Australia has to look forward on energy, says Zibelman: “We have no choice”

Australia’s exit from from coal and transition to a renewable grid is tracking not only ahead of most of the rest of the world, but is coming faster than almost all of us would have predicted, the head of the Australian Energy Market Operator has warned.

“We have to look forward, we have no choice in Australia,” AEMO chief Audrey Zibelman told the audience at Australian Energy Week 2019, in Melbourne on Wednesday.

The comments come as the nation heads into a new term of federal government under the coal-attached Coalition, headed up by a man whose main claim to fame is having brought a lump of coal into Parliament, and supported be an energy minister who has said there is already too much wind and solar in the grid.

But Zibelman, who rarely wades into the quagmire of energy politics in Australia, likes to stick to the known knowns – namely that coal is on the way out, and a completely different grid to that we have known for the past century is on the way in. It’s just a matter, now, of how quickly and neatly this transition plays out.

“The fact of the matter is, it’s happening really fast,” Zibelman said. “Everyone’s predictions around solar uptake, even the most aggressive ones, were below what it actually is.

“I think even all of our predictions around storage, and the changing price of storage, I think we’re probably all shy of where it’s going to be.

“And so thinking about that means that… we have to assume that it’s going to be faster than we anticipate. At the same time, we need to make sure it’s an orderly transition,” she said.

“This is a critical industry. …If we get energy right, then our economy prospers. If we get it wrong, it suffers.

“So it’s very important that we take a measured approach and we have a way of exiting the existing technology.”

Zibelman was particularly keen to stress how quickly the energy market is changing at the consumer level – as households and businesses take up ever cheaper solar and battery storage at a break-neck speed, and in turn set the pace and the direction for the rest of the grid.

This, Zibelman calls the “democratisation” of the grid – one of the four Ds that will shape the future NEM, alongside decentralisation, digitalisation and decarbonisation.

“We talk about the (NEM becoming) decentralised, which is true .. and we’re seeing that in Australia at a very rapid pace. But the point is that for the first time in this industry, consumers have a real vote.

“It’s not just simply, do I want to pick this supplier or that supplier? It’s actually how much energy do I want to buy? Do I even want to buy it at all, or do I want to produce it myself?

“And that really needs to change the nature of how we in the industry think about consumers. We can’t take them for granted any more.

“And that, in some ways, could be threatening, but in other ways is a real opportunity to do things better.”