Featured in the Media:

More media references

No smart energy policy for Australia

My involvement in the Australian energy market started in 2001 when I brought  the energy companies together in Sydney, be it at that at that time we were looking at utilising their infrastructure to assist the ailing telecommunications market that was dominated by Telstra who was at that time unwilling to introduce residential broadband services to Australian users.

Within the alliance called Utilitel, a range of telecoms related businesses were initiated at that period. The big change however came in the 2006 –  2007 period when climate change started became the hot political topic of the day. Energy companies suddenly started to understand that in order to respond to the ecological disaster, they would also have to change their operations as 30% of national carbon emission was directly linked to their operations.

The first action undertaken by what would become Smart Grid Australia was to petition energy ministers in COAG urging them to use smart grid as a strategy rather than smart meters. We compared that to promoting cars without having the appropriate roads. Our advice fell on deaf ears and the resulting disastrous roll out of smart meters in Victoria was a clear indication that you first of all would need a holistic national smart energy policy before embarking on any details.

At the same time there was internal resistance to such an approach, after all saving energy would mean less income for energy companies. Perhaps the best example for this came from Basil Scarsella at that time the CEO of ETSA the energy distribution company in South Australia.  I sat on a panel with him at the ENA Energy Australian conference in 2007.

Here I participated on behalf of the Smart Grid Australia, arguing for smart grids. Basil made it very clear that ETSA would not do anything without clear government policies and regulations. ETSA (now SA Power Network) is a privatised energy company majority owned by Hong Kong based Cheung Kong Infrastructure Holdings. He made it very clear that without a national policy his company would not invest in any significant new energy investments beyond their normal run of the business.

Things started to look up with the government announcing an Energy Trading System as this was seen by countries around the globe as the best basic policy system going forwards (and this is still the case).

Climate Change together with government leadership meant that at the energy companies’ communications interests changed from external opportunities for their network – such as telecommunications –  to an internal strategy on how communications could assist them in modernising their infrastructure in order to become far more energy efficient. Organisations such as Ausgrid (Energy Australia at the time) had indicated that a full blown smart grid operation could deliver energy efficiencies between 30 and 40%.

The government of the day picked this up and made in 2009 $100 million available for what became known as the Smart Grid Smart City Project. A further $200 million was added to the project by direct and indirect private investments. The project included: smart grids, micro grids, integration of renewable and electric vehicles. The geographic area included Sydney,  Newcastle and the Upper Hunter region (Scone).

The project would run for three years and would become the blue print for a national approach to smart grids. The project was seen as one of the most significant smart grid projects in the world and gained international attention, especially as part of the project was that the data gathered would be made available nationally and internationally (this has happened and many organisations from around the world have received that information from the Australian Government).

What however became very destructive was that while the Federal Government at that time launched its new policies the Federal Opposition undermined it by mischievously calling it a Carbon Tax System. Ever since that time a bi-partisan political energy solution has eluded the country, this was not based on the national interest but on party politics.

What also hasn’t helped the situation was the sometimes rather militant position taken by many people and organisations involved in the green movement. It is simply not possible in the short and medium time to replace all of our energy needs by renewables. This was politicly used by the more conservative forces in politics to oppose anything renewable resulting for example with leading national politicians bringing coal into Parliament to undermine renewable energy policies, similar unhelpful actions were taken by senior politicians ridiculing wind energy.

Within this convoluted environment another disastrous policy was taken. Already for more than a decade natural gas was seen as another cleaner energy solution. Australia is one of the largest producers of natural gas. But in its infinite wisdom the Australian government issued gas mining licences allowing the producers to export  nearly all  of that gas with  only a small proportion needed to be made available for Australia. Changing this policy now (as mentioned by the Prime Minister) would mean that Australia will have to buy back its own gas for prices significantly higher than what customers in Asia are paying for it.

The NEM (the organisation in charge of national energy management) together with the Australian Energy Regulator – despite ongoing warnings – have largely been sleeping at the wheels. The NEM has belatedly mentioned that Australia is facing a national energy crisis as there will not be enough energy available for the running of the country, where were these organisations a decade ago to add their weight to the development of sound national policies.

Even now political disarray simply continuous with the Prime Minister plucking yet another rabbit out of the hat – an upgrade of the Snowy Mountain Hydro System. Something that came totally out of the blue without any consultation with the country, the industry or the energy experts. Again another not thought through development in a non-existing national energy policy, simply aimed at quick political scores rather than addressing the long term national interest.

Paul Budde