This is Tom Rowlands Reese and you're listening to Switched on the podcast brought to you by BNF.

In April of this year, Spain and Portugal experienced a massive power blackout, with severe voltage fluctuations triggering a grid collapse that led to the widespread disruption of transportation, communication networks, and essential services.

The Spanish government and red Electrica de Espana, the transmission system operator or TSO for Sure, both agreed that this voltage fluctuation was the root cause of the incident, but presented separate reports that offer conflicting opinions as to why authorities were unable to bring voltage under control.

As always in these situations, renewable energy sources have come under attack for their potential role in this outage.

But as we sift through the reports and assess the evidence presented, what was the actual reason behind the blackout and what forms of grid upgrades and management could help prevent the occurrence of similar large scale incidents in the future.

To help unpack the reports and identify possible reasons for the blackout, on today's show, I'm joined by Ava Gonzales Esler, a senior associate from our Grids to Ta, we discuss findings from her research.

Note Iberia Blackout blame before facts, which BNAF clients can find at BNF go on the Bloomberg terminal or on BNF dot com.

All right, let's get to my discussion with ava.

Eva.

Welcome to the podcast.

Thank you for having me.

So today we're.

Talking about the Iberian blackout, which happened in Was it April.

Yeah, it was the end of April, on the twenty eighth.

I mean I should know this because actually at the time my parents were in Spain on holiday and they lost all their power.

But you're Spanish, so this is small for I'm assuming your entire family was.

Affected by this.

Yeah, So anytime the lights.

Go out, it's a really big deal wherever you are in the world, and there's always a great, big post mortem that happens to try and understand what's gone on.

And as we were talking before we press record, you and the producer were saying how it was a little bit like a murder mystery trying to figure out because we all know what happened which the lights went out, there's been a lot of debate about what actually happened, So can you just tell us a little bit about some of this debate, and it's interesting that you know, you're part of our grids team, you also happen to be from Spain and this was obviously it wasn't just Spain that was effected, with Portugal as well.

We probably have a unique perspective on some of that debate as well.

So, first of all, we don't really know what happened.

When both the Spanish government and read Electrica, which is the system operator, released the rewards analyzing the situation, it seemed that they were more focused on pointing fingers blaming different stakeholders rather than looking at exactly what happened.

If you look at the research note that we put on beneath dot com, there's at least five questions that are key to the event for which we don't have an answer, for example, why the power plans started disconnecting.

But what they do agree with in the two reports is that there was an overbold each issue that triggered a cascade of events and plans start did disconnecting.

And then there were other events that far exceeded the security criteria for which the Spanish greed or any grids are designed.

And that's why the lights went off.

So over voltage has emerged as a suspect, even though these two reports have actually slightly different conclusions.

Yeah, this is one thing they agree on.

Where do they differ, Well, I guess.

The main line for the Spanish government report, They say that it's it's all about assigning a blame.

As I said earlier, So what the Spanish government says is that the blame would sit solely within Red Electrica because they didn't provide or they failed to secure enough voltage resources or voltage control resources.

And then there was also reported then some power plans that were hired to provide the voltage control not only failed to do so, but only managed to make the situation worse.

So then, according to the Spanish government, it will be the fault of the system operator and some power plans.

But then Red electric has said that they actually did provide enough voltage, and so the blame would solely sit with these companies that fail to provide what they were contracted to do.

I just want to understand.

So, in a sense, the argument over what happened is no longer about the technicalities.

It's more it's kind of coming back into the human domain.

Of who didn't do what they were supposed to do?

Is that right?

Well, it is right, but it shouldn't be like that, Like an incident like that shouldn't be politicized in this way as to just point fingers.

And there's there's some technical details that still are unknown to the public and that are absent from the reports.

Right, I mean, I suppose, I mean we shouldn't be surprised that fingers getting pointed.

I mean, every time there's a blackout or any kind of public disaster, you know, it does enter into the political domain.

And obviously pointing fingers is you know, particularly when people don't have the facts, is not right.

But at the same time, there maybe is some use in assigning accountability if indeed, whether it's Red Electrica who has a obligation to society or these other companies that have an obligation to Read Electrica, if they haven't done what they are supposed to do, then obviously we do need to understand that.

But is what you're saying is that they're pointing fingers before they even have enough facts to be able to point the fingers.

Yes, exactly, That's what I'm saying.

Yeah, got it.

So this is super interesting.

I suppose you know a lot of our listeners.

I think they'll understand this whole thing about the politicization of an event.

But there's this concept that you've introduced that is very specialist, which is this idea of over voltage.

So let's try and explore that a little bit to unpack some of this mystery.

So there's several ways into you can go for blackout, and in this case it was over voltage.

How that's over voltage trigger a blackout?

Well, basically there are protections, electrical protections attached to power plants, some substation and when the voltage becomes just.

To go really basic, it's over voltage.

I know, it sounds like I could dumb question.

And when the voltage is higher than it's supposed to be a certain threshold, it yes, exactly.

So then there are protections everywhere in the electrical system, and if the voltage becomes too high or too low within a certain range, these protections will disconnect whatever is connected to them, and that can be generating power plants, large industry groups, your house, anything would disconnect from the network if the voltage is outside some ranges.

And is that because if they stayed connected.

There's a danger that those things, whether it's your home or whether it's a generator, that they'll be going to become damaged and it's going to cause you know, billions of dollars of damage across the network.

They don't yeah, exactly exactly, yeah, to protect the equipment.

So Red Electrica and the government both agree that there was the voltage.

Was too high.

Was this across the entire of the Iberian Peninsula?

Was it in certain specific parts?

I mean, is this a localized thing anywhere or does that apply university to the whole system.

Well, no, voltage is really local voltage of like, certain lines or certain areas of the network will be very different the voltage in other areas or other parts.

So then when when the voltage becomes too high in a certain area and protection starts dripping or plants start dripping.

If it's a generator, then with every loss of generator, the voltage raises even more in the vicinity, and then more generation trips until they all trip into a cascade that provokes the blackout.

So it can be a real domino effect.

And I suppose when the system is designed and there's this thing where all the different generators can trip.

I suppose they know that it's going to have this cascade and there's going to be a blackout.

But that is preferable to all of your generators being damaged, which can I guess is considered a much bigger problem.

Yeah, and even if the protections act and this connect some of your equipment, that doesn't mean that all your equipment is going to be undamage.

There's electrical industrial equipment, for example, aluminum smelters that if they don't have constant power at all times, they're very hard to like run.

So there's you know, not all machinery can be saved even in the event of our voltage.

So I want to try understand a little bit about what it means when we say, you know, obviously we've identified what it means the voltage is higher than usual, and then Red Electrica and other system operators like them, they have various tools to stop.

The voltage getting too high.

I want to kind of understand, is voltage like a car on the road and regulating the voltages like a steering wheel is there?

You know, of course you have to be using your steering wheel even on a normal day, and when you crash it's when you don't have your steering wheel.

Or is it more like a train where it should stay on the tracks and you only need to resort to emergency measures to keep it on the tracks when something is wrong, Should the focus be on why did the things that were supposed to keep the voltage in this range stop working?

Or is there another question of why was it drifting outside of that in the first place.

That's a really good question.

The voltage in Spain had an underlying condition of being relatively high, and actually, if we get really technical, or a voltage didn't go the blackout, it was voltage swings, so the voltage changing too dramatically between high and low or higher and lower if we get to the technical bits.

So it's more like a car.

You need to constantly control the voltage because the voltage is the result of a balance between something called reactive power.

Reactive power is a byproduct of electricity.

So you'll have your active power, which is the one that's measured in megawats or gigawats, and it's the one where like your plants generate, and the reactive power is used in motors and in transformers to generate voltage and make sure this equipment works.

But it doesn't perform any work.

It's more a byproduct of the flow of electrons that creates electric and magnetic fields.

And ways to control reactive power.

Some ways to control reactive powers are better than another's, and so you can have some fixed that just generate an amount of reactive power regardless, and you can have some dynamic ways in which you inject or consume reactive power to have full control of the voltage on a certain line, on a certain mode.

Just want to make it really clear, is what you're saying.

Is the question is not you know, why was the voltage going high.

It was why did the controls that are supposed to keep the voltage limited not do what they were supposed to do.

That's the real question that it's at the heart of this.

Well, we should also ask why it was relatively high in the years before, because one of the things of this blackout report is that it focus it focused a lot on like the actions just before or just after.

But when agreed riches have blackouts never because one thing.

It's because of different things that went wrong at the same time.

And if one of them had been better, then maybe the blackout could have been avoidable.

H got It's like it's never about one thing failing.

It's always like multiple issues combining.

Which is I suppose why blackouts are so rare.

I suppose, but you know, we should have half our glass half full.

Is that normally there's multiple sort of layers that protect us from a blackout happening.

So I guess there's a couple of questions I have, and I'm going to ask them both at the same time.

One is that there's this other grid.

Factor that is talked about when there's a grid failure, which is frequency, and because often when there's a blackout, that's mentioned, so I'm sure people have talked about that.

Does frequency connect to any of this?

And then the other one is whenever there is a blackout in a grid, people blame renewables.

I mean, even in grids where there aren't very many renewables, people blame renewables.

Spain actually does have a really high penetration of solar, So I suppose, yeah, there's these other you know, in this murder mystery, there's these other villains that have had the suspicion cast on them by various quarters.

You know, especially if you're on social media, can you just talk about, you know, your view on the merits of bringing those other topics up.

You know, the first oscillation was triggered by a solar plant, but that oscillation was solved by mid day twelve or twelve past mid day, and the blackout was at thirty three pass.

So even though people are still pointing at renewables because that was the original incident, of the of the day is still not clear because it was solved.

Frequency is another key of power stability.

I talked about reactive power when I was talking about voltage.

This frequency is an active power issue.

As you will know, power systems run at like fifty herds.

I think in the US is also fifty herds.

In Europe is fifty herds, and that is the frequency of the system, and it needs to be balanced at fifty herds because again there are protections everywhere that the frequency is too higher to low will disconnect.

And for every protection that trips, the variations of the frequency become higher and more unstable.

So that that's how frequency causes a blackout.

And so frequency is about matching supply and demand every second.

If supply is bigger than the mand the frequency will be slightly or fifty, and if the mond is higher, it'll be slightly be low fifty.

Now there's something called inertia that renewables are blamed because they don't have it, And inertia is basically at which speed the frequency will change depending on the supply and amandum balance.

So if you have a system with more inertia means that if one generation drops, you have more time.

It buys you time to solve this frequency and balance.

It's like a system with high inertia.

And I always I remember like, well, look I was saying about inertia.

I thought, oh, it's a metaphor for inertia, the physical concept.

Now I realized it's literally inertia because it's all of these spinning things have energy stored in them which help cushion like any oversupply or under supply.

So it's kind of almost like, how forgiving is your system to supply and demand imbalances on a short term scale?

Just easier to manage a system with high inertia, right.

Yeah, exactly.

But heavy grids also collapse.

And there's an example in two thousand and three in the northeast of US that low renewables, and that grid also collapse, so there can be more things than go wrong.

But yeah, as you said, it is really a mechanical thing because the synchronours generators, which are those that's been at fifty hertz, are connected to the grid, and these are the ones providing the inertia and renewables around wind.

They don't have this inertia.

Solar doesn't spin, and the wind speams, but it speams not that fifty herds necessarily, but at the wind speed.

So blaming it on frequency, which is often an issue, is like a pathway to blaming it on renewables exactly.

But that Ben said before generators before what we call now traditional generators, so like GUS but also hydro nuclear, we're able to provide the inertia.

Synchronous condensers existed already to provide inertia.

So it's not that all renewables because they can't provide it, they are not suitable for the system because the Greek technology to provide it existed already well before.

It's a well understood problem with well understood solutions exactly.

So let me try and understand where we are up to with this murd mystery.

So we've ruled out the idea that it's frequency related, even though that is often involved in blackouts and by association, it's not really related to renewables.

In this case, frequency issues made the over world.

It's worse because, as I said, there's there's no one only on one guilty.

Yeah yeah, yeah, so maybe maybe frequent If this was a murder mystery, frequency did not pull the trigger, but maybe it was at the scene, you know, provoking some.

Of what happened.

Yeah, exactly, so we know the lights went out.

There's this kind of slight lack of clarity still on exactly why certain things happened.

The government the TSO have both published their reports with slightly differing views, and maybe we shouldn't be surprised on how they've assigned blame because they've basically blamed the party that is accountable to them for what's happened, So that shouldn't be a surprise.

But are there any other reports or investigations that we can expect, you know, from groups that have access to the information to be able to make a call or is that sort of where this ends in terms of official investigations.

So there's another report that we expect within six months of the incident provided by Enzo, and there's a big group of like forty expert people within twenty five tsos or something like that, that would probably be more neutral because there's different stakeholders from different regulators in Europe, different tsos.

However, some of the information that's missing from the report, in our view, cannot be provided by ENZOE.

If, for example, if the generating plants don't contribute, so information of why the first generation plant tripped, it can only be known by said generation plant, and so it can gather some data and cans can have some theories, but we will never know if these plants don't give a statement and don't say actually, this is what happened.

And that becomes very clear in a report that the UK put together for a very small blackout in a very small area on the east, in which you see that if you don't have this inside information, you have no clue of what would have happened.

It's so interesting with these things.

It might well be that there was a single plant with a single fault that disconnected because something maybe was calibrated wrong, or there was like a computer error, and so you know in a certain way of thinking, we could say, well, if that is the case, then all of this was that one plant's fault.

But also, living in the real world, we know that these things are likely to happen at some point, and so you know, going to your point around how there's always multiple things that combine a system should be more resilient to those kinds of faults.

So I suppose a question too, is has there been any thinking of, you know, knowing that even if we never get to the bottom of exactly what happened, is there already some conversation in Spain and Portugal about what could be done differently to make the grid less susceptible to this kind of blackout?

And do you have your own opinion on what should be being done differently.

Well, two things come to mind.

The first one mayatheror Spice Red Electrica suggested to the regulator five years ago so that they should change the way that they regulate voltage, because right now, the way the options that Red Electrical has to regulate voltage is just use the traditional power plants, so say, call gas, hydro and nuclear, and all that the renewables need to do is to keep it within a range that we call the power factor.

So whenever the generation lowers in renewables, the reactive absorption also lowers, and that's also something that triggered the blackout in this instance, that there was a frequency oscillation between France and Spain.

The way to deal with that, and that's very normal because the interconnection capacity between fronts and Spain is very limited and that's a very well understood issue that happens between fronts and Spain.

And so they lowered the generation in Spain and when they lower the active power, they also lower the reactive power absorption, triggering even more voltage that went up, so aggravating the problem in this case.

And these regulations that have taken five years to get approved will allow renewals to participate in a reactive power market and provide reactive power in real time, so that that would be awesome for the system.

And there's also some advanced great technologies that Read Electrica can invest in and if you will, look at more isolated grids, because at the end of the day, Spain is quite isolated from Europe because as I said, there's limited capacity between fronts of Spain, and that's also the case for the UK, which is an island, and so it's isolated from Europe as well.

And the voltics which recently synchronized with the European system, they were synchronized with Russia before.

Spain has been lagging compared to these other isolated grees into advanced technologies such as synchronous condensers, which are the ones that I mentioned before have existed for years.

But it's a synchronous condenser.

I'm just curious because I see it written in reports.

I have no idea what a synchronous condenser looks like.

It's basically a spinning machine.

So you plug it to the power to the system and it spins at the said frequency and it provides inertia.

But now they also have some power electronics and they also they can help with reactive power as well thanks to power electronics.

So it's a river'sa tile machine that allows you to con.

Next generation flywheel.

Yeah, exactly, exactly.

Carry on with what you're saying now that we've established one of a synchronous condenser is yes.

So the government announced plus week that they're going to invest seven hundred and fifty million euros on the grids, and part of that is to buy eight synchronous condensers for mainland Spain, and that would save the system something like two hundred million euros a year, which is a lot because the operating costs.

If you only rely on on synchronous generation, you need to pay a higher power price because they were out of the merit order because renew was produced cheaper.

So you need to provide a higher power price so that they give you the.

Could you just explain, I mean, because I look at power markets, I know exactly what you mean when you say that.

But just for people who when you say, oh, they're out of the merit order, put that in layman's terms.

Sure, So every day to provide power to the general population, there's an auction system that matches supply and demand.

And so for example, all the power all the BIV power plants will say we can provide two jigawatts at close to zeroco system because the sun shines for free.

Nuclear is a bit more expensive.

And then with the current gas prices that we have in Europe, the most efficient plants will have a cutoff price that's close to the gas spot market right now or the gas price, but the less efficient power plants will have higher prices.

As I said earlier in Spain, these are the plants that are used to control the voltage.

So it means that now the regulator needs to pay the renewables that were very cheap to stop producing so that supply and demand are always balanced, and they need these inefficient plants to produce instead, not for the energy, but so that they can control the voltage and the frequency.

So that's how you get savings in your system with synchronous condensers.

So let me just make sure.

I'm going to read this back to you and you can tell me if I got it right.

So there are some power plants that are not competitive at current power price is basically because wind and solar are so much cheaper and are meeting so much of demand.

But those plants in the kind of system that has been those plants still basically get paid to make up the difference between their operating costs and the power price so that they're online to provide that stability.

And so with synchronous condensers, which will you know that they don't have any fuel costs.

They just take excess power from the grid and absorb it, or they'll have very low operating costs at least sunny means that there's no more made.

They have higher braiding costs, but not as high as Yeah, I mean, it depends on how you even high.

But they will have lower operiding costs than your most inefficient plants, So you're right, right, right, right, You're.

Right.

They'll be cheaper than these these plants.

So then there's a saving that will happen from this investment, which is no longer needing to pay inefficient plants to generate even when they're unprofitable.

Yeah.

Do you know how much Spain spent in regulating issues other than voltage in twenty twenty four?

No, but I've got a feeling, and to tell me.

Over three billion euros three.

Billion euros a year.

Yeah.

Wow.

So I'm guessing these synchronous condensers, amazing as they are, they're not going to completely offset that three billion euros, but they're going to take a bit out of it.

Yeah, exactly.

And the more comfortable red electric igage with these, with these new machines, and the more they are understood, then it means more of these can be deployed.

But yeah, as I said, the UK and the Baltics have already a lot it was time for Spain with some of these given that they are also isolated within the European network.

And I suppose, you know, and it was really unfortunate.

I make it sound like, oh, the good thing about this blackout is that it's accelerated making some necessary changes to the grid.

In order to avoid a blackout.

But you know, in a way that the blackout has happened, and these things do come with a human and economic cost.

And I know that for most of us, the experience of a blackout is that it's annoying and inconvenient and uncomfortable, but actually there can be really serious consequences.

And I think I saw in the notes somewhere that there's been calculated the impact that this had on Spanish GDP.

So Spain has already suffered a bad blackout.

But it sounds to me like irrespective of whether we ever truly learn exactly what happened and whose fault it was, actions are being taken to help reduce the likelihood that such a thing will happen again.

Yeah, definitely.

And you know, it's so interesting talking about this with you because you know, and my job I cover power markets, so in theory I should know all about this stuff, right, but I don't.

You look at grids.

There's a bunch of stuff you look at that I have no idea about, but it really speaks to this.

I like this thing that I think is sometimes overlooked is we're talking about what is widely perceived and was a crisis for Spain and the Iberian Peninsula as a whole with this outage.

But even on this podcast, I've learned, as someone who look a powerful time, I've learned a bunch of things just understanding why the lights went on, and it really illustrates why it's actually just a miracle that the lights stay on at all in the first place.

You know, we're so used to this perfect and uninterrupted power that we take it for granted and all of these things, and we can have opinions about what's the best strategy or the worst strategy.

It's always easy to sort of say they got it wrong when the lights went up.

It's actually really an amazing feat of human ingenuity and engineering.

I always say this, the power system, it's both a technical machine that is also plugged into and being operated continuously by human leavers.

Like markets and regulation, I don't think there's anything else like it.

So now I know that we've been kind of on this murder mystery who killed the Spanish power grid?

I think also, like, let's just take a moment to appreciate how incredible and one amazing job this thing is in the first place.

And you know, sometimes people point the fingers at renewables, and maybe unfairly, but I think it is fair to say that a system so complex that is experiencing change, there are going to be missteps along the road.

I know.

That's just my little thought for the day.

I realized I'm supposed to be interviewing you and I do you agree or do you have any other reflections like that?

Yeah?

I agree.

I guess I had some reflections when I saw the reports and I saw that like some information was missing, that this shouldn't be the case, Like if the power really went off, it's obviously not because of one thing.

It's because one thing and another and another, and so we all should be able to learn from what happened and prevent it from happening in the future.

And it seems that people or stakeholders or politics are using this as an opportunity to point fingers instead of you know, solving a problem that the whole nation and Portugal have and that shouldn't that shouldn't be like that.

It should be avoided, and we should have objective information of all the key questions that we don't have, and there should be better communication to understand what really happens so it doesn't happen again.

Well, I suppose, I would say, at least the politics is always going to be like that.

And honestly, as I was saying, this stuff is really complicated, I didn't expect a typical politician who isn't an electrical engineer by training to ever really understand what went wrong.

So they're probably always going to be a bit like that.

But at least it seems some positive steps are being taken.

Am I reading it right?

Or does this feel very reactive what you're seeing?

Yeah, I mean it's it's probably a bit reactive, but it's also historical context.

So in Spain, GRED investment is sculped as a percentage of GDP because there was a big depth from the power system.

And yeah, according to the regulator calculations, the DEVI will be paid off fully in twenty twenty eight, but it has been over ten years of paying debt.

And so there was this Spanish law that was set to run the power system using the minimum costs possible, and that means that you know, there has been there hasn't been a lot of investment in the Spanish power graith, which can look like, oh, they did agree to job, they're super efficient, or actually they're under investing.

And there's these things that are coming to light now because of the law that tried to keep cost to a minimum.

Yeah, it's such an interesting point.

And you know, I manage a global power team and everyone is like looking to model markets and forecast markets, and there are certain markets that I think people are more enthusiastic to model than others because there's some of the most interesting and the ones that are sort of at the bleeding edge of the energy transition.

So I think of like California, for example in the US, or Urkot, which is Texas in the US.

Spain is a.

Market that people are always like really keen to do analysis on because it's so interesting and there's so much to learn because you know, you have a very high penetration of solo.

I mean, we're looking at really cheap electricity now during the spring at certain times of day, and you know, be interesting to see where that trend goes.

So everything you've just described to me is just.

Another layer on why there's a lot we can learn from looking at Spain.

Sometimes from looking at what Spain does right, and if Spain as a country or as the operators or the government makes mistakes, everyone else can learn something from that as well.

And that is the nature of the energy transition, is that we are looking at across markets trying to figure out what's going on.

Yeah, un changing a system that you know was very centrally run to one that's very dish, really generated, that will take some learning everywhere, for sure.

Absolutely, Ava, It's been absolute pleasure, and thank you for providing some really interesting context on, as you say, something that's so politicized but it's a really technical question at the heart of it, and actually fully explaining so much of it.

I mean, if if you take nothing from this podcast, you all know how a synchronous condenser works now.

But I learned a lot more than just that.

So thank you very much for joining today, Thank you for hosting Ry.

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