One of the laments repeated by residents of the Lismore area after the recent record-breaking floods has been: “We were here in 2017; five years later, why were we not better prepared?”
The same question could also be asked about the catastrophic 2019-20 bushfires in southeastern Australia. If a bushfire crisis emerges in 2022 or 2023 that is of a similar magnitude to the last one, would the outcomes for affected households and the electricity system be much different?
To jog your memory, the national Royal Commission reported that:
“… more than 280,000 customers from various energy providers experienced a bushfire-related power outage at some point. These outages were largely attributed to fire damaging more than 10,000 power poles and thousands of kilometres of powerlines, including those located underground.
“… In the worst-affected areas, some customers were without power for up to 10 days. Essential Energy reported that over 104,000 of its customers were affected (including 4,700 life support customers) and over 3,200 power poles and 4,500 cross arm poles were damaged or destroyed.”
In response to this litany of destruction, the NSW Bushfire Inquiry canvassed (in very general terms) a range of potential ways to build back better, including more vegetation clearing near powerlines; undergrounding some lines; the use of more fire resistant materials in poles and cross-arms; and the potential for some properties and small communities to be served by stand-alone power systems (SAPS) and microgrids instead of long skinny lines running through heavily forested areas.
So what has happened to prevent a similar outcome next time? Aside from the replacement of some timber poles and cross-arms with more fire-resistant (and expensive) composite alternatives, and the gradual introduction of insulation on some overhead lines, not much so far, it appears.
Early in 2020, there was much fanfare around the announcement by Atlassian gazillionaire Mike Cannon-Brookes that he would put $12 million into a new initiative called the Resilient Energy Collective.
It was intended to help supply portable solar and battery systems to local communities which had lost supply in the fires.
It was a worthy initiative, but it appears they actually installed the grand total of two systems, and the organisation itself seems to be defunct. Why? Regulatory hassles, apparently.
Meanwhile, Essential Energy installed eight SAPS on remote properties on the NSW South Coast which lost power for long periods after the lines supplying them burnt down. These systems were provisionally approved by the AER under ring fencing waivers.
However, an internal analysis subsequently concluded that the business case for installing SAPS rather than rebuilding the lines like for like could not be justified under Essential’s existing risk assessment framework, which does not factor in the increasing risk of future bushfires. The SAPS were then removed and the old lines rebuilt.
Finally, in Mallacoota, AusNet Services installed a 1MWh battery system and generator that were supposed to back up the main line to provide continuous supply during “unexpected disruptions”. However, a report for ECA found considerable disquiet among residents about what the battery was supposed to do and how well it was performing, even in short outages.
Total Environment Centre spent much of 2021 trying – largely unsuccessfully – to get the Australian Energy Market Commission, the Energy Security Board and ARENA’s Distributed Energy Integration Program interested in the role of local energy resources like SAPS, community batteries and microgrids in increasing system resilience.
Still, there is hope, in the form of the six distribution networks (in NSW, ACT, Tasmania and the NT) which have started planning for the next round of five-year revenue determinations. They are taking climate resilience very seriously. There is a buzz of activity around climate modelling, risk assessment frameworks, consultations with vulnerable communities and capital investment wish-lists.
These networks are trying to develop a coordinated approach. That is good, because at the moment there is not even a shared understanding of what is meant by resilience; how it interacts with reliability; who is responsible for achieving which bits of it; how much users and communities are willing to pay for it; and so on.
At least one government is also getting on the front foot. The Victorian government is investigating reforms to the state’s electricity distribution network regulations following prolonged power outages caused by severe storms on June 09 and October 29, 2021.
The Distribution Network Resilience Review is considering how networks can improve their preparedness for, and response to, prolonged power outages arising from storms and other extreme weather events, and how to strengthen community resilience to prolonged outages.
The pachyderm in this bunker, though, is whether the Australian Energy Regulator will allow networks to frontload what might be substantial long-term capital investments to improve climate resilience (such as SAPS and microgrids) in their revenue proposals. According to the AER itself (in a letter to TEC):
“If a network business considers that the frequency of outages or duration is increasing (or is likely to increase) due to the increased frequency of extreme climate events, under the NER, the network business can seek additional funding above that already included in its forecast capital and operating expenditure.”
We’ll have to wait and see how this pans out after the six networks submit their draft revenue proposals to the AER.
Below this sit a host of other related regulatory issues which are also the responsibility of the AER.
Another issue was the need for new rules that would allow networks to own and operate SAPS. This required changes to the National Electricity Law as well as the National Electricity Rules.
The AEMC published its final determinations for the required rule changes several weeks ago. Unfortunately, it persisted with a model for charging tariffs to SAPS customers as if they were still part of the retail market, rather than according to the way customers actually use SAPS. This, say the networks, will make SAPS uneconomic to install and operate.
The biggest regulatory question of all, though, is whether resilience needs to be specifically recognised in the NER, or even in the National Electricity Objective, as one of the criteria relevant to the long-term interest of consumers.
TEC has drafted a rule change request which would recognise resilience in the Rules. It would also create a context for having some difficult conversations around how much resilience we are willing to pay for, and who should pay for it. We look forward to progressing the rule change if and when the time is deemed right.
We now have extensive evidence of the impact of climate change on Australia’s electricity system from bushfires, floods, storms and heatwaves. The damage from each of these is only likely to get worse. If we don’t want to change where and how we live, including how we source the power to enable the “electrification of everything”, we may have to pay a lot more for electricity from the grid.
Meanwhile, TEC is working with a consultant on what households, small businesses and communities can do themselves to improve their energy resilience – independent of networks, regulators and governments – in the context of more chaotic and destructive weather events.
Because, when la merde hits le ventilateur, we can’t always wait for help to arrive.
Mark Byrne is Energy market advocate at the Total Environment Centre
