Transcript – Energy Insiders podcast from the Smart Energy Conference

This is a lightly edited transcript of the Energy Insiders podcast from the Smart Energy Conference an interviews with Danny Kennedy from New Energy Nexus and IEEFA’s Tim Buckley.You can listen to the episode here on the Energy Insiders podcast.

Giles Parkinson  00:30

Hello, and welcome to a very special episode of Energy Insiders. My name is Giles Parkinson. I’m the editor of Renew Economy, and joining me, not in his own studio this time, but actually standing next to me, next to a wooden crate at the Smart Energy Conference in Sydney, is David Leitch from ITK. How are you David?

David Leitch  00:48

Giles, I’m very well. I trust all our listeners are well. And isn’t it nice to be doing a live outside broadcast for the first time? I’m almost expecting the footy teams to run onto the field. But instead we’re here iat Smart Energy?

Giles Parkinson  00:58

Well, that’s exactly right. Look, I’m not too sure what this wooden crate’s about, but anyway, it’s, it’s pretty interesting. We’re surrounded by the wooden crates but we can hear the conference in the distance. Look David, this has been a pretty interesting conference. It has been the first time in more than a year that all the industry has gotten together. So everyone’s been very happy to catch up with each other. Gee, a lot’s happened, lots of change in the last year, hasn’t it?

David Leitch  01:20

Well, a lot has changed. But first of all, I think it’s hats off to the organisers of the Smart Energy Conference, John Grimes and Steve Blume I guess as chair of the Smart Energy group.

Giles Parkinson  01:32

I’d like to put in a word for Wayne Smith too and his team.

David Leitch  01:35

It’s a very well organised conference and had a fantastic lineup of speakers. And Steve was only telling me that they had 3000 people through the doors on the first day of the conference, which is pretty darn good and shows, I think the quality of the speakers and even that Angus Taylor sent his in by video shows …

Giles Parkinson  01:56

By time capsule actually….

David Leitch  02:00

Not sure if it would change if it was delivered in another 20 years, but anyway, shows the maturity of the industry and how establishment mainstream it’s actually become. We’ll probably talk about it but we had Kerrie Schott here, we had most of the State Ministers and as I say Angus Taylor, representatives from AEMO, a lot of serious hitters.

Giles Parkinson  02:22

It was actually really good, and it was good to see the State Ministers. Matt Keane was here in person, I mean it is his home state so that you’d expect, and we heard Bill, Bill Johnson, from WA, Lily D’Ambrosio in Victoria and Shane Rattenbury from the ACT. But I was particularly impressed with Matt Keane’s speech. I don’t know, was it you who mentioned at the time that, about Matt Keane actually sort of, a minister actually coming out and saying this rather than just talking vaguely about it?

David Leitch  02:54

Well look, we also had Malcolm Turnbull, who of course, got most of the mainstream media….

Giles Parkinson  03:00

…Yes, sorry, listeners, I just tripped up there. I was just I had a bit of a mental fog, I’m pretty sure it was you just sort of say, well, the difference between Malcolm Turnbull and Matt Keane was that they’re both saying the same message but Matt’s actually saying it when he’s in a ministerial position.

David Leitch  03:14

Yes. And for that, it’s, the outcome is wonderful. But what In my opinion, it’s a triumph of politics. Of being able to build the political consensus to get this policy through with relatively little opposition. But it’s more than a triumph of politics. It’s a triumph of bringing the bureaucracy, the executive along with you, as well as the leaders because, for me, one of the standout presentations was the one on renewable energy zones. And  that had a couple of great sessions in it. One was on industrial precincts from Simon Holmes a Court and you know, particularly in the Hunter, where we could maybe put the aluminium and fertiliser and hydrogen and renewable energy all together to create a big industry.

But Amy Kean talking about the New South Wales renewable energy zones and how she went out ion a bicycle tour of the Orana zone to really get the vibe of how the community are thinking about it. t’s this idea of social licence, which has become such a big deal in doing business these days. And by being open in the way they’re approaching this and consultative in the in best practice and putting the local communities at the centre of it and making sure that they’re going to get, you know, a good supply of electricity in the actual renewable energy zone. So that’s the way you do things!

Giles Parkinson  04:35

Yeah, that’s really interesting. And Kerry Schott, was actually making an interesting point too, about renewable energy zones, and just that social licence thing which is very important. So I think the solar industry can learn a lot from the wind industry about how it managed its issues. And I think certainly the transmission industry is going to have to learn a lot from both because that’s also going to be a major issue as we go forward. So look, I managed to do a couple of recordings while I was here. And one of the first ones I did was from Danny Kennedy that people may remember, he was the former head of Greenpeace International. He went to play a very significant role in  California, and now runs the California Clean Energy Fund, and let’s listen to what he has to say.

I’m catching up with Danny Kennedy at the Smart Energy Council Conference. It’s great to catch up again. It’s been a while. Yeah. Last time when we saw each other were having having a meal at the Bangalow Hotel. I think it was.

Danny Kennedy  05:29

That’s right.

Giles Parkinson  05:31

You’re now heading the California Clean Energy Fund, which I think’s got a new name. Now, what’s it? What’s it called?

Danny Kennedy  05:36

Well, we broadened our scope from just focusing on California to New York, and also other countries, markets that matter bringing funds and accelerators into India, China, Indonesia, Thailand, Philippines. So that’s called New Energy Nexus. So we run teams in all those places, and Uganda, I should mention, but basically the same idea and ecosystem of money and training for startup founders to get faster, further better.

Giles Parkinson  06:02

Give us a bit of a sense of what’s happening in California now. There must be fairly buoyant with Joe Biden….

Danny Kennedy  06:07

Sure.  …In the White House, no more Trump and a lot of money being thrown at clean energy in the transition?. Yeah, it certainly feels like springtime in America. Yeah, COVID, sort of passing too, we hope, you know, the vaccinations are rolling out. But you know, California as a State just hit 94%, you might have seen that news, in terms of renewables, one day, last, two weeks ago now. And, you know, that’s pretty impressive for the fifth largest economy in the world, you know, we regularly do 70% on a given Sunday. But to do that, in the middle of the week, means it can be done again, and again. And then 365 days of the  year, which is the law by 2045. But I’ll be honest, I think, you know, now we’re being pushed by Biden at ours, to how much faster we can go, and New York and other States are sort of bringing forward that 100% mandate. And really, it’s now about, as it is in Australia, you know, it’s not 100% of demand, it’s going to be 4/5/6/700% of demand that will actually generate with renewables,

Giles Parkinson  07:01

Which is a happy outcome for the grid in the end.

Danny Kennedy  07:03

That’s right, and for all of us, but also for industry and new, innovative sectors that are gonna come up around it. So in California, we do a lot around lithium, for example, now looking at a reshoring of the battery supply chain across America, which again, is a sort of Biden initiative to make batteries in America again. And that will probably be rooted in Southern California down near the Mexican border at a place called the Salton Sea. A lot of great stuff happening. Very buoyant, you know, old friend Jigar Shah is in the loan programme office of the Department of Energy talking about giving away, well, not giving away but investing 10s of billions of dollars, doing it the right way. So yeah, it’s good times. We’ve done about 100 startups pre prototype in California in the last four years and plan to do 100 in the next three. So we’re trying to accelerate our own craft.

Giles Parkinson  07:52

And when you come to Australia, and you look at what’s going on here, I mean, it seems to me that Australia in so many ways, or in some ways is leading the world, in sort of, you know, the uptake of rooftop solar. And I guess the amount of wind and solar that’s being put into the grid, and the fact we’ve got coal generators exiting, and we’re actually decarbonizing the grid at a reasonably rapid rate. But in so many other ways, we’re behind the rest of the world, because the lack of Federal policy and things like that. So what’s your observation?

Danny Kennedy  08:16

Yeah, absolutely. It’s sort of the best of times / worst of times, crazy stuff. But certainly, your postcard from the future is how I talk about Australia overseas. Wonderful penetration of the rooftop space and how that’s affecting DERs more broadly, and battery uptake and the DERMs and all the cool companies that have come up to service that grid and AEMOs digitization agenda, or stuff that the rest of the world is behind, truly, but then you’re completely laggardly on EV adoption and other things. So you know, sort of success despite and in spite of the politicians, I guess, but good on the entrepreneurs of Australia for making it happen and  consumers for demanding it and choosing it. I think Australia’s got a huge opportunity to sell those smarts to the rest of the world, but less the States, you know, I wouldn’t encourage that as much as Indonesia. I mean, you know, you might have seen just last weekend, the Indonesian government finally sort of broke on their rhetoric from, you know, it’s a coal base future to Okay, Okay, we recognise we’re going to have to do some of this stuff, and probably by 2023 that’s all we’ll do. That’s 300 million people just north of here that need microgrids and distributed energy resources and grid management. And guess what,

Giles Parkinson  09:30

Hey, I’ve got an idea….

Danny Kennedy  09:32

Sell some services and know how to get our friends just north. I would suggest that and a landing pad is open to you at New Energy Nexus. We got offices in Singapore, have a small fund to invest in Indonesia, the Philippines, Thailand, Vietnam, you know, really keen to just support the kind of cross fertilisation of all these key markets that matter and Australia could do great with that.

Giles Parkinson  09:57

Fantastic stuff. Danny, thanks for joining us. And that was Danny Kennedy from the California Clean Energy Fund. David, I guess the message there is that Australia must seize the opportunities. There is sort of, there’s a lot of investment out there. They’re looking for opportunities. Australia really has to seize it. And it was a similar message that came in another interview I did with Tim Buckley from the Institute of Energy and Economic Financial Analys, it might be the other way around.

David Leitch  10:26

20 people Tim’s got working for him here in Australia but keep going..

Giles Parkinson  10:28

No, no, I think it’s fantastic. I remember actually IEEFA grew at about the same time as Renew Economy or nearly a decade ago, and it’s grown into a very important and very influential Think Tank. So let’s have a listen to what Tim had to say.

Tim Buckley from the, from IEEFA, the Institute of Energy Economics and Financial Analysis. I hope I’ve got that right Tim?

Tim Buckley  10:50

You have.

Giles Parkinson  10:51

Oh, fantastic. We’ve just had an interesting session where you’ve been speaking about the export opportunities for Australia. We heard from Sun Cable, that massive 14 gigawatt project and 33 gigawatt hours of battery storage, possibly going to Singapore. We heard about some of the other export opportunities, we’ve been hearing about hydrogen quite a lot. But it’s also interesting just talking about the Australian opportunities. And this is not just about exporting power, or electricity or energy overseas, it’s also making so much surplus energy that we actually create this massive manufacturing opportunity in Australia and decarbonize at the same time. Tell us more about that.

Tim Buckley  11:31

Yeah, Simon Homes a Court talked about it. The the idea of industrial demand precinct. So before we work out, and before we even get the engineering on how to transport liquid hydrogen to Japan, at double the negative temperature of LNG there is not a ship in the world that can do that. That’s a decade away. We have opportunities right now to learn by doing at massive world scale by decarbonizing our heavy industry in Australia. So the players like Tomago from being, go from being our archenemy five years ago to, in fact, the enabler of the decarbonize of the, decarbonisation of the grid.

And as we heard from Dr. Schott yesterday, getting to 75% is actually really easy. It’s the last 25% that is difficult, and that’s where flexible industry, buying in and rewarded for decarbonizing becomes a key enabler. And that probably crosses the political divide, because then all of a sudden, the Liberal National Party has to talk about jobs, they have to talk about reindustrialization, take advantage of COVID. We’ve learned that supply chains are key, let’s decarbonize our manufacturing, I would be starting with replacing imports of ammonia, not worrying about exporting green ammonia to Japan, let’s stop the imports of ammonia, and decarbonize our, our existing ammonia nitrate manufacturing facilities, particularly up in central Queensland for the explosives for the gold mining exports.

Giles Parkinson  12:57

And we’re talking about billions of dollars. I mean, you know, we’re talking about sort of having 10s and 10s of billions of dollars of extra industry in Australia. And it’s interesting what you’re talking about there, because we’re talking about not just seizing the opportunity, but was what was also discussed this afternoon, was the fact that of avoiding catastrophe, because there’s other economies decarbonize, then there’s quite open talk now about, about border taxes. So you’ve got all the industry in Europe, they’re basically dealing with a real or shadow carbon prices around $100 a tonne. And they’re just thinking, well, we want to we don’t want to be laid victim to this so we should impose this on other ones, other countries,

Tim Buckley  13:36

Correct. I mean, that’s where the thinking from players like Heidelberg Cement for the last 10 years, they’ve tried to undermine the European carbon ETS, now they’ve accepted it’s inevitable. It’s there. It’s growing, it’s growing every month, and it is going to 100, as you said, and that’s exactly what the Norwegian Ambassador said, today, as well. It’s going to a hundred and therefore carbon capture and storage in the North Sea works, because my response is well, it will never work here, because we don’t have a price signal. They do. They’ve got a price signal of 50 euros today go to 100. And so therefore Equinor is the biggest developer of blue hydrogen potentially in the world, it’s probably the only blue hyydrogen project that will get off the ground because they’ve got the underpinning that we don’t have, which is carbon price.

Giles Parkinson  14:23

Well it’s interesting, I think in the first session today in the hydrogen thing, and look, there’s been a whole room, basically two days of hydrogen talk and lots and lots of different projects and things like that, but one of the fascinating things that emerged this morning was the German representative talking about the appetite for green hydrogen. And then all the Australian agencies such as Arena and other ones will say, well, we’re supporting hydrogen projects, but some of them are blue, and some of them are brown and the guy is just sort of going, well, sorry, guys, but the market’s for green hydrogen. We know Australia really seems to be sort of chasing this fossil fuel hydrogen, for no good reasonable purpose.

Tim Buckley  14:55

Yeah, I mean, I won’t try and justify it at the end of the day. My view is blue hydrogen is a myth. It is is going to be an absolute, like as common as flying pigs, everywhere except in Europe. And the idea that Australia is going to ride that one anywhere?Absolutely no. But we do have a massive fossil fuel industry, there is a lot of learning by doing, the governme nt’s going to subsidise it all as we’ve just heard from ARENA. But at the end of the day, that’s an important first step, let’s do something. We’ve got to start but the massive, multi billion dollar opportunity is for exports of green hydrogen, there is no way Japan or Korea who have just committed to net zero can use mythical blue hydrogen to deliver on net zero. But in the meantime, the bigger opportunity and one of the numbers that came out yesterday that sticks in my mind, someone put up a slide saying we import $29 billion of oil and diesel every year. So we could replace high emissions, expensive imported oil imports with domestic renewable energy by adopting a really fast accelerated deployment of EVs. So you’ve been here…..?

Giles Parkinson  15:58

What a great idea who would have thought of that?

Tim Buckley  16:00

You’ve got The Driven!  But it’s now become an economic reality. And that’s how we drive 29 billion a year of import replacement. And so rather than stuffing around with this road tax that Lily’s colleagues in Victoria have just done. I mean, how dumb? But at the end of the day, it wasn’t her policy, one of her colleagues must have snuck in while she was ……

Giles Parkinson  16:26

It was Treasury I think….

Tim Buckley  16:27

It was just stupid. But at the end of the day, maybe in five years time, but in the meantime, what we should have been talking about was the $29 billion a year of annual opportunity and the Federal Government’s now absolutely stuck, because two of the last four refineries are closing.

Giles Parkinson  16:42

Well Tim, riddle me this then,  if it’s so damn obvious, then why aren’t they doing it?

Tim Buckley  16:48

Idiocy and ideology. There’s no other two words for it. Murdoch, obviously our favourite friend, and just the absolute power of APPEA in Australia is, in my view, it’s a massive undermining of democracy. They, if you think Shell has a $51 billion PRRT rebate on their balance sheet for Australia. $51 billion, that they will never pay to the Australian Government for use of offshore LNG in Australia.

Giles Parkinson  17:16

You better just spell it out for us.

Tim Buckley  17:18

The Petroleum Rent Resources Tax, so it’s pay, it’s a royalty that supposedly goes to the federal government on oil and gas from the offshore. So if it’s onshore, it goes to the state. If it’s offshore, it goes to the federal government. But 12 years ago, the ALP Martin Ferguson did a deal which meant that effectively players like Shell will never pay royalties on any LNG deal. Any LNG project that they have developed in this country. Shell’s annual reports says they will not pay rent resources royalties for the next 20/30/40 years.

Giles Parkinson  17:50

So they’re just getting basically $51 billion of our money that,  yes, well, or keeping it…

Tim Buckley  17:55

Correct. They’re using Australian public resources for tax haven based foreign gain. And the only person that’s benefiting, and it’s not Shell because Shell share prices in the shit just like Exxon’s is,  they’re going down so itsnot the shareholders that are benefiting. Martin Ferguson’s being paid, what is it $900,000 a year? Now that says to me, both sides of politics are being corrupted by the fossil fuel vested interests, the lobbying power of players like Appea are destroying Australia’s democracy. I’m saying that I know they can sue me, they probably will. But at the end of the day they are destroying our democracy, and Murdoch’s reinforcing it, and so politics has been ridiculous so that we can’t even talk sensible economics and finance.

But let me finish on a positive. Larry Fink makes me look conservative. Larry Fink now talks about decarbonisation investment opportunities as the biggest opportunity in the world for BlackRock in BlackRocks history. BlackRock, for all of your listeners – $9 trillion of assets – he makes Scomo look minor and irrelevant in the world. Larry Fink is the most powerful man in the world. And he’s telling every CEO decarbonize at an aggressive speed. He’s already called out AGL, he’s already called out KEPCO. He’s going to be calling out every fossil fuel company, every major emitter in the world to decarbonize. That’s BlackRock in our side, our team. So we’ve won.

Giles Parkinson  19:15

Well hooray! And that’s a nice positive note. And before we go and get our lawyers I better say goodbye to Tim, thank you very much for joining us.

Tim Buckley  19:21

Thanks Giles.

Giles Parkinson  19:23

And that was Tim Buckley from IEEFA, David. Yes. So many opportunities in Australia. It’s really interesting that the idea of bringing ammonia back onshore rather than importing it, and rather than just exporting all our hydrogen opportunity to think of that as an export, of actually creating industry in Australia. I think this is a point that you’ve actually made previously.

David Leitch  19:41

Well, yes, I just wanted to also finish on the Orana  Renewable Energy Zone. That’s the first one in New South Wales where Miss Hicks talked about the possibility of actually putting in five gigawatts of new renewable supply.

Giles Parkinson  19:55

I’m going to have to interrupt you there because yeah, Chloe Hicks, it wasn’t Amy Kean as you said originally, so Chloe Hicks. So who was on the bicycle?  Chloe or Amy?

David Leitch  20:02

It was Chloe Hicks. Miss Chloe Hicks as far as I know,

Giles Parkinson  20:05

It was Chloe Hicks on the bicycle. There you go, apologies to both, but there you go, continue on.

David Leitch  20:09

So that just shows the scale. And then also we had Monique Miller from the CEFC pointing out that there’s just an absolute flood of money out, which I think you and I know, around the world that wants to find the investment opportunities. So there is great opportunities for Australia. In terms of ammonia, I think the expert in Australia is is the CWP group. That’s the group that has the hub in Western Australia that wants to build, essentially 100 terawatt hours. So about equal to half of the NEM  annual consumption in a very, over $20 billion project. And it has decided, it started out it was going to move electricity on a transmission line to Indonesia. And then it switched over to thinking about hydrogen, but now it’s switched from hydrogen to ammonia exports. And basically, the idea would be to ship ammonia to Japan to replace about half the coal in, you know, in Japan’s coal generators. And so that’s not going to reduce Japan’s emissions to zero, but it’s gonna, it’s a pretty good start.

Giles Parkinson  21:18

It’s a pretty good start. It was interesting at the start of the hydrogen conference, actually the German representative sort of talking about, as I discussed actually with Tim, it’s sort of saying, you know, we want green hydrogen and all the Australian agencies saying, Oh, well, we’re making green hydrogen, but we’re also funding blue hydrogen and brown hydrogen. You just sort of think, guys, I don’t think you quite understand the market. But anyway, look, let’s probably get back to a little bit of Australian politics.

We saw Keith Pitt’s extraordinary intervention. I don’t know whether I actually want to sort of do it, but it’s just so frustrating to hear a minister of the crown and an electrical engineer as well, just sort of refusing to say whether battery storage is dispatchable or not, I just thought it was perfectly ridiculous. But Angus Taylor is moving forward with his preferred gas generator in Kurri Kurri, despite the fact that Energy Australia is now building its own plant at Tullawarra. The interesting thing with Kurri Kurri is it’s gonna burn on diesel for the first six months becauseit hasn’t,  if it gets built, it’s gonna burn on diesel for the first six months, because there’s no proper gas connection,

David Leitch  22:14

Look, notwithstanding that AGL had a proposal to build a gas generator in a similar area, it’s Newcastle’s not actually an obvious place to build gas generation. Because the, it’s right at the end of the current gas supply chain at the moment, and I think we can look at the difference between the Tallawarra project funded by the private sector, Energy Australia, which required essentially an $80 million subsidy from the New South Wales Government dressed up as a hydrogen sort of thing to actually get the Go ahead, even though that was being built on the side of an existing  gas generator plant. And the plants have been developed for years so it’s bound to be cheaper than a brand new plant, which doesn’t have any gas infrastructure.

And we can compare that with the, with the plant that Snowy is proposing to build, which could only be built because essentially the federal government’s building it. Now there’s good and bad things to say about Snowy, and I said fairly regularly. But I mean, I doubt that this project would be all that commercial, or obviously commercial on its own merits. But if you’re Snowy, and you’ve got a very big share of the peak market, you know, then it’s a chance to kind of use federal money to essentially buy up control of the market without having to worry about competition from the private sector.

Giles Parkinson  23:34

And that’s exactly what a lot of people have been telling me in the past, actually, if I saw that, that caps market. They’ve got a large share of it now by building this gas/ diesel plant, then they can lock it up even further. So not great for competition, really.

David Leitch  23:45

Now another thing we heard from the people from the solar side of things, and this conference didn’t have a lot of wind, was about the problems in South Australia with South Australian households just being switched off, without any consultation, without any social licence. Because of these issues was just in South Australia, it was system security and minimum demand. Now it’s true, those issues exist. And that’s, but in the end, the thing that’s missing from all of the work, we heard AEMO talk about the different streams of work that they’re doing. And one of them is like an engineering study to talk about. But the trouble is, and it’s the same with the energy security board, it’s all this muddle through approach. Now muddle through is fine as a way of doing things. It’s a well proven, actually successful thing as we discussed last time, Giles, that you and I are well versed in the …..

Giles Parkinson  24:33

Aah, we muddle through…yes definitely..

David Leitch  24:33

… But the other way of doing it, that’s also well accepted is to start with your end goals, and then work back with a gaps analysis. What do you need to achieve your end goal? And I think what’s missing in the security side of things more than anywhere else is what, how would we manage you know, inertia or virtual inertia and current and system strength in a world where there wasn’t any coal or gas generation? I think the academic groups and AEMO and CSIRO have all let us down in that regard, because they haven’t done the work to actually have a departure point. You know, we don’t know what the endgame is. And as a result, we keep building synchronous condensers, and saying you’ve got to have this much synchronous generation running, because no one’s got any, they haven’t done the work yet, or show how to do it differently.

Giles Parkinson  25:23

Yeah look, another interesting thing I came up with, particularly in the first day, and this idea about solar and how it’s kind of eating its own lunch in a way, and this is mostly rooftop solar. Because good news in one way, it just basically means that all the households and the consumers and the businesses are put solar on the roof are really having an impact on the markets and, and the first and biggest victim has been coal fired generation, but the next victim has actually been large scale solar plants. And both you and some other analysts came up and justsort of pointing out the problems that that is putting too many people are wanting to develop solar farms. What’s the solution? David? Is it to simply more storage or spilling? Or hydrogen? Or what? How do we get around that? Because….

David Leitch  26:03

Well, I think we should develop more wind, most of the studies that I’ve seen so far, depending on what costs you want to put in, so that the low cost solution for Australia generally has a lot of wind in it. Whereas everyone wants to talk about the falling cost of solar all the time. That’s you know, and they don’t people don’t like to talk about wind, because it’s not wind is not a game for cowboys so much, you’ve actually got to have a few hundred, you know what I mean? You’ve got to be a serious player to get into wind and do all the environmental stuff. Leaving that aside, the answer is that, in the end, the low prices in the middle of the day, will end up setting the prices in the evening. Because if it’s, if you’re a battery, and you’re you’re charging at zero, and you need say a $70 spread between your buyer costs and your sell price, that to cover your cost of your battery, then that means if you buy at zero, you can sell at $70 in the evening, and that sets the price of electricity at that time.

Giles Parkinson  26:57

And if you buy at minus $70 you can sell at zero in the evening.

David Leitch  27:00

Well, I don’t think minus that… In the end, the fact that the rooftop solar is going to push prices down to zero in the middle of the day, from the system’s point of view, and even from the people who are buying electricity in the evening, that’s not a bad thing.

Giles Parkinson  27:13

But yes, so it’s actually a good thing. Yes, it can be a good thing if managed properly.

David Leitch  27:19

You just need to think, do a lot of thinking about these things. Now the other theme that seemed to emerge from the conference that a lot of presenters have made is this point, and it goes to the gas thing, is that we are going to need something beyond batteries in this highly renewable world. And we’re not quite sure what it’s going to be yet. For those cold winter nights when there’s not much renewable energy production for a couple of weeks on end, and you can’t recharge your batteries, you know, as fast as you need to. What are we going to do then? That’s the, that’s the other sort of missing piece in the market.

Giles Parkinson  27:50

We can switch on Angus Taylor’s diesel generator.

David Leitch  27:52

Yeah, we could switch on Angus Taylors’ diesel generator. But what else, David? Well, we don’t know, maybe, maybe it’s going to be ammonia driven generators and those sorts of things. Maybe it’s an aluminium smelter turning down, in part, you know, which can deliver 1000 megawatts for a couple of weeks on end, across the three or four smelters that we’ve got running in Australia. So there are plans, but but again, it’s thinking needs to be done about this. Over and beyond the integrated system plan. Let’s be honest, the integrated system plan is a transmission plan in the end. It’s a step by step transmission plan. It doesn’t have an end goal in mind. It’s not driven by a central government objective. It’s not driven with an end view. I think AEMO needs to read, they did a study years ago, where they looked at 100% renewables. But they didn’t, I don’t think they took that study very seriously. This time, I think they need to do a serious study and work it out from all the angles.

Giles Parkinson  28:46

Well certainly they’re fast change, their step change plan that gets us to 90%. They’re modelling this, well, it’s just a scenario that gets us to 90% by 2014, what they’ve been saying or what Kerry Schotts been saying, and  what other people have been saying, is basically we’re going even quicker than that. So that sort of assessment should be or probably will be forced upon us because we’re now starting to talking about getting very close to 100% renewables, possibly by the mid 2030s. The biggest difficulty, of course, is getting that last five or 10%. And that’s the….

David Leitch  29:16

There’s a lot of steps to go to have this high penetration of renewables. There’s a lot of things that have to happen. Well over and beyond building the wind and the solar plants. Now we are actually despite what all everyone’s optimism, actually when you look at it, there’s a slowdown in the last few months. And then we can argue about the reasons for that slow down, but I suspect it’s tied up with the New South Wales plan. And just to be clear that the New South Wales plan wont have its first projects sort of shovel ready before the end of next calendar year.

Giles Parkinson  29:46

Yes, that’s

David Leitch  29:46

That’s a lot of podcasts between now and then Giles.

Giles Parkinson  29:48

Absolutely. Yes. And just to sort of, just sort of embellish on that, a lot of people have been saying to us while we’ve been here is that this New South Wales plan is great, but because they’re waiting for an auction in a system that basically everyone’s sort of putting, putting a hold on their project decisions now because they’re waiting to see how that unfolds, so it will be good in the end when it sort of rolls out. But the inevitable result is that there’s a bit of a hole happened in the meantime. And but that’s been true of just about any incentive plan that’s ever actually been produced.

David Leitch  30:17

Yes, yes. Things don’t go in a straight line. True love, the course of true love and all of that…. not that I’m wanting to suggest anything here. Look, I think we’ll have our listeners will start to wonder what we’re on about in a minute.

Giles Parkinson  30:28

No, that’s right. Look, I think we’ve probably covered enough time, it’s probably time to wrap up. It’s winding down outside there and away from these wooden crates. So David look, great to catch up. Great to be here in person. Congratulations once again to the Smart Energy Council for putting on this conference. Thanks also to our sponsors Pylon and Evergen. And thanks, of course, to our listeners, it’s been actually great getting your feedback. We’ve been wandering around the conference floor, or sitting there working on our laptops and just a lot of people come up to us and said look, really enjoy your podcast, really good, and we really appreciate that and fantastic! So David, back to our studios next week and enjoy the rest of the conference, or one hour of it.

David Leitch  30:36

I’ll do that Giles. Cheers again.