My involvement in the Australian energy market started in 2001 when I brought the energy companies together in Sydney. At that time we were looking at utilising their infrastructure to assist the ailing competition in the telecommunications market that was dominated by Telstra, which at that point was unwilling to introduce residential broadband services to Australian users.
Within the alliance, called Utilitel, a range of telecoms-related businesses were initiated at that time.
But the big change came during 2006-2007 when climate change became the hot political topic of the day. Energy companies realised that in order to respond to this ecological disaster they would have to change their operations, as 30% of national carbon emission was directly linked to their operations.
The first action undertaken by what would become Smart Grid Australia was to petition energy ministers in COAG, urging them to use the smart grid, rather than smart meters, as a strategy. We used the analogy of promoting cars without having the appropriate roads. But our advice fell on deaf ears and the resulting disastrous rollout of smart meters in Victoria was a clear indication that a holistic national smart energy policy would be needed before embarking on any details.
At the same time there was internal resistance to such an approach. After all, saving energy would mean less income for energy companies. Perhaps the best example of this came from Basil Scarsella, at that time the CEO of ETSA, the energy distribution company in South Australia. I sat on a panel with him at the ENA Energy Australian conference in 2007.
There I participated on behalf of Smart Grid Australia, arguing for smart grids. Basil made it very clear that ETSA would not do anything without clear government policies and regulations. ETSA (now SA Power Network) is a privatised energy company majority-owned by Hong Kong-based Cheung Kong Infrastructure Holdings. Basil made it very clear that without a national policy his company would not invest in any significant new energy investments beyond their normal run of the business.
Things started to look up with the government announcing an Energy Trading System, as this was seen by countries around the globe as the best basic policy system for the future (and this is still the case).
Climate change, together with government leadership, meant that the energy companies’ communications interests changed from external opportunities for their network – such as public telecommunication services – to an internal strategy on how communications could assist them in modernising their infrastructure in order to become far more energy-efficient. Organisations such as Ausgrid (at the time Energy Australia) had indicated that a full-blown smart energy operation could deliver energy efficiencies between 30% and 40%.
The government of the day picked this up and in 2009 made $100 million available for what became known as the Smart Grid Smart City Project. A further $200 million was added to the project by direct and indirect private investment. The project included smart grids, micro-grids, integration of renewable and the deployment of an electric vehicles infrastructure. The geographic area covered Sydney, Newcastle and the Upper Hunter region (Scone).
The project would run for three years and would become the blueprint for a national approach to smart grids. The project was seen as one of the most significant smart grid projects in the world and gained international attention, especially as part of the project was that the data gathered would be made available nationally and internationally (this has happened and many organisations from around the world have received that information from the Australian government).
What, however, became very destructive was that while the federal government at that time launched its new policies the federal opposition undermined it by mischievously calling it a carbon tax system. Ever since then a bi-partisan political energy solution has eluded the country.
This was based, not on the national interest, but on party politics.
What also hasn’t helped the situation was the sometimes rather militant position taken by many people and organisations involved in the green movement. It is simply not possible in the short and medium term to replace all of our energy needs with renewables. This was used politically by the more conservative forces in politics to oppose anything renewable – resulting, for example, with leading national politicians bringing coal into Parliament to undermine renewable energy policies. Similar unhelpful actions were taken by senior politicians ridiculing wind energy. As a result we still don’t have a long term energy policy that let’s say over a period of 20-30 years would transform the Australian energy market to one mainly based on renewable resources.
In this already convoluted environment another disastrous policy was taken.
For more than a decade natural gas had been seen as another cleaner energy solution, and Australia is one of the largest producers of natural gas. But in its infinite wisdom the Australian government issued gas mining licences allowing the producers to export nearly all of that gas, with only a small proportion to be made available for Australia. Changing this policy now (as mentioned by the Prime Minister) will mean that Australia will have to buy back its own gas at prices significantly higher than customers in Asia are paying for it.
Despite constant warnings the organisation in charge of national energy management, NEM, together with the Australian Energy Regulator, have largely been asleep at the wheel. The NEM has belatedly mentioned that Australia is facing a national energy crisis as there will not be enough energy available for the running of the country. Where were these organisations a decade ago, to add their weight to the development of sound national policies?
Even now political disarray continues, with the Prime Minister plucking yet another rabbit out of the hat – an upgrade of the Snowy Mountain Hydro System. Something that came totally out of the blue, with no consultation with the country, the industry or the energy experts. Another ill-considered development in a non-existing national energy policy that is simply aimed at quick political scores rather than addressing the long-term national interest.
See Australia smart grid reports
- Australia – Smart Grid – Major Players and Projects
- Australian Smart Energy Market
- Australia – Smart Energy and M2M
- Australia – Smart Cities
We invite your comments: Please click here to commentTagged in: Australia, Electricity, Energy, smart cities, Smart Grid, Snowy Mountain Hydro