Interviews

Transcript: Energy Insiders podcast interview with AEMO’s Daniel Westerman

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AEMO chief Daniel Westerman. Image: CEDA

This is a lightly edited transcript of the recent Energy Insiders podcast, featuring the Australian Energy Market Operator CEO Daniel Westerman.

Giles Parkinson  00:00

Daniel Westerman. Thank you very much for joining David and myself on Energy Insiders.

Daniel Westerman  00:04

Thanks for having me, Giles.

Giles Parkinson  00:07

You gave your first speech two weeks ago at the CEDA meeting in Melbourne, and one of the featured parts of the speech was the need for Australia to prepare to accommodate 100% instantaneous renewable energy. And I do emphasise instantaneous. You weren’t talking about 100% renewable energy target or anything like that. But that got most of the headlines. And a lot of reaction, both negative and positive.

Many people in the energy industry have described it as something of a game changer, game changing thought or thinking. Why was it so important for you to focus on that in your first speech since inheriting the job in early May?

Daniel Westerman  00:52

Well, thanks for the question. And  look, I think I tried to cover actually quite a lot of ground in the speech at CEDA a couple of weeks ago. One of my core messages actually was that when you look at the way Australia is positioned in the energy transition, and particularly with the experience that I’ve had over the last seven years across the UK and the US, there’s just a huge amount of opportunity in the energy transformation for all Australians, right. And you’re right that there was the perspective that AEMO needs to be ready for periods of time, moments in time, when the grid does need to cope with 100% penetration of renewables.

So instantaneous penetration, as you point out, that is a challenge for us. But there are just huge opportunities in the energy transformation in general. I also tried to point out that there are many aspects of that transition that we need to consider. We’ve got to do the right thing by Australian consumers. That the energy transition is in the interest of consumers. We’ve got to act collaboratively together, and look around the world and really learn and implement things where solutions already exist.

Giles Parkinson  02:14

Yeah, and the point about consumers is well made, and I’m sure we’ll get into some of those other details, but just wrestling with 100% instantaneous penetration just for a little bit longer. This seems to be an acceleration of the thinking within AEMO. A year ago your predecessor Audrey Zibelman was talking about the need to accommodate up to 75% instantaneous renewables. What has happened?

I’ve got a couple questions here. What’s happened in the meantime to drive your thinking about being able to accommodate 100% instantaneous renewables? What does that actually mean? Are you talking about the NEM as a whole having 100% across all because it’s basically a bunch of State grids? Are you talking about individual States? And I guess, finally, in a three pronged question, what do we actually need to do to be able to actually accommodate that?

Daniel Westerman  03:00

Yeah, well, what’s changed really Giles is, you’re right, a year ago, a little more than a year ago now, AEMO, published the Renewables Integration Study. And that was a seminal piece of engineering work that forecast a number of different scenarios for the grid going forward under what were the scenarios within the integrated system plan at the time.

Under the base case scenario that had instantaneous penetration of up to 75% of the time in 2025. And don’t forget, we’re already operating at around about 50%. So actually, the record at the moment is 57%  of renewables as an instantaneous level, so within a half hour period, actually. And really, what’s changed since the publication of that report is that Australia has really embraced the energy transition. And we’re installing renewables at, you 10 times the world average. Twice the rate of our fastest, our newest competitor in the installation of renewables, Germany. And I think that’s a really great thing for Australia, you know, the embracement of the energy transition. Why is it important for us?

You know, it’s important for the system and market operator to be able to deal with the operating conditions at any moment in time. That’s what matters for us. It really does. And, you know, my aspiration for the grid to be able to deal with 100% instantaneous penetration, that’s not a policy statement. You’re absolutely right. It’s not about that Australia should have 100% renewables all around the around the clock and around the year. That’s not the case.

And certainly we don’t step into policy ambitions like that, but it is where the world is headed. It’s where Australia is headed. And what we see is that the market is moving faster than what we call our step change scenario. And the step change in that report was forecast at 100% instantaneous penetration by 2025. And as the market operator, we need to be able to facilitate that. And if we don’t, you know, we’re constraining off the cheapest electrons, free electrons if you like, for Australian consumers, and I don’t think that’s the right outcome for Australia.

Giles Parkinson  05:32

Does that mean at that point in time, no fossil fuel generation is happening at that particular point in time? At 100%t instantaneous? Or is there some there going into storage or whatever? How do you imagine that  actually happening?

Daniel Westerman  05:45

I think there are a range of different potential scenarios. But for us, the challenge is all about the shift from rotating kit, the big coal fired gas fired generators that provide system services that I’m sure your listeners know well around inertia, system strength and others, and shift to generation that’s provided through inverter based generation, you know, solar and wind that is injected into the grid through these electronic inverters. And the challenge that gives us is the system security mechanisms that we’ve had in the past just aren’t there in the same way.

And so you asked before, what’s the pathway? What’s the roadmap to get there? The honest answer to that Giles is we don’t know yet. And that’s why we need to set it as an ambition because we think it’s the right thing for Australia to be able to have a grid that can cope with 100%, instantaneous penetration of renewables. We think we’ve got the tools probably to get us to about 75% instantaneous penetration. And I’m personally very optimistic about the work that the energy security board has done and we’re in the process of submitting our recommendations to energy ministers now. But above all of that, we actually need to put our best minds from right across the industry, the operator to, you know, to generators, to new connections, to jointly work together to figure out how we do engineer grids that are capable of running at 100% instantaneous penetration of renewables.

David Leitch  07:24

So Daniel, can I ask about AEMO as an organization? I think you have some background in National Grid and also at McKinsey for a while, as well as Ford Motor Company. And I suppose as the new Captain or Chief Executive, the first thing you do is look at the team you have there and its assets and its organization. And, you know, when I speak around the industry, I hear comments that AEMO historically it hasn’t been, like a Japanese train, if I can put it that way, in terms of its efficiency and everything. When you look at the strengths and weaknesses of AEMO, what’s your initial assessment after this brief time in the seat?

Daniel Westerman  08:11

Well, I think AEMO is a very privileged organization to be operating right at the heart of the energy industry in Australia, that will play a really pivotal and critical role in facilitating the energy transition, as well as obviously every day enabling the energy markets that keep the lights on and the gas flowing. My reflection on having now spent a couple of months in the seat, is that the priority is for AEMO quite clear for the period ahead. We’ve got a terrific place in the industry, and we’ve got some amazing people with wonderful talents. And what we need to be clear about is what our priorities are for the future.

In doing that, we’ve actually just launched our corporate plan, in which we’ve set out four simple priorities for us to focus on in the period ahead. And they are firstly, operating today’s systems and markets. And I think you’d be disappointed, and I think your listeners would be disappointed, if that wasn’t our first priority. The second is about navigating the energy future. And so that’s really collaborating with our members and stakeholders to identify issues, identify solutions and work together to implement reform. The third is around engaging our stakeholders.

So becoming a much more transparent, collaborative, stakeholder oriented, open organization and really changing the way we work externally. And the last one is about just evolving the way that we work and being a more transparent, efficient, well run, well oiled machine. As an organization, I think focusing on those four priorities will mean that AEMO is the most effective we can be in that privileged role that we have right at the heart of the energy industry.

David Leitch  10:16

And so I’ve been reading the corporate plan for the past couple of days, as well as a few other things. And having had a look at AEMO as an investment banking analyst, and as an organization, it seems to me that it’s got a fairly weird grab bag of functions. And, you know, from one point of view would be trying to do too many things for too many people like, I don’t know, transmission planning in Victoria and a lot of gas stuff that doesn’t relate to electricity, running the West Australian system, and you’ve just taken on the corporate trustee role for New South Wales energy road transformation map, energy transformation.

On top of that, the budgets are bit constrained the revenue models, a bit strange, and there’s all this IT stuff going on at a huge rate of knots as well. I guess my question is, do you think AEMOs’ functions are the appropriate ones? Shouldn’t  it just slip back a bit what it does, and focus on, you know, the first couple even of those priorities you mentioned?

Daniel Westerman  11:26

Well, so I’m really clear on what AEMOs’ core functions are, right. So you know, we run the system, we run the market that runs the system, and we plan for the future. So just unpack those a little bit. Running the system is all about real time operations. And, you know, again, this is the kind of core day to day job operating the market. So we facilitate all the trades. And I guess that enables a whole bunch of market investment into the energy system, over $20 billion worth of trades every year. And planning for the future. So all around the integrated system plan, generating the least cost and least regret, pathway forward for Australian consumers.

There are a couple of other functions that we do provide, or other services that we do provide for each of our stakeholders and members and provide support across the industry. We’ve been providing support, that sort of bespoke support to jurisdictions for a long time actually, from the Victorian role through to South Australia. And you point out the new role that AEMO Services, a subsidiary of AEMO, has taken on as the New South Wales Consumer Trustee, or is about to anyway. And these are, I think, important roles for us to help support our members and stakeholders. It’s important that we do them the right way, that we’re always focused on our core obligations, which is running the system, running in the market and planning for the future. And I’m very confident that we’re doing that.

David Leitch  13:09

So I’ll just ask one more question and then head back to Giles. And it’s like one of his, it’s a bit of a broad question that relates to the connection reform initiative that I’ve been reading about that AEMO and the CEC have been looking at. And I guess the way I see it as an external analyst is that it would be something like two gigawatts of wind and solar wanting to connect every year, that is to say with approvals, plus another two gigawatts of behind the meter stuff every year at an absolute minimum, that’s about that.

So connection, being able to get stuff connected efficiently is like obviously a very high priority for those people that are in the queue somewhere along the line. And from what I’ve been reading they complain that the GPS standards change between when they first approved and when the project is built. And so that’s a big issue. And they also complain that the dynamic modeling doesn’t necessarily equate with what is observed in the real world. And I just want wondered, there’s probably more, but there’s always lots of complaints, but I just wondered, can we actually, can AEMO connect, you know, say two gigawatts of wind and solar at utility scale or more, every year for the next 10 years?

Daniel Westerman  14:34

Yeah, look, I’m really pleased with the Connections Reform Initiative, both in what it’s achieving, but also in how it’s going about it. In terms of what it’s achieving. It’s obviously a collaborative effort across the industry being led by both AEMO and the Clean Energy Council, as you say, that brings people together to identify roadblocks in the current connections process, and work together to identify solutions. It’s early days in that connections reform initiative process, but still, some good early wins have been achieved.

So I think I mentioned at CEDA that we’ve connected through AEMO 121 new wind and solar projects over the past four years, 32 of those were in 2020, which was 3300 megawatts, or nearly 6%, of the NEM generation capacity. And so there is some some good momentum and good output of the Connections Reform Initiative. But like I said, it is early days, and I think there … are many, many more ideas and improvements to make in that process. But if I say that for a moment, I’m also equally pleased with how we’re going about it. Like I said, I’ve worked across the UK, in the US, I’ve built a large renewables business of about a gigawatt in scale across the US, and operated, leading a large part of the electricity transmission business in the UK.

And I’ve not seen such a reform initiative, where the system operator comes together with such an influential set of people to drive change in the industry in such a collaborative way. So I’m very optimistic about what it can achieve and what we can achieve in improving the connections process, because of the way we’re going about it. And I might just say, we’ve got 50 gigawatts of renewables in the pipeline, you know, in terms of wanting to connect into the NEM. It’s a big job to connect all of those. But everything that we can do to improve the connections process improves outcomes for Australians.  I can’t control policy or the cost of debt. But what I can affect is the risk premium that people associate with connecting in, the connections process. And I want Australia to be the best place to connect a new generation asset in the world. And I think that’s the aspiration that we should all have.

Giles Parkinson  17:21

Daniel you mentioned before the Energy Security Board process, the market reforms, were going to go towards the state ministers, and you mentioned your own recommendations. Can you give any insight into what you are focusing on there? There’s, my guess that the main focus of intention has been about the physical retailer. Reliability, obligation. Do you have any thoughts on that?

Daniel Westerman  17:44

So the ESB has now submitted our recommendations to Ministers. And unfortunately, now that leaves them in cabinet in confidence. So I can’t talk about what’s in there. I guess the thing that I would say is that I was pleased to be part of a process where we really listened to industry. There was a lot of consultation that came back from the consultation paper that was published around about Easter time. And we really listened to that, or really took that on. And I’m really optimistic about the package of reform that we’ve proposed to Ministers and look forward to the decisions that come out.

Giles Parkinson  18:20

The other interesting thing that’s happening, and I think there might be some announcement later on this week is the next version of the Integrated System Plan. Now, I think what we’re going to hear later on this week, or perhaps next week is going to be about these scenarios that make up the next integrated system, the basis of the next integrated system plan. This is actually quite important.

You mentioned before about the step change scenario, which I think sort of mapped out a 20 year blueprint to about 90 or 90 something percent renewables by 2040. I think there are another couple of scenarios upcoming, which could be export superpower, which is talking about an even more rapid transformation to renewables. Can you give us any insight into those at all, and the importance of those, and also the importance of a central scenario? Because one of the, I’ve heard from some people in the industry that they’re also interested in that because it’s the central scenario which forms the basis of all of their financing deals and proposals when they’re trying to get projects up and running.

Daniel Westerman  19:18

Yeah, so the inputs, assumptions and scenarios report will be published on Friday. And, you know, I’d commend that as a great read to all of your readers. As you say, and as I’ve mentioned, it does reflect the rapidly accelerating trends in the Australian energy transition, and includes some things that have been possibly under represented in the past, the electrification of transport, for example, as an EV driver I’m pleased to say that there. The opportunities in Australia for green hydrogen you’ve mentioned.

So I think there is a huge amount of great content in the report and I definitely we recommend folks read it and get to grips with the detail in there. But also, again, I’d come back to a key element of this is that this report, it’s almost like it’s not really an AEMO report. This was co developed with stakeholders over an eight month stakeholder engagement program. So it is really a co created document that reflects the inputs and assumptions  of all of our stakeholders, tries to get the sensitivities right. So this is AEMO shifting from  pushing information out to playing much more of a central coordination role in the industry.

Giles Parkinson  20:43

And I’m just wondering about the increase in the pace of transition. You mentioned before about getting to 100% instantaneous, and you said “we don’t know yet how to get there”. That seems a little bit alarming perhaps, seeing as we’ve only got about four years to find out. Difficult to imagine there might be and what do we need to know, or I guess it might be what Donald Rumsfeld might have called a known unknown?

Daniel Westerman  21:09

Well, I think we’ve got the skeletons of a pathway to get there. So in the last quarter we hit our peak of 57%, instantaneous penetration of renewables. That was in April, actually. And through the reforms, or rather, the tools that were outlined in the renewables integration study, as well as the energy security board reforms, we think we’ve got the pathway to get us to about 75% instantaneous penetration. But like I said before, 100% is a difficult engineering challenge.

And we need to put our best minds on it right across the industry and from academia, to us, to generators, to regulators and figure out how we deliver an energy system that’s capable of 100% instantaneous penetration of renewables. Because at points in time, we don’t want to be constraining off the cheapest electrons for Australians.

David Leitch  22:05

So you’ve mentioned your stakeholders, and if it was a public company on the share market management have a duty to  maximize profits and shareholders can work things out. But AEMO is not like that. It’s got multiple stakeholders who have different objectives. And I guess it’s difficult for you as the chief executive to make them all line up. And I’ve got two questions about a sort of unknown voice, or hidden voice that is not very powerful individually, is the behind the meter sector, which is nevertheless the fastest growing.

So when they get cut off, you know, unilaterally, like what happened in South Australia, it does make me think about social licence and stuff like that. And the minimum levels of generation and why they get cut off, and in 100% renewable world would they need to if they are these free electrons? So that’s one question. And a sort of even more complex one, but important to me is that all the states seem to have their own agendas. They have their own transmission connection rules, which is another thing that slows things down. And the original aim of the national electricity market was to make it all work as one system for the benefit of everyone. Does AEMO have a role in trying to bring the states back into the national fold? And can… I’ll leave it there.

Daniel Westerman  23:30

I thought you said just one question, David. Look, I think, to answer the first question, which is about shareholders versus like, who is AEMO acting in the best interest of? I’m really clear that AEMOs’ role is to ensure safe, reliable and affordable energy today, and to enable the energy transition for the benefit of all Australians. And it’s that benefit of all Australians that’s really important. Yes, we do have lots of different stakeholders, and some of them have competing views and interests and ideas. But we are mandated through the National Electricity Objective, to work in the interests of all Australians. And that is something that is at the front of my mind every day. And I know that it’s in the front of all of our people’s mind.

You touched on social licence. And look, I think this is a really important and vexed issue. We’re seeing right now some of the first real major investments in transmission in three decades, and you look at the West Murray, Western Victorian transmission project area, and these transmission investments have, youknow,  any infrastructure project these days does have community pushback, and I think we’re we’re absolutely right as an industry to seek to really understand those issues, and try and address them in the best way possible, because there is a bit of an asymmetry between who’s being asked to shoulder the kind of burden of these investments, versus where the benefits accrue.

And so I think addressing the social licence of energy infrastructure is a really important issue for us to grapple with over the period ahead. The behind the meter topic you mentioned, as well,  I think, again, this is a, it’s an important topic, the switching off or the constrain the constrainment of rooftop solar in South Australia did receive quite a lot of attention. And over time, actually as part of the energy security board work, we also do need to find the right sort of suite of tools that allow us to manage the system and the grid at the bulk level first, leaving those you know, the switching off or the constraint of consumers to an absolute last resort, because no one wants to see those things constrained.

David Leitch  26:23

And as far as bringing the states into the fold and, you know, stopping the disintegration of the NEM? I mean, you know, we’ve seen a rise in derogations. And quite clearly, like if I take the New South Wales roadmap, which I thoroughly support, but it has big implications for Queensland and Victoria which have been electricity exporters in the past and may not be so in the future. How should I think about that?

Daniel Westerman  26:51

Well, I think the balance here is between the best interests for all Australians, comes when we are an integrated national electricity market, and that’s why the national electricity market exists because electrons don’t respect state boundaries, and we all benefit from energy diversity and energy security across the greater portfolio of assets. But overlaid on that is that Australia’s regulatory or rather, our energy policy regime, gives states the sovereign right to legislate the energy policy that they see that they need.

And our role, I think AEMO at the heart of the energy industry is to be able to work productively with all of our stakeholders for jurisdictions, for states, as well as federal, to be able to achieve the benefits that they are looking for. Largely, we are all aligned. We are all actually looking for the best outcome for consumers. We just tackle it sometimes in different ways. And so I see a really positive role for AEMO there to help to navigate the transition by bringing people together.

Giles Parkinson  28:11

Daniel I’m just wondering if we can talk maybe about some of the technologies that get you excited. We’re about to see some synchronous condensers switched on in South Australia, which may change the generation profile there quite significantly. I mean, syncons are not exactly new technology but I guess this might be a new application in terms of balancing the grid while you’ve got a lot of wind and solar going.

We’re seeing batteries come into the market, a huge pipeline of battery storage projects, a couple being completed in just, one just registered this week, the Victoria big battery, which will be the biggest in Australia. And you’ve also talked a couple of times about using  mothballed gas generators. You’ve talked about Deeside in the UK about using spinning machines as providing syncons, or providing inertia. I don’t know whether that’s the same thing as the syncon or something already exists or not. But can you just maybe talk about those technologies and anything else that kind of gets you excited?

Daniel Westerman  29:08

Well, that’s a broad list of topics. Anything that gets me excited. That’s the whole industry. So let me talk about the syncons. I mean, you’re right that synchronous condensers are being commissioned and tested in South Australia. And this is a great outcome. Look, it’s going to unlock about an additional two and a half thousand megawatts of renewable energy to operate in South Australia. So a terrific outcome. And you’re right that I’ve spoken previously about the Deeside plant in the UK.

So it’s an old gas station in the north of Wales, where, because the National Grid electricity system operator commissioned a market for services, it’s not economic to essentially generate energy at that plant, but it is economic to spin the rotors and provide inertia back into the grid. And that is, essentially it’s a very similar sort of technology to a synchronous condenser. It’s a big spinning piece of kit that helps keep the voltage and frequency stable. And batteries are a key part of how the energy future will evolve for these types of services here in Australia. Australia has led the way in utility scale batteries.

The Hornsdale plant was the largest lithium ion battery in the world at the time. And the Victorian big battery that you mentioned is twice the size. Batteries provide some of these essential systems services at an increasingly cost effective manner, but also provide additional services. So things like they can store energy and arbitrage right, so they can store energy during the day and release it at night. And so they have a wide range of services that can be provided into the grid, and will play a key role for us as we go forward.

Giles Parkinson  31:08

I’m just wondering if you can just talk about the difference between working in Australia and in the UK and in the US? You talk about your work with National Grid. They perform a similar role to AEMO in the UK. You’ve developed a renewable energy portfolio in the US. Now you’re back in Australia where you actually come from. There seems to be a fair degree of skepticism about new technologies. Your references to 100%, renewables was sort of greeted by “absolute nonsense” by one senior minister, can you sort of describe some of the challenge? I mean, how different do you think it’s going to be working in Australia than it has been in the UK?

Daniel Westerman  31:44

I think Australia is absolutely leading the way in the energy transition in many aspects. But as I’ve said, I think there are opportunities for us to look around the world, learn and apply those to Australia. Australia is a unique country. We all know that. And in many ways that’s terrific. But it shouldn’t stop us from kind of looking around the world, stealing what’s good and just implementing it here. The Deeside example is one example, but there are loads and loads of others. In the US the similarity is that the US have state based energy policy in the same way that Australia does. But in my experience there, no matter what the political persuasion of the particular state, the energy transition is still continuing, just with different sort of motivating factors. But the one thing that always motivates is price. Yeah. So investing in new technology that reduces price, that is the lowest cost technology for consumers, is the one thing that motivates everyone.

There are some terrific technology solutions that exist in the US. So I’ve been part of some virtual power plant, some really great virtual power plant work that aggregated 1000s and 1000s of home batteries to provide services into the grid. We’re running trials here in Australia, and proving the same concepts and I’m very optimistic about those. In the UK, I think one of the big lessons is about connectivity. So the UK, recognizing the low cost opportunity for offshore wind, they have an ambition to harness up to 40 gigawatts of offshore wind in the North Sea, what’s called the Saudi Arabia of wind, and it’s very low cost energy for consumers. Recognizing that they need connectivity to ensure the security of supply and they’re just finally building another two interconnectors which takes the level of interconnection between the island and mainland Europe of up to nine gigawatts of interconnection. I think we can really learn from that about the benefits of an integrated network and that diversity of energy supply across a great area.

David Leitch  34:19

So I observed that National Grid is actually selling off it’s a majority share of its gas transmission businesses and focusing more towards electricity. And I personally think that Europe and the UK are the world leaders and the rest of the world will follow along. And, you mentioned transmission, it’s of course putting social licence in, giving it appropriate weight, it remains the case that the transmission development process in Australia is exceedingly slow at the moment, and when I think about the increased volatility that is going to come as the share of, instantaneous share of renewables goes up and down, things like electric vehicles, and particularly hydrogen might imply we need even more transmission, say to North Queensland and places where hydrogen hubs might be developed. What can be done? I mean, are you satisfied with how things sit with the transmission development process at the moment and the actual speed of it?

Daniel Westerman  35:25

The development of Australia’s transmission network,  it is really important for consumers, as we go through this transition. From a both a low cost and a resilience perspective. Low cost, because we want to enable the lowest cost generation at any point in time. But also from a resilience perspective, right?

We want to make sure that when the wind is blowing in one part of Australia and not another,  or the sun shining or not, that consumers can still access, low cost, cheap, reliable electricity. And I think having not built major transmission in several decades, there’s an opportunity for us to look at how we both approve those investments and how we build it in everything from, I think the regulatory framework in which decisions get made, through to the social licence issues that we’ve talked about. And this is something that I’m looking forward to working with all stakeholders on over the coming months and years ahead actually.

David Leitch  36:32

Yeah, look at just one quick question on that. And we’re getting to the end of the time, I guess, Daniel, but, the ISP is focused on AC transmission, frankly, other than the Marinus Link, but it does seem to me that we’re moving to a more DC world in general. Is there some thought that maybe DC links from something like North Queensland or something might might also have a value going forward?

Daniel Westerman  37:01

Well, the integrated system plan is developing the least cost and least regret transmission system for Australians, and considers all types of technology. I think what I’d say is, let’s let that process play out over the coming couple of months. And I’m very optimistic about the the outputs of the 2022 integrated system plan. The draft, I think gets published just before Christmas, and then the full version in the middle of next year. And that will be an update of obviously, the previous integrated system plan that has provided some really good solid direction for the network in the best interest of Australians.

David Leitch  37:47

Yeah, but I would say that ‘least regrets’, before just handing back to Giles, starts from where we are and moves forward. Whereas other plans start at where we want to be and move back to what we have to do. And sometimes this incremental approach, you know, it’s like endless renovations on a car before you finally decide to get a new one. But anyway, that’s just my view. I’ll hand back to Giles.

Giles Parkinson  38:10

Just two questions. Two quick questions to finish off with. And the first one might not be that quick, actually, you’re talking about this rapid transition. The responsibility for AEMO is also to keep the lights on. And obviously, that transition is quite difficult. One system may work. Moving from one system to another may be the biggest challenge. What keeps you awake at night?

Daniel Westerman  38:35

What keeps me awake at night? That is a really good question. I think AEMO has a lot of challenges.  I have a lot of confidence in our operational teams. So I think we saw through the Callide, and the incident that followed subsequent to the issue at Callide earlier this year, that our operational teams, not just within AEMO, but right across the industry, can really, really come together  and work in the best interests of Australians to get solutions in place, lights back on, all that sort of stuff.

So I think I have a lot of confidence in that. And I’m frankly, really optimistic about the role that AEMO plays. I think the thing that occupies quite a lot of my attention is just how we navigate the energy transition and get the right technologies at the right time in the best interest of Australians. And I think it’s a challenge that we frankly all grapple with, policymakers through to everyone in the industry. So in the energy industry is is rife with these challenges. And frankly, that’s one of the reasons I love it so much is it’s this complex kaleidoscope of economic, technical and political challenge, I guess. 

Giles Parkinson  40:06

One final question. You did mention that you, I think David might have mentioned that you worked at Ford in the past. And you did mention that you’re driving an EV. What are you driving and why and how optimistic are you about the electrification of transport?

Daniel Westerman  40:19

Thanks. Yeah. I’ve got a Tesla Model 3, and I absolutely love it. We’ve driven, we had a little BMW i3 in the UK for a while. But the I drive a Tesla, because it is a great car to drive actually. And yeah, the fact that it’s electric is obviously a great bonus. I’m a car guy from days of old. And yeah, I’m very optimistic about the electrification of transport. Having an electric vehicle, the range anxiety problem, you know, people sort of worried about where they’ll charge their car, it sort of dissipates pretty quickly once you’re actually driving it. You plug it in at home, and I haven’t had to go to a charging station for a long time actually,

Giles Parkinson  41:08

Once you know there’s hundreds of millions of plugs around the place. Absolutely. Well Daniel Westerman, thank you very much for joining the Energy Insiders Podcast. I thoroughly enjoyed it. May the lights stay on for you and the transformation happening at the quickest pace possible, and we look forward to talking to you again in the future. Particularly once maybe we get more clarity from the ESB, we find out more about the ISP and some of the other major projects that you have planned for.

Daniel Westerman  41:37

I look forward to that Giles. Thanks for having me today.

David Leitch  41:40

Thank you

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