Due Diligence in the Electrical & Power Industry

In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss due diligence in the electrical and power industry.

They discuss due diligence and risk management considerations in the sector, with examples that focus on renewable energy sources like wind turbines and the potential role of nuclear power in Australia's energy mix. Key points include:

• The need to carefully assess and document the safety and emergency protocols even for foreseeable events like fires.
• The trade-offs involved in designing effective systems which can sometimes introduce new risks.
• The challenges of transitioning to a more distributed, renewable-heavy electrical grid, including the need for reliable baseload power and the shifting seasonal demand patterns in Australia.
• The thorough, "cradle-to-grave" approach taken by Finland in developing nuclear power, which may serve as a model for Australia.
• The difficulty of developing a coherent, long-term national energy policy due to the political complexities involved.

Find out more about Richard and Gaye’s consulting work at https://www.r2a.com.au.

The full episode on Nuclear Power is Episode 9, Season 2 of this podcast.

Transcript

Megan (Producer) (00:00):

Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss due diligence in the electrical and power industry.

(00:13):

We hope you enjoy their chat. If you do, please give us a rating and subscribe on your favourite podcast platform. If you'd like more information on R2A's work or have any feedback or topic ideas, please head to the website www.r2a.com.au.

Gaye Francis (00:32):

Hi Richard, welcome to another podcast session.

Richard Robinson (00:35):

Morning Gaye. We're quite surprised how many people are listening to our podcasts too, aren't we?

Gaye Francis (00:39):

Pleasantly surprised. Absolutely.

(00:42):

Today we're going to talk about the electricity industry and do one of our industry related podcasts. And I guess the reason for doing it is we have just been appointed on to the Energy Safe Victoria panel to assess safety arguments or safety cases from the different power utilities. And also the timeliness around the discussion around wind turbines and particularly the wind turbine fire that happened down in Portland, I think it was the 30th of June this 2024. So that was sort of our introduction. We've got a couple of other case studies that we can talk through that we've worked on at R2A, just to show you the breadth of the different types of work that we do in the electrical industry. But I guess if we start with the turbine fire, Richard, and go from there.

Richard Robinson (01:35):

Well, I can't actually remember what we we were going to say about it Gaye because I remember we were surprised at the time about it because it did surprise us. I mean obviously these things are foreseeable. There will be turbine fires, there's nothing remarkable about that. And the question that became how it was managed electrically, I presume the think was instantly isolated.

Gaye Francis (01:52):

Correct.

Richard Robinson (01:53):

And then whether or not there was proper fire suppression systems or it was just allowed to burn out. I mean obviously if it happened on a catastrophic (fire warning) day and it was dropping sparks and things around that could be fairly complicated

Gaye Francis (02:03):

Rather than in the middle of winter. My understanding was, and I think that's where the discussion is going in the investigation, should fire protection be put on wind turbines? So they did allow it to just basically burn out, but one of the turbine blades fell off. And as you said, if that was a catastrophic day and all of the grass around it was very, very dry then would that have started a fire? It did start a small grass fire, but the consequences weren't there at the time.

Richard Robinson (02:32):

Well, this sort of flowed onto the fact that I'm still acting as an Expert Witness for the Cuddlee Creek fire in South Australia before the Supreme Court, which is a class action. Now I obviously can't talk too much about it, but I think what was interesting, I wasn't asked by the respective lawyers to what I thought the decision that ought to be made. What I was asked to do was go through the process by which they came to the decision. And I think that's what all this due diligence stuff is about, which is what we hammer: precaution due diligence. You can't always be right. That's one of the points the courts understand. But what you can do is be diligent all the time and diligence means that you thought the thing through and you came to a reasonable basis. So it's a bit like whether or not this thing should have had fire protection systems installed because you can install fixed fire protection systems on remote devices like engines on aircraft, always have extinguishing systems built into them. You can buy different technologies. The Russians, for example, used to use a form of halon on which put out fires particularly well but wasn't very good for people. So you wouldn't want to be around when the system went off where other designs like Halon 1301, they could release it inside a computer room at the concentration that would extinguish a fire, but it wouldn't extinguish the people, which is nice and was good. But it wasn't quite as effective as the other halon stuff that the Russians were using as just extinguishing fires.

Gaye Francis (03:55):

But that comes down to that balance, doesn't it? What is the risk and then what other things does it introduce potentially.

Richard Robinson (04:01):

Correct. And you'll be aware we did that other job, which perhaps I shouldn't speak about, fire protection on vessels, and they had a gaseous extinguishing system, which if it got too hot, converted a number of the products of combustion to hydrogen fluoride, which basically would go through anybody's PPE, including the people trying to put the fire out, which means in effect if the fire got hot enough, you really had to abandon ship anyway.

Gaye Francis (04:24):

Yeah, just let it go.

Richard Robinson (04:25):

And so the fire control system in some ways created a greater hazard than the fire itself, which is obviously problematic and there's something you should really try to avoid.

Gaye Francis (04:34):

So I guess going back to the turbine fire, it's not about necessarily what was or wasn't in place. It's really the process that the operator went through to decide on what their emergency protocols were and what they did have in place. And I always say to our clients, I think sometimes it's even more important to document why you're not going to do something as to why you think it's unreasonable.

Richard Robinson (04:59):

Well, I'm completely certain it would've had thermocouples all over it, so they would've known it was getting hot. And maybe all you do if you think you've got a problem like that is you just turn it to side, feather the blades and just turn it off and isolate it from the network so there's no further power going into it and it can't possibly, you'd expect at that point everything would go inert.

Gaye Francis (05:18):

So before the fire actually started it just gets hot. You think that was an option?

Richard Robinson (05:21):

Well, that's the mechanism. That's part of the question was what's reasonable in the circumstances, how would you know? Anyway. Now that sort of led onto a rather interesting discussion about power networks and I don't know if anybody's aware, but there's sort of an interesting philosophical argument going on Engineers Australia about nuclear power and whether or not nuclear experts should be addressing the question. Now we're kind of... Gaye, because she spent all this time in Finland and the Fins are very keen on nuclear power obviously because they don't have much sun in winter.

Gaye Francis (05:51):

No. And they didn't want to rely on gas from Russia.

Richard Robinson (05:54):

So there are very good reasons for going with nuclear power.

Gaye Francis (05:57):

Correct.

Richard Robinson (05:59):

And the way they go about it is particularly thorough. Now we've talked about this previously, but they don't until they're completely happy to say if they won't turn it on, they're very thorough people.

Gaye Francis (06:08):

I think the last reactor that was added to the Olkiluoto system was 20 years in the making just to get all of everything right and they were comfortable with the safety of it.

Richard Robinson (06:22):

Well see, what's strange about this is, I mean I'm just reading a couple of things and roughly now, last time I looked at some reports about this, Australia's about 45% renewables at the moment, but in the last year, I think twice the renewables have actually been generating a 100% of power. So the need for base load thermal power stations has declined. Now what's really curious about this is when you look at all this sort of stuff is that once upon a time we used to define what we required for power by the maximum load, which was winter, which is when thermal power stations are at their best when you've got the cold weather for the chillers and obviously heating and burning water to get the energy out of it. Now, thermal power stations are at best around about 30% efficiency just like cars in terms of the energy you get out of the fuel and converting to electricity. They're quite low efficiency. And most of our thermal power stations in Australia are aging badly. But the question is what happens with the renewables? Obviously when the sun's shining and in summer, particularly, we get a lot of surplus power.

(07:20):

And what changed though in Australia was that once upon a time, peak load was winter when we're trying to keep warm and now it's flipped around to air conditioners trying to keep us cool. And so you've got this whole paradigm shift in the way in which you're thinking about how power is generated and how you're trying to consume it. And the entire network was never designed for that kind of distributed generation as opposed to centralised generation. And I have to agree on all the politics of this sort of thing that you're going to need some reliable base load because remember when you're trying to restart, we did the black start restarts in New Zealand, you need, they're relying on hydro. You need a nice...

Gaye Francis (08:01):

Stable and reliable base load to be able to do that.

Richard Robinson (08:04):

Base load and generator and then you can start building the network back once you've blacked out. Now from my point of view, we are just a bunch of engineers discussing this, trying to work out what might be a way forward. But the question of nuclear power otherwise, but having a stable nuclear generator somewhere wouldn't actually, as opposed to building coal fired power stations because building coal fired power station, getting the coal out of the ground is quite a dangerous occupation. There's a horrendous lead time for a thermal power station just like a nuclear reactor. And the Fins, if we adopt the finished method of making nuclear power safe, maybe that's what we ought to do or hire us some Fins.

Gaye Francis (08:43):

They do some cradle to grave stuff, they take it all the way through.

Richard Robinson (08:47):

Well, they actually dispose of their own nuclear waste too.

Gaye Francis (08:49):

They do. Correct.

Richard Robinson (08:50):

Unlike we've failed that test miserably in Australia, haven't we?

Gaye Francis (08:54):

The power plant, my understanding is the power plant doesn't get approved until, as I said, the cradle to grave and the burial of the spent fuel rods has been addressed.

Richard Robinson (09:05):

So they actually competently think it through, which I don't see many other societies actually doing. So there's a whole lot of interesting issues here and you and I, we talk about these things, but we don't have a clear view on the matter (of nuclear in Australia).

Gaye Francis (09:18):

But I think what we've seen is in the power industry, what's required or what we're using it for and how it's being generated is changing. And it's sort of that strategic approach, isn't it, to an industry that you almost got to look that 20 to 30 to 40 years out, what does it look like? And then what do we need to achieve that? Whereas we keep creeping up on it and there's no head room left in the network.

Richard Robinson (09:47):

And one's pretty much gone so far as we can tell.

Gaye Francis (09:49):

Everything's aging. So we're sort of at a stage where things are starting to come crashing down, but we don't have an overall policy or framework to say this is what the best solution is or the optimum solution for either Australia or different parts of Australia, to say: And that's what we're all going to work towards. It's unfortunately very political and political timeframes, which when you're talking about those sort of projects that are five and 10 years out, certainly don't fit the political cycle.

Richard Robinson (10:21):

Well, you've heard my little story about my solar system on my roof, which when I put it on it was a pretty good return for the power I put into the grid, but just as it paid itself off, the inverter died and I had to replace that. Now they give us such little amount of money, the whole thing wasn't worth the trouble, let me put it that way.

Gaye Francis (10:38):

No, you only get the benefit from what you use.

Richard Robinson (10:41):

Well they don't do that anymore. They charge you for what you use and you get a little bit back for what you sell.

Gaye Francis (10:48):

Oh, that's really not a good deal, is it!

Richard Robinson (10:49):

It's not a good deal anymore.

Gaye Francis (10:53):

So it's really that precautionary approach. What do we want it to achieve? And I guess we've talked about it before, I think on one of our podcasts, but Richard and I were the risk management experts on the power line bushfire safety task force. And then I followed on the committee.

Richard Robinson (11:11):

This arose from the Royal Commission into the Black Saturday fires where it killed 173 Victorians.

Gaye Francis (11:19):

And they took on that precautionary approach and put in REFCLS (rapid earth fault current limiters), which...

Richard Robinson (11:26):

Ground fault neutralises for those who don't believe in REFCLS.

Gaye Francis (11:30):

Thank you, my technical brain. So they put those in and our understanding is that they've worked really well and where they've been installed, haven't started a bushfire in those particular areas.

Richard Robinson (11:44):

In the last, what would it be, six or seven years now?

Gaye Francis (11:46):

Six or seven years. Yeah.

Richard Robinson (11:48):

Although there were other problems.

Gaye Francis (11:50):

Yes, there was some hardening of network. And that comes back to that. What do you want your network to be? And it hasn't ever been designed to do those things. So you almost got to put a line in the sand: What do we want it to achieve? What will our current network get us to? And then what do we have to do to achieve the rest?

(12:10):

So that sort of brings us to the end of a very diverse discussion around the electricity industry, not a one size fits all solution for any of this, I don't think. But if you take the philosophy that Richard and I have always had that it's safety in design and designing for optimum outcomes. What do you want to achieve first? What are your options on the table and in the circumstances, which are the best?

Richard Robinson (12:40):

And the political fights we're having aren't helping.

Gaye Francis (12:43):

No.

Richard Robinson (12:44):

They would be on optimum that would work for Australia. And for some reason we seem to be politically unable to actually think it through.

Gaye Francis (12:50):

I think it has to be divided into two things though. It's what's the best technical solution for Australia. And then how do you get it through the politics of it? I mean, we've said this many times as a young engineer, you to always told me, it doesn't matter how technically right you are, you have to be on the political ball as well.

Richard Robinson (13:07):

Yep.

Gaye Francis (13:08):

So thank you for joining us and we hope you'll listen next time. Have a great day.

Richard Robinson (13:13):

Thank you.