The Importance of a Planned Energy Transition
Author – Darren Cave
Energy is always a hot topic in Australia; from security to transmission and from generation to the renewable energy mix, everyone has an opinion on what is required, and the voices that share, often diametrically opposed viewpoints, are arguably louder than ever.
At Lidiar Group, we have supported projects within the energy sector, bringing our procurement, planning, and project management skills to vital energy infrastructure projects across the nation and, for the last few weeks, have been travelling from Melbourne to Gladstone to examine the trends, issues, and realities of our existing and future energy needs.
Here is my take on the views, opinions, facts, and information that we have seen discussed, presented and debated by leaders across the sector.
The Clean Energy Transition
It is clear that we are in the middle of a changing period for energy in Australia as we seek to secure our future energy needs, balance our obligations to climate legislation and public opinion, ensure our valuable domestic and export resources are utilised fully, explore new technologies and generation methods, create new markets for future fuels and minerals and all the while ensuring that the lights are on at a price we can afford whenever and wherever power is required. And that is all centred around a clean, renewables-based future energy strategy.
Whether you agree with the politics of change, the rationale for change or even the future methods of energy generation and consumption, it is impossible to deny that change is happening; change is inevitable. Therefore, for me, it is about looking at the areas on which change must focus, and from the sector, it is clear that there are three areas of focus that will drive the transition across the industry:
- Capacity – Ensuring that we have the ability to generate and distribute the energy we need when and where we need it.
- Connection – Connecting energy with communities and businesses when they need fit at a price that they can afford.
- Competition – Winning the race for people and materials versus the world’s leading economies who are seeking to produce and roll out the energy networks, generators, and transmission services of the future.
But before looking at the three areas of focus, one of the things that get lost in the noise of debate is just how challenging and complex the change will be. We are taking a system that, by and large, does what it says on the tin. We don’t typically have brown-outs; the lights come on when we flick a switch, and businesses don’t have to hold back production due to an unreliable energy supply. In fact, the reality with our electricity network is that apart from periods after a natural disaster or during planned power outages, we have access to power when and where we need it.
The Airplane Upgrade
The best analogy I have heard about the transition to a new energy plan is the idea of upgrading a plane. In this scenario, you are an airline operating a vital route that must be completed daily. Your craft is an old Boeing 737. First taking to the skies in 1967, the 737 was cutting-edge state-of-the-art technology at the time and was reliable and got the job done.
These days it remains reliable but needs more maintenance than ever. By the standards of the time, it was comfortable and safe, and although it has served you well, it isn’t up to the standard that is required anymore, and your airline is about to lose its license to transport passengers due to the aircraft’s age, public opinion, escalating costs and the advent of newer, safer, more comfortable options.
And arguably, that’s where Australia is now. We can produce energy and get it to where it needs to be, but the world is moving on, and we need to follow suit to remain competitive and relevant. And like our little airline, we have two options:
- We can rip up what we have and start again
- We can update what we have to meet the needs of the future
For our airline, we are going to take option two, but to do so, we need to be able to fulfil the requirements of our existing agreements, upgrade our fleet, and do so safely and in a manner that gives our customers confidence and to do so at a price we can afford.
The Reality of Our Transition
That means taking our time, being methodical, structured in our planning and managing significant change while delivering business as usual. Sound’s simple, doesn’t it? But to do so will, in reality, be complex, lengthy, expensive and, unless done correctly, disastrous.
Like any good project manager, we will define a list of actions, put in place plans and timelines for those actions and effectively communicate those actions to the stakeholders reliant on our service and responsible for our commercial success.
We may begin with upgrades to safety systems, then look at changing the engines, upgrading the seating, improving the onboard entertainment and a million other key tasks, but after a long process, we will have an aircraft that meets modern expectations and maybe futureproof itself against changes that are trends at present, but may need to be planned realities in the future.
The analogy is true for energy in Australia, the system of generation and infrastructure works, but it isn’t what we need moving forwards. At the same time, we have invested billions in infrastructure, expertise and more to ensure our system generates and transmits power to the market on demand. We have also communicated how well our system has worked since mass electrification occurred.
The 3 Cs
Looking ahead, maybe the most exciting thing that came out of the conferences we attended is that there is now a mood for change across the sector. The energy industry knows and accepts that change is coming and that we must plan for a low-carbon future, but that doesn’t mean throwing the baby out with the bathwater; it means having a plan that gives confidence to communities, businesses, politicians and stakeholders who like all of us want affordable power available at the flick of a switch.
To my mind, that means focussing on the three Cs.
- Capacity – Ensuring that we have the ability to generate and distribute the energy we need when and where we need it.
- Connection – Getting the grid right is challenging in a vast country like Australia. From large-scale connections to factoring in micro energy producers, the connection requirements are still being defined, and financial investment needs to follow as we require lots of new connections and transmission capability, using and connecting to technologies that are, in the minds of some, not proven.
- Competition – While pricing competition is something consumers crave, the industry is battling with a more challenging competitive environment as the global competition for resources as the world’s leading economies produce and roll out the energy networks, generators, and transmission services of the future.
Capacity will not mean we switch off all coal-fired stations tomorrow and hope renewables can take the load. Significant investment is required to build baseload capacity across alternative sources such as pumped hydro, large-scale solar or even – perhaps a debate for another day – nuclear power. Or a mix of all the above.
Connection will not be achieved unless we invest in transmission capability across Australia. Projects like CopperString 2.0 in Queensland are examples of how investment is required in transmission capacity to be able to leverage the state’s north-west minerals province to produce the future fuels such as hydrogen needed and extract the vast minerals deposits required to build solar panels, wind turbines, batteries and more.
Competition for people and resources is vital. That’s why we must look to international trade and migration as well as further investing in STEM and local manufacturing to create a pipeline of people and resources central to the transition as we plan, procure and deliver products and infrastructure programs to support capacity and connection.
And finally, we need to get the story right. We need to engage all stakeholders with a robust plan and communicate it effectively so that we can outline the realities, the risks, the opportunities and the benefits the energy transition will have to our networks, employment, security, way of life and standard of living. If we can do that, then the importance of a clean energy transition will not be lost and can be effectively managed and delivered.