Daniel Westerman takes the reins as CEO of energy market operator

The Australian Energy Market Operator’s new chief executive Daniel Westerman has begun work at the company’s Melbourne headquarters, some three months after his appointment was announced and more than five months after the departure of predecessor Audrey Zibelman.

Westerman, an Australian, has been working with National Grid in the UK, where he was the chief transformation officer, and had previously been responsible for National Grid’s renewable energy business in the United States.

The Australian grid is in the midst of a major transformation of its own that most senior energy executives describe as the fastest in the world, with huge amounts of large scale wind and solar, and particularly a predicted 4GW of rooftop solar, changing the way the grid operates, and challenging existing business models.

Westerman, who has previously worked for McKinsey in Australia and before that as a senior engineer with Ford in Melbourne, is expected to keep a low profile for the first few weeks of his tenure as he comes to grips with the multiple issues facing AEMO and the grid operations, for which it is responsible.

Chief among these is the rewrite of the market rules by regulatory bodies led by the Energy Security Board which will, or should, be focused on providing flexibility and new market mechanisms for the new technologies flooding into the market, particularly battery storage and behind-the-meter innovations.

AEMO is also in the midst of a new version if its Integrated System Plan, a  20-year blueprint for the transmission and infrastructure needs for the transition to a renewables-dominated grid.

The last version included a scenario for Australia’s main grid to reach 90 per cent renewables by 2040, but the industry says the transition is occurring even more quickly than this “step change” scenario and the next ISP will include a new scenario that will model a transition to renewables by the mid 2030s.

AEMO also has its own issues managing connections in the state of Victoria, where many wind and solar projects have suffered delays and curtailment due to system strength or oscillation issues – with the most notable project affected being the 530MW Stockyard Hill, what should be Australia’s biggest wind farm.

And there are any number of reviews and programs and new standards, particularly affecting behind the meter installations such as rooftop solar and battery storage, new inverter settings, and the ability of AEMO to direct local networks to “switch off” rooftop solar if needed to maintain grid security.

Finally, there is the delicate matter of politics. The ISP has been generally warmly embraced by state and territory governments, who have their own ambitious emissions reduction targets and renewable transition plans, but it has mostly ignored by the federal government, which has mocked the plan as “lines to nowhere” and expressed its displeasure at AEMO’s gas forecasts, which have not echoed Canberra’s narrative out the gas recovery plan.

Zibelman is now working at the “Moonshot Initiative” of Google’s X, which is advancing new technologies needed to make the transition to zero emissions. She recently took centre stage at President Joe Biden’s recent climate summit to promote the fast transition to renewables, and the need for new systems to deal with climate events as occurred to AEMO in the tragic bushfires of the 2019/20 summer.

Nino Ficca, the former head of Ausnet who filled in as interim CEO of AEMO will return to his position as non executive director.