Zibelman on changing energy market: “Get used to it”

Australian Energy Market Operator chief Audrey Zibelman isn’t given to making grand statements.

But at the Australian Energy Week 2018 conference in Melbourne on Wednesday, she had a subtle message for those politicians, industry groups and media outlets still struggling to come to terms with the clean energy transition.

“I would say that (something) that would be really critical for all of us, is that we could all agree in Australia, that when we say it’s changing – it is changing,” Zibelman.

“So whether it’s 30 per cent renewables, or 40 per cent, or 60 per cent, or 30 per cent DER (distributed energy), or 40 per cent or 50 per cent, all of that is vastly different than what we’ve had before.

“So we need to to adapt to that change and we need to make sure that it happens in a way that benefits the consumer.”

Zibelman’s comments comes as AEMO prepares a landmark document – the Integrated System Plan – which it hopes will provide a template for planing and investment in coming decades.

As we reported earlier this week, some of the assumptions in the modelling for the report are profound: another 50% cut in the cost of solar, a huge uptake of electric vehicles, rooftop solar and battery storage, and a major shift to technologies like demand management.

The comments also follow yet another absurd week in energy politics, in which some of the federal government’s most senior members, including the minister for resources, Matt Canavan, reportedly issued a please explain to Energy Security Board chair Kerrie Schott over her comments that new coal would have no place in the future NEM.

“I can assure you that, unless there’s a change of technology, there would be absolutely no way that anybody would be financing a new coal-fired generation plant,” Schott told a the Energy Users Forum last week, in comments first reported by RenewEconomy.

Those comments, later seized upon by mainstream media, some claiming an “exclusive” resulted in two days of headlines, mostly reporting the outrage of Canavan, Abbott & co that anyone could say such a thing out loud.

But people are saying that very thing out loud, and those who do tend to understand a lot more about the machinations of the energy market than the Coalition’s right-wing rump. Like AGL Energy CFO Brett Redman.

“Australia is transitioning,” Redman told Australian Energy Week in a panel discussion on Wednesday.

“Historically, 90 per cent-plus of our electricity energy was coming from coal plant – it built the nation and was the backbone of the manufacturing sector,” he said.

“When we go forward, though, it has become very clear to us, it is very clear and very central to our planning, that new coal doesn’t stack up.

“New coal doesn’t work economically. Investing in new coal-fired plant doesn’t work, absent some very large government subsidy.

“New coal is now well and truly beaten out over the longer term by renewable energy, so that’s wind and solar. And the question becomes, firstly, how do you firm up wind and solar?

“So in the short-term, that’s using firming products like gas-fired generation. In the longer-term it’s a really fascinating discussion about storage – batteries and pumped hydro are the current technologies that we see.

“If we think about the energy mix, we can begin with saying the old coal-fired stations are now playing out… and as they finally retire, what you’ll find is that they will be replaced by renewable energy,” Redman continued.

“And so the mix of the future… and this is where Australia can get back to and capture its energy position in the world … will be very much built around renewable energy.”