Good afternoon, dear viewers. Welcome to the seventh episode
of New Magazine's podcast entitled Coal phase out in the Western Balkans.
I am Damir Dizdarevic and I will be your host today.
I will host today Jelena Stojkovic Terzic, Assistant Professor of the
Faculty of Electrical Engineering of the Belgrade University,
who works at the Department of Electrical Energy Systems.
We will hear and learn from her more about the concept of 5D
Energy Transition, which implies decarbonization, diversification,
decentralization, digitalization and democratization, as well as the role
of prosumer in this concept. Additionally, she will share with
us the necessary innovations in conducting energy transition.
The recording of this podcast is supported by Open Society Foundations
for Western Balkans, and it is available on our YouTube Channel.
Moreover, it is available on other podcast platforms such as Spotify,
Deezer and Apple Podcast. Finally, we are active on
social networks, on Instagram and TikTok, so feel free to follow us.
I hope that you'll enjoy our today's episode.
Good afternoon, Jelena, welcome to NM podcast.
Please, introduce yourself briefly to our audience.
First of all, thank you, Damir, for inviting me to this podcast.
My name is Jelena Stojkovic Terzic, Assistant Professor of the Faculty of
Electrical Engineering in Belgrade, Department of Electrical Energy
Systems, which is the sphere of my main interest.
As for narrower field of expertise, I deal with the integration of
renewable energy sources, especially in the context of their effects on
the system, frequency regulation, flexibility.
In addition, my research includes consumption management,
and the impact of electric cars on the power system.
Thank you very much. So, for a start of this episode,
I would like to begin with a question: What is energy transition and what
does it entail? It is not just a transition to renewable energy sources
and coal phase out, as this podcast is called,
but it entails a series of activities and measures, and it is popularly
called 5D energy transition, what does it mean at all?
When we talk about energy transition, we see it through the 5D prism,
the first one is decarbonization. It is the basic goal of the energy
transition, to switch from power plants to fossil fuels,
to the renewable energy sources, i.e. to reduce CO2 emissions,
and consequently the impact on climate change.
So, the first D from 5D of energy transition refers to decarbonization.
The second D refers to diversification which implies using diverse energy
sources, not to depend on one energy type, but to diverse sources,
such as Sun energy, wind energy, nuclear power plants maybe in future,
I mean in our country, hydroenergetic potential, biomass, because
it is very important from the aspect of energy security.
In this way, when we have several energy sources, if something goes
wrong, we can always rely on some alternative energy source.
So, the second D refers to diversification, the third D
refers to decentralization, this is very important concept within
energy transition, because we are moving from a centralized system,
based on small numbers of big power plants, this was conventional
system, we had small number of big thermal power plant and hydroelectric
power plant, and now we move towards large number of power plants that are
present everywhere in the system, which is useful for the system itself.
Now, we have power plants that are much closer to consumption,
that is, we have production at the point of consumption.
Therefore we reduce the need to transmit energy from long distances.
We reduce grid load, as well as reduce losses.
So, there are other benefits from this as well.
This is also very important concept. Apart from decentralization,
we also have digitalization, which is also rather important, given that
now within the electrical energy system, we have the use of
information and communication technologies, which enable us
to have much more data on the grid, strengthening observability,
in the same time countervailability, to use management algorithms smarter,
in order to make our grid smarter.
This makes digitalization such a vital aspect of energy transition.
Last but not least in 5D transition, there's energy democratization.
To somehow bring citizens closer to becoming active participants in the
energy system, and to include them in the energy issues, in its production.
So, we see that energy transition is a rather comprehensive concept,
and that, apart from decarbonization and digitalization as technical and
technological elements, we also have democratization, together
with security aspect, which is taken care of through diversification.
Given all said, can you explain to me the basic difference between
the current energy system that you've mentioned as a small number
of centralized units, distributing energy through the grid,
compared to the future energy system that we should establish in future
according to current projections sometime around 2050.
To what extant is it decentralized, how we come to provide that,
what is the role of digitalization and democratization in it?
We can say what are our expectations. -Yes, our future projections.
Well, from that centralized approach we are going to a decentralized one.
This is already evident in Europe and now it seems evident here.
Less than four years ago, through legal regulations, we have for
the first time enabled citizens to become their own energy heroes
and to have the opportunity to become producers and consumers,
that is to say, prosumers. In addition to being end consumers,
they can also produce electricity. Now, with the new amendments to
the law, we have gone a step further, defining energy communities of citizens
which enable individuals, but also companies and entrepreneurs,
local self-managements and public institutions to join forces
in the production and use of energy. So, from this aspect, we have moved
from centralized system with small numbers of big power plants,
to a huge number of small power plants which are much closer to consumers
or end customers. It is also very important to mention that
traditional power system was such that consumers were fully passive.
When we regard power system from a technical aspect,
we have production on one hand, and the consumption on the other.
We have a network that links production and consumption.
In conventional systems, traditional power systems,
consumer was fully passive. With new future energy systems,
consumer will become much more active, that is certain.
Consumer can take part on the market, adapting it to their needs,
and to the conditions within the system.
I would like to explain another concept, which is also important.
In power system, what seems to be vital is that production and
consumption must be equal at all times.
In the conventional energy system, the old one, we had consumer who
behaved as he pleased. However, in order to establish a balance
between production and consumption, we have changed the production.
We could do that because we had controllable production units,
thermal power plants and hydropower plants.
Now, with as many renewalbe energy sources, which are uncontrollable,
unmanageable or very difficult to manage, those are variable energy
sources, we cannot establish the balance between production and
consumption so easily, at least on the production side.
So, we are now moving to the consumption side,
so, by managing consumption, we will actually manage
to balance production and consumption at all times.
It is the consumption that will be much more active in the process.
It's great that you mentioned consumption, in what ways
can we manage energy consumption, in that ideal sense?
What does it refer to? Whether electricity should be used more
intensively, for example for heating water in certain hours, anything else?
I must say that consumption management is nothing new.
We are already conducting consumption management.
How we do that? For example, in Serbia, for a decade now,
we do it through a two-tariff system. This system was introduced in Serbia
by observing consumption diagram. We noticed that during the day,
we had a higher consumption, while we had lower consumption overnight.
In such conventional system, with thermal power plants in effect,
and hydropower plants, such a consumption profile, since we always
have to have the levels of production and consumption equalized at all times
requires that we sometimes turn off thermal power plants, during night,
because we simply didn't have the consumption to use that electricity.
Or to reduce it to a minimum.
The very process of shutting down and restarting thermal power plant
used to be technically challenging, but also in terms of time.
Because some thermal power plants have to be out of operation for
a few hours in order to be back in operation.
There is a time required to be in operation and out of operation,
and financial aspect is also very demanding.
Then, it was more profitable for the system not to put those thermal
power plants out of operation during the night, but to leave them on
the grid, so that they produce some electrical energy.
However, in order to produce, there should be consumption, which must
match it. What was designed was not designed by Serbia,
it exists in the world, and it is to create a two-tariff system,
where the price of electricity in night's second tariff will be low,
with the intention of motivating consumers to use more electricity
during the night, and thus save money as far as electricity bill is concerned
while on the other hand, the system also makes profit,
because it doesn't have to shut down and restart the thermal power plants
which is time and finance-wise very challenging.
Indirectly, through those tariff mechanisms, they managed
consumption, by motivating the consumers.
Those tariff mechanisms can be used even now, with the fact that this
two-tariff system, created for a conventional concept, can't really
work now, now the availability of electricity is based on how much
solar and wind we have, if we are talking about an electric energy system
in which the degree of integration of renewable energy sources is very high.
For instance, in Germany or in Denmark, the availability of
electricity depends on availability of wind and sun and then a tariff
system should be created that can serve this purpose.
So, the prices should be higher when there is no sun or wind,
and vice versa, the prices should be lowered when there is sun or wind.
In this way, people will be prompted to use energy when it is available.
This is and indirect approach. There's also a direct approach.
To create appropriate algorithms so that people in the household
of some smart house to turn on appropriate machines,
not on their own, to monitor the price on the market, but to leave it to
algorithm to do that for them, for some devices, it is not so
practical, for example, if I want to watch television right now, I'll do
that rightaway, but should I turn on washing machine at that moment,
or a dishwasher, as algorithm can decide for you, depending on
when it is convenient, so that I as a consumer will use electricity when
it's price is lowered, while the state will achieve profit as well.
The balance between production and consumption will be established.
You've explained this issue greatly.
My next question is what is the role of democratization or the role of
prosumers and energetic communities, as people used to call them.
Those are two different concepts, so what is profitable for me personally,
if I end up as prosumer, or that I will join the energy cooperative,
or some energy community with other citizens...
When we talk about benefits, financial benefit is vital.
The most represented is the financial benefit. -Surely...
When someone assumes the role of prosumer, or as defined within
our regulations as buyer, producer, the first and utmost motivation is to
reduce electricity bill as part of energy will come from solar panels,
and just small part or none from the grid, so the bill for
electricity has lowered and that investment can be repaid
after a few years. What seems to be challenging, not only in Serbia but
all over the region, is the fact that we have subsidized electricity bills.
So, I'm not saying it's low, but I mentioned that it's subsidized,
and in that way, there is no motivation to invest in those systems
as they request some financial means at the beginning.
It pays off the most to households that have a large consumption.
It surely pays off to the households that transfer to red zone.
They can pay of investment in a few years time.
However, average households, which are the most widespread,
which consume some 350 kilowatt hours per month,
maybe somewhat less, 330 kw per month, let it be 350 kw,
in order to set up solar panel that fits its needs,
the investment repayment period is over ten years.
This is rather long period of time, so it lacks financial motivation...
For larger consumers, especially for the industry, there is high
motivation, and it is basically financial, but it doesn't have
to be only economic, it can be ecological, as in this way,
we reduce the coal usage in the process of energy production,
we reduce the emission of harmful gases, which is of utmost importance,
as in Serbia, thermal power plants are large emitters of harmful gases,
not only CO2, but also particles that harm our health.
However, the main problem are individual fire pits.
How much would it cost for an average household to meet their
needs, not full 350 kw hours per month, but in percentage.
How much will this capital investment cost for a start?
As for subsidizes, they exist in Serbia, for a couple of years.
Municipalities in cooperation with the ministry allocate and cover
part of the costs, it differs from municipality to municipality,
in the range of 50 percent, and for energy-impaired households,
a larger amount of investment can be covered by non-returnable
grants, i.e. a subsidy, so there is a state support in that aspect.
Of course, we need to get those subsidies, maybe some municipalities
don't have them, but it's not like they don't exist.
There is an awareness that financial assistance should be provided
in order to motivate people to invest.
As far as I know, currently most contractors calculate the price of
the system in the range of 2,000, fixed cost, plus 500 per kilowatt.
which means that if you want to have a 3 kilowatt system,
which would be sufficient for an average household,
that needs to be recalculated, I don't know it by heart,
you would need an initial investment of around 3,500.
Something like that, around 3,500.
Of course, this cost can change within a six month period.
It is a fact, though, that the cost of solar techonology is decreasing,
for the last decade, it was downsized for some 90 percent.
I often use this as an example, when I was on studies, which
happened some 15 years ago, we learned that a kilowatt hour
produced from a solar power plant is expensive and that it is not so cheap
in terms of costs, as, for example, from a thermal power plant.
Whereas now... -Now a kilowatt hour in a solar
power plant is by far the cheapest. The price of technology has dropped.
It is expected to fall further, technology is improving,
the efficiency of those panels is being improved,
less material is needed for the panels,
so certainly the technology is advancing, the same goes
for the batteries, it will all get better.
Great, let's stay on this field of democratization for now,
and then we'll proceed to the issue of batteries.
What about energy cooperatives and communities? What are benefits?
Let's assume that I want to become member of the cooperative,
or to establish with my friends one energy cooperative.
What would be the benefits and what does it mean and represent?
I don't know if cooperatives are defined in our legal regulations,
but I know that communities are defined by law now.
But community and cooperative differ. However, community is a very nice
mechanism, which enables citizen participation in the production of
renewable energy, and it is vital especially for people who are
limited in a way, and it is hard for them to take part in this.
They could be limited due to financial means, they cannot invest as much as
they should, they have limited funds, still they want to take part in energy
transition, by investing some of their own funds.
Or they rent an apartment, so they cannot install on their own premises.
The residential communities are very problematic in our country as far as
consumers/producers are concerned, presently, we have only four of them,
and they are not fully operational, so this concept allows those who
would not be able to be on their own consumers or producers,
to get together, so someone would give roof, investment, and others
necessary expertise, and to harvest the fruits and benefits together.
So, it's about expansion and joint participation of people.
I wonder what's the difference between consumer/producer and active consumer
because, if I'm not mistaken, that concept was also introduced for
the first time in our country by amending the law on energy.
Now I don't know how well it is defined and worked out,
but what does the concept of an active consumer represent
and what is the key difference between active consumer vs producer consumer.
Active consumer is a new legal institute that has been introduced,
how it will function further will be more precisely defined through bylaws
and certain regulations, but what seems to be crucial, an active
consumer compared to consumer producer can have larger capacities,
as according to current regulations, consumer producer could be one
consuming up to 10,8 kw, for a household, up to 400 kw
for the industry, this limit doesn't exist for active consumers,
so they get more opportunities, and in the same time more committments.
They are pulling each other, and active consumers can...
Those are end consumers as well, can join individually or in a group,
and participate in the production or storage of electricity, they can sell
surplus energy on the market, through aggregators or some other entities.
They can place it on the market and thus make profit.
On the other hand, consumer producer cannot make profit,
when we talk about households and net metering concept,
consumer producer can only have savings, without income.
In the legal sense as well? -Yes, that's right.
As for consumer producer in the household, net metering concept
implies a calculation period from April 1 till March 31, 2026,
we give excess energy we produce and that we do not use during
that accounting period to the supplier for free.
So, we do not have any financial compensation if we produce more
energy than we consume. -Fine, we straightened this out.
Now, as for the very appearance of the energy system in 2050,
to what extent this decentralization, democratization and decarbonization,
integration of renewable and variable energy sources to a large extent,
can affect the stability of the grid, we just hear that these are some
of the biggest and crucial criticisms of the whole energy transition concept,
people say we don't have stability, these are variable sources,
we cannot do without base load energy, our systems are aligned
like this, in this way... So, what is the solution for balancing
the intermittency or variability of renewable energy sources?
The solution lies in increase of flexibility, by all means...
This is the challenge the integration of renewable energy sources brings.
When it comes to stability frequency, what seems to be the problem with
renewable energy sources, not problem, maybe challenge...
Sorry to interrupt you, let's explain to our audience what stability
frequency means. -Of course, let's start with frequency first.
Frequency is one indicator, one quantity in the system,
which shows how production and consumption in the system are balanced.
Frequency in our system amounts to 50 Hz, and when it is 50 Hertz,
then production and consumption are balanced.
How can that value be changed? If production exceeds consumption,
at some point, then, the frequency exceeds 50 Hz, but if consumption
exceeds production, then the frequency is lower than 50 Hz.
What seems to be vital for the system, and it is the duty of the
transmission system operator, is to keep frequency within very narrow
limits, meaning that frequency cannot fall to 40 Hz, it is 50 Hz, plus or
minus 200 MHz. If it is not in this scope, frequency breakdown may occur
and other problems such as disconnection of consumers,
even to the collapse of the system, temporary or complete.
So, it is very important that we have balanced production and consumption
in the system and we know it by the frequency.
When something's wrong, the frequency changes.
One of the resources that we used in regulating frequency were
production units, synchronous generators which introduced
inertia into the system, now, you'll ask what's inertia?
Let's look at it this way. I'm not sure if the comparison will be suitable.
Conventional system that had small number of large power plants,
which had synchronous generators directly connected to the system,
can be regarded as a large truck, a large truck that's on the road.
System which has a large number of renewable energy sources,
those are not directly connected to the grid but through power
electronics devices, so they do not contribute at all or they contribute
very little to the inertia of the system.
That means that when we transform coal power plants with our renewable
power plants, out of this large massive truck, we make a lot
smaller vehicle. -Fiat 500, that's a deal.
This is great. When we are in the normal operating mode,
we can reach point B from point A with Fiat 500, as well.
Under the normal working conditions, we can easily do that,
both the truck and small vehicle will reach its destination.
The problem arises when there is a disturbance or disruption.
The disturbance might be power plant outage,
a smaller defect, sudden consumption switch...
This is the same as if you put a large rock on the road.
Truck will probably go through that rock, maybe it will shake a little,
but it will continue its path, meaning that it is very robust,
it is inert, whereas a small car can end up in a ditch.
This is the issue of big and small inertia, it is very important as
inertia defines to what extent the system is robust,
and how it can endure when it comes to disruption.
I don't know whether my comparison was useful...
I think it is great comparison, now I am also interested in
specific ways to reach balance, are those batteries,
or hydroaccumulations, irreversible pumps, what kind of technologies
we have on our disposal and how far have we come with this?
Some 10-15 years ago, people were quite skeptical regarding batteries,
and its technology, but today we have electric vehicles that
run on batteries, we will have solar power plant, a self-balanced one,
on batteries in the next couple of years, so how far did we go with
this and what kind of tecniques and technologies exist in order to reduce
variability of the electic system? -I can say that we work on that.
We had made quite a breakthrough. Integration of renewable resources
brings challenges, as they are unpredicted and variable,
and among solutions is to try to strengthen the flexibility of system.
So that it becomes more adaptive to all the changes that might occur.
Earlier, changes were coming only on the part of the consumption,
and now we have changes on the part of the production, they can be larger,
so the system has to be more flexible, and more adaptable.
There are several ways to strengthen the flexibility of the system,
one is energy storage, we are mentioning batteries and they
will be more and more present, because the price of technology
is expected to fall, and if we follow trends for the development of other
technologies, we have to say that batteries are not only solution for
storage, we can use diverse mechanic storages, flywheels,
gravity over the warehouse, reversible hydroelectric power plants,
this is a rather significant resource and it is particularly interesting.
Flexibility also has an exact temporal decomposition,
it means that some storage devices will be more suitable for shorter
intervals, and others will be for some longer intervals,
depending on what we need. Batteries are great for some
shorter intervals, when the changes are in smaller time intervals,
other devices for other circumstances. This is one of the mechanisms,
but there are others, as well. There are several mechanisms
for increasing flexibility, grid modernization is one way
to increase flexibility, we can then have better observability and
controllability, to manage the system more successfully,
including the usage of advanced algorithms, control algorithms.
There are several ways.
Excellent, and what would we use in the long term?
If we need to store energy for longer periods of time?
Yes, as for storage potentials, we can ask for how long?
We can always store more energy but the costs are higher.
As for capacities, power plants can be of significant use,
we talk a lot about base energy, that storage cannot provide.
If we have an energy deficit for a longer period of time,
because that would mean that we have a storage with a much larger capacity,
which is not economically justified, and this is one of the solutions.
Now, what would be base capacities, nuclear power plant or small modular
power plants, or something else, maybe some new technology,
such as hydrogen, perhaps linking of several sectors, power, heat, gas.
This could also contribute to certain level of flexibility and reserves,
it is all a subject of study and it should all be carefully selected.
Where are we when it comes to the development of hydrogen technology,
this is always very intriguing issue, also controversial a bit, in a sense,
as there are diverse scientific articles and expert opinions
on this subject, starting from hydrogen volume, to its flammable
nature, chemical composition and the performance itself as an energy source.
Where are we and in what sectors it will be used mostly, maybe on the
energy sector especially, or in transportation field, where are we?
And whether it has a likely future soon?
I believe that this answer is not clear-cut either. -Of course...
Yes, but we have made a lot of progress.
Hydrogen is a promising technology, but what's promising and has potential
it doesn't mean that it will actually be established as genuinely valuable
to have achieved a real value in couple of years time.
Still, today this storage type conversions mean that when
we have hydrogen on our disposal, and then we use it in order to
produce electricity in accordance with our needs, but I believe that
still this isn't profitable neither in economic or technologic sense.
It doesn't mean that it won't be in some five to ten years...
In the power industry, I'm not sure, to what extent it could contribute,
while in some other industries, it surely can, in transport,
in industries that use some other fuels, I believe it could contribute
better in the immediate future... -These are more intensive industries.
Compared to electrical engineering, power system, through this process,
to obtain hydrogen by electrolysis and then to have processes that
allow hydrogen to produce electricity, I think it's still a bit far from us.
It's good to say this because of the viewers, technical solutions are not
ideal either, two degrees in innovation so to speak...
First, technical technology, price, that is, economic aspect,
because some technologies can work but it is not economically profitable
for usage, it is not profitable and it is not implemented at all,
such was the case with batteries. As for solar panels, they exist
for some 50 years, but they turn profitable for the last decade,
or for the last 15 or 20 years. As for the innovations in the
production, you've mentioned that the price of solar panels keeps
dropping but far less materials has been used in the process.
What is the case with wind turbines? -It is similar, somewhat slower.
I believe that for the last decade, the price had decreased for some
80 percent which is significant, we are talking about efficiency
here, now bigger turbines have been made, and then economies
of scale are always present, if something is bigger that means
that the cost per kw/h is smaller, there we experienced progress.
Fine. My next question would be what do you see as key obstacles
for energy transition in the future time interval, not to limit the time,
without ending up with the question where you see yourself in five year
time, but what do you regard as crucial challenges there?
Well, I am an engineer, I regard it from technical point of view,
and as far as technology is concerned, I don't regard it as limiting factor.
So, I believe that engineers will do their job... -We hope so...
Energy transition is not only technology transition, but it is
a broader concept, this is social transition.
So, we cannot just regard that stong technical aspect,
but show a broader image, political, geopolitical, legal,
regulatory, economic, and finally, social aspect as well.
So, as for challenges, I would say that for Serbia and for our region
in general, economic aspect presents quite a big challenge.
Energy transition costs a lot, financial means should be provided.
This financing is limited for us, compared to the EU members,
as they have access to funds that we lack, so financing that
defines bankability of some projects can pose a challenge,
and of course it couldn't be realized without political and regulatory side,
I think that Serbia made smart moves during last year,
we adopted strategic documents, as well as energy development strategy,
we adopted integrated national energy climate plan, and it is
very important, because by doing so, we have defined our goals.
As for the road to take to achieve those goals, we will agree on that,
we'll see how we should fulfill our goals, but this is the first step.
It is also significant to point this out, but we should not
disregard that social aspect as to how to urge the citizens
to take part in that transition, how they can contribute to be
the main actors of it, because in the end, they should have
the greatest benefits from it. -I like this last sentence of yours,
I believe it is perfect for some kind of conclusion.
What would you say to our audience, to include themselves into energy
transition, to get involved and take up things into their hands.
Among other things, yes, but not everything is up to the citizens,
they need support from the system. I would like to point out that energy
transition is not so connected with technologies, with technical aspect
but it is social transition, and social aspect currently has
the biggest benefits, while the role of the system is to try to urge
people to be actively involved and to become the bearers of that transition.
The citizens should get engaged, but the system also needs
to make it as easy as possible. -Both top-down and bottom-up.
Thank you very much for being my guest. -Thank you for inviting me.
Produced by New Magazine
Supported by Open Society Foundations for Western Balkans