Don't waste this energy crisis

All players in the energy market need to move quickly and not waste the energy market crisis, AEMO Chief Executive, Audrey Zibelman said at a CEDA event in Victoria on Australia’s energy market outlook.

“The markets were started about 20 years ago, at a time when the predominant mechanism to supply energy was large scale generation; coal, gas, in the US nuclear and hydro,” she said.
“That’s simply not true anymore and so it shouldn’t surprise any of us that we ought to be thinking about these markets moving forward and how we operate the grid moving forward, in a very different way.”

Ms Zibelman said there had been significant changes in Australia’s energy market within the last decade.

“In 2008, we had 2700 megawatts roughly of coal, we’re now at 2300,” she said.

“In gas, we were at 7000 megawatts, we’re now up to 10,000.

“On wind in 2008 we had 1100 megawatts, we’re now at 4000 and AEMO is predicting that by 2020 we’re going to be up to 10,000 megawatts of wind.”

Ms Zibelman said due to the length of their queue for connections, AEMO predicts that Australia’s use of solar will jump to 11,000 megawatts over the next several years.

“So without question, you can’t take a look at the system and say we can operate it the same way,” she said.

“At AEMO we agree that the Finkel Review identifies a number of changes that we need to make and we really need to get on with it.”



Ms Zibelman said that a high degree of collaboration and understanding will be required to implement the Finkel Review’s pillar on improved system planning.

“Entities like ABB, GE, Siemens, Tesla, all the new technologists are going to be very important because we’re going to need to understand what they’re thinking about,” she said.

“You want to end up with a view of how these industries are going to evolve, how do we create stability and how do we advise on what I would call the no-regrets types of investment to create a national network.

“What should we be investing in today so that we have the confidence that we’ll be able to drive value to consumers.”

Ms Zibelman said AEMO and the other industry experts need to come up with an actionable and detailed plan to take to the COAG Energy Council.

“We have this coalition of the willing and now the challenge is how do we harness that into the actual plans and implementation, in a short period of time, because we want to take advantage of this,” she said.

“We’ve got to get on with it, there’s no question that there’s a path forward, and we need to take it and we need to move and we need to move quickly.”

AusNet Services Managing Director, Nino Ficca said that change and disruption in the energy sector is a reality and a juggernaut that won’t be stopped.

“Just as political will and industry collaboration over 20 years ago created the national electricity market, we must redefine our energy system to meet the changing needs and expectations of our customers,” he said.

“What we don’t need more of is finger-pointing and blaming, we need to get on the bus and make sure we can transition into a new energy future.”

Mr Ficca said strong political and industry leadership is needed to provide clear direction and certainty to both investors and consumers.
“The Alan Finkel Review has given us a reasonable template,” he said.

“But we’re all looking to the COAG Energy Council later this week to provide some leadership on the adoption of that Finkel Review.”

Mr Ficca said the Finkel Review’s pillar of improving system planning is particularly welcome.

“As networks, we’re focused on delivering a connected future, being flexible and being smart enough to integrate a range of emerging energy sources,” he said.

“Renewable generation and transmission investment has to be coordinated and has to look beyond state borders.”

Mr Ficca said that continued partisan politics will lock in poor outcomes for customers.

“We call on all governments, at all levels, to work collaboratively to ensure positive outcomes for customers, communities and investors alike,” he said.

“We must focus on customer outcomes, both in terms of cost and security, as we transition from a traditional energy and network sector to a more innovative, flexible and responsive energy system.

“This remains a once-in-a-generational reform opportunity to get energy policy back on track.”