All we want for Christmas: Four “disruptors” share their 2019 energy policy wishes

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What sort of policy do we need to take Australia’s electricity grid into 2019 and beyond? Some of the nation’s leading energy innovators tell us what’s on their list.

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While renewable energy technologies go from strength to strength in Australia, the policy path has been far from smooth. As Giles Parkinson writes here, where there might have been progress and vision, the federal Coalition has instead lurched even further to the right on climate and energy policies.

The final COAG Energy Council meeting for the year saw both Coalition and Labor states united against the federal government in calling for some form of accounting of emissions in the National Electricity Law – although still to no effect.

The only thing the states and just about everyone else apart from the “idiots and ideologues” in the Morrison government want for Christmas, notes Parkinson, is to have is some sort of federal policy that recognises the clean energy transition and the opportunities and benefits that it could deliver – not least of all in department of climate action. And to ensure it happens in an orderly fashion, not brought to a halt.

But don’t take our word for it. Let’s hear from some of Australia’s leading energy market “disruptors” on the sort of policy they believe is needed to usher the nation’s grid into 2019 and beyond.

Virpi Barrett, Trading Manager, Enova Energy

The perfect NEG includes both the emissions guarantee and the reliability guarantee, because it is only through tackling both aspects of the challenge that the energy industry can create the required confidence in investors to provide affordable capital.

The emissions guarantee should go above and beyond the targets laid out in the Paris agreement and include frequent milestones to support orderly disruption, exclude international carbon credits and remove the burden of compliance from smaller retailers.

The reliability guarantee should operate through AEMO led reverse auctions that are subsidised through market fees instead of the current complicated contracting arrangements between market participants, audits and penalties. This will improve competition and lower prices for consumers.

Christopher Thompson, Founder and CEO, Amber Electric

The perfect NEG would examine the industry as it exists today and help guide future development without dictating particular solutions. It should put the customer at the centre of our energy future and encourage innovation.

We need a policy framework that gives customers the option to actively participate in the energy market, whether this means incentivising load shifting, leveraging household batteries or allowing for the integration of electric cars.

In the last decade we’ve seen the repercussions of overbuilding the network to meet unreasonable expectations that, quite frankly,  customers aren’t willing to pay for. Now we need to focus on delivering the reliability that customers want and are willing to pay for.

For us, the NEG should begin from the premise that Australians want a future with reliable and clean electricity – and at the best possible price. Then work backwards to create a regulatory environment where market participants can deliver against these expectations.

Matthew van der Linden, Managing Director, Flow Power

Good policy needs to take in and foster new innovations within the industry, while also placing the needs of users front and centre.

The perfect NEG will continue to grow demand response in Australia, facilitate low-priced power supply for consumers, and a more reliable energy system. It’s still unclear how demand response will be recognised under the Reliability Obligation – just as we aren’t sure the implications of the growing market for Corporate PPAs.

Flow Power has partnered with a range of different companies from various industries, all of which involve large memberships of energy users. Energy prices and lack of confidence in the energy industry are major issues, quite often due to customers being disconnected from the true signals of the energy market.

While investment in renewable energy will continue increase, with or without the NEG, the need for the NEG in its previously proposed form will decrease. For innovative retailers such as Flow Power and Amber Electric it is still business as usual. We need to get on with it.

David Martin, Managing Director, Power Ledger

Any long term energy policy or governance framework needs to reflect the fact that we’re moving from a centralised to a distributed energy system.

The physical nature of the system has evolved and is continuing to change faster than it ever has before. Our market and legislative frameworks need to reflect this and focus on the primary role of Distributed Energy Resources (DERs) in this environment.

The biggest change in the energy system won’t be whether it’s renewable or not, but where those energy resources are placed, their scale and who owns them.

It requires us to create an economic environment where owners of distributed renewable energy assets are incentivised to support the overarching system. We need to look at things from a granular scale and ensure those assets operate in a way that’s sympathetic to the needs of all consumers.

Our industry can’t just glibly say: “we put the customer at the centre of our thinking” we need to provide the right incentive framework for the customer to put the continued safe, secure, low-cost and low-carbon operation of the system at the centre of their planning.

In a decentralised energy system control is an illusion but cooperation can ensure we achieve a low-cost, low-carbon energy future.

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