There’s a flip side to the obscenely tough battles the renewable energy industry has been forced to weather during the dark climate-denying years of the recent past.
Strangely, surprisingly and almost perversely, it seems the resilience that comes from hardship might be paying off. The battles today are not about creating more solar, wind and battery storage but about how to integrate it into the grid.
It’s the kind of problem other parts of the globe can only dream about, according to the impressive Audrey Zibelman, chief executive of the Australian Energy Market Operator (AEMO), who addressed a Property Council of Australia luncheon last Friday in Sydney.
In New York where Zibelman, as chair of the New York Department of Public Service, was chief regulator, they’d call this a “high class problem”, she said.
“We were desperate there to get distributed energy in New York. We were desperate to get this much solar. And now here we have it – the opportunity to think about how we can adapt the market and regulations to take full advantage of these resources.”
This was evidenced recently by data from the Climate Council that showed almost half of Australian businesses were investing in renewable energy and that businesses installing solar PV was up by 60 per cent in just 12 months to 2017, with more than 40,000 systems now installed.
The most difficult issue has been cracked, Zibelman said, “which is how to get interest.
“And now we have to solve the easier issue, which is how to adapt regulations and markets, so that we can create the business models.”
Zibelman was sharing the stage with another leader in the energy regulation space, Kerry Schott, independent chair of the Energy Security Board, who gave the keynote address; with Paul Wall, head of group sustainability and energy at Dexus; and Cameron Evans, chief executive of Enwave.
The thing that surprised Zibelman most about the policy landscape in Australia, she said, was that we were “actually debating policy”.
“In the US we’ve decided we’re not going to.”
There was a lot on AEMO’s plate, she said, but “the work on the national energy guarantee, despite the way we got there, is actually world leading.
“In Europe they’re trying to solve the same set of issues and are looking to Australia to see if that’s part of the solution because it’s a problem everywhere.
“The other piece is the work that’s going on here at the tech level – and I can brag about AEMO here. On wind and storage and [how to integrate these resources to manage the security of the system] we’re getting questions from all around the globe on how you do this, what we’re doing – because Australia is actually leading on these directions.”
Equally impressive was the work happening “behind the meter”. There were “ingenious companies coming to us with incredible capabilities”, she said.
In fact, said Zibelman, she’d moved off the “depression thing” to “true optimism”.
The situation for property
Kerry Schott led the session with a presentation that summed up the energy scenario that faced the property industry players in the room.
Profound changes were under way, she said. Solar prices were plunging and payback was pretty quick.
“Increasingly people are adding batteries, and I know many of you are adding batteries in your precincts and buildings.”
That means the grid, which was never designed to be a two-way system, had to work out how to become just that.
“The changes happening in this industry are phenomenal and a lot of you are in the thick of it, especially on the demand side.
“We’re on the start of this journey on distributed resources and treating consumers as individuals rather than passive receivers.And we’ve got a long way to go.”
Dexus’ Paul Wall said there were big opportunities for his company with renewables, particularly in retail and industry.
“If we filled our roof space on our industrial property, we could supply electricity to all our office buildings.”
Australia’s potential, he said, with its vast geographic diversity meant it was likely that the sun was shining or wind was blowing somewhere in Australia, so a national energy grid that could take advantage of that made sense.
Enwave’s Cameron Evans agreed the market was transitioning, shifting from centralisation to decentralisation.
In response to a question about the potential of hydrogen, Evans said the push to decarbonise the energy market was significant. If there was an opportunity to decarbonise gas, as hydrogen promises, then “we should look at it”. But it was also important to look at other gas options such as waste to energy.
Schott said price was an acute issue at present because while wage growth had frozen, electricity prices had risen roughly 50 per cent.
Moderator Francesca Muskovic, policy manager, sustainability and regulatory affairs at the Property Council of Australia, pointed out the failure in Australia to develop a national energy efficiency platform. This was despite the “many willing partners in this room” who had evidenced their intent and ability with drastic cuts in emissions intensity.
Wall said the industry had indeed taken a lead. And if a national energy efficiency model was sought then its designers could do little better than look to NSW where the NABERS and CitySwitch energy efficiency programs had both been replicated around the country precisely because they were successful.
Dexus had claimed more than $2.1 million through energy efficiency certificates through the energy savings scheme (ESS), Wall said.
And the Better Buildings Partnership, which Wall chairs and which covers about half of Sydney’s core CBD properties, had overseen a 52 per cent reduction in emissions in the past 10 years, saving $33 million a year in electricity costs and abating 1.1 million tonnes of carbon.
“If you extrapolate that across the country on national portfolios we’ve done a lot of heavy lifting on energy efficiency and we’ve probably pulled every lever we can.
“Now we’re waiting on smart building technology that will bring the next wave of energy efficiency to further reduce costs by bringing down energy use.”