What we discussed: Except for roads, we don’t tend to interact with large, physical infrastructures. For sure, we see the wires of the electric grid, but we don’t commonly see the electric power plans, refineries, and substations. Stuart and I discussed the business models and challenges that electric utilities face in Australia as they undertake decarbonization efforts.

Why it matters: We often forget that we rely on infrastructure being available 100% of the time. Yet the cost of keeping the electric grid operating at that level is immense. Utilities build physical hedges in terms of overcapacity so as to provide certainty on uptime.

What it means for you: As you think of system change, think of the failure modes of the system. How many failures are you willing to tolerate? How many can you avoid, and how many backup plans do you need to draw up to guarantee a certain performance criteria?

Interviewee’s Bio:

Stuart Hillen, EnergyAustralia, Melbourne, Australia

MBA, Saïd Business School

As Portfolio Development Lead Stuart is responsible for originating and executing generation development opportunities to transition EnergyAustralia’s 5,000 MW generation portfolio. Technologies covered include utility scale storage, pumped hydro and renewable investments. https://www.linkedin.com/in/stuart-hillen/

In this interview, we discussed the following questions:

• What's your favorite infrastructure?
• What were the critical skills you learned as a civil engineer that helps you with your day-to-day jobs?
• What is the problem solving approach you take as a trained engineer? 
• What's your role at EnergyAustralia?
• What stage of project development do you get involved in? 
• What is the business model of EnergyAustralia?
• So you try to have the right physical portfolio mix to provide electricity. When you don't have it, you procure it from the market.
• Can you describe dispatchable power?  
• Batteries time-shift resources, depending on what's available on the market. Given these movements of fuel shifting globally, what's the role of the utility in decarbonized future?
• There is quite a bit of indication to "electrify everything". It implies the need to double the size of the electric sector to absorb the transportation sector!
• You've mentioned a smattering of technologies. Technology cycles are usually 6-18 months, yet utilities need to think in 30 years. As a project developer, how do you match these time cycles?
• When you're project financing, how much do you have to take into account new business models? 
• What is the not-often discussed field of Ancillary Services?
• Can you comment on the high costs to effectively maintain 100% uptime of the electric grid?
• Sometimes the overbuilding is criticized as waste, but to maintain nearly 100% uptime, one just need physical assets as hedges.
• Another way of creating that resiliency is fuel switching. What's the advantage of the hybrid power plant you worked on?
• Is Hydrogen a drop in fuel for Natural Gas? 
• Have you seen the trend of hydrogen projects?
• Hydrogen electrolyzes produce the hydrogen. What sounds unclear is whether the electric utility should own the business model of producing hydrogen, right?
• When you're evaluating technologies, how do you know if a technology is "good enough"?
• Are we waiting for technology to improve, or for capital to implement?
• How many different stakeholders get involved and how many do you have to satisfy? 
• When did you first get exposed to these issues that made you want to work with an electric utility?
• Were you surprised by the level of complexity of the stakeholders and issues involved?
• What is it about complexity that made you want to seek it out?
• So basically, complexity gives you job variety!
• To a student or early professional, what skill would you recommend them to learn?
• Curiosity has a humbleness of knowing that there's more to know, and a seeking of what one's lacking.

About Levers of Exchange:

Interview by Jimmy Jia (www.jimmyjia.com)

Music by Sean Hart (www.seanhart.com)

Website: https://www.leversofexchange.com/

Season 3 is funded by a generous grant from the Skoll Centre for Social Entrepreneurship, at the Saïd

Business School, Oxford University.

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