CLEAN ENERGY: Delegates at the Global Smart Energy Summit this week got a chance to hear some of the final words and thoughts from departing chief executive of the Australian Energy Market Operator Audrey Zibelman who announced this week she was heading to a leadership role at Google in its X “moonshot division”.
A key message from Zibelman was that although the hard work is still ahead, Australia in many ways is leading the way in the decarbonisation of its energy sector.
“Here in Australia, we are seeing a massive transition, not just in terms of generation supply, but also in our technology mix – going from a more centralised power system based on fossil fuels, to inverter-based renewables technology,” she said.
“We now have a much more productive and effective two-sided system, one that has the ability to efficiently manage both demand and supply, so from here we can move to increase productivity on all sides of the meter.”
“We are rapidly looking at creating this two-sided market around the country and what we’ll see in the next several years is that Australia is leading in the capabilities that are going to be required to manage a decarbonised power system.”
Coal is facing burnout
In its Integrated System Plan (ISP), AEMO identified that over the next 20 years, 63 per cent of the coal fleet in Australia retire because of age.
And, as a result of the changed economics of resources, Zibelman expects those resources to be predominantly a mix of both wind, solar and storage, as well as the possibility of hydro.
“The big story in Australia is around the uptake of rooftop solar – as of 2020, we have two and half million systems, compared to 100,000 systems in 2010, while the other major piece is the integration of storage and how we get the most value from that,” said Zibelman.
She told the conference that in terms of energy Australia was a “postcard from the future”.
One of the major issues for AEMO right now is around what happens with peak and off peak demand, and how it manages these in a way that they are not spilling these resources in an uneconomical way.
“While the technology is changing, the physics of power doesn’t – we still need to make sure voltage and frequency is maintained and in balance and we have enough energy reserves to deal with many different types of events” she added.
“At AEMO, we are looking at a power system with more than 50 per cent of energy being provided by renewables regularly by 2030, so those are major issues we need to solve now.
“The amount of energy that we are replacing over the next 20 years requires us to do everything we can now to get the prices right and to make sure that we make cost-effective investments to achieve our goals in an affordable, reliable and secure way, which also meets our environmental expectations.”
To transition as efficiently as possible Zibelman believes Australia’s regulation and market environment needs to change, as it was initially designed for the last iteration of the power system, which was around a central power system with lots of dispatchable generation.
“Now, we are thinking about an energy system where there are essentially free electrons coming from renewables, but it is inverter-based and it is highly distributed,” Zibelman said.
“So, how do we make sure that the regulation and the markets are going to be set so that we can make investments in the most cost-effective way and reduce prices to consumers. The most important thing we can do while rebuilding the system is reducing capital risk.
“We can’t wait and I think the area that is going to be critical as we think about these infrastructure investments is how to support the communities going forward.”
Zibelman said in an official media release about her departure that Australia had taught her “how important advanced computing and the application of artificial intelligence (AI) and machine learning is to our industry.
“The opportunity to support these needs as part of the team at X is for me a compelling opportunity to support the power sector both here and globally as we navigate to greater electrification of our economy and a diverse, decarbonised power system,” she said.
The AFR said: “Such a job offer from one of the world’s most innovative companies preparing its assault on the huge challenge of building the platforms to manage the modern distributed energy system would be hard to resist at the best of times.”
“A new rooftop solar system is added to the Australian grid every six minutes, more than a third of South Australian households have solar, and the complexity of millions of individual generators instead of hundreds can’t be managed by five smart engineers in a control room.”
The Global Smart Energy Summit also heard from former Prime Minister Malcolm Turnbull, who took part in a panel discussion and said
that the political uncertainty around the country’s energy remains the single biggest obstacle in our transition to cleaner energy.
According to Mr Turnbull, one of the world’s largest investors in renewable energy told him “they would not invest in Australia because of the political uncertainty”, instead citing China as a more stable environment for investment.
Turnbull believes China will soon be getting an even bigger boost in this space due to its recent decision to target carbon neutrality by 2060.
“China’s ability to meet the target, given it is the world’s largest consumer of energy and largest emitter of carbon, but its political system lent itself to fast action on climate change,” he added.
“It is a very authoritarian system there and their ability to turn things around and mobilise capital and people is without peer anywhere else in the world. It will drive investment in renewables in China, and that will support investment around the world.”
Earlier this month, Prime Minister Scott Morrison declined to commit to a target of net zero emissions by 2050 – a goal adopted by all Australian states and the opposition Labor party.
Energy Minister Angus Taylor last week announced the government’s new technology-neutral energy roadmap, which he claims will ensure economic prosperity while lowering emissions.
The government’s roadmap identified “clean” hydrogen, energy storage, “low carbon” steel and aluminium, carbon capture and storage, and soil carbon as priority technologies.
Zibelman is widely credited for initiating a cultural change in AEMO and leading the push to create the 20-year blueprint for the country’s renewables transition, and was appointed to the role at a pivotal time for the broader energy industry.
“What we’ve been able to do is apply engineering and economics and cut through the politics to really just talk about what is actually happening in the power system using a collaborative process,” said Zibelman.
“It is a difficult time, it gets frustrating at times, but we are really trying to work to change the culture at AEMO to be more outward-facing, commercially-oriented, and to better work with our numbers.
“It’s a work in progress, but it is something that I am hoping will be enduring, because frankly, the complexities of these issues are huge.
“We cannot do this alone, it has to be a collaborative effort. As Malcolm Turnbull once said, energy has no morals; they are going to do what they are going to do, so we have to make sure that they are working for us and not the other way around. And this is really what it is all about.”