(See also our year in review, with the top stories of the year, and the 2016/17 podcast with Giles Parkinson and David Leitch).
It’s difficult, and probably a little bit pointless, to make predictions about the year ahead. But we are beholden to media custom at this time of year. The only question is whether to bury you in numbers, or simply outline the major themes.
Let’s go with the latter, because there are plenty of them.
Two major forces stand opposed in 2017. One is the falling cost of clean energy technology – solar, wind, storage and other smart controls – that is heralding what Alan Finkel calls an “unstoppable” energy transition away from centralised, polluting fossil fuel plants.
Solar now costs less than $30/MWh in many major economies, wind energy is about the same. As Bloomberg recently pointed out, this makes them cheaper than any new generation, and cheaper than much existing generation.
Battery storage costs have fallen 50 per cent in 12 months, and energy experts are freely talking about new energy systems with concepts such as localised and shared energy, zero marginal costs, and even “free energy.” Electric vehicles, inspired by Tesla, are also on the rise with major car makers investing billions in new electric models.
The other major force is political – funded, aided and abetted by the very fossil fuel interests threatened by renewables, storage and EVs. They’ve hit the jack-pot in Washington, and when Donald Trump moves into the White House on January 20, he will be accompanied by a cabinet notable for its collection of climate change deniers, fossil fuel lobbyists and billionaires. And with the Exxon Mobil CEO and chairman as secretary of state.
It is unthinkable, and it is potentially dangerous, but there it is. Clean energy technology will never have faced greater politics headwinds than Trump’s America.
Can you pick a winner? It’s hard to imagine any political force standing in the way of cheaper technology alternatives for long, despite what has happened in some hermit kingdoms. But you can bet that the Trump administration will seek to tilt the table to help incumbent interests fill their pockets as quickly and for as long as they can.
This will have an impact on Australia too. Australia finds itself at the cutting edge of this energy transition, with a huge natural and technological advantage, and even greater motivation (enormous electricity costs and a dirty inefficient grid).
But it also boasts a powerful fossil fuel incumbency. The Trump administration will encourage the climate deniers and vested interests within the ruling Coalition, and there are many.
The Frydenberg Review of climate change policies should be promising, but it has already been hamstrung by Malcolm Turnbull’s subservience to the Far Right.
The only hope will be that the review by chief scientist Alan Finkel will provide some clarity, and may actually be read by the government. Just how long will it take to sink in?
The first draft was promising, so much so that it could turn out that the South Australian blackout was the best thing that happened to renewables in Australia: it did not signal the death of wind and solar, as the media screamed, but it did highlight how dirty, costly and ill-fitted Australia’s ageing grid is to the modern era.
On the technology front we are going to see numerous changes.
The first is the concept of free energy: Elon Musk gave us a taste of the future when he unveiled the solar roof in November. No, it’s not the first solar roof on the market, and it probably won’t be seen in Australia for a few years.
But the implication is clear: solar generation built into infrastructure, thereby coming at no extra cost to consumers. Utilities and their economists are going to struggling to get their minds around this. It is diametrically opposed to anything that they had every considered.
Battery storage: The economists are already struggling with zero marginal cost from wind and solar, and now this output can be stored cheaply. Energy is shifting rapidly from centralised to distributed energy – and battery storage will play a key role.
Australia, with its high electricity costs caused by greedy government network owners, will be at the forefront and lead the first mass-market take-up of storage.
Devices will get cheaper, more powerful, and easier to use. The price cuts will likely be visible from February or March when the Tesla Powerwall 2 arrives and its competitors are forced to cut prices or roll out more cost-effective models.
Expect to see more trials of the likes of AGL’s virtual power plants, the network offset trials by SAPN, Ausnet and others, and the power-sharing technology liberated by blockchain software and being rolled out by Powerledger and AO4 and the like.
Solar and wind costs will continue to fall. In Australia, that could be significant as the backlog in large-scale renewables projects finally breaks: expect to see numerous large-scale solar projects, many of them displacing second tier wind developments.
“Merchant” models will be the vogue for a while, before the big retailers wake up and lock in more projects on contract, particularly as consumers rail against the soaring cost of the “green energy” component of their bill, caused only by the retailers’ own failure to invest.
But it’s not the technology that is the major concern, it is the politics, and the potential for powerful interests to bamboozle politicians and encourage them to make dumb decisions about energy choices – or in the case of the Australian federal government, no decision at all.
The Finkel review will be critical to cut through the myth-making of technology deniers and myth-makers. But it will likely take time to sink in, presuming that anyone in the Coalition actually reads it.
The mainstream media could play a constructive role, but there is not much hope there. They seem completely enthralled by incumbents and completely uninterested in the potential of new technologies.
It is disconcerting enough that most energy market and pricing regulators seem to think that their primary role is to protect the incumbent over the consumer – see the way they protect network revenue, how they demonise renewable incentives as a “transfer of wealth from the generators to the consumers.
Consider the mainstream media response to our revelation that BHP’s Olympic Dam “blackout” in December wasn’t actually a blackout at all, but a contracted “load shed” over a three-hour period (70MW from the 170MW they were using). Most completely ignored it. “Splitting hairs” sniffed the AFR.
Don’t expect much from the ABC either. When the excellent Finkel review was published, chief political reporter Chris Uhlmann tweeted with glee, and then congratulated himself in subsequent tweets for his prescience.
For some reason, as The Climate Institute’s John Connor quickly pointed out, Uhlmann completely ignored the next sentence in Finkel’s summary: “Fortunately, solutions are available to effectively integrate variable renewable electricity generators into the electricity grid.”
Finkel even put it in very big type later in the report so that even ABC political editors could find it.
It just goes to show, it’s going to be a long year. As Connor pleaded with Uhlmann over Twitter, “all we want is a mature debate.” The chances are that we won’t get it: Technology marvels on one hand, and Trump, post truth, ideology and media indifference and ignorance on the other.
Which is why we hope you will be back with us at RenewEconomy in 2017. It’s going to be a fascinating year – exciting and infuriating all at the same time. And we’ll be here to document it.
