring regions at all.

Anders Lindberg: 22:23

No, you have the ERCOT system which is a large part Texas no. So interconnects of course, we can see that also in Europe between different countries, of course, helps with balancing the systems. So having interconnects between countries or between states in the US would, of course, help with balancing the system as well.

Tom Raftery: 22:45

Fair enough. Yeah. I always say to people who say the sun isn't always shining and the wind isn't always blowing, that's not true. The sun is always shining and the wind is always blowing somewhere. So if you do have enough interconnects and a massive supergrid, then there's no problem getting to a hundred percent renewables.

Anders Lindberg: 23:03

Yeah,

Tom Raftery: 23:04

That's a topic for another day.

Anders Lindberg: 23:06

No, that's very true that all the interconnects will help balancing the systems as well, especially, of course, with the sun, you need east west. I was in, as mentioned in Chile, the challenge with Chile is that they are a very, very narrow country, but very long country. So, of course, the sun sets everywhere, more or less at the same time. While if you, of course, look at the US or Australia, if you take east coast to west coast, you would have a good opportunity to actually help balancing the system because you have a very wide east west continents.

Tom Raftery: 23:47

And what about the likes of the regulatory environments? I mean, they're different regions with different regulatory environments obviously. Do you have any examples of where policy has been particularly effective in supporting renewables or the opposite, areas where it's been holding them back?

Anders Lindberg: 24:08

Yes, I think that there are a number of different things you can help with enabling the renewables and the flexibility into the system. And if you take Texas as an example, which we talked about earlier. They have a very nodal pricing, and they also let the price vary a lot. And, of course, this is giving incentives to those that can supply power when it's mostly needed and doing the balancing. Also, they have the Texas Energy Fund that is giving loans to companies that want to invest in balancing capacity in the market. So this is the way that it has been done in Texas. In other markets, you have like capacity markets or where you pay for having capacity when the renewables are not there. So that also helps and you also have ancillary services in, in some markets as well. So there are different mechanisms, but I think you touch a very important point that of course our traditional markets have been built for running as many hours as possible and producing as much power as possible. And if you then want to incentivise rebalancing engines. Then, of course, you don't want them to produce. You actually want them to enable the renewables to run as much as possible. So you might only have like 300 or 400, 500 hours in a year. And then you, of course, need to create the revenue in another way than producing as many running hours as possible.

Tom Raftery: 25:43

And what about the need for cooperation and collaboration? I mean, businesses, states, communities, do you have examples of where collaboration has been transformative and models for others to follow?

Anders Lindberg: 25:59

I think one such example is, of course, what I mentioned in Texas where the regulatory part had good discussions with the generators and understood what is needed by the system and then come up with this idea of the Texas Energy Fund. And I think we can see that also in other parts of the world. I think that one challenge is obviously that for the entity that runs the system and always should make sure that the system is always balanced, I think that the people there, they see this need quite clearly of how to balance the system. But then in many countries, it takes time before politicians can change the regulatory part of the system to incentivise both storage and balancing engines in the system to create that flexibility. It can take a lot of time depending on system. So it's important that discussion starts and that people can change the regulatory system. Listen to the parties that control and operate the overall system. And have a good understanding for what is needed.

Tom Raftery: 27:12

Yeah, and there's, a lot of renewable projects, which are held up in permitting as well. So obviously we need to make changes to the permitting systems globally.

Anders Lindberg: 27:21

That's that I think is very much on the renewable side. So building out offshore wind where I used to work before, but also onshore wind and solar. It's both to get the grid connection, but it's also to get the permits of building also the environmental permits can take a lot of time. Many countries we also see that there is a local opposition, even if there is of course full support for building out the renewables on country level or state level, we can see that locally there is opposition. So, yes, all of these things need to be addressed and made more efficient in order to speed up the build out of the renewables.

Tom Raftery: 28:06

And one thing we haven't mentioned is the likes of demand side management for balancing. Is that something that you're looking into as well?

Anders Lindberg: 28:14

I think we are more focusing on the generation part. but I definitely think that the demand balancing is also something that we will see more of in the future because there are certain loads where you can balance. There are many loads that cannot balance as well because they are critical industrial processes where you run 24 7 and you cannot interrupt. But there are also other things where you can interrupt temporarily, like district heating and other things where I think you can temporarily shut down. I think we will see more of that in the future. I also think with the increase of EVs we also have the opportunity to vehicle to grid and other things which will also help. So, I think there are many things and we need to look at all of these things for the having the fastest way to zero system so to say, so all contributions are welcome. Also energy efficiency contributions are, of course, also very important. So you limit the increase in demand because we know that the economy will continue to grow and normally continued growth in economy has always led to more need of energy, especially in countries that are less developed, which now will. Be developed in industrial they will need much more energy and there we need to make sure that we in the whole global economy, make sure that we make our systems more efficient in order to limit the increase in demand.

Tom Raftery: 29:46

Right, yeah. And obviously innovation is going to play a huge role in this as we move forward. What advice would you give to energy companies or countries that want to make sure their current investments are adaptable for the future?

Anders Lindberg: 30:04

I think it is very much to look holistically at the system and understand the system's needs because then you also know where you need to incentivise and put the efforts in on innovation. What is it really that the system needs the whole power system? I think that's a good start. And then the second thought I have regarding innovations is that sometimes when I meet with politicians, I think that we need to recognise what technologies that are available today and go for those technologies. It doesn't mean that we should not invest in new technologies like small modular reactors, if I mentioned one,

Tom Raftery: 30:51

Mhm.

Anders Lindberg: 30:52

but there are many others. I, of course, think we should continue to invest in those from an R&D point of view, but it is not the technology that is here and that will make any impact, substantial impact in the next 10 years. So go for technologies that exist today, like solar, like wind, like battery storage, like pumped hydro, like hydro, like flexible engines. These things exist already today and can help us decarbonise the system. What technologies will be available in 10 years? Yeah, let's worry about that in 10 years when those have been developed, And let's not get confused on what is commercially available today versus what will be tomorrow. Hydrogen is the same thing. That's of course we have already discussed that. That's something that will have an impact in 2035, but it will not have an impact on how we build the system today, so to say.

Tom Raftery: 31:56

Fair enough. And for people who are listening who are hopefully feeling inspired, but maybe a little bit overwhelmed, what's one action you'd recommend they advocate for either personally or within their community, or within their employ to support the shift towards renewables?

Anders Lindberg: 32:15

I think that if you look at all companies around the world and all organisations, I think we can all contribute in our way. In Wärtsilä, we have two major targets until 2030. One is to decarbonise our own operation, and the other one is to have products that will enable our customers to decarbonise. So in the energy field, it is to have the products, the engines, that will run on sustainable fuels and that will allow our customers to decarbonise. So I think that all companies and people can look at how can we contribute, to the decarbonisation.

Tom Raftery: 32:58

Okay. And if we were to fast forward to 2050, what do you hope the renewable energy landscape will look like? And what's kind of the one achievement that would make you say, we did it.

Anders Lindberg: 33:13

I think that if we have a system that runs a net zero system that runs on renewables. And also have zero carbon fuels so it is fully sustainable. Then I think we have achieved it. At the same times, we should have 100% energy security. We should have a zero carbon system. And what I think maybe we forget sometimes to an optimal cost as well. That I think is very important. And of course, you can build a complete renewable system with batteries only. And we have studied this and compared if you do that compared to one where you also add the flexibility in form of balancing engines. And we can see that there is a substantial difference in cost. Because you need to overbuild a lot with the renewables and the battery, if you do that. I can take an example of Chile which I have fresh in my mind. So if you build a complete system with renewables and battery only, versus one with renewables, battery and flexible engine, there's a difference of 17 billion dollars in investment in only Chile between these two systems. So it's a substantial difference. On energy security and sustainability, they will come to the same level but it's a substantial difference in cost.

Tom Raftery: 34:43

Anders a left field question for you, if you could have any person or character alive or dead, real or fictional as a spokesperson for a successful renewable energy transition, who would it be and why?

Anders Lindberg: 35:02

I think that 1 person that come to my mind that I think is quite good as a spokesperson is Michael Leibrich. And the reason for that, what I like a lot with his approach is that he based everything on facts and figures and that I think is also for me very important. And also for our company when we talk to different stakeholders, we sometimes find that there is lots of discussions and believing in different things, but we have facts and figures and if you do the proper modeling of the systems like we are doing with Plexus, which is a commercially available software, you can show with facts and figures how the development are being and then you can take the decision based on facts and figures. And me being an engineer I like very much that approach that we stop discussing out of emotions and beliefs and instead look at the facts and figures how you do this in the most optimal way. So I will say, Michael Leibrich is the first name that comes to my mind of being a good spokesperson for the energy transition and what makes sense and what does not make sense to do.

Tom Raftery: 36:15

Yeah, and for people listening who might not be familiar with Michael, he's obviously the author of the famous hydrogen ladder, which talks about where hydrogen will be useful and won't be useful in the coming years.

Anders Lindberg: 36:27

Yes.

Tom Raftery: 36:28

Anders, we're coming towards the end of the podcast now. Is there any question I did not ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to think about?

Anders Lindberg: 36:38

No, I think we have discussed all the important questions and I think the key takeaway from this podcast, the key message from my side is that you need to look at the system holistically and to enable renewables to thrive and to be implemented as fast as possible. You need the flexibility in the system and that is often forgotten. And that I think is the key message from my side.

Tom Raftery: 37:07

Superb. Anders, if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Anders Lindberg: 37:15

So first of all we at Wärtsilä have a webpage and we will also drop you some links to our webpage where you can find interesting material. And then when it comes to myself, I'm on LinkedIn. So I'm available on LinkedIn and post messages there every now and then.

Tom Raftery: 37:32

Superb. Great. Anders that's been really interesting. Thanks a million for coming on the podcast today.

Anders Lindberg: 37:37

Yeah. Thank you very much.

Tom Raftery: 37:39

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to tomraftery at outlook. com or message me on LinkedIn or Twitter. If you like the show, please don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.