Australian Energy Market Operator boss Audrey Zibelman says Australians need to understand that they can have a renewables-based grid that is cost effective, zero carbon, and reliable and secure. All at the same time.
Zibelman, speaking at a symposium at the University of NSW this week, along with chief scientist Alan Finkel and UNSW solar researcher Martin Green, said distributed energy resources would play a critical role in a low-carbon grid.
However, the biggest challenge was actually making the transition of a very complex system, and that needed a detailed plan, and a clear policy, as well as changes to market rules and the way the grid was managed.
“We are looking at how to manage the system to be more resilient as well as … cost effective and carbon neutral, or zero carbon … (they) are not necessarily antithetical,” Zibelman said.
“Nor is having renewable resources and having a reliable and secure system antithetical. In fact, you can have it all.
”What we you need to do is to start moving towards a system that is truly integrated, and use the intelligence in the system. And we see this merger between new energy products and digital intelligence so we can manage a much more efficient system.
“What we are recognising now in Australia is that the real issue is how do we get to scale, and how do we get to scale quickly? … And this is going to need a new tool set to manage a very different power system.”
Zibelman’s confidence in the future power systems and integrating “new technologies” such as wind, solar, batteries, other forms of storage, demand management and distributed energy, echo those of Angelina Galiteva, the vice chair of California’s equivalent to AEMO, the Independent System Operator.
In an interview with RenewEconomy’s Energy Insiders podcast earlier this week, Galiteva outlined how the world’s fifth-biggest economy, aims to transition away from nuclear, coal and gas and reach 100 per cent renewables by 2045.
“Initially, like in Australia, we had the utilities and traditional energy players being very skeptical of renewables. When the first 10 per cent target was introduced, the utilities said oh, no, we are going to have gird disruptions, it will cause all kinds of problems. Well, it didn’t.
“The next 30 per cent target, introduced by Republican governor Arnold Schwarzeneger, attracted warnings of Armageddon, but the grid operator found that if anything, renewables made the grid more reliable. Once a 50 per cent goal (effectively 70%) was introduced by Governor Jerry Brown we can have reliable.
“Once everyone realised that, it became a no-brainer,” Galiteva says. “We might as well go to 100 per cent. The technology is there, the political will is there …. and we have a vision for the future.”
She adds that the transition is not so much a technology challenge, but a regulatory challenge, a view supported by Zibelman, now managing a grid where even a 50 per cent share of renewables appears to the limit for mainstream politicians, and too far for some.
Zibelman’s comments also echo those of a group of academics and researchers who made a similar call for a plan and policy clarity after a symposium in ANU, where they agreed that a shift to 100 per cent renewables was an essential part of a transition to a low-carbon economy.
At the same time, conservative politicians, media and commentators have intensified their scare campaign against renewables and emissions reduction targets, warning of blackouts, economic destruction, lost jobs, lower wages, and calling for support for new coal investment and an end to renewable energy schemes.
Green, who predicts that the cost of solar will fall below $US10/MWh by the early 2020s, says Australia should not be scared of the transition to renewables, because it will be a big beneficiary.
For a start, it opens up the possibilities of green hydrogen exports – a vision pursued vigorously by Finkel and others. Green also noted that the increased value of mineral exports used for the construction of solar farms – steel, aluminium and copper – would easily make up for any loss in thermal coal export values.
“We have to have a planned transition. It is not going to happen overnight, or because we want it to happen, we have to think it through.”
Zibelman says the ISP was looking at what might happen over the next 30 years, and how current ageing capacity (mostly coal) could be replaced in the least-cost way.
As the recent report from AEMO and the CSIRO pointed out, the least-cost resources are a combination of renewables, pumped hydro, some battery storage and some gas.
This also involved a shift from slow-moving machinery to fast-moving machinery, and Australia needed to make sure it was paying for resources needed to deal with inertia and frequency.
Currently, there is little in the way of market recognition and revenue options for distributed energy and batteries.
“We are going from managing around 300 power plants, to millions of bits of different resources,” Zibelman said.
Those pieces can be put together, but Zibelman indicated a frustration at endless pilot projects and wanted to see scale.
“This is not a question of replacing one thing and doing a pilot or a demonstration. It is now time to get to scale quickly,” she said.
“The ability to get into the market is really complicated. We need to think about policies that allow quick entry and avoid the valley of death of so much innovation.
“How to make it easier rather than harder is going to be very important.”
Finally, Zibelman was asked about the challenges of the electoral cycle and, by implication, the extraordinary nature of the debate around energy in Australia.
“The problem is real. The reality is that the electorate in general will never be supportive of politicians who say they can’t solve your problem now, but they can in 10 years, so stick with me and I’ll sort it out.
“We need to have direction. We need to … have our eye on prize of where we want to end up and be clear about short-term actions.
“If it doesn’t happen, the future will never mature because people will go back to what they think they know is the answer.”
Sounds to us that Australia needs the same sort of political vision and certainty that has underpinned the transitions in California and Hawaii.