Jolt to the system: What the Iberian blackout says about grid investment

In this week’s Power Playbook: Nearly two weeks on, the April 28 blackout is still under investigation. But what it has highlighted is the criticality of the right type of power grid investment.

I have covered extensively the urgent need for investment into the power grid.

But now, after the significant blackout in Iberia, commentators are specifying not only how much Is needed financially, but what needs to be invested in.

Power grid investment

We know by now quite clearly the figure needed to keep the grid fit for purpose. According to Eurelectric, it boils down to €67 billion ($75.7 billion) annually to 2040.

But now, in light of the blackout that shook Spain, Portugal and parts of France, we need to pay more attention to where this investment is going.

At the time of the blackout, I covered several points of grid fragility that the blackouts had highlighted, chief among them interconnections, as well as how the power grid is monitored, and the role of storage.

To take things a step further, Wood Mackenzie’s analysis points to three critical factors that contributed to system vulnerability, namely; high renewables penetration, reduced conventional capacity and limited interconnection capacity with France, which is at a fraction of the level recommended under EU guidance.

Indeed, as renewables inevitably penetrate more of the energy mix, we need to invest in the technologies – such as STATCOMs, storage, or synchronous condensers – to back up the power grid and meet the inertia requirements of a renewables-based energy system.

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Flexibility too, is another element that can assist.

According to SmartEn in a statement, a rapid response capability is crucial in systems with high renewable penetration and activation speed is critical: the faster flexible demand kicks in, the more effective it is at preventing the grid frequency from falling dangerously low.

To go back to Eurelectric, the association called the blackouts a wake-up call, showing that the need to modernise and reinforce Europe’s electricity grid is urgent and unavoidable.

Their secretary general, Kristain Ruby, puts it aptly: “As society relies more and more on electricity, it’s crucial that electricity is reliable”.

Slow money flows

While we know the figure, this does not mean the money is flowing as fast as it should. Au contrair, it’s far too slow.

Analysis from BloombergNEF finds that Spain lags behind other European states in spending on the grid relative to renewables investment.

Namely, the country’s solar capacity has more than doubled in the past five years, producing frequent surges in generation that far surpass demand. Yet much of Spain’s grid equipment was built and installed decades ago, before the solar rollout.

Indeed, investment flows to back the grid up have not been at the pace needed and things have been getting a tad heated on the political front too.

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Andalusia, an autonomous region in Spain, earlier this week called on the central government to urgently invest in the region’s electricity infrastructure.

Regional Minister Carolina España said that the region was one of the hardest hit, denounced a 40% structural deficit in the transmission grid, and pointed to a lack of information and transparency during the incident.

“The lack of investment makes us more vulnerable. Andalusia cannot continue to be the last to recover essential services such as energy supply,” said España.

However, in Andalusia specifically, a grid investment focus has certainly been on the agenda, namely from Red Eléctrica.

The privately held TSO, responsible for the transmission and operation of the electricity system in Spain, back in March announced over €100 million ($113 million) across 25 projects to build new infrastructure in the region.

These projects include STATCOM technology, which provide grid stability services, as well as permits to extend and connect substations.

Whether political fallout or the economic hit – Reuters reportage finds the economic cost of the blackout between €2.25 billion ($2.54 billion) and €4.5 billion ($5.08 billion) – the urgency to invest in this infrastructure cannot be understated.

But what do you think?

What has the Iberian blackout shown about the fragility of the grid and the status of its investment? How do we ensure nothing like this happens again?

Reach out and let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International