Australia at the epicentre of the global energy transformation

John Bradley, Chief Executive Officer

When the Australian energy industry meets in Adelaide this week it will be at the epicentre of the global energy transformation.

South Australia’s energy system is a living energy laboratory in which renewable energy supplies about 40% of electricity and rooftop solar has reached world leading rates of penetration.  As major power stations close to make way for wind and solar, it is challenging key features of the National Electricity Market and the way it achieves power system security.

Energy Networks 2016 occurs as Australian scientists witness a dismal milestone –  the first baseline reading in the world of 400 parts per million (ppm) of carbon dioxide in the atmosphere at the Cape Grim monitoring centre.

It is easy to forget how quickly things have changed.  Ten years ago, a meeting of all Australian generators could occur in a small conference room.  Today, we have over 1.5 million small generators and our energy market is a hotspot of early adopters, particularly residential customers seeking greater choice and control over their energy.  It is no coincidence that innovators in batteries like Tesla and Enphase use Australia to launch their products.

The Energy Grid is enabling this transformation, connecting millions of new, smarter and cleaner applications. It is the platform which will host the new “apps” of the energy system while maintaining the safe and reliable electricity and gas services that customers care about.

One thing about the future is clear – it will be customer driven.  No one – not Governments, regulators or industry — will be able to ‘command and control’ our way through a transformation being driven by millions of customers and market participants.  The energy system will be shaped by customer choices in rooftop solar, battery storage, electric vehicles or smart homes enabled by an integrated grid. In fact, the CSIRO’s recent research for the Electricity Network Transformation Roadmap estimates customers or their agents will make 25% to 40% of all investment decisions in the energy supply system out to 2050 – up to $400 billion.

Far from being tethered to “dirty generation”, gas and electricity networks are vital to decarbonising Australia’s economy, not only in electricity but in key sectors like transportation.  Australia’s high voltage network will provide essential support to intermittent renewables and we are likely to rely on stronger interconnection between regions and utility scale storage for security of supply.

Many customers will never see the dramatic changes needed in the operation and design of the electricity network, which is sometimes called the world’s largest machine. In a smart phone society, it is easy to forget that Australia’s 730,000 km distribution network was built to be relatively passive, for a one-way electricity flow, without real time sensors in the low voltage network.  Our outdated meters can’t measure when most of us consume electricity.   Yet a more actively managed smart grid, with intelligent devices, connectivity and controls, will be essential to the efficient, distributed and cleaner energy future that Australians will value.

Energy transformation is more than just an electricity story.  If government policy provides a level playing field, gas can lower greenhouse gas emissions for households and businesses and it can support power system security as the proportion of dispatchable generation declines. While gas is too often the forgotten piece in Australia’s carbon policy jigsaw, one only has to look to Europe, US and Asia to see gas – and in some cases, our Australian gas –playing a vital role in energy security and emissions abatement.

Australia’s energy system finds itself in an “Egg and Spoon” Race on behalf of consumers.  We must execute a rapid transformation without compromising a delicate balance.  Even as Australia races to re-equip our businesses, customers and institutional frameworks in the transformation, the challenge remains to simultaneously balance the classic “energy trilemma” – affordability, sustainability and reliability.

These challenges are the focus of the Electricity Network Transformation Roadmap being developed between the Energy Networks Association and the CSIRO for release late this year.  They will also be in sharp focus for the 800 attendees as Energy Networks 2016 meets this week.

This is a modified version of the Opening address by Energy Networks Association CEO John Bradley at the Energy Networks 2016 Conference and Exhibition in Adelaide.