Australian news, and some related international items

Australia’s energy future at a critical turning point

The hope is that the Finkel Review – due in just over two weeks – might convince more people that we can do without the waving of red flags. The change is upon us and it’s all OK. We just need our regulators and our politicians to catch up. 

The great divide over Australia’s energy future, REneweconomy By Giles Parkinson on 22 May 2017  It was the head of the biggest electric network operator in the world, China State Grid, that summed up best the challenge of moving to a high renewable energy grid: It is not so much a technical problem, but a cultural one.

In other words, there are those who say it can be done, arguing that it offers a smart, cleaner and ultimately cheaper and more reliable alternative. And there are those who say it can’t be done, and are reluctant to adopt the new technologies and the new ways of managing a complex electricity grid.

In Australia in the past few weeks, we have been getting a clear signal as to which authorities fall into which camp, and the obstacles facing those who want to get on with the job and go with the technology, rather than fight it.

There is, inevitably, the politics, led by the federal Coalition, railing against the “reckless pursuit” of wind and solar and yet, at the same time, drumming up huge ideas for massive pumped hydro schemes, a sure sign that they see more wind and solar as inevitable.

And there is institutional resistance. The Australian Energy Market Commission, which sets market rules, last week released a document which painted a view of Australia’s energy market nearly as dystopian as Donald Trump’s inauguration speech, the one that prompted former president George W Bush to note at the time: “That was some weird shit.”

And so was the AEMC’s. Its full document is a thorough appraisal of the events of 2015/16, but the media release was another thing altogether: painting a dark picture of energy shortages, risky additions of wind and solar, lost inertia, reduced reliability and the threat of blackouts – comments that were readily picked up by the green-baiting Murdoch media.

Ivor Frischknecht, the CEO of the Australian Renewable Energy Agency, has said on several occasions in the last few weeks that it is clear that the technologies exist for transition to a renewables-based electricity grid. It is only old rules and regulations that are getting in the way and preventing it from happening.

It’s a view that is now widely shared. The CSIRO and Energy Networks Australia, in their ground-breaking Network transformation roadmap, speak of the critical important for rules and regulations to catch up with technology, lest the changes and cost reductions in solar, storage, and software becomes so rapid that the industry is unable to catch up.

Their two-years of research found a zero emissions grid could be put in place, based largely around renewables and with a special focus on consumer-owned solar and storage, and save consumers more than a $100 billion by 2050.

That would be at least some recompense to those consumers, who are clearly the biggest losers from the creation of the National Electricity Market two decades ago, and its failure to check the spending of the networks or the pricing power of the gentailers.

The consumers are now paying ridiculous prices from electricity still mostly delivered by now mythical “cheap coal”, and are facing even more rises in coming months.

Yet, as Accenture points out in a separate report, these consumers now have the technologies to be masters of their energy destiny, driven by concerns about sustainability, energy independence and simple economics.

When the cost of solar and storage is likely to be half the cost of grid power, as some networks recognise it will be, the economic modelling behind this grid concoction has a major, major problem, one that rivals the disruption posed by the internet and digital technology.

And because this is a heavily regulated and essential service, the challenge is not just to the incumbents but the regulators and rule makers.

The Australian Energy Market Operator has grown so frustrated with the situation that in its submission to the Finkel Review it asked to be allowed to take responsibility of many of the rule changes itself, so it can rapidly adapt the markets to the changing technologies and dynamics.

This call is likely to be intensified under its new CEO, the reforming Audrey Zibelman, and it was notable that last week AEMO and ARENA teamed up to drive a pilot on the use of demand response, an obvious and relative cheap solution to dealing with peak demand, and a lot cheaper and cleaner than building new peaking generators.

Zibelman knows it will work, because she has seen it operating effectively in markets throughout the world, including the one in the US where she used to manage New York’s radical shift in energy policy………..

The hope is that the Finkel Review – due in just over two weeks – might convince more people that we can do without the waving of red flags. The change is upon us and it’s all OK. We just need our regulators and our politicians to catch up.



May 24, 2017 - Posted by | General News

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