Climate action

Switching to renewable energy could save trillions – study

The cost of green energy like wind and solar has been falling for decades. Image: Philip Silverman

LONDON, Sep 13 (BBC) – Switching from fossil fuels to renewable energy could save the world as much as $12tn (£10.2tn) by 2050, an Oxford University study says.

The report said it was wrong and pessimistic to claim that moving quickly towards cleaner energy sources was expensive.

Gas prices have soared on mounting concerns over energy supplies.

But the researchers say that going green now makes economic sense because of the falling cost of renewables.

“Even if you’re a climate denier, you should be on board with what we’re advocating,” Prof Doyne Farmer from the Institute for New Economic Thinking at the Oxford Martin School told BBC News.

“Our central conclusion is that we should go full speed ahead with the green energy transition because it’s going to save us money,” he said.

The report’s findings are based on looking at historic price data for renewables and fossil fuels and then modelling how they’re likely to change in the future.

The data for fossil fuels goes from 2020 back more than 100 years and shows that after accounting for inflation, and market volatility, the price hasn’t changed much.

Renewables have only been around for a few decades, so there’s less data. But in that time continual improvements in technology have meant the cost of solar and wind power have fallen rapidly, at a rate approaching 10% a year.

The report’s expectation that the price of renewables will continue to fall is based on “probabilistic” modelling, using data on how massive investment and economies of scale have made other similar technologies cheaper.

“Our latest research shows scaling-up key green technologies will continue to drive their costs down, and the faster we go, the more we will save,” says Dr Rupert Way, the report’s lead author from the Smith School of Enterprise and the Environment.

Wind and solar are already the cheapest option for new power projects, but questions remain over how to best store power and balance the grid when the changes in the weather leads to fall in renewable output.

Cost of net zero

Back in 2019 Philip Hammond, then Chancellor of the Exchequer wrote to the prime minister to say that the cost of reaching net zero greenhouse gas emissions by 2050 in the UK would be more than £1tn. This report says the likely costs have been over-estimated and have deterred investment.

It also says predictions by the Intergovernmental Panel on Climate Change (IPCC) that the cost of keeping global temperatures rises under 2 degrees would correspond to a loss of GDP by 2050 were too pessimistic. The transition to renewables was, it says, likely to turn out to be a “net economic benefit”.

The research has been published in the journal Joule and is a collaboration between the Institute for New Economic Thinking at the Oxford Martin School, the Oxford Martin Programme on the Post-Carbon Transition, the Smith School of Enterprise & Environment at the University of Oxford, and SoDa Labs at Monash University.

Author: Jonah Fisher

Global climate goals threatened by lack of clean tech collaboration: IEA

Birds fly over a closed steel factory where chimneys of another working factory are seen in the background, in Tangshan, Hebei province, China, February 27, 2016. Image: REUTERS/Kim Kyung-Hoon

LONDON, Sept 20 (Reuters) – Global efforts to reduce emissions and curb rising temperatures are threatened by a lack of collaboration between countries in sharing and developing new technology, the International Energy Agency (IEA) said in a report on Tuesday.

Major economies around the world such as the United States, and European countries are seeking to reach net zero emissions by 2050 to try to limit a rise in global temperatures well below 2 deg C, requiring huge changes in energy production, transportation and food production.

“Through international collaboration, we can make the transition quicker, cheaper and easier for everyone,” IEA Executive Director Fatih Birol said in a statement with the first Breakthrough Agenda report, released on Tuesday with the International Renewable Energy Agency and the United Nations (UN) Climate Change High Level Champions.

“Without this collaboration, the transition to net zero emissions will be much more challenging and could be delayed by decades,” he said.

The report said collaboration needed to ramp up and made 25 recommendations including increasing cross-border power super grids to support cross country trading in low-carbon power such as wind and solar.

It also said countries should agree a common date by which all new vehicles should be zero emission, such as electric vehicles, suggesting 2035 for cars and vans and 2040 for heavy duty vehicles.

“This will send a clear signal to industry and unlock larger economies of scale and faster cost reductions, making the transition more affordable for all countries,” the report said.

Countries should also work to increase the production of low-carbon steel to over 100 million tonnes by 2030 from less than 1 million tonnes today, it said.

The report was requested by world leaders at last year’s COP climate conference in Glasgow, Scotland, to help align actions and scale up investment in technology in five major sectors – power, road transport, steel, hydrogen and agriculture – that account for around 60 per cent of global greenhouse gas emissions.

Author: Susanna Twidale

Southeast Asia needs $210 bln annual investment on renewables -IRENA

Workers walk between solar cell panels over the water surface of Sirindhorn Dam in Ubon Ratchathani, Thailand April 8, 2021. Picture taken April 8, 2021 with a drone. Source: REUTERS/Prapan Chankaew

JAKARTA, Sept 15 (Reuters) – Southeast Asian nations need to more than double their annual investment on renewables to accelerate energy transition and to meet climate goals, a report released on Thursday by the International Renewable Energy Agency (IRENA) showed.

IRENA said, in the long term, average annual investment of $210 billion was needed on renewable energy, energy efficiency and to support technologies and infrastructure in the period to 2050 to limit a global temperature rise to 1.5 degrees Celsius.Advertisement · Scroll to continueADVERTISINGReport an ad

The investment is more than two and a half times the amount currently planned by Southeast Asian governments to reach their goals, IRENA said.

“Coal retirement, coupled with renewables and regional grid interconnection, is an indispensable step to aligning with net-zero targets,” IRENA’s Director-General Francesco La Camera said.

Southeast Asia is home to 25% of the world’s geothermal generation capacity, but the region also has major coal reserves. The region’s biggest economy Indonesia is the world’s top exporter of thermal coal.Advertisement · Scroll to continueReport an ad

While half of the members of the Association of Southeast Asian Nations (ASEAN) have pledged to stop using coal in the power sector, La Camera said climate commitments required concerted and accelerated action “that must begin now to have a hope of success.”

The region aims to have 23% of its primary energy supplied by renewables by 2025, however, investments in recent years show mixed progress, IRENA said.Advertisement · Scroll to continueReport an ad

“Accelerating energy transition is crucial in order to meet climate goals and support the region’s economic growth,” said Nuki Agya Utama, executive director of the ASEAN Centre for Energy, adding the bloc remained committed to its 2025 goals.

IRENA said countries could by investing more in renewables reduce their energy costs and avoid as much as $1.5 trillion of costs related to health and environmental damage from fossil fuels up to 2050.

Author: Fransiska Nangoy

Australia PM pledges ‘new era’ of climate action

Mr Anthony Albanese took power at an election in May where Australia’s lack of action on climate change was a major issue. Image: AFP

From The Straits Times

SYDNEY (BLOOMBERG) – Australian Prime Minister Anthony Albanese has promised a “new era” of climate action and energy innovation under his centre-left Labor government, despite criticism from activists and Greens Party lawmakers who say that his planned cuts to emissions don’t go far enough.

Speaking to the Sydney Energy Forum on Tuesday (July 12), Albanese said Australia’s current energy infrastructure and policies are inadequate to handle the global fuel crisis which has been sparked by Russia’s invasion of Ukraine.

Albanese reiterated his promise to introduce new climate legislation, including a target of 43 per cent cuts by 2030 and net zero by 2050, when Australia’s Parliament sits for the first time under his leadership this month.

“This is a new day. It is a new era. We need to act – and we will act,” he said.

Albanese took power at an election in May where Australia’s lack of action on climate change was a major issue. While Labour won government with a majority in the lower house of Parliament, Albanese will be held to account by a wave of new lawmakers who were elected after campaigning for tougher action on climate change.

The Australian Greens Party and pro-climate action independent David Pocock hold the balance of power in the Australian Senate, leaving the new government highly dependent on them to pass legislation.

The Greens and Pocock have called for emission cuts of at least 60 per cent by 2030. Greens leader Adam Bandt has also called for an moratorium on any new coal or gas mines in Australia.

Minister for Climate Change and Energy Chris Bowen has described the government’s 43 per cent emissions target as a floor rather than a “ceiling” for Labour’s climate ambitions. However, Albanese has been clear he will not legislate a higher target in his first term of government.

Global peers

Albanese’s target brings Australia into line with nations including Canada, South Korea and Japan, though the plan remains less ambitious than action pledged by the United States, the European Union and Britain.

Bowen and US Energy Secretary Jennifer Granholm were scheduled on Tuesday to discuss collaboration on climate technology on the sidelines of the two-day forum. Ministers handling energy policy from the Quad nations – which also include India and Japan – are meeting for talks in Sydney alongside executives from companies including Siemens, Fortescue Metals Group and Mitsui & Co.

Australia has already seen the impact of climate change-fuelled natural disasters, including severe flooding in the state of New South Wales over the past month.

In his speech on Tuesday, Albanese said the extent of the flooding in Sydney has previously been described as a “once-in-a-thousand-year event”. “Guess what? It’s now an annual event,” he said.

Albanese said Australia can become a renewable energy “superpower,” describing the coming years as a “once-in-a-generation” opportunity.

“Our government’s policies are designed to seize that opportunity with the determination and resolve it demands,” the prime minister said.

Climate change is also a major issue among Australia’s neighbouring Pacific nations, who have long criticised Australia for not living up to its climate action obligations. Canberra is working to burnish its credentials in the Pacific among a growing battle for influence with Beijing in the region.

Albanese is expected to head to the Pacific Islands Forum on Wednesday to meet with regional leaders.

“Australia will once again be a trusted global partner on climate action. I am ambitious about what we can achieve together,” he said.

Singapore regulator issues fresh appeal for clean power

The International Renewable Agency calculated Singapore had 433 MW of grid-connected solar capacity at the end of 2021. Image: Engin_Akyurt, pixabay

The Energy Market Authority has already attracted proposals for 1.2 GW of renewable electricity, to be generated in four southeast Asian nations, and wants to raise that figure to 4 GW by 2035.

From pv magazine

Singapore’s electricity and gas regulator has issued a second call for electricity imports as it aims to procure 4 GW of clean power by 2035.

The Energy Market Authority last week said it had opened a second request for proposals (RfP) for generators to supply electricity to the city state.

A first RfP, issued in November 2021, attracted 20 proposals from solar, wind, hydro and geothermal power generators in Indonesia, Laos, Malaysia, and Thailand to export clean power to Singapore.

The regulator said all those proposals – which amounted to 1.2 GW of electricity imports from 2027 onwards – would automatically be considered under the latest RfP.

Fresh proposals can be submitted until December 29, 2023, the EMA said.

The regulator added, it has started operation of its Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, which will see up to 100 MW of electricity generated in Laos exported to Singapore via Thailand and Malaysia.

Author: Max Hall

Hydropower systems in high mountain areas need to be better adapted to climate change: NUS study

Pangong Lake in the Himalayas. Glaciers or glacial lakes at high altitudes are vulnerable to global warming. Image: ST File

From The Straits Times

SINGAPORE – Power generation through harnessing water, one of the world’s largest renewable sources of electricity, is coming increasingly under threat in the Himalayan mountains and neighbouring ranges because of climate change-related disasters.

Many new hydropower projects are planned near glaciers or glacial lakes at high altitudes – which are vulnerable to global warming.

Better adaptation measures and more robust planning and monitoring systems are urgently needed, said a new study led by the National University of Singapore (NUS).

Known collectively as High Mountain Asia, this region has the largest reserves of water in the form of ice and snow outside the polar region.

Its glaciers, which provide water for drinking and agricultural use, also represent largely untapped potential for hydropower.

There are more than 650 hydropower projects either under construction or planned in the Himalayan region, with the hydropower potential in the High Mountain Asian region exceeding 500 gigawatts of energy, enough to support more than 350 million homes.

But only about 20 per cent of the estimated 500GW potential has been tapped so far.

Dr Dongfeng Li, the study’s lead author and a research fellow in NUS’ Department of Geography, said the study was motivated by recent hydropower plant failures in the Himalayas.

The team wanted to study the link between these mountainous hazards and climate change.

In February last year, an avalanche hit a Himalayan glacial valley in the Chamoli District of Uttarakhand, India, resulting in a cascade of debris and disastrous flooding that swept away two hydropower projects.

Conducted in collaboration with scientists from countries such as Britain, Nepal and Australia, the study, published in the journal Nature Geoscience on June 23, recommended climate change-resilient hydropower systems in high mountainous areas.

The study found that global warming-induced melting of ice systems is severely altering the volume and timing of water supplied from High Mountain Asia to downstream areas, which people rely on for food and energy.

The construction of more reservoirs to regulate stream flow and produce hydropower is a critical part of strategies for adapting to these changes.

However, these adaptation projects themselves are vulnerable to a complex set of interacting processes, including melting glaciers, the thawing of permafrost which results in landslides, as well as debris flows and floods from glacial lakes.

These processes can mobilise large amounts of sediments, which then fill up reservoirs, causing dam failure and degrading power turbines.

Professor Xixi Lu, also from NUS’ Department of Geography, the second author of the study, said future reservoirs should have additional storage space to cope with increased sedimentation from potential climate-related hazards.

The study also suggested that maps be created to better delineate current and future hazard-prone regions, particularly for hydropower plant hot spots.

These maps should inform policies for maintaining current hydropower plants and planning for new ones.

In addition, monitoring, forecasting and early-warning systems for future disasters should also be further developed and implemented.

Author: Cheryl Tan

Singapore eyes green hydrogen as energy source with $25m institute

Professor Liu Bin (second from right), Director of the NUS Centre for Hydrogen Innovations, with principal investigators (from left) Associate Professor Yan Ning, Assistant Professor Lum Yanwei and Assistant Professor Wang Lei. Image: NUS

From The Straits Times

SINGAPORE – A new $25 million research institute aimed at making green hydrogen a commercially viable clean fuel to power Singapore’s needs was launched last Friday (July 1) as the Republic moves to decarbonise its energy sector.

The National University of Singapore’s (NUS) Centre for Hydrogen Innovations will help create breakthrough technologies that will make hydrogen a viable green energy source.

Professor Ho Teck Hua, NUS Senior Deputy President and Provost, said that both the new centre as well as NUS’ Green Energy Programme – which focuses on carbon capture and utilisation technologies – are part of the university’s strategy of coming up with innovative ways to reduce Singapore’s reliance on fossil fuels.

The centre, the first of its kind in South-east Asia, has received a total investment of $25 million, of which $15 million is an endowment gift from government investment firm Temasek.

Led by Professor Liu Bin, who also established the NUS Green Energy Programme, the centre will be “taking a holistic approach” in tackling both the technological and infrastructural challenges of creating a competitive hydrogen economy.

Low carbon hydrogen imports have also been identified as a viable way forward in bringing the power sector – which now produces 40 per cent of the country’s emissions – to net zero by 2050, according to the Energy 2050 Committee report, which was released in March.

In the first phase, the centre will primarily focus on hydrogen carriers for storage and transport – a fairly nascent area of research – as well as the global supply chain for hydrogen.

“While hydrogen can be imported through pipelines, this can only be done for short distances from countries like Malaysia. Liquefied hydrogen is very energy-intensive and would require investments in new infrastructure,” Prof Liu told The Straits Times.

Another method would be to convert hydrogen into a liquid chemical carrier that can be transported at room temperature using existing infrastructure. But more research is needed to extract hydrogen from its carrier.

Aside from looking into transporting hydrogen, the centre is also gearing up to produce hydrogen locally, to safeguard Singapore’s energy security in the event of supply chain disruptions.

Hydrogen can be produced through the electrolysis of water, separating it into hydrogen and oxygen, as well as methane pyrolysis – a process which splits natural gas into hydrogen and solid carbon.

But in order to be considered a green fuel, both processes must be powered by renewable energy such as solar.

To accelerate the use of green hydrogen as a fuel for sectors such as transport and electricity, the centre will be working closely with industrial players in these areas.

It will also create a talent pipeline such that workers can contribute to different components of the hydrogen economy.

These training programmes range from degree programmes to short courses which target undergraduates to adult learners and industry leaders.

To enable the safe adoption of these novel hydrogen technologies, the centre will collaborate with NUS to work with policymakers and national agencies to come up with safety regulations, risk assessments and policies targeting these issues.

So far, nine projects in hydrogen research will be funded by the centre, each receiving up to $250,000.

Temasek’s head of Strategic Development Russell Tham said it is pleased to support the centre to accelerate its research and development efforts and develop talent for the hydrogen economy.

A board comprising leaders from the academic, government and corporate sectors in Singapore and overseas will be co-chaired by Prof Ho and Mr Tham to provide strategic direction and stewardship for the new centre.

Dr Victor Nian, chief executive of the Centre for Strategic Energy and Resources, an independent think-tank which is headquartered in Singapore, said that while the NUS centre is striving to make an impact in accelerating the creation of a global hydrogen economy, industries will also have to build strategic partnerships along the value chain, especially for building an ecosystem from hydrogen supply to demand among countries.

The Government would also have a role in accelerating the adoption of hydrogen for downstream applications, he added.

Author: Cheryl Tan

Longi unwraps reasons behind green hydrogen shift

Longi’s green power and green hydrogen plans will provide much-needed decarbonisation opportunities to heavy industries such as metals manufacturing. Image: Pixabay

In recent years, Longi has turned its attention to green hydrogen. Li Zhenguo, company founder and CEO, speaks with Vincent Shaw in Shanghai about the strategic shift and how coupling this technology with solar PV will be key to achieving carbon neutrality.

From pv magazine 05/2022

How does Longi view the relationship between hydrogen, solar and storage?

Longi firmly believes that green power and green hydrogen is the best solution to achieving carbon neutrality. Solar power (green electricity) fundamentally reduces carbon emissions in hydrogen production. And as an extended application of solar energy, hydrogen production can bring hundreds of gigawatt-level increments. In addition, green hydrogen is a new type of energy storage that can address intermittency issues. This is what we call the “green electricity – green hydrogen – green electricity” cycle.

Low-cost solar power is critical to the development of hydrogen. It takes around 50 kWh to produce 1 kg of hydrogen by electrolysis. If the cost of PV electricity drops to US$3.33 cents per kilowatt-hour, the total power cost for 1 kilogram of hydrogen will drop to around US$1.67. If the cost of PV electricity drops to 1.67 cents per kilowatt-hour, the total power cost for 1 kilogram of hydrogen would be around US$0.83, which means the cost of green hydrogen from electrolysis is even lower than the current cost of hydrogen produced from coal (grey hydrogen).

The world currently consumes about 80 million tons of hydrogen every year, and most of it is grey. For green hydrogen to account for 15% of consumption, it requires about 450 GW of PV installations to support it. That is why we say solar and hydrogen production are inextricably linked in terms of scale and cost.

As a solar company, entering the hydrogen industry requires a strategic change. How have you approached this?

In 2018, Longi began to conduct strategic research into the hydrogen value chain. On March 31, 2021, we established Longi Hydrogen Energy Technology Co., Ltd., and our first hydrogen energy equipment manufacturing plant in Wuxi, China. The first 1,000 Nm³/h alkaline water electrolyser was officially launched in October 2021, and so far, several more have been delivered to our customers and put into production. The production capacity of the Wuxi plant will reach 1.5 GW by the end of 2022 and is expected to reach 5 GW to 10 GW by 2025. The “green power and green hydrogen” solution fully covers synthetic methanol, synthetic ammonia, steel smelting, petroleum refining, and other industries that are in urgent need of decarbonisation. As a renewable energy industry leader, we will continue investing in R&D to increase efficiency and reduce the cost of both solar PV and hydrogen production. In addition, we have developed a five-year development strategy for the hydrogen business and are committed to accelerating the global transition to clean energy.

What are Longi’s strategic hydrogen plans?

Longi has launched its alkaline water electrolyser, which marks a significant milestone, and represents a key step towards becoming a world-leading hydrogen technology company. Our electrolyser can provide a hydrogen output of 1,000 Nm³/h and we have already provided a 4000 Nm³/h hydrogen production system for the world’s largest green hydrogen project. The service life of the equipment exceeds 200,000 hours. The distributed I/O control system realises automatic and unattended operation. We will continue to invest in R&D and innovation and push for the development of products based on our technical abilities.

What is the biggest challenge for the development of hydrogen and how can it be resolved?

Like other green energies, the development of green hydrogen is highly dependent on policy. Interest rates and carbon prices play critical roles in the cost of green hydrogen. We have made a simple calculation: If the technical cost is considered, the cost of green hydrogen is around US$1.17 to US$1.33 per kg, which is very close to or even lower than that of grey hydrogen. This calculation is very sensitive to interest rates. If the local interest is 5%, the cost of green hydrogen will grow to around US$3.33. Therefore, green hydrogen is financially competitive in countries with low-interest rates, like Europe and Japan; but there are still cost difficulties in China.

The second constraint is the carbon price. Compared to grey hydrogen, green hydrogen saves around 20 kg of carbon dioxide emissions per kilogram of hydrogen. Based on the present carbon price in Europe, which means an extra income of about US$1.33, it makes green hydrogen more cost competitive. Therefore, green hydrogen has an absolute economic advantage in regions such as the European Union with low-interest rates and high carbon prices. However, in China, the current carbon price from Shanghai Carbon Exchange is only around US$8.33 per metric ton, which means a compensation rate of around US$0.17/kg for green hydrogen. This is far from enough for the development of China’s green hydrogen.

What are the trends in green hydrogen pricing?

It is possible to realise US$0.25 per cubic meter on the production side. The cost rise in the PV industry in the past two years is temporary. I believe the cost of solar will continue to decline, and eventually, in many places, PV power will reach 3.33 cents or even lower per kilowatt-hour. In that case, the power cost for water electrolysis would be around US$0.15 per cubic meter, thus allowing hydrogen to achieve US$0.25 per cubic meter.

What are the main applications for green hydrogen?

We see a variety of industries that need hydrogen, and especially green hydrogen. For example, in petroleum refining, hydrogen is used as a feedstock, reagent, and energy source. Hydrotreating is one of the key links in the refining process, involving processes such as hydrogenation, hydrodesulfurisation, hydrodenitrogenation, and hydrodemetallisation. Gasoline and diesel hydrogenation, wax oil hydrogenation, and hydrocracking units also require a lot of hydrogen consumption. The global oil refining industry consumes 38 million tons of hydrogen every year, accounting for 33% of the global hydrogen demand. The International Energy Agency estimates that demand for hydrogen in the refining industry will continue to grow. Meanwhile, tighter standards for air pollutants will lead to an extra 7% increase in hydrogen use in refining.

Author: Vincent Shaw

Acra, SGX RegCo set up committee on sustainability reporting for S’pore firms

Acra and SGX RegCo are developing a road map for wider implementation of sustainability reporting for Singapore companies. ST Photo: Lim Yaohui

From The Straits Times

SINGAPORE – Companies in Singapore may soon have a clearer picture of how to carry out sustainability reporting, with a committee set up to discuss the suitability of implementing international standards here.

The Accounting and Corporate Regulatory Authority (Acra) and Singapore Exchange Regulation (SGX RegCo) have formed a sustainability reporting advisory committee to provide guidance on a road map for companies incorporated here.

“As part of its work, the committee will provide inputs on the suitability of international sustainability reporting standards for implementation in Singapore,” said Acra and SGX on Tuesday (June 21).

Acra and SGX RegCo are developing a road map for wider implementation of sustainability reporting for Singapore companies beyond those listed on the local bourse.

SGX RegCo has mandated sustainability reporting for listed companies since 2016 and climate reporting from financial year 2022 on a comply-or-explain basis.

Climate reporting will be mandatory for issuers in the financial, energy, and agriculture, food and forest products industries from FY2023. Listed companies from the materials and buildings, and transportation industries will also be subject to mandatory reporting from their FY2024.

“The growing interest in environment, social and governance (ESG) issues globally has led to a call to provide greater transparency and assurance on companies’ ESG-related information which investors and other stakeholders can incorporate into their decision-making,” said Acra and SGX on Tuesday.

The new committee is chaired by Ms Esther An, chief sustainability officer of property developer City Developments.

Its 13 members include other chief sustainability officers, representatives from financial institutions, institutional and retail investors, sustainability reporting professionals and academics.

Ms An said effective ESG integration and disclosure are critical to accelerating global efforts to build a greener and more resilient future.

She added that the committee’s efforts will complement Acra and SGX RegCo’s initiatives to rally corporates and stakeholders to contribute to the Singapore Green Plan 2030 and the global agenda on sustainable development.

Author: Prisca Ang

‘The villain is the framework’: crisis an opportunity to review regulation requisites

Gas and coal generators’ role in exacerbating the unfolding energy crisis in Australia has been harshly criticised, but Dufty points out companies are simply following the logic of profit within a framework that makes such practices possible. Image: Bluescope

Australia’s energy crisis affords it an intricate, if painful, look at exactly where and how our current electricity regulations no longer fit their purpose. According to analyst Gavin Dufty, now is the time to retrain our eyes on the prize: designing a new framework suitable for the future decentralised system. “But everybody needs to put their guns back in their holsters,” Dufty tells pv magazine Australia.

From pv magazine Australia

With Australia’s National Electricity Market spot market now suspended, an extraordinary move from the market operator yesterday to cool a fiery situation, the emphasis now needs to be on what can be learned from the meltdown, says Gavin Dufty, an energy analyst with St Vincent de Paul.

“Here’s an opportunity,” he tells pv magazine Australia. “It’s about recasting regulatory framework so it’s fit for purpose.”

“The world is watching us,” he adds. “We actually get to be leaders.”

“It’s not just one tweak. Everything needs to move together in concert to create the new orchestra or architecture for the future energy market because this one is not going to work, and it’s not working.”

Our current regulatory framework, built for a centralised fossil fuel system, uses a top down approach. Now, as electricity is increasingly generated on rooftops and in paddocks, the system needs to reflect this shift from a handful of mega generators to a collection of small technologies. That is, it needs to be designed for the bottom up future.

In the days days, the operator (AEMO) and ministers have come out against gas and coal generators’ role in exacerbating the situation, and therefore jeopardising an essential service, Dufty is quick to point out the companies are simply following a logic made accessible to them.  “They’re doing what they’ve been told to do for a hundred years”: maximise profits.

“Maybe the villain is the framework,” he posits.

Under Australia’s current framework, he says, the cost of the crisis will eventually wash up with consumers, but this doesn’t have to be the case. “Where it falls depends on how governments intervene,” he says. “In unusual times, you probably need unusual transition methods.”

He believes the electricity system is moving from a goods market to service market, which means companies operating within it should have a duty of care. This is especially true since the market delivers an essential service.

Moreover, Dufty says there needs to be a laser focus on consumer households and delivering value to them.

“Follow the money,” he says, “in the next 10 years, if you have five million Australian households investing in electricity assets like PV, EVs [electric vehicles], batteries and the like, that’s $250 billion worth of energy assets installed behind the metre.”

“The investment in energy is going to happen and those consumers will want value for their investment.”

The role of industry and the framework which governs it is to make sure that value is realised.

Solaray Energy says its inquiries and battery sales have surged since the federal election in May. Image: Solaray Energy

St Vincent de Paul were one of the primary proponents of two-way pricing, which quickly came to be dubbed a ‘sun tax’ and fiercely criticised. Be that as it may, the vision is not without merit – especially when taking into account future technologies beyond solar. The Australian Energy Market Commission agreed, heralding in the change last year.

The changes, for Dufty, are imperative because they shine a light on the other side of the electricity grid balancing equation, the side often left out of the discussion: load flexibility.

Creating and compelling load flexibility, that is changing when electricity is used, is the other side of the generation drama. As others have pointed out before him, jamming more solar into the situation simply won’t work. The penetrations are already so high that much of the energy generated in the day is simply going to waste and causing greater imbalances in the night.

“There isn’t one magical solution,” he says, “diversity is the key here.”

Dufty is adamant what’s good for individual households and what is good for society and the larger electricity network don’t need to compete. But to ensure those two forces aren’t mutually exclusive, the regulatory framework needs to change drastically.

“This is not incremental change. We might have step by step,” he says, but in the end it must amount to a full redesign, especially in terms of consumer protections.

Likewise complementary frameworks like the Small-scale Renewable Energy Scheme (SRES) and the National Electrical and Communications Association (NECA) need to be reviewed to ensure they remain fit for purpose as well, Dufty says.

Author: Bella Peacock