This is the second episode of our series State of Energy, presented by the LF Energy Foundation. I was joined by Arjan Stam, Director of Systems Operations at Alliander, and Lucian Balea, R&D Program Director and Open Source Manager at RTE to talk about the evolution of the energy sector and changes the industry is going through to address one of the biggest crises human civilization is facing today.
Swapnil Bhartiya: Hi, this is your host Swapnil Bhartiya and welcome to the State of Energy, a special episode for COP26. We are going to discuss how open source can help us fight this climate crisis. And today we have two guests with us, Arjan Stam, director of system operators at Alliander and Lucian Balea, open source program director at RTE. Lucian, Arjan it’s good to have you both on the show. Let’s start with some of the basics. Arjan, if I ask you, what do you folks do? Tell us about Alliander.
Arjan Stam: Alliander is the biggest distribution system operator in the Netherlands. We serve 26,000 companies with energy, either electricity or gas. And we also serve three million households with electricity and gas.
Swapnil Bhartiya: Thanks Arjan. Lucian, tell us a bit about RTE.
Lucian Balea: RTE is a power transmission system operator in France. So we operate, we maintain and we develop the extra high and high voltage power grid. And actually it’s the largest transmission grid in Europe. Another core mission of RTE is to support the energy transition and to prepare a shift towards a carbon-neutral economy and society by 2050.
Swapnil Bhartiya: That creates a segue to the next question, which is around COP26. What role can companies like RTE and Alliander play in tackling some of the challenges posed by climate crisis?
Arjan Stam: Well, from the Alliander perspective, we are very curious about the outcomes of COP26. We will expect the ambition of carbon reduction will increase, will become bear, and the challenge for the distribution network operators in general, especially for Alliander, is therefore much more challenging. What we can do is actually quite a lot.
So we are distributing both cars and electricity. What we do with gas is that we have an active strategy in reducing the number of gas connections and transforming connections with gas to energy neutral with municipalities. It’s quite a big project, runs for years, but it will impact, of course, CO2 reduction.
On the electricity distribution part, the impact can be much bigger because there’s a lot of new energy demand. First and foremost, I think we should, and we will, supply this through electricity and not anymore through gas. So in the urban areas, when there is new houses being built, the whole areas, they will have only electricity. And in the Netherlands it’s quite typical because traditionally you always get a gas and electricity connection, but now it’s only electricity only connections.
There’s also an autonomous growth in energy demand. So [inaudible 00:03:19] not the new ones, but also growth, autonomous growth. And we can service that mostly through utilizing our existing grid much better. So looking more in depth into what’s happening in our grid, how we can see where the additional room is in serving additional electricity to our customers. And then we have built opportunity to connect more customers to our grid with the existing grid that’s available.
And one of the other things, I think is, and that’s quite new for a distribution system operator, is facilitating free energy markets. So the challenge for the DSOs, especially is to flatten and distribute the curves that you see from individual users of energy. So every household, every business has a pattern and if you can influence that pattern by using energy markets, that would be very beneficial in the room that we find in our cables to connect additional customers and to provide additional electricity. And at the scale at which we work, that’s quite a lot of energy that we can still provide.
Swapnil Bhartiya: Arjan, you mentioned that electricity is becoming preferred source. What is driving that change in the Netherlands? Is it government policy changes? Is it awareness of consumers or is it driven by power companies?
Arjan Stam: Yeah, it’s a combination of factors. So people, also businesses, they want to contribute to reducing CO2. So they’re requesting additional connections for supplying energy through renewables, either solar or wind. Policy is changing. Traditionally, if we provide a connection to our customers, we had the obligation to deliver energy seven times 24, 365 days a year. But now there’s a change in policy, we don’t need to do that anymore because we can adjust the conditions on which we provide a contract to our customers. And it gives them a lot of opportunity to start playing, and that’s maybe the wrong word here, but to start engineering, maybe that’s a better word, to start engineering the distribution profiles for our customers.
Swapnil Bhartiya: Then mostly change happening in the energy sector is that users are now also becoming producers with solar panels and batteries. They are putting electrons back into the grid and power companies are paying back customers, bringing their bills down to zeros. What kind of effect is that having on the power systems?
Arjan Stam: Yeah. So current regulation in the Netherlands is that everything you use on an annual basis is compensated for the same tariff for delivering back. So that’s a big incentive for people to start using solar panels. And that’s what you see now, it’s growing exponentially and that’s also giving exponential problems on our grid, like congestion issues that we have to manage in order to keep the growth of solar panels going.
But there’s also some investigation going on now to reduce the tariff for delivering back energy. And then we see a different behavior of customers come up and that’s that people will start to use storage as well to gain the benefits of generating energy themselves. Because then you may use it at the same value, although you need to do an additional investment. But the batteries help us also reduce peaks on our grid and makes it also possible to add new customers to the grid.
Swapnil Bhartiya: Lucian, what role do you see RTE is playing in addressing the problems of climate change?
Lucian Balea: So we are facing similar challenges as Alliander, so we have to prepare to a power system that will have to accommodate for a big part of distributed renewable energy. We have to prepare for new uses such as the electrification of mobility, that is an important aspect to reach the goals or also the fact that we need to integrate with hydrogen networks, that may also be important for the galvanization of the industry or of transportation of goods. So we are in a similar situation and this will imply massive transformation of our businesses and an important part of this transformation will rely on software. So we have seen our software development roadmap growing, and for sure this is an important challenge because this is needed to be successful in this transition.
An important fact to outline is that we need to acknowledge that the signs of the climate change will worsen in the coming years. We already observed that in the recent years, and if we look at the IPCC reports on the topics, it shows that the situation will worsen even if we meet the ambitious targets that have been set up in the Paris agreements. And that means that the pressure and expectation from the society to tackle this issue will grow in the future. So for sure, as a company, we don’t want to be a blocking factor. So transforming our businesses and facilitating this future of energy is of key importance for our company.
Swapnil Bhartiya: Lucian, you brought of the point of the Paris agreement. It has become a political topic, whereas science is telling us that we need to do something urgently. What can industries do to address this crisis, irrespective of political views of countries? Companies do it all the time. For example, Apple protect the privacy of its user, even if there are no such laws in the US to do so. So what can power sector do to address this crisis on its own?
Lucian Balea: So for sure, the political agreement and the top-down approach will be important. And we understand that it’ll be hard work for the COP26 to reach such kind of political agreement up to the challenges. But at the same time, we also believe that bottom-up approach is, such as LF Energy that are running today based on voluntary actions are important as well. This is because it is often said that devil is in the details and such initiatives already today they are discussing and solving many details.
And we strongly believe that sharing forces and brains today will help us to be in a better position tomorrow because the changes that we are talking about are huge transformations. So anticipating on a voluntary basis as an industry is something very important.
Swapnil Bhartiya: You emphasize the importance of collaboration to tackle this crisis. There is a lot of collaboration that is already happening within industries. Open source does help a lot in bringing a lot of people from different industries together to collaborate on the areas they normally could not. So can you talk about the role of open source, and specifically the role of LF Energy in bringing company like RTE, Alliander and many more together to work on some problems?
Arjan Stam: So then we have to start with a little bit of history. So Alliander is changing rapidly to give shape to the energy transition. One of the things we did as a DSO is started a department that’s called system operations, so actively doing the energy management, so the smart solutions operating on the grid.
But deciding to do that is something different than realized. So the tasks, in order to get energy management operational in such a huge grid with so much history, is a really big task. So in order to understand what we had to do, we didn’t have the knowledge to do that because from a static grid, it became suddenly a dynamic system that needs its control.
We didn’t have any experience on dynamic system control or stochastic system control, whatever you want to call it. Also, having solutions that involves customers actively because that’s basically what we’re doing. We didn’t have any experience with that either.
So what we needed was experience, knowledge, vision on how to do that. And we discovered a little bit of the world and we found out that the TSOs in general are slightly more developed into that area. So for us it was really interesting to reach out to TSOs for collaboration. And then is the question, yeah, where do you do that? Because you can approach any TSO and then look for collaboration but it has to be a mutual advantage, of course.
And then we run into the Linux Foundation community and we had discussions, and then we found basically a sort of common denominator in what we wanted to achieve. The only problem was we didn’t speak, actually, the same language immediately. But having a discussion and going over multiple topics that we needed to address both the TSOs and DSOs, so in this case, Alliander and RTE, we found out that we are actually doing more or less of the same things, if you look at it functionally, and that we more or less also had the same ambitions and goals.
So the conversation converged actually to how can we collaborate on these topics that will work for both of us? And there it’s all started. So there we found each other on the same mental model, because that’s really important. And you think in the same direction, it doesn’t have to be identical, but at least in the same direction, more or less the same ambitions and the same need to develop and build applications that help us start managing, actually, energy transition.
And that’s what happens. So then we found each other on collaborations and, well, RTE already had a long history in doing open source more than Alliander did. So there were a number of applications available already that RTE open sourced already. And it were very interesting for us because we wanted to speed up our development effort, but we had a choice in either doing it all ourselves or utilizing what’s already there and start working together on making it better on what already is available.
So there are a number of projects that we work together and we developed together, although we are different type of companies. And it works out very well, Lucian always calls it the common plumbing, and that works. Because one of the things he said for example, OperatorFabric, is an application in which you can visualize the status of your energy system, actually. Well, we first started working together with one developer that we put forward to help building on the roadmap of OperatorFabric. And now visualization is one of the key topics in our roadmap.
So we put a whole team on it and start working with OperatorFabric and developing it further together again with RTE and bringing value for both of the companies by just investing. And I think that’s the key to being successful and making speed in this energy transition, is that you don’t reinvent all kind of things, but you reuse what’s already available and build on top of it. Because, yeah, it helps you speed up in your first steps. And secondly, when you continue development, everybody benefits from it. And that’s what we need in this era of change in order, yeah, to be functional and helpful in the CO2 reduction.
Swapnil Bhartiya: As Arjin mentioned that RTE has been doing open source for a very long time, Lucian, I want to ask you, can you talk about why do you folks do open source? What benefits do you see or what benefits do you get by releasing your code to open source?
Lucian Balea: So, first of all, what we discovered from open source communities is that they provide a tremendous leverage. The challenges that we are facing are not specific to RTE, they are common to all grid operators and also energy utilities globally. So instead of doing those changes, the adaptations and works individually separately, by joining policies, we save a lot of time and lot of money. And that’s very important because we have to make this transition, but at the same time, we need to preserve operation and performance because electricity is a vital good for the economy and this society. So the cost for the end consumers is an important aspect as well.
Additionally, we are facing an increased complexity and the solution that we are talking about involved various set of competencies. And for instance, we are talking about artificial intelligence solutions or computing at the edge of our grid. We are also talking about further integration, higher integration between the mobility system and the electric system or the hydrogen system and the electricity system.
So all these entail a vary set of competencies, and it’s very difficult for a single company to hire and to build those competencies on all that topics. So through open source collaboration, we can pull up those competencies and we can work with Alliander, and they have a different perspective as a DSO that we are, so that brings a lot of value in the joint collaboration. We are also working with IT service companies that come from other horizons, such as [inaudible 00:20:56] Linux. They are strong expertize in the embedded system that we don’t have and it’s not our business to have such competencies.
Additionally, these open source collaborations deliver from our viewpoint, but also from what we understood from other industries, software of better quality in terms of modularity, in terms of interoperability, in terms of [inaudible 00:21:27].
And these are very important characteristics because we need more interoperability, and not only within the company, but also beyond the boundaries of the company. So for instance, building a seamless interface between the transmission system operator and the distribution system operator will be a key aspect, a key feature to manage the future power systems. Also, we are in a transition, so we don’t exactly know what kind of solutions we will need in five or 10 years from now to operate our system.
So this is an iterative process and the open source collaborations provide the proper governance framework to work in this incremental manner. Also, open source will allow us to reduce the kind of lurking in that we sometimes get with traditional approaches to software. And we strongly believe that vendor lurking does not provide the proper incentives both to vendors and to end users to achieve the software that we need tomorrow.
Swapnil Bhartiya: You mentioned governance, open source is nothing new, companies have been releasing their code into open source for a very long time. But what really matters is governance, as it ensures that the code is in safe hands, that no single company is going to change the license and cut everyone else from that code. So talk about the role that foundations like LF Energy play in this space, which is also directly and indirectly helping fight climate change.
Lucian Balea: Yeah. So when we decided to go open source, the next question was the proper governance framework and how to organize it. And it became quite obvious for us that we should not reinvent the wheel and, observing the how other industries are leveraging open source and benefiting from this model, we wanted to transport these benefits to our industry. So we reuse the governance framework that proved to be successful.
It’s very important because the software that we’re talking about is a core business software for our industries, which have vital infrastructures, in fact. So we’re not talking about some tiny software at the fringes of our companies. And that means that the software that we are building needs to be reliable, we need to be able to trust it to have the guarantees of quality, et cetera.
And open source foundations provide the proper framework and good practices and governance rules that enable important topics, such as community health, cyber security, license compliance to be managed properly. So this is something very important to us.
Additionally, we want also to be inclusive because the roadmap is so huge that, the more we are and more we collaborate, the better it will be. So adding a model that is inclusive, open to any partner, be it an energy utility, or technology vendor, or an IT service company, or an academic institution, is also something that we are looking for.
Swapnil Bhartiya: Arjan, What benefits do you see of organizations like LF Energy?
Arjan Stam: Well, Alliander is also a company that was always looking for collaborations, but then at a local scale. So we always try to figure out solutions with vendors, with generators, with other DSOs, and also with TenneT, the only TSO in the Netherlands.
But we realized starting with the system operations department especially, that was the trigger. So it’s actually valid for [inaudible 00:26:28], but that was the trigger. That the scale at which we work together is actually too small to address all the problems that we see in the world, and how we can contribute and benefit also from what others are doing.
So we were actually looking for a platform, that was the initial thought, where all roles or all players, all stakeholders that have a contribution in the energy system, if you look at it holistically, have an equal vote or an equal say in determining which direction we want to go, how the priorities are, solutions that we can share.
And that’s where we found LF energy because, and that’s what I still see today, it’s agnostic to the role for which you are participating. And we consider the whole system being in scope for discussions on architecture, applications, goals, ambitions. And that’s bringing a lot of value for us. So every stakeholder comes from a different perspective, puts in ideas. And depending on the perspective you come from yourself, it’s either building on top of, or even innovation for some areas. And that’s bringing a lot of value for us and it’s helping us, yeah, moving forward.
Swapnil Bhartiya: Arjan, Lucian, thank you so much for taking time out today and talk to me about how the energy sector is working together to help us fight climate change with collaboration and open source technologies. [crosstalk 00:28:25]. And I look forward to our next conversation.