Archive for February, 2016

The show’s not over

One of the most anticipated pieces of news about electricity costs in some time arrived today (Friday,26 February) and how it is being received depends very much on where stakeholders are standing.

The announcement is the Australian Competition Tribunal decision on appeals against the Australian Energy Regulator power network revenue awards for the trio of New South Wales distributors and ActewAGL in Canberra.

The regulator’s version is that the tribunal has “largely endorsed the AER’s approach in terms of equity, but accepted some aspects of the appeals, notably in the areas of debt and the methodology used to determine operating expenses.”

The AER claims the tribunal has found “we are correct to conclude that the (four) businesses were not operating as efficiently as other networks, so consumers (have been) paying more than necessary for safe and reliable electricity and gas.”

The NSW trio – Ausgrid, Endeavour Energy and Essential Energy – say the tribunal decision “will support the long-term interests of State electricity consumers” and they commit to “keep delivering on our plans to make our businesses more efficient,” pointing out that they have saved more than $6.8 billion from capital and operating budgets since 2012.

They expect the AER to now “remake its determinations.”

The Public Utility Advocacy Centre, which appealed to the tribunal on the basis that the AER had been too soft on the network businesses, is warning that power bills can be expected to rise in NSW (instead of falling by $100 to $300 per household, depending on location, under the AER’s original decision) but “we are months away from knowing by how much.”

The outcome of the tribunal review, it says, is “disappointing.”

Via the media, the community is being told the tribunal’s decision “should add around $2 billion” to Ausgrid’s revenue at a time when the State government is awaiting privatization bids (The Australian) and is “a partial win in the government’s bid to push up household bills by as much as $560 a year” (Fairfax Media).

Needless to say, the State Labor opposition thinks the decision is “very bad” while the Baird government (via Energy Minister Anthony Roberts) says it’s not going to speculate on what revamped prices may eventuate.

The Australian Financial Review says AER chairperson Paula Conboy “concedes that is likely (the regulator) will have to raise household prices somewhat to comply with the guidelines in the tribunal’s decision.”

The Electrical Trades Union NSW declares the tribunal decision “vindicates” its stance that the “massive cuts” imposed by the AER were “wrong” and “would impact negatively on service delivery and network reliability.”

The union has also hit out at State Labor leader Luke Foley, saying he “has no idea when it comes to delivering an affordable, safe and reliable electricity that best serves the interests of NSW people” while calling on the DBs to rethink the “thousands of job cuts” they warned would follow tribunal support for the AER determinations.

The Energy Networks Association (representing all the power and gas networks in Australia) opines that the tribunal findings should “make future (AER) decisions more simple” and expresses its members’ support for economic benchmarking provided it is “based on robust data and rigorous analysis.”

This, it adds, is especially important when regulatory decisions “set business-critical operating expenses.”

The tribunal’s work, it asserts, will “require better outcomes for customers.”

The bottom line is that the show is not over for NSW and ACT electricity customers or the DBs and their current owner (the State government) and the extent to which customers will “lose out” remains to be seen.

The new-ish Palaszczuk government in Queensland decided not to challenge the AER’s determinations for its two DBs, Energex and Ergon Energy, and the regulator’s final word on what revenues the five privatized Victorian networks can recoup has yet to be delivered.

Not for the first time this century, the issue of power network outlays and their recoupment has been demonstrated to be complex and difficult —  and the last word on the subject has not been provided.

Putting widgets in context

The “Electricity Storage Future Forum” I have co-chaired in Sydney over the past two days with Jim Snow of Oakley Greenwood has been notable for the balanced, factual approach that speakers from a range of perspectives have brought to the topic.

As one participant commented, this was a “grown-up” discussion after months of hype and naïve outpourings in the public arena.

Certainly, as Matthew Warren, CEO of the Australian Energy Council observed in a panel discussion, the forum made clear that the electricity supply industry is now heavily engaged in seeking to get right the role of storage in the transition – and one of the key measures of success, as with so much else, will be the provision of reliable, affordable power.

John Bradley, CEO of the Energy Networks Association, made the right call, I think, in identifying storage as “just another tool” in electricity supply’s transformation even as Warren identified it as having the potential to be “an incredible enabler.”

My own perspective is that, in the public debate, there is a low understanding of the potential role of storage in the grid and an over-estimation of its value to residential customers (at least in the foreseeable future).

That said, it’s hard to think of a stakeholder in the supply chain who does not have a vested interest in this technology being pursued efficiently – and it’s hard to avoid the judgement that market overall is evolving faster than policymakers (ie politicians) and their advisers in government seem to be able to handle.

John Pierce, chairman of the Australian Energy Market Commission, the rule-maker, was right to point out to the forum’s attendees that the energy market is always changing and adjusting to new ideas, technology, the relative prices of inputs, consumer behavior and political intervention.

This has been true for the past quarter-century and there is no reason to assume it won’t continue to be so out to, say, 2040.

However, I never lose the opportunity at these “energy outlook” events to remind people that, standing in 2016 and trying to project what the situation will be in 2040 is the same as being prescient about today’s environment in the early 1990s – and we all know how that turned out.

I also again took the opportunity of this forum to remind all concerned that “consumers” are not just householders, but also hundreds of thousands of small businesses, the sprawling large commercial sector, our public services, big industry and mining.

To focus only on how many residential rooftop PVs there may be in 2040 and how many installers may also be using battery storage is to lose sight of the big picture.

In passing, the many safety issues involved in residential battery storage use came up in this discussion and one of the participants pointed out to me in a sidelines conversation that householders will find it interesting (and very necessary) to discuss their plans with the businesses insuring their homes.

So far as the suppliers are concerned, a top-of-mind issue is just who (retailers versus network businesses) will play what role in consumer relations with respect to storage and other new technology services?

AEMC’s Pierce told the conference that, from the commission’s perspective, new technologies and business models coupled with consumer-led developments mean that the biggest gains in the transition will come from network tariff reform and redrawing the line between what is subject to economic regulation and what belongs in the competitive arena.

The commission’s objective, he said, is clear: it wants to see a resilient energy market that is flexible and capable of adapting to whatever the future may bring.

This, Pierce added, must be a market that delivers secure and reliable power at prices for end-users that are as low as possible.

How new technologies are adopted must be in the consumers’ collective interest, he argued.

Which, needless to say, raises the big issue of how consumers – and especially the residential mass market because that’s the heartland of the voters, whose opinion obsesses our politicians night and day – themselves perceive their interests being served?

This is a very open question in 2016.

Pierce made a further good point that the perception of change, and its impacts, must look “beyond the widgets” – storage being just one of many – to the functions they perform.

For the rule-maker, not surprisingly, this is a critical challenge for regulatory and market processes.

What is new about today’s situation, Pierce suggested, is that technology is allowing an increasing number of functions to be performed much closer to, and within the control of, mass market consumers. “The power to determine how the electricity sector develops is becoming disaggregated.”

For an industry that over many years past really meant “we know where you live” when it talked about “customer focus,” this is indeed a game-changer.

Pierce pointed out that it follows, if consumer choices are driving sector development, that a competitive energy services market delivering the lowest-possible costs depends on how network prices are constructed.

Next year is important in the shift to cost-reflective prices and we have already seen the Victorian Labor government taking fright at the implications of being first cab off the rank.

I am touching in this post on only some aspects of the discussion over two days at the “Electricity Storage Future Forum.” It was an event with a lot of food for thought.

To state the blindingly obvious, people’s points of view on storage (and much else) depend on where they stand – and, for more than a few, on what they (their business or their sector) hope to gain.

This does not require discarding what they say but seeing it in context – and it is the context that fails to be communicated to the public at large because of the soundbite nature of media coverage (as well as the endless search for villains and victims, the main fodder of the media today).

I have mainly focused on Pierce’s comments here because it seems to me that the key points he raised this week go to the heart of how efficiently the electricity transition is pursued.

“Widgets” like the Tesla battery may appeal to people for a range of reasons, but the chances of things ending in tears – witness the debacle of soaring prices following the past decade’s initial reform of network regulations and all this has has wrought – can’t be brushed aside.

From my perspective, the “revolution” mob (and their media fellow travellers plus the deep green zealots) are not the friends of the common good; electricity is a service that needs careful management and changes that work to deliver the outcomes Pierce raised with the forum attendees.

In the excitement of spying “watershed” moments, too many (and not least politicians and government ministers pursuing popular support) overlook this and then we all have to wear the “unintended consequences.”

Pierce’s talk is now up on the AEMC website. It’s well worth reading in full.

Its critical context, I suggest, is the CoAG Energy Council commitment to pursuing integration of carbon and energy policies.

I remain to be convinced that the nine governments who signed up for this have a proper handle on the implications of their pledge – and some those implications have been canvassed at this week’s forum.

Accidental experiment

More and more frequently State-related energy reports are of significance nationally and not least across the whole east coast power system (the NEM) meeting 90 per cent of Australian demand.

Recent examples are the Queensland Productivity Commission report on electricity pricing and the electricity-related parts of the South Australian royal commission in to nuclear issues, soon to be followed by the QPC report on “a fair price” for rooftop solar power production.

The latest cab off this rank is the joint technical review by the Australian Energy Market Operator and South Australia’s ElectraNet in to power system security in a State that is an international leader in the penetration of renewable generation (41 per cent from intermittent sources, wind and solar) and a poster child for the green jihadists.

Not surprisingly, the Australian Energy Council (just renamed from the Energy Supply Association) has been quick out of the blocks to draw attention to the report.

South Australia, says the association’s CEO, Matthew Warren, is “an accidental experiment” in the integration of wind and solar in to a grid at scale.

The transition, which has seen old and not especially efficient conventional generation being pushed out of the State’s segment of the NEM, is a laboratory for what Warren calls “technical challenges to be solved in real time.”

What’s happening in SA, he adds, is a critical factor in “continuing confidence in (our) transformation to a decarbonized energy system.”

It’s worth interpolating here, I think, that the foreshadowed decarbonized system may (and should, I suggest) include not only nuclear generation (my personal fancy is that it will be a number of small modular reactors not honking big plants, at least between now and 2030) but also higher technology coal and gas plants making use of carbon capture and storage, a notion that is anathema to the aforesaid jihadists.

It is also a system that, in all likelihood, will incorporate a fair amount of large-scale energy storage (as well as household storage — to what extent yet unknown and the focus of the Electricity Storage Future Forum I am co-chairing in Sydney next week) and hybrid power stations (such as solar/gas systems).

How long it will take to deliver this transformation is a point that can be debated endlessly.

What policymakers need to understand is that a dilatory approach today will deliver their voters real problems tomorrow.

Note the “will” – there is no “may” about this prospect unless it is given really significant attention.

The national bottom line is that the transition needs to be delivered in a way that ensures reliable, safe power supply at prices consumers (ie the mass market, manufacturers, small business, large commercial users and the public service sector) can wear without pain – that should be “more pain” because past failures have seen power bills almost double in a decade.

The Energy Council’s Warren stresses that what we are seeing in South Australia is a set-up where local consumers (of all shapes) are “increasingly reliant on a narrower range of generation sources to meet their needs when the wind isn’t blowing and the sun isn’t shining.”

As he says, however this is managed, there will be a requirement for “significant extra investment (the cost of which, I point out, lands on end users) and careful consideration.”

This brings us back to royal commissioner’s Kevin Scarce’s vital point (which I covered in my previous post) that we must have a total system costs analysis of the future NEM based on a range of credible low-carbon options.

If the CoAG Energy Council does not address this call at its mid-year meeting, it will be a dereliction of collective duty that deserves loud condemnation – and it should be noted here that it was surprising (if not downright amazing) that federal Energy Minister Josh Frydenberg (and the Energy Council chairman) could deliver a review speech to the National Press Club in Canberra this month without even mentioning the ministers’ commitment to integrating energy and abatement policies as a priority.

That not a journalist in the Press Club audience challenged him on this says everything about the deplorable energy illiteracy of most of the media.

Coming back to the AEMO/ElectraNet report, the market operator’s CEO, Matt Zema, says it highlights “the crucial need for power system support services” to maintain secure and reliable supply in the environment now existing in South Australia (and proposed for the rest of the NEM, especially the largest sub-region, New South Wales, by the Greens and their fellow travellers).

Included in the AEMO/ElectraNet review is the observation that, while short-term measures can be taken to address some of the immediate operational issues in SA, the need for changes to market arrangements and new infrastructure to meet security and reliability expectations must not be overlooked.

The CoAG Energy Council also has bureaucrats from the jurisdictions participating in an AEMO-managed review group looking at the implications of the growing dash towards renewables for the NEM and the SWIS (Western Australia’s south-west integrated system based on Perth).

Again, the Council should be taking the opportunity of its mid-year meeting to receive an umbrella briefing on the issues and their implications Australia-wide.

The Energy Council and Warren are right to say that the AEMO/ElectraNet review highlights “the growing challenge of providing reliable and affordable electricity as we continue to increase supply from renewables.”

The issue is bigger than this, though.

The draft Scarce report has done well to make this clear and there are aspects of the QPC electricity pricing draft report that talk to the same point.

There is an old boxing ring adage that the energy ministers – and beyond them first ministers and environment ministers – would do well to keep strongly in mind: “you can run but you can’t hide.”

The dispiriting fact for consumers (if only they knew it) is that, even when at least some ministers start acknowledging the energy/carbon policy integration issue is a priority, governments are still not telling them (and the broader community) that this is now a supposedly top-of-mind subject.

A tag that I remember from my schooldays studying Latin is “quis custodiet ipsos custodes?” – which translates as “who shall guard against the guardians themselves?”

In our modern society, the notion is that this should be the serious media and expert opinion on which they can call.

In the case of the electricity transition, this notion is fanciful indeed when the media pay little or no attention to the serious messages that are on offer and seize continuously on soundbites, hyperbole, self-serving trumpet blowing and zealotry.

Thinking nuclear

It’s hardly surprising that a lot of the initial mass market media reaction to the South Australian nuclear royal commission should focus on the prospects for a “nuclear dump” in the State – and coverage of its comments on nuclear power should be of the once-over-lightly type.

The Australian Energy Council, which is the new name the Energy Supply Association is adopting, has been quick off the mark to note that the commission is right to take the view – in its “tentative findings” – that nuclear energy would not be commercially viable under existing market systems but that it may be necessary as this country shifts to a low greenhouse gas emissions future. For those who would like to see nuclear in our electricity future, the commission takes the heartening stance that “it would be wise to plan now to ensure (it) would be available should it be required.”

Perhaps most importantly in terms of the community at large, the commission’s view that nuclear power can be safe will be helpful in an environment where (roughly) 40 per cent of us are for and against the fuel and 20 per cent belong in the “dunno” box.

As Energy Council CEO Matthew Warren says, any new generation investment – other than that forced in to the market by the renewable energy target between now and 2020 – is virtually unbankable under existing NEM conditions. “But,” he adds, “conditions change and it is sensible to keep all options open.”

The report actually states “there is value is having nuclear as an (electricity) option that can be readily implemented.” In all, the royal commissioner,

Kevin Scarce, a retired admiral and former governor of South Australia, has included four measured pages on electricity in his draft report. They are worth reading in full (on www.nuclearrc.sa.gov.au).

In paraphrase, some of the points Scarce makes that I find interesting are these:

First, there is a considerable uncertainty about future federal policy, changes in technology, power production economics and patterns of consumption.

Second, in this environment large-scale nuclear is not really commercial, even looking out to 2030 and beyond, but the potential should be considered for small-scale reactors.

Third, even on anticipated substantial reductions in their costs, renewable technologies (wind, solar PV and storage) “will not provide the lowest-cost mix of generation.” Modelling suggests that the low-cost mix requires “a substantial fraction of demand being met by gas generation.”

(In this respect, as I see Tony Wood of the Grattan Institute pointing out today, that there is a tendency to talk of declining costs for renewables and storage over time while assuming that nuclear costs will remain unchanged.)

Fourth, a national requirement of near zero carbon emissions from power generation might make it impossible to rely on gas plant to balance the intermittency of renewables and carbon capture and storage costs might be greater than anticipated.

Fifth, the “trilemma” of creating a future east coast power system that is low-carbon and reliable at the lowest possible cost is difficult for policymakers, especially as market intervention can have unintended consequences.

Sixth, and something that should be underscored, is Scarce’s comment that “at present there is no analysis of a future NEM that examines total system costs based on a range of credible low-carbon options.”

(In this respect, the commissioner observes that “tidal and geothermal energy sources remain commercially unproven at scale in Australia” and, in the case of geothermal, about which there was a huge bubble of enthusiasm a decade ago, there are “unresolved technical challenges.” He also notes that carbon capture and storage integrated with new fossil fuel plants also remains unproven at scale and in need of “significant public investment.”)

Finally, Scarce says a critical issue awaiting determination in a total systems analysis of the future NEM is whether nuclear power could lower the overall costs of supply, bearing in mind the need for over-capacity in a system reliant on a large share of non-hydro renewables and the investment required in networks to support remote and distributed sources.

Scarce’s draft reports comes with a review of generation commissioned from consultants DGA Consulting that is also well worth reading, particularly from my perspective with respect to the constraints the present interconnector arrangements place on South Australia being a stronger exporter of electricity to the rest of the NEM.

(Bringing the central Australian geothermal resource to the NEM grid, by the way, would have cost $780 million a decade ago.)

Bearing in mind that this inquiry relates mainly to South Australian interests and to the SA Labor government’s particular interest in boosting the State economy through SA becoming a waste repository, the bottom line here for east coast electricity was neatly summed up by Grattan’s Wood: we should be looking seriously at a developing a range of credible low-carbon generation options, especially for the NEM.

How the CoAG Energy Council thinks it can achieve its stated aim to deliver a viable energy path to a low-carbon economy without doing so is a question that should be on its mid-2016 meeting agenda.

The simplistic “not viable” tag on nuclear power for Australia – some media are at it again in reporting the inquiry – is just that, simplistic, especially when one starts to focus on the possibilities of small modular nuclear infrastructure.

The waste storage issue is important but our energy policymakers (and federal and State government leaders, probably more pertinently) are also getting a reminder from commissioner Scarce to think more smartly about our future electricity supply.

Are they capable of taking the issue up?

Queensland reality check

The draft report of the Queensland electricity pricing inquiry by the State’s new Productivity Commission is 250 pages long and worth reading by many power market stakeholders beyond the State’s borders.

One reason for this is the commission’s dissection of the solar power situation (only one of the supply chain issues it addresses).

Anastasia Palaszczuk’s Labor administration came to office a year ago, in what was really a surprise election outcome as the Newman LNP regime self-destructed, spouting promises about a “million solar rooftops” and a 50 per cent renewable energy target by 2030, the sort of stuff politicians parade when they don’t expect to have to deliver but are seeking green points in the modern era of soundbite politicking. (You can see it at work again with Bill Shorten’s federal Labor at the moment.)

The commission’s initial advice — it’s final report is due at the end of May — is a bit of a reality check for the Palaszczuk government.

For starters, the commission points out that modelling it has had undertaken indicates rooftop solar in Queensland can achieve another 3,000 megawatts capacity by 2022 without any additional incentives. Any acceleration of this timeframe, it says, “will require significant incentives for a modest improvement in outcomes.”

The State government, riding its election commits, wants to drive the 3,000 MW uptake as a target for 2020, a move the commission says requires a premium FiT of 45 cents per kilowatt hour and an extra “very large” transfer of wealth between customers, imposing “a net economic cost on society by making businesses less competitive and reducing productivity by increasing investment but not output.”

The State’s power customers already bear a not insubstantial burden from the 44 cents “solar bonus” schemes imposed by Labor when last in office and led by Anna Bligh.

This helped to drive PV uptake in Queensland to 400,000 houses (278,000 of whom grabbed Bligh’s generous feed-in tariff while it was going), but the cross-subsidy bill this financial year is $312 million, with more than $3 billion to be shelled out between next financial year and 2027-28.

This would bring the total cost of the measure to $4.4 billion over its 20-year lifetime, a disbenefit to, among others, low-income and disadvantaged households and people renting accommodation.

The extra bitter bit for many is that the majority of the recipients of this largesse, according to the commission, will have recovered their capital costs by mid-2020.

The Bligh PV bonus is also another burden for the State’s small business community, who consider energy costs one of their biggest hassles, helping to depress their profits and curb their ability to further invest. (Queensland electricity prices have increased, in inflation-adjusted terms, by 87 per cent since 2006-07, driven in the main by escalating network costs — as a result of $22 billion being outlaid on augmentation of the grid — plus the “solar bonus” scheme and the federal renewable energy target.)

The inequity in the solar sphere, the commission adds, has been exacerbated by the volumetric nature of existing network and retail tariffs, “which have allowed PV customers to largely avoid their share of networks costs.”

The Productivity Commission has offered the government a solution to the existing direct solar subsidy: take the burden off consumers and pay for it through the State budget. Amongst other things, it observes, this would shine a public light on the actual costs of the scheme.

Because the Palaszczuk government has also asked the QPC to undertake an inquiry in to “a fair price for solar,” there will be another bite at this cherry later this month in the form of a separate draft report.

As I have said previously, the “fair price” task has a resonance beyond the State’s boundaries as other politicians in eastern Australia play around with populist energy ideas.

On the broader issue of political boosting of renewables, the QPC is no less clear.

Looking at the scene Australia-wide, it observes that renewables (i.e. non-hydro technologies) “continue to be a more expensive form of electricity (production) due to higher capital expenditure cost and lower generation efficiencies compared to the traditional coal and gas-fired options.”

The challenge for national and State governments, it adds, is to provide a clear framework for a transition to lower-emissions power supply “in a way that supports the generation market (to deliver) reliable and cost-efficient supply.”

This, of course, echoes the commitment the CoAG Energy Council (with Queensland sitting at the table) made in December to do a better job from here on in integrating energy and carbon abatement policies, something I pointed out at the time goes beyond the remit of energy portfolios and falls on governments from their leaders on down, including environment ministers.

Is that pledge real or just another piece of political rhetoric?

The Palaszczuk government, as mentioned, is off on a “50 per cent renewables by 2030” frolic and has now appointed an expert panel to lead a public inquiry in to the move.

The QPC meanwhile engaged consultants ACIL Allen to model a 50 per cent QRET.

They found it would require 37,250 gigawatt hours of renewables power supply annually in the State by 2030, primarily being met by around 19,000 GWh of new large-scale generation, needing about 6,300 megawatts of wind power and about 600 MW of solar farms to be built in addition to boosting rooftop PV capacity.

Ironically, but not surprisingly to anyone who understands the power sector, the outcome would be to kick 1,600 MW of lower-emitting gas generation from the State mix rather than displacing coal (and most of the coal generation capacity in Queensland is owned by the government).

The ACIL Allen modelling, QPC reports, shows that QRET would require a subsidy of about $10.8 billion over the period to 2030. Renewable generators setting up shop under such a scheme would receive a subsidy of about $765,000 per megawatt of capacity.

One of the quirks of going down this road, the modelling shows, is that Queensland consumers would effectively subsidize other NEM businesses and consumers in pursuing emissions reductions because the flow of excess green power west and south in the market would lower retail prices elsewhere by about three per cent when Queensland-generated power was dispatched interstate at prices below the low-run marginal cost of coal generation.

The better way to go, the QPC suggests, is for the Palaszczuk government to work with the CoAG Energy Council to find national opportunities for emissions reduction.

How much a government with the slimmest possible parliamentary majority will listen to sensible advice when its focus is already on the next State election (to be held in or before 2018) and on how to sustain and improve its vote in the green-leaning suburbs of Greater Brisbane is an open question. Past experience suggests that the answer is not much and the speed with which State Treasurer Curtis Pitt rushed out a rejection of a shift in the government’s solar gambits in response to the draft commission report probably tells us all we need to know.

 

Seeing storage in a better light

It’s a sign of the times that only 20 months ago a substantial independent Australian report on electricity networks forecast that storage technologies might not really impact on the east coast market until the middle of the next decade and now claims are being made by at least some analysts that a million homes here will have batteries supporting rooftop PVs within five years.

The problem with all such predictions is that there are so many variables in the policy and regulatory mix as well as bumps in the innovation development road that 20:20 foresight is even less likely today than in the past. This does not, of course, stop a whole heap of people from dropping their opinions on us – and that only becomes a problem when politicians (aka policymakers) start intervening to promote concepts they like or think the voters will like.

We too seldom get the opportunity to pause and subject what is going on to some dispassionate scrutiny; in the case of storage, one such review will take place at the end of February when the Electricity Storage Future Forum, which I am co-chairing, will be held in Sydney. (See www.questevents.com.au/electricity-storage-future-forum-2016)

This is not an event to proselytize the technology – social and mainstream media have been playing that game for months in Australia and a number of other countries, often with what would be breathtaking naivety if such goings-on were not now so common – but an opportunity for people with expertise to canvass the real issues and opportunities.

Thus the forum will include such speakers as Paul Fox, chief technology officer new energy at AGL, John Pierce, chairman of the Australian Energy Market Commission, Paula Conboy, chair of the Australian Energy Regulator, Ian MacGill, director of the Centre for Energy & Environmental Markets, Phil Mackey, general manager, solar and emerging businesses, Origin Energy, Zeno Atherton of the Clean Energy Finance Corporation, Simon Gamble of Hydro Tasmania, senior executives of Transgrid and ElectraNet, Gavin Dufty of St Vincent de Paul, Nicola Falcon, planning manager at the Australian Energy Market Operator, and professor Anthony Vassallo of the University of Sydney (and more).

I’m particularly looking forward to a panel discussion where my co-chair, Jim Snow of Oakley Greenwood, will moderate ESAA’s Matthew Warren, Jim Bradley of the Energy Networks Association, Dufty and Daniel de Schutter, general manager strategy of the Australian Renewable Energy Agency, in a debate on “the economics of storage for multiple stakeholders in the energy chain.”

One of the questions being posed to the panel is “What will be the biggest challenges for suppliers, networks, generators and users?” You could hold a conference on that point alone.

There is so much hype and hoopla out there in the “debate” on storage that, it seems to me, this is a really timely event: storage is not the holy grail but its arrival at this time in a commercially applicable form (even if one that is still emerging) is potentially at least of considerable importance.

Of course, all the usual caveats apply: over what time, led by whom, at what cost, with what changes to regulations and implications for safety standards and so on.

Electricity supply is serious business not a game for ideologues, activists and rent-seekers (let alone the political remora fish); there is unarguably a significant transition in train but, mishandled, a fair bit could go wrong and still more large amounts of consumer and taxpayer money could be wasted.

The purpose of the Electricity Storage Future Forum is to produce a clear view of the state of play.

In this context, I saw a comment last month by the UK Secretary of State for Energy, Amber Rudd, that “storage represents a fantastic opportunity and is a necessary partner for renewable generation helping to create a secure (supply) system.”

Fair enough, so long as one goes on to place the opportunity in the wider milieu of a resilient, reliable, affordable power system serving the best interests of all consumers (who in Australia are not only 9.4 million household account-holders but also 1.3 million businesses, most of them small businesses).

Hard though is may be for the “death of the grid” mob to get their heads around the point, one of the major implications of this technology is how it could be applied at network scale to make variable generation (eg wind and solar) more flexible and useful, changing the equation for coping with peak demand.

In passing, it seems to come as a huge surprise to some people that energy storage is not something just now leaping out of the power box – pumped hydro-electric storage, which accounts for most of the world’s grid-scale storage capacity, has been with us (here and elsewhere) for decades.

The emergence of new storage technologies (do note the plural, this is not only about batteries) at a time when the international power supply sector has a whole set of drivers for pursuing change, including the ongoing need to provide electricity to tens of millions of poor people around the world, not least Africa and South-East Asia, is not a threat to the industry but an opportunity that, like all other opportunities, needs careful management to deliver optimum benefits to consumers as well as to investors being asked to put huge sums of money on the table.

The Electricity Storage Future Forum is a premium chance to better wrap our minds around the issue locally. I’m really looking forward to being part of it as a personal learning experience.