Energy's innovation challenge: closing the deployment gap

Adam Sroka (00:00)
Welcome back to the HyperCube podcast. I’m joined today by a woman that needs no introduction. Laura Sands is chair of OFTRA and Innovate UK Networks Innovation Task Force, but has done so much stuff across the energy sector. It’s ⁓ an absolute pleasure and an honor to be speaking today, Starstruck, just about done with it. So thank you for joining us. Laura, I guess.

Laura Sandys (00:40)
on it.

Adam Sroka (01:05)
Do want to introduce yourself ⁓ for the audience, for the few people that might not know who are?

Laura Sandys (01:10)
Well, Adam, I’m absolutely thrilled to be on this podcast. So thank you so much. And I’m sure I need lots of introduction, but ⁓ I’m primarily a sort of energy geek, recovering politician on the board of quite a few energy companies. And what I love are system problems. And that’s really what we face through this energy transition, which is exciting. So

Anything to do with systems and the interrelationship between all these fabulous silos that we’ve got in the energy sector, that’s me.

Adam Sroka (01:47)
Fabulous silos, love it. I mean, you’ve worked as you say, government, you’ve worked in industry, plenty of task forces. Like one of the broadest like strategic level perspectives, I guess out there, how does your mind shape what you see and how you see the sector today?

Laura Sandys (02:08)
Well, maybe both from my commercial side, but also obviously from government and working with ⁓ on sort of policy areas. There are tensions between, you know, policy, regulation, real on the ground delivery, regulated businesses versus unregulated businesses. And then that fun thing called, you know, parliament and scrutiny and

all of those things ⁓ and now we’ve got a very contested site. So I really do understand the tensions between all of these silos and that is really in some ways that’s part of the checks and balances. But there isn’t a lot of whole system thinking. There is not a lot of strategic architecture. And as a result, we end up with a very complex picture.

of lots of different actors, all issuing consultations, which I’m sure most people on this call would say, ⁓ my God, not another consultation. And actually in some instances, well, not in many instances, we lack action. And so there does need to be quite a strong simplification of the system, of the regulatory framework and of decision-making.

going forward. we will see whether some of these things will materialize some rationalization.

Adam Sroka (03:36)
mean, you’re going to go off piste immediately, like, is it possible to hold all that in your head? the system, is it intractable? Like I don’t have an answer. It’s not rhetorical. Like, is it, do you think for any one group to have all the requisite skills and experience to do that strategic level architecture design stuff?

Laura Sandys (04:02)
I really think it is because I don’t think they need to be the experts. What they are is the overall shape of the sector going forward. And one of the things that is the major problem with all these silos that have emerged over time is actually the value to the system lies between the silos. And nobody is looking at how these silos knit together.

Adam Sroka (04:25)
guys.

Laura Sandys (04:31)
And so there does need to be a much greater and stronger focus on the architecture and then the integration. And there are quite a few examples. I mean, it’s very funny if you… Maybe it isn’t less funny, actually, but if you think that desners or bays in the day procured a huge amount of offshore wind, really, really great. In another silo we have Ofgem.

who was not understanding the amount of generation, so didn’t bother investing in networks. So now what we’ve got is we’ve got wind farms, and let’s call them farms, right, that have no roads to them. And so all our food is dying in the fields because we forgot the food, we forgot the roads and we forgot the storage. So seen where…

whole system thinking has actually caused a lot of cost and a lot of problems. And that sort of analogy, it’s not that difficult that you need a road to get your food out of the field, you know.

Adam Sroka (05:42)
mean, if you read Made to Stick, it talks about the visualization of ideas being really important, the way you present that there. Could you imagine the outrage if you saw the tabloid screen of food rotting in fields in the UK? If that was happening in the food industry in the UK, Edlum. But because it’s energy and it’s like, it’s like kind of like.

Laura Sandys (06:01)
Mm-hmm.

we don’t

really understand, you know, whatever.

Adam Sroka (06:09)
Yeah, mean, yeah, okay, amazing. I realized that as soon as I asked that question and you started answering that I don’t understand all the elements of my own business, but I’m still the expert in the room and I can still design and shape. There’s techies in my business that do wonders that I’ve never touched. So yeah, fair enough. And then the…

I’m going to misremember this, it’s going to annoy me into look up later. I remember reading something that actually all the best innovation happens at the interface between two hard problems. And that’s the line.

Laura Sandys (06:37)
Exactly.

Exactly. And that’s also where we’re going to potentially drive a lot of efficiency, productivity, but also new business models. So these silos are actually precluding people coming forward with new solutions.

Adam Sroka (06:57)
like you’ve said, I think this leads us into, you’ve said before that the energy sector needs to get out more. Is that still true? Where are we most guilty of being inward-looking?

Laura Sandys (07:03)
Ha ha!

Okay, so now I’m going to really upset everybody on this podcast. We have fantastic experts in energy. It’s wonderful, really, really great. But actually we have a huge amount to learn from other sectors and we don’t get out a lot. So If you think of the distribution and transmission side, is that not very similar to logistics?

So if what you’ve got, let’s say DHL, I think they move 60 million parcels around the world every half hour, right? It is totally and utterly automated and actually it’s more complicated because there are human beings involved. Actually, if you Let’s say electricity, first of all, it doesn’t go off like let’s say food, because it’s quite a simple process

governed by physics. And Secondly, there is no human being really involved in the logistic part of it. So the whole logistic side is really, really interesting. And One day I hope that we’ll have somebody very important in the energy sector that comes from the logistic side. So I think we can learn a lot from that. We can also learn a lot, I think, from the food sector, which actually

has optimized certain commodities and then manufactured them into solutions. So let’s talk about wheat, right? So wheat only comes twice a year. We eat bread every day, don’t we? So we have two harvests and every day we’ve got bread. Now that is all to do with the integration of

obviously farming, also storage, refrigeration, manufacturing with yeast and everything. And then we are delivered a 360 degree product. And so I think there is the whole area around productisation, multiple ingredients going into a product and

Energy will never be as complicated as that. So it’s actually quite simple, but I think we can learn ⁓ from a lot of sectors. The telco sector, they’ve gone through exactly the same, in many ways, revolution. Everything used to be, I mean, you’re probably too young, but you remember something called the IBM mainframe? Hey, my mainframe is bigger than your mainframe, right?

Adam Sroka (09:40)
Yeah.

Laura Sandys (09:44)
And now the whole system has been turned on its head and it is designed around users and it’s designed around devices at the so-called grid edge of the telco data market. So, and my mobile phone is being optimized all the time. I don’t know whether the data is coming from the device itself, a local data cache or a central data center.

This is all being done around my journey. So I would welcome that we got more people who came from other sectors that have been very, very consumer facing. Fast moving consumer goods, electronics, et cetera, et cetera. So maybe, maybe one day.

Adam Sroka (10:32)
Maybe. Well, like, I mean, we’re trying, but I think it’s interesting because I agree with you, but I do have that hunch that I just, and it’s a cultural mindset thing. It’s like, if you click your fingers and you can have all these people, ex-Amazon, 3PL people, DHL, whoever you wanted, plonk them into the sector.

Does the sector have the mindset to change or the culture? There’s this massive wall, I think, that they might get.

Laura Sandys (10:59)
So I had a few experiences. When I first started working very deeply in the energy sector, I mean, I’ve been involved for about 35 years, but really in the power sector. Have you got an electrical engineering degree? Well, I I left school at 17, so I don’t have a degree at all. So there is an exclusive club.

element to this. ⁓ It’s not that we don’t need fabulous electrical engineers and it’s not that we don’t need fabulous energy economists but sometimes and we’ve seen this in some policy areas we have the combination of the two E’s the engineers and the economists and the engineers want perfect system design and the economists think we’re all going to respond

rationally within the energy sector. So if my mum is cold, but the price of energy is very high, the economists would think, well, I’ll just, you know, the heating off. Well, I’m absolutely making a rational decision by keeping my mother alive. But that isn’t so we’ve got the two E’s that want perfection and think we’re all going to act rationally within energy.

and that needs to be broken out. I think that there is a very big fundamentalist, my new sort of soapbox, and that is I think that the energy sector thinks it’s on this earth because God put it here, right? ⁓ Actually, Actually it is a service sector and the culture of service ⁓

needs to be very, very much more ingrained in everything we do. We talk about customers, but do we really love them? There was a chief executive who went into the chief executive of Ofgem and said, I’ve got 2.3 million MPAN numbers and the wonderful chief executive of Ofgem said,

I’m not really going to continue this conversation until you start calling them customers.

Adam Sroka (13:24)
Yeah.

Laura Sandys (13:26)
So listen, I’m creating sort of stereotypes, but I think we do need to understand what customer cultural shifts are needed within the sector and within the regulator and within the policy makers.

Adam Sroka (13:45)
Yeah. And I think it’s really, I think like, it’s hard to do at the consumer level if you’re not in the retail bit, because you immediately get into massive complexity and huge, like sort of everything you could possibly say there’ll be an exception to. So how do you manage that? And what’s the tooling? And then, yeah, people do fall back to, I said it in the room the other day, but like in the absence of a decent system or good understanding, we just find someone that’s old, that’s done it for ages.

Laura Sandys (14:01)
Yeah, yeah.

Thank you.

Adam Sroka (14:14)
just take their gut instinct because

it’s too hard otherwise. We just find someone that’s done it for years and they go, well, they’ve got the scars and they are really capable. Just use their accountability as a safety blanket for us. And I think it is such a challenge to do. And we’re seeing this massive step change in technology, right? And like it’s where we live and breathe and AI is becoming the new thing. But we still have an argument about the cloud.

Laura Sandys (14:19)
Yeah, yeah.

Adam Sroka (14:43)
digital adoption and like things that banking, for example, solved a decade ago that’s proven and it’s regulated and it works. And why are we still trying to adopt digital transformation? mean, do you think the leadership across the sector, leadership teams today do understand enough about digital data AI? Because you’ve run like digital task force, right?

Laura Sandys (14:49)
Thank you.

Thank you.

Thank

Yeah, well, I think there’s a problem across the sector and it’s as much on the policy side as it is on the industry side. mean, industry people can employ people who really, who do understand this. But I think in some ways conflating the culture piece. So with do people understand new technologies?

So when I did the data task force, I used to go around to ministers and sort of say, well, you know, we’re doing this data task force. It’s really important for the sector. And they say, oh yes, no, I totally understand all of that because I know all about blockchain. Right? I had, and this is a while back, okay? And then I had a conversation with a lot of the DNOs and one of the…

chief executive said, so I said, have you got digital skills within your organization? And they said, we’ve got a great guy who rolled out Microsoft Word really, really well across the whole organization. And so there’s still a little bit of that. And at this moment, when you talk about data and digitalization, everyone just says, oh yes, I understand AI. Well, to be frank, nobody understands AI because it’s

It’s not a thing to understand. It’s a thing to develop and it’s on a very big journey. But that’s not what I’m talking about. If you don’t have the data, you don’t have AI, number one. There’s another cultural problem. again, know, energy is not unique in this, but it is quite far behind other sectors. And that is I’m concerned that we are digitizing current processes.

And for me, I’m not an expert in anything by the way, but so I look at these things from a sort of very practical point. Digitalization is actually about changing what you do and how you do it, not just layering on an efficiency technology to how you’re doing it. So if you think we’ve got

as I say, about 400 people who know how to, who run the energy sector today, we’re moving to a hundred million actions and assets. We’re not going to be able to just digitalize how we do things today. It’s going to have to be fundamentally different. So I, know, it just worries me that we just sort of think, oh yeah, well, we’ll talk to Microsoft and they’ll come and sort things out or…

Adam Sroka (17:41)
Huh.

Laura Sandys (17:51)
you know, putting things in the cloud is great, of course, whatever, you know, maybe there’s grid edge solutions as well. But the problem is it’s where people are starting from and where they want to end up. It is transformative what we should be doing, not ⁓ just an efficiency sort of layering.

Adam Sroka (18:13)
That’s the faster horses thing, right? Like if you ask the customer, and I totally agree. mean, this is my soapbox, but ⁓ the asymmetry in the investment in digital solutions versus hardware and infrastructure and physical stuff is bonkers. And I think if you look at roughly the numbers, energy sector spends one to one and half percent of its revenue on digital.

Laura Sandys (18:15)
Yes, exactly, exactly.

Adam Sroka (18:42)
banking since been seven to eight, right? Ballpark numbers and bank and then banking’s like done a pretty good job with that stuff and people are safe and their money feel like confidence in the banking and they make a lot of money. And Bridget, our non-exec was saying to me where, is that because it’s high? Bridget brilliant. And she challenged that. She said, but is that because banking’s a high revenue, like a very profitable business? And I said, well, maybe it’s chicken and eggs. Maybe they’re high.

Laura Sandys (19:00)
Thanks.

Adam Sroka (19:11)
revenue because they spent the money on the digital stuff. And either way.

Laura Sandys (19:15)
Well, yeah, mean, firstly, Bridget is fantastic and congratulations to having her. But I would also say something, and that is that actually banking is much simpler. If you think we’ve got maybe 20 banks, right, they’re all dealing with more or less the same type of information and they are point to point sharing.

Adam Sroka (19:19)
That’s very lucky.

Laura Sandys (19:36)
right, ⁓ with an ecosystem that looks identical. ⁓ So if you think the energy sector is going to have and has a huge amount of different types of assets with different characteristics, with different personalities and different functionalities, ⁓ if the banking sector is spending 7%, I would have thought that ours is more complicated and probably needs.

even more investment.

Adam Sroka (20:08)
Yeah, like I think so because as well, like I’m like banking, the actual foundational technology through which we generate energy is changing all the time as well. Like new asset classes come in line all the time. And I think there’s like my favorite kind of sound by the minutes about this data center company called Crusoe. And they kind of tackled, they’ve done an amazing job, darling of Silicon Valley. And they tackled the data center problem, like a software problem. They said, right, we’ll be a software company that happens to own assets.

Laura Sandys (20:32)
Yeah.

Adam Sroka (20:37)
And they did an amazing job of the whole thing. okay, data centers is like they’ve hit an infinite demand market. Well done. But I do genuinely think like you look at what Kraken and Octopus have done, right? If you start Amazon and like retail, right? If you look at this like a software problem that happens to own or sort of sweat physical assets, I think that is the future of the sector. And 30 years from now, you’ll

Laura Sandys (20:39)
Thank you.

Thank

Yeah.

Totally.

Adam Sroka (21:05)
landlord on top of some aging asset that you don’t know how to extend the life of, or you’ll be a software company that just happens to own a load of infrastructure.

Laura Sandys (21:14)
I totally agree. And I think actually, all these are coming back to my silos, they’re creating very old fashioned business models when actually there’s a whole new approach to, as I say, logistics, right? ⁓ How do you move my trainers from China to my house across lots of different transport vectors, et cetera, et cetera, and jurisdictions,

I totally agree. I think we need to look at new actors who can come and optimize. So my problem a little bit, and I did a big piece of work called recasting energy a while ago, but is what we’re trying to do at the moment is we’re still living in a commodity world. And commodity players need to sell you as much commodity as possible. So.

actually what we need is we need an optimization mindset where actually we should be utilizing the least amount of energy possible with the least amount of capacity through deep technical technology embeddedness to optimize. I mean if you are a know shipping container you do not set sail when you’re only half full. You absolutely make sure that you are

building as much sort of product onto that ship to ensure that you’re utilising its whole capacity. And if we had those sorts of mindsets and in some ways incentives, then we would be in a different place.

Adam Sroka (22:52)
Yeah, think that’s interesting. It’s like you very quickly bump into bottlenecks that have been solved elsewhere, but we kind of aren’t open to them. I guess, do you have any other examples of where, where should we or where should listeners be looking to learn from of like operational maturity or I think we’ve named quite a few, but like good.

Laura Sandys (23:12)
Yeah, I mean, if

you look at, ⁓ I mean, it became very obvious when JLR had a cyber attack. But when you look at the automotive sector, they have just-in-time production. They have got total communications right the way through their supply chain. I mean, that was one of the problems with the cyber attack, to be frank. So there are lots of risks as well. But fundamentally,

they are able to deliver the right number of, ⁓ you know, screws, widgets, whatever, at the right time, in the right place. And that goes through the manufacturing, the transportation of those products and long-term relationships between everyone within the supply chain. If you think that to make a chicken biryani,

you need 25 different ingredients. They’re possibly all coming from different parts of the world. You have to have exactly the right amount of everything because otherwise your labeling is wrong and you can’t sell your product, right? So how are these medium-sized companies managing all this complexity across lots of different actors?

And they’re doing it. And they’re doing it even in quite, you know, as I say, small medium sized companies being able to optimize the movement of product of third party actors to ensure that their product is actually delivering the outcomes for the customer.

Adam Sroka (24:32)
Mm-hmm.

Yeah, that is, I like the chicken biryani. It reminds me of a someone sort of thought exercise that someone put me through. It says there is no one person on earth that could build from scratch a mouse, a computer mouse, but I can go buy one for a tenner. It’s so like an optical mouse, any whatever mouse, computer.

Laura Sandys (25:16)
Yes.

Adam Sroka (25:18)
There isn’t a single person that could build that from scratch, refine the materials, source all the parts. It’s so complicated yet. Yeah. Get one for 10 pounds delivered tonight. I wanted to like, if you really got into the weeds of what is happening within that device, is incredibly complicated yet it’s achievable and it’s been commoditized yet. can’t seem to do it. Something as essential as the core energy system because

Laura Sandys (25:28)
Yeah.

Thank

Adam Sroka (25:48)
There’s too much inertia, the capital’s too hard, the risk’s too scary.

Laura Sandys (25:52)
I don’t know. mean, I do think that the whole policy and regulatory framework rather puts a dampener on. I mean, I think it’s interesting to look at some of what the independent DNOs are doing. They’re looking at things quite differently. I’m very interested always in business models that actually conflate utilities.

Adam, I have a dream, right? And my dream is that I end up just having one utility supplier doing my water, my telco and my energy, right? And that they can manage those processes. They’re going to get a much better deal than I am as an aggregator. And I just want myutility.com

Adam Sroka (26:18)
of it.

Laura Sandys (26:42)
to manage the whole thing. And if they want to be switching suppliers every five minutes, that’s absolutely fine. But fundamentally, we have created different purchasing pathways for each of those sort of, you know, utilities and expecting me, the customer, to both navigate that, find the best price and know

actually what I’m buying. So I think that there are these consumer, customer-facing business models. There’s also a huge amount, we talked about banking, but there’s a huge amount of opportunity around financial services. So if I want to put heat pump, PV, know, a battery, an EV, can I not just have all my energy integrated into that financial service product?

You know, I pay for it over, let’s say my solar panel over a five year period. I get X amount of energy embedded in that proposition. I don’t need to think about it. Now, maybe the company that owns the solar panel is doing a bit of arbitrage on flexibility. Fantastic, good for them. But that’s actually reduced the capital cost for me. You do the same with EV cars.

So I think that there is a huge amount of opportunity to really break open the current business model. I mean, if you think about the telco sector, know, Vodafone, EE, all these guys, they used to be really, important to us. It’s now Apple, Samsung, et cetera. These are the people who own our loyalty and, you know,

The data looks the same whether it comes from EE or Vodafone. There’s big deal there and it’s the same with energy. But I might want a really exciting EV car that is being, you know, sort of powered by my solar panel. Now that is an integration piece. It’s a proposition that I need. And it’s all around the assets rather than the commodity.

Adam Sroka (28:54)
I was trying to think like when was the last time I heard anyone say, oh, I really love my mobile data provider or my mobile phone network, I didn’t even think this would age me, but it was Orange Wednesdays. It was like the one I know I have two of awards program and all that. But I used to love Orange Wednesdays. That was a huge success of like, here’s the thing, but that’s it to to really differentiate that commodity.

Laura Sandys (29:08)
Yeah, yeah.

Adam Sroka (29:19)
few things in another space because actually it’s really very difficult. Whereas to your point, like you look at the asset, the handheld device, that is a status symbol. It’s got a look and a feel. makes me feel a certain way. It says something about me. does all these magic tricks for me. And where’s the analog in, yeah, curative of my energy, my, we’re seeing interesting stuff around what are your thoughts are briefly on them?

Laura Sandys (29:38)
Thank you.

Thanks.

Adam Sroka (29:45)
Like heat is a service. There’s lots of inspirational companies out there about this. What do you think?

Laura Sandys (29:47)
⁓ totally.

So

I’m very proud to be chair of a fab company called Ciro Homes and they turn social housing homes into power stations, right? So they retrofit them. Everybody’s bill goes down by about a third. Then they put solar, battery, heat pumps and thinking about also doing some EV charging. This is all in social housing, right? And…

What you’re getting is first of all, that’s all been funded not by government, but by pension funds. And they’re getting a long-term revenue from the export of the energy. All the residents are getting much, much cheaper costs. And everything is being optimized around their usage, the customers’ usage. And they do, I mean, it’s energy as a service.

its heat as a service, its energy as a service in its totality. And there you go, you’ve got the whole package and you just have a standing charge on it. I mean, not standing charge in the energy sectors, but you just have a fixed charge. And One of the things when in my previous life as a member of parliament was the reason why the energy bill was so toxic was

If you’re on low income and in Margate the average wage then was 16 and a half thousand pounds a year. ⁓ All people’s bills were fixed, right? Their mobile phone, their this, their council tax, their water bill, The only one that they didn’t know what was going to be in it, whether they opened the email or the letter was the energy bill. And that lack of certainty, the fear that goes around that.

Even with fixed pricing, you end up with a balloon at the end or some form of shock. And so that’s why energy bills were so toxic. And So we must start to be able to take the risk within the sector to be able to give much greater certainty for customers.

Adam Sroka (32:01)
I never heard it explained like that, but I get that. Totally can see that. And I always talk about how like when lots of my friends are not energy geeks, which is strange for them, but I talk to them. hear like you see on Facebook forums and stuff, like local neighborhood chat where people talk about the standing charge on their bill and there’s zero understanding of what that is and why it exists. And they think, ⁓ that’s a rip off.

It’s like if you understood what it took to run the grid and et cetera, et cetera, but we’ve lost trust on that front on the bidding and the pricing. And it’s just like the trust is completely absent. And I think people like, I love that example you gave around zero homes.

Laura Sandys (32:29)
Yeah.

on it.

Thank

Adam Sroka (32:49)
People don’t mind you making a profit as long as they’re not being fleeced and like stable and there’s other benefits. mean, that is an example of technical, but also innovation that is like a financial product innovation, right? And I think people don’t often think like finance can be innovated. Any other examples or things like we have all this good stuff, all these good ideas, where do we fall short with innovation and turning it into like really

Laura Sandys (32:51)
Bye.

Bye.

I mean, where we fall short, I would say that the sector loves pilots and I would try and stop pilotitis, right? So we’ve got a lot of really, really great innovations, really, really good ones, right? And they were done over the last 10, 15 years and they’ve sat on a shelf.

So what we’re not very good at is translating. I mean, and there are some great innovation companies and they’ve become sort of, you know, innovation funding addicts and have never been able to scale their businesses. And the reason why is because there is no drive, although I think this is really changing and I hope our task force and what Ofgem and Innovator doing is going to shift this. We need to make sure that everything is business as usual.

So you’ve come up with a great innovation in, let’s say, of the areas, one of the network areas. Why in the next price control is that not just mandated? But it isn’t. It sits in this wonderful bucket called innovation and everyone goes around and they shine their halos saying, how innovative I am. But nothing actually gets deployed. I mean, there’s a really, really irritating one that about 10,

12 years ago, there was a big innovation program done to reduce voltage across the system. And that was done by ⁓ Northwest Electricity Network. Then last year or the year before, there was the same innovation project, almost identical, done in Northern Power Grid. Both of them super successful. Both of them showing

that you can reduce people’s bills by 130 quid, right? Isn’t that quite nice? Anyway, and still we’re waiting for these things to become BAU. So Innovation is not there to look pretty. It’s there to be deployed. And so we do have a quite a sort of cultural problem. Hopefully our task force has said actually What we need is innovation for outcomes,

not for processes and that there are very clear targets on business as usual. So let’s fingers crossed.

Adam Sroka (35:45)
won’t hold my breath because I mean, there’s analogs in being a consultant, right? Previous life as a consultant, you actually so many tech teams, really well-meaning people, really bright people, capable companies go in with the best intentions, but it’s so very easy to innovate for innovate sake or tech for tech sake, or now it’s all AI for AI sake.

Laura Sandys (35:57)
Yeah.

Yeah, no, I know. And you know, one shouldn’t be sort of over optimistic, but I’m hopeful.

Adam Sroka (36:16)
I’m ever the pessimist, apologies. Changing pace a little bit, you’ve mentioned policy and yeah, look, including your time as a member of parliament, what do we get right and what is still overdue a change?

Laura Sandys (36:18)
No, no, ⁓

Okay.

So I’m going to be really, I mean, I should have said this right at the beginning that we can all, all of us geeks can say, ⁓ well, you know, a bit of the Harry Enfield thing, I wouldn’t have done it like that, you know, sort of stuff, right? But let us really reflect on what has been done in the energy sector. We have the highest growth sector

Adam Sroka (36:42)
Yeah.

Laura Sandys (36:55)
in the UK at about 10%. The rest of the economy is bouncing around 1%, right? This is really, really great. We are absolutely moving forward on big infrastructure. A lot of flexibility is coming on the sector, on the system, not enough, and there are some big challenges there. But actually, I think we should really admire what has happened in terms of transformation in this country and energy.

There is still some big gaps. I personally think that the 2030 mission and that ambition by Ed Miliband has been a real galvaniser. Whether we get there exactly or not, I really welcome it. And thinking with a bit more of a political hat on, think it has really, I mean, strangely enough, it’s actually driven down cost of capital from

external investors because they feel that there’s policy certainty and ambition. People are being pushed into making decisions, my God, rather than having another consultation. ⁓ So let me be much more optimistic on one level. It’s still, you know, there’s still challenges and still things that I’m sure frustrate us all. But as a sector,

We haven’t done badly over the last 10, 15 years, particularly though in the last few years where we’ve been sort of challenged to meet targets.

Adam Sroka (38:34)
Hmm. That’s funny. I don’t think the sector knows that sometimes, but no, I really like that. I guess we’ve been, we have been through it’s, it’s hard because there’s like so many dimensions of change that go on. You’ve got like rapid deployment and you tell others, he is soft.

the policy change, which I agree welcomed and it has made a difference. And it’s funny, so many people like, like you do meet grumblers, but like, okay, but it’s made, it’s like pushed us in a direction and things are happening off the back of it. But when it comes to the grid, I think there’s been some significant changes there and it comes under a lot of pressure from industry groups, from like all over the shop.

Laura Sandys (39:11)
Thanks.

Adam Sroka (39:18)
Where you see it, like, what do think the biggest challenges and inefficiencies with the grid and system design?

Laura Sandys (39:27)
So I think that there are quite a lot of, I mean, to be really geeky, some engineering standards that need to be modernized. And Simon Harrison, one of the energy geeks, did a very big report on this maybe, what, four, five years ago, and it still hasn’t been implemented. we can get, then there’s all issues around dynamic line rating. There’s lots of technology that can really maximize the capacity on the grid.

And I mean, I don’t know, I think we’re probably talking even at high points, we’re probably talking about 30 % redundancy or 30 % margin. So people capacity is getting up to about 70%. I don’t know any other sector that has 30 % redundancy in their systems. So the more we get visibility, the more we put technology into

our grids, the higher the capacity we’re going to be able to run them and so we’re going to be able to get what I would call more from less. There is again a little bit of a problem about the whole grid and connections piece. Again, everyone is worried about whether they get their battery connected or their wind farm. I actually

happen to worry much more about the commercial and industrial users. This thing Adam called customers, If what you do is you connect to data center, I mean, fine, tremendous, right? I don’t know how many ongoing jobs there are, but maybe nine, 10, 12, maybe. If what you want to do, there’s a great example down in Somerset, Henry the Hoover.

You know, they want to expand. They’re being given a connection date in 2030, 1.32. So they actually want to expand and employ 30 % more staff or whatever it is. are. So are we understanding where the connection capacity needs to be allocated? And I personally think we need to look a lot more at the commercial and industrial side. We think.

that there is three billion pounds worth of investment in commercial and industrial sectors that ⁓ are being held up due to connections. That’s three billion and that is three billion that relates to jobs ⁓ in areas where there is, you know, needing sort of economic regeneration, et cetera. And so I think

Adam Sroka (42:00)
Yeah. ⁓

Laura Sandys (42:13)
we need, again, this comes back down to we are a service sector and we need to serve our customers. And they’re not just our domestic customers.

Adam Sroka (42:21)
Yeah, think that’s an incredible point. mean, I’m surprised if it’s only three billion. There’s so many businesses in

Laura Sandys (42:27)
I mean, this is… ⁓ I agree.

Yeah. No, no, no, I agree. I mean, this is what Make UK has been able to identify, but I should think is absolutely. And there are a lot of people who are not even saying that they want to expand or develop a factory or whatever, because they know it’s going to be seven years before they can get a connection. So they’re just self-editing themselves out of the system.

Adam Sroka (42:45)
Good night.

Yeah, in a globalized economy where there are genuine options over the sea and cost of human labor, all this stuff, if you’re trying to think of a holistic business case for a manufacturer or something, must say I’d love to go and see the Henry the Hoover factory. I think that would be amazing. I’d love to go and see them expand. for them, when you’ve already got the option to send all those jobs to another country, maybe do it cheaper, when they get past all that and they make the economy.

Laura Sandys (43:22)
Okay.

Adam Sroka (43:24)
to then find out that our tough luck, you’re going to have to wait a decade for that to get connected. Like, why would we throw up yet another barrier to British business?

Laura Sandys (43:28)
Yeah.

Yeah, and the point is, there are these regional strategic plans going on, right? And they’re talking about a 15-year, I don’t know what the horizon is, but anyway, it’s sort of 10, 15-year horizons are being mapped at the moment. Well, proper business, no business in the real economy.

thinks according to those lines. I mean, you know, they want to know what’s going on in 18 months and they probably have a three year horizon. The idea that they’re going to be able to tell NISO that they’re going to be expanding in 2035, I mean, it’s just not how people work.

Adam Sroka (44:16)
Yeah, hundred percent. Such a knotty problem. I guess like talking of horizons, like I run a small business, right? So being totally selfish, like, cause you maybe think we are planning and we’re starting to look at 36 month horizons and some of the stuff we’ll do. And it seems nuts when you look out of that way and extrapolate out. But if you were, what advice have you got for me running a small business, newbies to the energy sector effectively, or anyone that was

Laura Sandys (44:26)
It’s like.

Adam Sroka (44:45)
maybe like young hungry entrepreneur that wants to make a difference and go for it. What would you advise they do and where can we drive change?

Laura Sandys (44:56)
Well, firstly, I absolutely love what you do. And so I’m wishing you all the success and happy to help in any way. I think it’s quite, it is quite challenging because it is a very risk averse sector. However, I would say to you that relationships with DNOs and all of the networks, et cetera, is really, really important. But I would

also suggest that actually it’s the tier one providers that might actually give you greater access to a wider set of ⁓ networks and energy assets generally. So whether that be the Hitachi, Siemens, et cetera. And actually, I think one of the other barriers, and we talk about this in the Innovation Task Force report right at the back, there are some recommendations.

⁓ And that is the whole procurement process. It’s really difficult if you think, I mean, I think they’ve got much, much better, but I still think there are quite a lot of barriers to smaller companies procuring with large networks. It hasn’t changed.

Adam Sroka (46:12)
I said, don’t get me started. Yeah, don’t get me started.

Laura Sandys (46:14)
Right.

So it’s just, I mean, you know, how on earth can you show, you know, three years profitability or, ⁓ you know, capitalization or whatever? None of these things are appropriate for innovation in innovative companies. And so we need much greater sort of light touch and also the time scales. So I don’t know.

with the UV experiences, you know, arranging to contract to actually getting paid can be six to eight months. Every month in a small business is about cash burn. So I’m not sure, you know, I think the misalignment there, but I would have thought that actually some of the large engineering firms and

those that are really leaning into the whole digital world might be an easier route in. And actually they’ve got more customers. So you’re going point to point, but they actually have a whole range of customers, both UK and globally, that your technology can integrate into. And there are risks on that as well,

Adam Sroka (47:26)
What about skills and talent? I was talking to, we hosted an offshore wind panel just after All Energy recently and it was amazing. And something really, really capable, really clever people from the likes of Buchan and Nidara and Exodus. they were saying that estimating like

Laura Sandys (47:38)
Thank you.

Adam Sroka (47:47)
400,000 new jobs have to come into the energy sector to pull off like Net Zero and you just think like that’s a bonkers number. Like how do we scale the workforce, the talent, how do we attract it, how do we make energy sexy enough to bring all those people here?

Laura Sandys (48:02)
Well, think with difficulty, mean, again, another company that I’m on the board of is SSE Transmission and they have gone from, I think about 800 people to two and a half thousand, maybe more now. And they have had to work very, very hard at it, but they have got unbelievably loyal staff now.

it takes work to get this. But there is also quite a lot of people who are multi-skilled, whether it be, I mean, let’s say on the retrofit side, that’s the construction sector. So you’ve got quite a lot of sectors that bump up against energy that can migrate. I wonder whether it’s quite that. I mean, at the moment, I think it’s about 800,000 people work in the energy sector.

So what you’re saying is you’re putting on 50%. I mean, we all need to get out to, you know, schools, FE colleges, we need a lot more capacity in technical training. That’s not because the young guys and girls don’t want to do it, but it is because there isn’t actually the capacity in the training sector.

And we need to be out there inspiring people.

Adam Sroka (49:21)
And if you were like a student or a graduate looking to break in, what kind of skills would you think are going to be the ones for the next kind of generation?

Laura Sandys (49:21)
I think I’m done.

So, I mean, you know, we will need electrical and gas engineers. We will need people who do that, right? But actually, as we’ve been talking about the complexity of the system moving forward and how that all needs to be knitted together, I think we need a lot more systems thinkers. We need a lot more marketeers.

to actually sell propositions. We need people who are much more curious and risk takers. And so it’s almost the personalities that I think we need as much as what I would call the skills themselves.

Adam Sroka (50:06)
Very good, I like it. Okay, I want to ask about Powerful Women and the community. You co-founded Powerful Women and you built communities like Energy Gates. How important are these networks to creating change in the sector?

Laura Sandys (50:21)
Well, we’re very proud about Powerful Women and it’s gone from strength to strength and it’s very exciting, ⁓ and it’s networks. But one of the important parts of the networking was actually getting some of the male chief executives involved. I would also say that we have some very leading companies that have cracked this and cracked this for years. mean, one of the…

best companies really as national grid, where if you look at the leadership, I mean, you know, it’s not quite all women, but there’s a lot of very, very serious women running the organization. So it’s totally possible. ⁓ I come back to my systems and my curiosity and the integration piece. I’m not saying that men don’t have these skills at all.

But I’m just saying we need diversity in the sector across both skills, gender, race. Absolutely, we need a multi-dimensional diversity. And at the moment, we are on the whole white, predominantly male.

predominantly engineering focused rather than business solution focused. I mean, I’d love to see a lot more business development type people in the sector. And I think that’s something that, you know, again, creates some diversity. I mean, on the Energy Geeks, we set it up just as a group of totally unpaid, you know, ⁓

not with any vested interest, just to in some ways look at the plumbing. We like the plumbing. And we think that there’s some problems with the plumbing that nobody else is that interested in. But we’re geeks and we are.

Adam Sroka (52:17)
And it is the thing, I think like we all we’ve gone through a change. I younger people that I see coming into energy are on the mission. Like it’s quite nice to see and the mission brings a different flavor. It’s not just service the infrastructure and do the job. There’s like, okay, there’s a thing to change here. And that does bring incredible people through. And I deeply believe in the power of community and like the things you can do when you just get together and share.

Laura Sandys (52:29)
Yeah, yeah.

Adam Sroka (52:48)
So, I mean, they’re amazing communities that you’ve created.

Laura Sandys (52:49)
I agree. I mean, just

coming back to your younger people point, sometimes I worry that young people come in with lots and lots of passion and actually some really, really good ideas. But the weight of incumbent thinking then stamps it out. And I think we should be listening a lot more to younger people and where they think solutions lie.

Adam Sroka (53:08)
You stepped out of

I love it. Okay, before I let everyone go, I always like to ask a couple of questions.

Have you got anything that’s really going to ruffle some feathers? Have you got a really strong opinion that’s really controversial that we get the scoop on?

Laura Sandys (53:29)
This sounds so geeky, but anyway, the energy geeks are going to do a consultation on consultations. We want to rationalize all these consultations. We want to make them agile, digitalize them, make sure that actually they’re asking questions that mean something. ⁓ That is going to stir a few.

I think we’re going to get a lot of support from the sector, but at the moment, this is actually a massive drag on decision-making, on taking things forward, et cetera.

Adam Sroka (54:08)
I love it. That’s good. That’s a good one. I love a WeMeta survey. That’s class. So yes, thanks very much. And then look, an incredible conversation. Thank you so much. ⁓ listeners want to find out more about you, things you’re up to, organizations you’re working with, or if there’s anything you’d like to promote or plug, where should we point?

Laura Sandys (54:12)
Yeah, yeah.

So really it’s connecting with me on LinkedIn would be great. we’ve got, we also have a ⁓ LinkedIn handle for energy geeks. Look for the ones with the pictures of the black and white pictures of the real geeks ⁓ for that link. And I have a website which is called challenging ideas. If that’s what you’re up for, then have a look there.

Adam Sroka (54:56)
Laura, thank you so so much for joining us. It’s been an absolute pleasure and I forward to following what you’re up to next.

Laura Sandys (55:04)
Adam, I’m really, really excited by what you’re doing and look forward to hearing much, more.

Adam Sroka (55:12)
Thank you once again for listening to the Hypercube Energy podcast. As always, if you have any feedback or comments or you want to get involved, please get in touch. And if you want to find out more about what’s happening in data and AI across the energy sector, please join the Beyond Energy community and I look forward to speaking to you soon.