All the smart people are on our side, we just need a majority | RenewEconomy

All the smart people are on our side, we just need a majority

Print Friendly, PDF & Email

The overall tone of Clean Energy Summit is much more upbeat than last year, and it appears that the political resistance to renewables is fading.

Print Friendly, PDF & Email

“All the smart people are on our side, we just need a majority”

Or so said Andy Vesy, CEO of AGL Energy, quoting one of his mentors. Day 1 of the Australian Clean Energy Summit sessions would have to be regarded as a powerful statement of the increasingly mainstream nature of clean energy.

nsw solar

If there was one theme from Wednesday’s sessions it was general recognition that it’s time, and as we all know, long past time to develop an enduring energy policy. In addition, there appeared to be something close to consensus that a review of the structure of the market, including the National Electricity Objective, the gross pool and network pricing arrangements are all in need of a “refresh’ 20 years, more or less after they were first introduced.

The appointment of Josh Frydenberg as energy and environment minister is currently being seen as a circuit breaker. Policy under Ian Macfarlane and Greg Hunt had been so poor that the feeling is anything else will be an improvement, or at least a fresh start.

There was widespread support, at this early point, for the merging of energy and climate change. His appearance at the dinner event was greeted with cautious optimism. Here was a man who appeared to be listening and had left any ideological baggage at home.

South Australia was mentioned by many and again the main message I heard from speakers about South Australia was that there is a need to learn from what is going on there to enable policy to produce better outcomes.

Your author can confidently say that we wrote two years ago that every time a large fossil fueled generator is decommissioned it represents a big reduction in supply that will likely result in increasing prices for a time.

David Swift, from the Australian Energy Market Operator, remarked that its not just the LCOE (levellised cost of electricity) that’s going to be important in the future, it’s the value of the electricity it produces.

What we took David to be saying here is that renewable energy that can produce when needed is going to be a lot more valuable than renewable electricity produced when it’s not needed. And in our view that’s where the industry is right now. The LCOE of wind and solar is now below the LCOE of gas and coal but that is not enough all by itself to produce a reliable, cost effective, decarbonized electricity system in South Australia, the National Electricity Market, or the world.

The other issue that was often mentioned during the day was the increasing power of consumers, and the impacts of distributed energy, including micro grids, PV and batteries. Although that was clearly an issue at the top of many agendas, it’s still so early in that process that the implications for policy and investment remain speculative.

However much the hype has been about batteries so far, there will be more in the future.

The sessions, a few random observations

First up were the politicians featuring Mark Butler, Anthony Robers, Larissa Waters, Simon Corbell and Mike Nahan. My main takeaway from this session was that the resistance to renewables has faded. The overall tone was much more upbeat than last year and there seemed to me to be some willingness to cooperate and to learn.

Perhaps I’m an optimist. As ever, it’s nearly impossible to overstate the contribution Simon Corbell has made in showing how to do it. It’s true that the ACT, as part of the NSW node, doesn’t have the physical restrictions that South Australia and West Australia have, but that is not the point – well designed reverse auctions for wind, solar and storage are years in front of the competition.

Secondly, we had the senior thought leaders from the industry and the NGOs. By and large these continued the well known themes of falling costs, the difficulty of forcing out incumbents in an era of flat demand and the help that good and enduring policy can provide. However, we think that those who spoke about flat demand missed a trick in not emphasizing the role that EVs could provide to increasing demand and speeding up the transformation.

Thirdly was the “smart regulation” session. Shame this was on at the same time as the financing session but always interesting to hear what John Pierce, long time chair of the Australian Energy Markets Commission has to say.

For me the main point from this was that the AEMC at the margin seems to be embracing renewables a little more. There is ideological and perhaps meaningful debate as to whether “decarbonisation” should be written into the National Electricity Objective which at present states

“s. 7—National electricity objective

The objective of this Law is to promote efficient investment in, and efficient operation and use of, electricity services for the long term interests of consumers of electricity with respect to—

(a) price, quality, safety, reliability and security of supply of electricity; and

(b) the reliability, safety and security of the national electricity system.”

We don’t see much chance of getting decarbonisation in there and so look for reforms one level down in the policies. Still getting decarbonisation written in would give confidence about the long term nature of policy.

Fourthly was session on the market trends and outlook. Not much new here other than the presentation from David Swift covered earlier.

David Leitch is principal of ITK. He was  formerly a Utility Analyst for leading investment banks over the past 30 years. The views expressed are his own. Please note our new section, Energy Markets, which will include analysis from Leitch on the energy markets and broader energy issues. And also note our live generation widget, and the APVI solar contribution.

Print Friendly, PDF & Email

  1. neroden 4 years ago

    That’s a ripoff of a line which is apocryphally attributed to Adlai Stevenson, in case you didn’t know.

    “Senator, you have the vote of every thinking person!”
    “That’s not enough, madam, we need a majority.”

    It does have Stevenson’s sense of humor.

    • Rick20112 4 years ago

      Maybe. Adlai had little sense of humor.

  2. Rick20112 4 years ago

    I am quite certain you may see this differently, but, IMHO, if all the smart people are on one side already, and they do not have a majority, then the ‘others’ should be rightly peeved enough to never, ever join them.

  3. Matthew Johnston 4 years ago

    These guys who sit on Moomba Patchawarra bore can’t provide power. They can’t afford a GE reactor. They certainly cannot be trusted to run one. Nuclear. Joking Jay. Admiral Scarce knows that. Having communicated with him about the anti bikie laws.

Comments are closed.

Get up to 3 quotes from pre-vetted solar (and battery) installers.