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“Australia is never going to be able to compete on our own against the Chinese, the robotics, the artificial intelligence, the scale of their manufacturing, their phenomenal investments in research and development, all of that says we’ll never catch them,” says Tim Buckley. “But we don’t have to catch them; we can partner with them”.
As we prepare to host Buckley and another powerhouse influencer in the green energy transformation space, Heidi Lee, chief executive of Beyond Zero Emissions, at our TFE Live event on Tuesday night 8 October, we caught up with Buckley for an expansive podcast on just what lies ahead for our green energy future.
Tim Buckley is “probably the most bullish” he’s ever been, and he thinks the rest of us should be too.
The news is good. Very good.
Much of his positive outlook comes from a recent trip he took to China along with a Smart Energy Council delegation to glimpse the advances that country has made since the US slammed the doors shut on China’s importation of semiconductors. Sure, the old adage that necessity is the mother of invention might be true but you get the feeling China was always going to lead the world in green tech anyway.
But there’s also good news on the home front as solar and wind power become cheaper, the grid transforms and technology promises to solve our mis-matched demand and supply problems.
Backing the optimism is the federal government’s Future Made in Australia policy that was announced earlier this year to rebuild manufacturing, especially in the green energy and tech space.
As one of Australia’s most high profile green energy finance commentators, with a strong pedigree in the capital markets, Tim Buckley’s views have impact.
We haven’t seen anything yet, this is a massive opportunity
We told Buckley about the property owners, managers and big industrial/logistics tenants, who attended our recent Buildings as Batteries masterclass and were clearly searching for how to take advantage of the fast changing energy world they could see emerging.
Especially in the opportunities to use their buildings as batteries and how electric vehicles – cars, transport and delivery trucks – could efficiently connect solar energy production and batteries.
What should we tell them?
“That we haven’t seen anything yet,” Buckley says. “This is a massive opportunity.
“China leads the world in all of these energy transition transformation technologies, and they see vehicle to grid as being a core way of enhancing grid reliability.
“So I really get a bit annoyed when AEMO (Australian Energy Market Operator) always talks about electric vehicles as a problem for the grid.
“They are a problem, but they’re also a massive opportunity. They’re going to dramatically enhance the reliability of the grid, and they’re going to lower the cost of energy for everyone in Australia, but we’ve got to actually break through the regulatory barriers and do that at a speed and scale commensurate with the opportunity and the threat.”
No silver bullet but a collection of smaller bullets
There is no silver bullet, he says, but vehicle to grid charging will be part of the solution, along with time of day pricing, smart meters, home energy and batteries and utility scale batteries. Methane gas peakers will be “a small but important part of the solution” and so too pumped hydro storage and grid transmission. A big solution will be aluminium smelters, which use 10 per cent of Australia’s energy.
Companies such as Rio Tinto – under the terms of its new energy contract with Meridian Energy – can now turn down its aluminium smelter in New Zealand on request, but then ramp up production at its Australian facilities such as at Gladstone or Newcastle to meet its global contracts.
Buckley envisages a world, soon, where AI will automatically switch on the charging to your EV and you’ll be paid to draw down power from the grid. At night you’ll tap the battery for your household use.
“All of a sudden you’ve got a really smart, intelligent, two way grid system. And that is completely the opposite of where we were 20 years ago, when the grid was designed.”
Buckley envisages a world, soon, where AI will automatically switch on the charging to your EV and you’ll be paid to draw down power from the grid.
There is enormous interest in this space, Buckley says. A recent seminar on vehicle to grid charging hosted by Arena attracted about 200 eager Australian executives “all listening in and asking a million questions about it”.
“And of course China is already rolled out. They said that they expect to have their whole national grid vehicle to grid charging ready by the end of next year.”
Backing this potential is technology.
That’s where companies such as Octopus Energy, a UK energy tech company, part owned by Origin Energy, is leading and about 10 years ahead of the competition, Buckley says. (One breakthrough proposal from this company is zonal pricing to give communities near renewable energy facilities cheaper prices).
China leads in so many ways
Buckley’s reports on China sounded like a return visit from a sci-fi set. Enormous factories pumping out solar panels, inverters and batteries for solar energy and electric vehicles, powered by robots, not a human in sight other than a supervisor to make sure quality was top notch,
Robots everywhere. They even supplied room service at the hotel, ringing the doorbell, via a scan mechanism, offering food kept nicely warm or cold behind their little screens. So, no, they weren’t shaped like humans…yet.
Buckley and the team travelled at enormous speeds of up to 350 km an hour on trains from one part of the country to the other.
By the end of the trip Buckley was a convert to the power of collaboration and the benefits it could deliver to Australia.
“It was great to see it firsthand, but it really just reinforced to me, that Australia is never going to be able to compete on our own against the Chinese, the robotics, the artificial intelligence, the scale of their manufacturing, their phenomenal investments in research and development, all of that says we’ll never catch them.”
A Future Made in Australia can be a partnership
“Unlike America, we don’t have to catch them. We can partner with them.
“So I am absolutely in favor of the Future Made in Australia [policy]. I think it’s brilliant that we finally have a prime minister who’s actually showing a vision. It doesn’t fit with traditional economics. I accept that it is all about saying the world’s changed.
“The global geopolitics have changed phenomenally. The global landscape for energy and technology is totally, fundamentally changing at an unbelievable rate of knots.”
We need to understand the strategic play under way.
According to Buckley we need to see the global picture in order to find Australia’s place in it. China is diversifying globally.
Its BYD car producer plans a $US 1 billion EV factory in Turkey that will employ 5000 Turkish workers, alongside an R&D facility. And there are other Chinese factories set to appear in Hungary, Morocco, Uzbekistan, Vietnam, Indonesia and Thailand, Peru, Chile, Mexico and Brazil.
“They’re building electric vehicle battery factories, wind turbine factories and solar module factories in Saudi Arabia,” Buckley says.
But as China plays a long term strategic game so too must Australia.
We are not a small time nor insignificant
Buckley says it’s true we’ve de-manufactured our industry and it’s the reason the Future Made in Australia is important.
But beware the false narrative that Australia is just a bit player on the world stage.
Absolutely not true, he says. “The idea that we’re a small market is a false narrative,” he says.
“Australia is the number one exporter of iron ore in the world. Half the world’s iron ore comes from Australia. Half the world’s lithium comes from Australia. Half the world’s coking coal comes from Australia.
“And so this crap that Australia is a small country, and we play by everyone else’s rules, and we’re too small to matter, is a false narrative when it comes to the export sector. We are a world leader. We’re not actually just a player. We are the number one player in the world by a country mile”
And our number one trade partner is China.
“So we’ve got a lot of things that China wants.”
The future it seems is in our green energy and green tech hands.