Politics Analysis

Lost decade of electricity policies could lead to power shortage

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A decade of Coalition government failed to give proper direction to Australia's electricity infrastructure (Image by Dan Jensen)

Australia is currently facing the consequences of policy bungling by the former Coalition Government that has left our electricity infrastructure in chaos, writes Paul Budde.

BACK IN 2001, I launched the UtiliTel Project. This was before there were plans for the NBN. The electricity utility companies were looking at using their infrastructure to start building fibre optic networks. They established several companies around the country dedicated to the development of telecom networks.

However, by 2006, the focus of the utility companies changed. Rather than looking at opportunities to use their infrastructure for external business opportunities, they faced the problems of energy efficiency. As much as 30 per cent of network efficiency could be generated by upgrading their networks to smart grids.

At that stage, UtiliTel changed its name to Smart Grid Australia and several other technology companies joined the association. In 2009, they facilitated a smart grid project where the Government invested $100 million and Energy Australia won the contract for the project. They established a pilot network in Newcastle.

Similar to what happened to the original FttH NBN, the Smart Grid initiatives were also “killed” by the Coalition Government which came into power in 2013. In relation to energy policies, it failed to provide any (alternative) direction on how to best prepare the electricity infrastructure for the future. The arrival of renewable infrastructure was unstoppable and with a move from fossil energy to alternatives, the demand for electricity skyrocketed.

Despite pressure from the electricity companies and many others, the Coalition Government failed to provide direction and as a result, the industry was stuck with outdated regulations that made it very difficult – if not impossible – to, for example, start building new infrastructure to enable access to new renewable plants around the country.

As a country, we therefore lost a decade and we are now facing the consequences of that.

With the Labor Government’s goal of reaching 82 per cent renewable energy by 2030 however, without the smart infrastructure to make the connections and allow for the increase of capacity needed, this will not be achievable.

 In order to reach the goal, a near complete rebuild of the electricity grid is needed, replacing infrastructure to old coal plants with a new network connecting the solar and wind energy plants.

According to the Australian Energy Market Operator, we need a ninefold increase in large-scale renewable energy and more than 10,000 kilometres of new transmission lines across the eastern states. On the latter, the Government has committed $20 billion for low-finance loans to “rewire the nation”.

Furthermore, a lot of issues that were not addressed over the last ten years are now coming to the fore. As mentioned, first of all there are a range of old policies and regulations that have stopped building new networks.

With no policies in place for the future, there also has been no consumer consultation over the last decade. This is critical as infrastructure is proposed through farming land and, in some cases, nature.

While people want to see renewable energy expand, some are concerned that power lines will increase fire risk and limit their ability to manage their property. Many would prefer to see power lines built underground rather than across their property.

Another likely outcome of the lost decade will be a shortage of electricity. This could lead to policies that will force the industry to reduce its energy use and as we are already seeing elsewhere, this also can lead to electricity companies being unable to provide extra capacity to industries that are expanded or new industry plants that are going to be built.

Countries in Europe are now looking at dedicated sites, close to both renewable energy and water-cooling facilities where companies can construct plants that require high levels of energy use, such as data centres and certain factories. Cyber security and geopolitical considerations also play a role in allocating those sites.

These are challenging issues that the federal and state governments will need to manage, quickly. New transmission lines are urgently needed as part of the climate solution. But the transition will not be a success if it lacks public support — or if people feel the trade-offs to the natural environment are too great.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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