rss
11

Nothing fickle about Finkel

Print Friendly
Source: ABC

Source: ABC

In the wash up of this weeks COAG Energy Ministers’ meeting, there is a real risk the importance of the Finkel Review of energy security will be lost.

For an issue as complex as energy market reform, the premise is remarkably simple. The existing energy market, which was created two decades ago, no longer works for our existing and known future needs.

The world is changing fast and doing nothing is not an option.

Our dirty power stations are ageing, new energy sources are coming online fast and energy demand has fallen, projected to rise again only out to 2030.

Unfortunately for all of us the Finkel review has become synonymous with the heated debate about a carbon price and an emissions intensity scheme.

Those issues are important, but the Review of Energy Security in the National Electricity Market, led by Chief Scientist Dr Allan Finkel, is not a one dimensional assessment of Australia’s energy future.

The review recognises “a unique opportunity to undertake a whole-of-system review” of the National Electricity Market, and its Terms of Reference require the Review to deliver a “blueprint” for Australia’s future energy market.

How do you make spending decisions if you don’t know where you are going?

Technology is changing rapidly.  With solar and battery storage, consumers are becoming market participants.

Grids need to be built with increased redundancy, greater interconnection, and to maximise the use of the current asset.

The days of massive, polluting coal-fired power stations located hundreds of kilometres from major population centres will soon be over.

That is why looking ahead to see what Australia’s energy system should look like in just over one decade’s time, and developing a blueprint to get there is so important.

Finkel’s preliminary report, released on 9 December, was really just an issues paper but the unreasonable knee-jerk response to it shows how far we have to go to have a mature debate in this country.

The Finance Minister, Senator Mathias Cormann, politicised the review from the get go, refusing to express confidence in Dr Finkel after he made the obvious point that existing policy settings were insufficient to meet Australia’s international climate change commitments.

With lightning speed, the internal politics of the Coalition meant the debate was canned even before it had begun.

An emissions intensity scheme, a rational and effective economic lever, and one that all major players agreed on, was taken off the table.

This idea was so dangerous it was rejected before it had been proposed.

Surely we can use the summer break to step back from the day-to-day politics and allow some reflection on how to build a smarter energy system.

A smart energy system puts consumers at the centre. It takes account of climate change, both reducing emissions and standing up to a more fraught and demanding climate.

A smart energy system has a diverse energy mix, encourages distributed generation, values energy efficiency, builds greater connectives and density to facilitate the energy system of the future.

The rules need to be modernized.  The National Energy Market must put consumers at the centre and make climate change mitigation a key priority.

In building a blueprint of where we need to head, the Finkel Review must deal with the fact that our major power stations are very old and there must be a transition strategy to close and replace them before 2030.

It must also acknowledge Australia has made an international commitment to help keep global temperature rises to less than 2 degrees.  A modern electricity market must do its fair share of the work in reducing Australia’s emissions.

The future means new business models and technology that will simply make crude, one-way energy from a coal-fired power station redundant.

The future is instead sophisticated and multi-directional.

The internet of energy will allow consumers to trade directly with their neighbours and for communities to aggregate their energy supplies through new or existing energy companies.

Doing nothing has a cost.  And it is substantial.

Locking in the status quo hurts competition and ultimately consumers.

It retards the opportunities technology and efficiency offer us.  It locks in the incumbents as the winners of the game, at the expense of the public.

And ultimately it will come at a political cost no political party can withstand.

So let’s not throw out the baby with the bathwater.   As the Finkel Review notes, Australia is not alone in grappling with these issues.

If we can develop a rigorous blueprint, other nations will want to learn from our experience and that presents its own economic opportunities.

Australia is at the forefront of solar and battery storage and smart energy research and development and commercialisation.

Our energy industry is full of smart people and smart companies that are building the energy system of the future.

There is now a once in a generation opportunity through the Finkel Review to harness these smarts and outline a blueprint for a future national electricity market.  

Share this:

  • DJR96

    Spot on John.

    This review by Alan Finkel is an absolute imperative for all of us as a nation.

    All the technology is already here. It just needs the industry and the politicians to adapt and adopt it. All quite feasible and doable.

  • Chris Fraser

    There’s a theory that goes the LNP understands the environmental need for RE, but are happy for private investment to do all the hard work. This will quietly strangle the idea that we vote for them to provide social, economic and environmental leadership for the greater good.

  • disqus_gF5uXVTUbL

    “Grids need to be built with increased redundancy, greater interconnection, and to maximise the use of the current asset.”

    Distributed generation and distributed storage is the increased redundancy and energy security. Most electrons will remain local, with a minor amount compensation for differences in energy consumption between regional levels.

    “The future means new business models and technology that will simply make crude, one-way energy from a coal-fired power station redundant.”

    It seems some us have realised energy will no longer be a one way transfer from centralised generator to consumer, then have assumed this means energy will be regularly flying around between regions, states and the NEM at large. Actually, this assumption needs questioning because it will lead another era of gold plating the grid again. It seems to be the people with the old grid-connect technology who then project the workings of this system onto the whole grid. Actually with a hybrid inverter matched with storage, the majority of a properties baseload and peak power is delivered in house by the inverter. Only rare occasions for additional peak power, shortfalls from adverse weather and seasonal variations in those states further from the equator, result in additional power being exported from the NEM. It really is important we think clearly about this, rather than giving networks a new social license to erect additional high voltage infrastructure and interconnectors. With approach load defection and some grid defection, the grid is already moving into challenging times and further exacerbating network efficiency won’t help us.

    With Dr Finkel and teams recommendations, only a government lacking the ability to consult expertise and respect science, would proceed down a treacherous path and electors have a growing awareness of the challenges we are all facing.

  • Rob G

    I’m finding even many Liberal voters are growing more and more frustrated by this government’s reluctance to embrace renewables. Like most Australian’s, they want to see Australia take a positive lead in climate change action and want to be using the latest and best forms of electricity generation (know anyone still using a blackberry??). Just this week I received a questionnaire from my local Liberal MP wanting to gauge his electorate’s concerns – if they cannot see this major issue, I doubt they can see any of the issues – they are becoming increasingly irrelevant to the wider population. The question now is, at what point to those voters stop voting for the LNP? Will Xenophon or One Nation (heaven help us) get them? The LNP are clearly worried – but if they are unable to move with society then they will pay in the polls…

    • Geoff

      Like Banksy says, “it doesn’t matter who you vote for, the government always gets in.” They will never bring change. Did the government invent the iPhone? No. It was individuals and again, individuals will spear head the energy transition.

      • Barri Mundee

        Governments CAN spearhead the energy transition but not when they are controlled by vested interests intent in delaying and frustrating effective action.

        • Geoff

          That’s exactly the problem mate. They put their interests before the people and hence, they will never make change.

  • Ian

    We have the sun, we have the wind, we have hydro and we have plenty of money and technical ability. Finkel has put all these things together but there seems a major political stumbling block. The international community is taken a back and gasps “what the!?”

    Perhaps we need a commission to determine the underlying reason for political resistance to renewables. Why? Why does the present government resist renewables? Why go to such lengths to support the burning of coal or gas? Comments on this site paint these people as inept and foolish, but these are crafty political creatures that have read the voter market and know how to wrangle an election, what makes them side with obsolete technology?

    • Barri Mundee

      There may be ideology involved but I think they have been captured by vested interests who fund them and then expect their obedience.

  • John makes some excellent points in this article.

    In addition to solar and storage, local electricity trading will also help to make energy supply more economical, which is something that he touched on. Read, sign and share this petition to change the national electricity objective (NEO) to consider environmental impact and reconsider the change request to allow Local Generation Network Credits or otherwise facilitate local electricity trading.

    https://secure.avaaz.org/en/petition/The_AEMC_Reconsider_the_change_request_for_local_electricity_trading/edit

  • Miles Harding

    What were the COALition thiniking? Appointing Alan Finkel was only ever going to produce the sort of result we are seeing.

    The fact that this carefully considered and rational report is very nearly diametric to the LNP policies should serve as a reminder that the LNP is controlled by the interests of the few and they are in process of committing a grand malfeasance against the people and environment.

    It’s interesting to also note that a discussion that doesn’t mention the environemnt or global warming is increasingly arriving at the same conclusions.