The way we generate, transport and increasingly store electricity has become a hot topic – whether discussing Tesla’s introduction of the Powerwall home battery installation, or the introduction of electric vehicles, or, of course, Hinkley Point C nuclear power station. A consensus has built around ‘smart grids’ which can react to power outages faster, accommodate renewable resources and allow consumers to self-generate electricity. Meanwhile, overseas, there are thousands of kilometres of conventional grid either still to be built or which have a reliability that you or I would not accept.
We must make good on our investment in innovation
So where does the UK stand? The European Commission published a study in 2014 of the amounts invested by individual European countries into smart grid demonstration projects.
The UK topped the leader board. We had awarded €462 million of funds to smart grid demonstration projects - this is an enviable position. Most of those projects are intended to assist the UK energy sector as it transitions to low carbon. But we have a huge opportunity for that money to pay for itself twice over – by converting that knowledge into exports, and thereby jobs and tax revenue.
Recent weeks give us a lot of confidence that the words ‘industrial strategy’ are making a comeback. Other countries have worn their industrial strategies in the energy sector proudly.
In the area of smart grids, UK companies have won the global Grid Edge awards, appeared on the Sunday Times Tech Track 100 list, won the CBI Growing Business awards and the Queen’s Award for Enterprise. Meanwhile in ‘conventional grid’, Lucy Electric’s subsidiary in India is the largest manufacturer in the country of certain types of switchgear. But we also create jobs and wealth when multinationals situate product lines in the UK. For example, Siemens have based their Global Cites Centre of Competence in the UK and GE’s control room software is designed in the UK.
India and sub-Saharan Africa represent a huge opportunity for the UK
I believe that the development of the grid in India and sub-Saharan Africa represent a massive export opportunity. We have a host of natural advantages: we share a common language; there is a legacy of British design standards meaning that the networks look like ours; we have an outstanding health and safety culture, which is exportable expertise; and there are Indian and African engineers working in UK industry and studying in UK universities, who are natural ambassadors for our technology. None of these is an outright winner, but the combination of these can really tip the balance.
Most importantly, however, there is a political consensus. Initiatives such as the announcement by Rt Hon David Cameron MP and Prime Minister Narenda ModI to develop three cities in India under a five-year partnership, and the Prosperity Fund introduced as part of the Strategic Defence and Security Review set us explicitly on a path to help countries like India and sub-Saharan Africa as they develop.
To give you one key statistic: 1.3 billion people globally are without electricity. Many more suffer from unreliable supplies, even in urban centres. But of those 1.3 billion, 905 million live in sub-Saharan Africa and India. A lot of infrastructure will be financed and built over the coming years – the only question remains, whose technology will it be?
What help is required?
We need to build an overall strategy which reinterprets the UK’s strengths in the context of India and sub-Saharan Africa. In the UK, we worry about narrow capacity margins between our generation fleet and our maximum demand; in India, the rate of construction means that the generation fleet may at times outstrip the available consumers. In the UK, we worry about the cost of construction of ‘conventional grid’; in India and sub-Saharan Africa, the challenge will be the lack of skills, and potentially trying to carry out large construction with poor transport links. It is vital that we understand that this is not about selling the same product cheaper – it’s about using our core technologies and innovations to tackle different market needs.
Ultimately we need to build confidence. This requires a combined effort from industry and government, recognising that for the mid-sized companies with real growth potential to take on investments in these regions can be a substantial bet. Government needs to continue to be bold – decisions and partnerships are being formed at country-to-country or country-to-multinational level. In order to allow our smaller companies to participate, we need government to be present.
We have developed world-leading skills in the UK in electricity grids and there is a huge export opportunity to India and sub-Saharan Africa. But this needs attention – otherwise there is a risk that it falls down the policy cracks between overseas development initiatives, UK decarbonisation initiatives, and the commitment to double clean-tech investment. It is not yet clear that the cross-government Prosperity Fund will ensure this doesn’t happen.
Martin Wilcox was formerly Head of Future Networks at UK Power Networks, the electricity distributor for 8 million customers across London, the South East and East Anglia. He is about to take up a consulting position in the energy sector.
The views expressed in this article are those of the author, not necessarily those of Bright Blue.