In the distant future, should we ever find ourselves sitting back and smugly thinking we’ve solved the energy problems that so occupied our minds, our politics and our resources during the early decades of this century, there will be some key moments we identify.
Times when the right people made the right shift at the right time, nudging us towards asecure and clean supply of affordable, abundant energy.
It just might be the case that we witnessed such a moment this week – and most commentators missed it.
Daniel Westerman, the new Chief Executive of AEMO – the body that operates Australia’s groaning energy system – laid out an ambitious goal in a speech to CEDA: An energy grid that can support 100% renewable energy by 2025.
While this declaration hogged the headlines, another focus of his speech was just as important. It explains how – as a population of 26 million energy users – we might actually get there.
The energy system needed to transform, Westerman said, but so did AEMO. It needed to focus on “building social licence and acting collaboratively”.
For a market operator to be thinking and talking in this way is a huge change – a realisation, long overdue, that successfully transforming our energy system requires doing things WITH everyday Australians rather than TO them.
As a nation we’ve fallen hard for solar. Almost three million of us have panels on our rooftops and that figure is set to double in the next decade.
With creaky coal-fired stations being retired we are moving from an energy system powered by a small number of large generators to one that features millions of solar panels and home batteries, operating alongside wind and solar farms and various forms of bigger storage.
That’s great, but it can also be messy. To keep the power on AEMO needs to be able to balance supply and demand.
Once, that meant dispatching power from a distant coal-fired power station when demand spiked. In the future it will likely mean taking steps to reduce demand or drawing on disparate and diverse power sources, owned by consumers or communities and located in houses, businesses or shared civic spaces.
It will also likely require sensible and proportionate investment in new transmission infrastructure, so that electricity can be efficiently moved to where it is needed most.
That leads to AEMO’s Integrated System Plan – a roadmap that envisages new infrastructure be built and located in places and communities that might not always welcome its impact on their local area.
In both cases, the challenge is similar. No successful future can be secured by imposing new conditions or new infrastructure and telling consumers they simply need to assent.
Westerman’s answer for both is the same: “The solution…I believe…is to create the critical social and community licence for this infrastructure, by working with communities, early on and collaboratively.”
Energy Consumers Australia has been calling for social licence to be embedded in the way we plan for and operate our energy system. Earlier this year we issued a report that set forth a possible framework for those who make the rules or manage the system.
We defined social licence as the principle that governments or market bodies cannot and should not access, limit or adversely impact privately held resources or amenity without first securing permission and endorsement from those directly affected.
Our framework investigated ways in which this could be done and conditions where it was most likely to be granted: Does the consumer opt in or not? Is the process easy and painless or complex? Does it appeal to rational self-interest, community spirit or environmental awareness? Does it threaten to punish or seek to reward?
We launched our report with a webinar, attended by leaders from across the energy sector. It was clear that this idea was landing at the right time.
In South Australia, in March, we had seen consumers have their rooftop solar turned off using an emergency backstop power introduced the previous year, because too much electricity was flowing back into the grid at a time when the sun shone brightly and not much energy was being used.
What followed was widespread outrage and an unpleasant experience for both AEMO and the South Australian Government.
But how much more outrage would surface if some of the changes we’ll likely need to implement to get to AEMO’s2025 goal were to be similarly applied?
Some of the most exciting and potentially positive ideas for a smarter, more resilient and more democratic energy system could feel threatening or unfair if clumsily or unilaterally implemented.
Already, we are contemplating a future where some household appliances could be temporarily turned off by a system operator in order to manage demand. When electricity stored in household batteries or electric vehicles might be remotely accessed in the blink of an eye to help resolve a threat to the broader system.
This possible future will feel unsettling if it arrives suddenly and without warning (as it did for those South Australian solar customers).
The vast majority of Australians are yet to engage with or be exposed to new ways of thinking about and using energy that have the potential to shape our system for the better (and provide consumers with better experiences). As an energy sector, we have not prioritised involving consumers in these discussions.
That process starts now. It won’t be easy. As part of it we’ve begun working alongside AEMO, as they investigate new ways of engaging with consumers and seeking social licence for the changes that lie ahead.
This idea, until recently on the fringes of the energy sector despite its self-evident wisdom, is finally having its moment.
Lynne Gallagher is the CEO of Energy Consumers Australia.
