A Rocky Transition: Industry leaders are concerned about energy supply gaps during Australia’s shift to renewable energy

The Australian Financial Review recently published an article outlining the concerns of industry leaders regarding Australia’s rapidly changing energy landscape on the road to decarbonisation. Here are our main takeaways from the article:

• Though energy ministers and officials are in strong support of the transition to clean energy, there are concerns that the existing plan for renewable energy replacements will not be able to keep up with rapidly closing coal plants across the country, which could contribute to energy supply gaps, especially in vulnerable communities.

• Industry leaders have proposed a two-pronged approach to the transition: keeping the current energy supply from non-renewable sources reliable and fast-tracking the current plans for building and implementation. “First, we must keep our existing energy system, which is still dominated by coal-fired power, functioning well and delivering reliable, affordable energy for customers for as long as it is needed.” says Origin energy CEO Frank Calabria, but the war in Europe continues and coal power plants are becoming run-down and closing prematurely across the country, making this prong of the approach more difficult to deliver on.

• The Energy Security Board (ESB) has proposed its “capacity mechanism” with a more detailed plan due to arrive in December of this year in order to create backup capacity for intermittent clean energy sources like solar and wind power. They hope that this will help to mitigate the issue.

• However, due to delays, industry leaders are more concerned about the state of transition than they were 12 months ago, with Alinta Energy’s Jeff Dimery saying he believes the transition is “headed for failure.”

• Australian Energy Market Operator (AEMO) CEO Daniel Westerman says that the key to this strategy will be strong communication between governments, industry and consumers: “Collaboration is the key to delivering a mechanism that drives the integration of more renewable energy, and ultimately more affordable energy for Australian homes and businesses.”

• The transition will not only require a massive build-out of capacity but also of transmission infrastructure to connect renewable energy sources to the grid. Three new projects (Project EnergyConnect, Humelink and VNI West) have been introduced by Transgrid to expedite the build process and potentially save up to $500 million of the $8 billion dollar budget, however Transgrid is mindful of the burden that these unprecedented builds will put on regional communities.

• Our Key Takeaway

  Now is the time to take control of your energy future. The transition from fossil fuels to clean energy is an ambitious project, and due to the mismatched speed at which coal plants are closing and clean infrastructure is being built, grid energy will become less reliable and more expensive in the coming years. 

  With consumers already feeling the pressure of rising electricity prices, it is a good time to invest in renewable systems like rooftop solar that decrease reliance on the grid. Over the next few years Australians are going to need to better understand and manage their grid consumption or face soaring energy costs, and decentralising from the grid with solar and home batteries will provide residents with their own energy supply to help navigate the fluctuating grid reliability ahead.
  

  Link to the full article here