The week before Thanksgiving, I attended a fact-finding mission to Australia hosted by the Smart Electric Power Alliance (SEPA). APPA also sponsored two of our board members to attend, with a third board member attending as well, given his role in SEPA’s leadership. Executives from other SEPA members – investor-owned utilities, rural electric cooperatives, TVA, and several clean energy company executives – and the excellent SEPA staff, led by its new CEO, Sheri Givens, also joined the trip. As I learned during the six-day trip, the folks attending were incredibly smart, interesting, and light-hearted – we got along amazingly well.
SEPA has been hosting fact-finding trips around the world for many years but had understandably paused these trips during the first two years of COVID. The last time the group was in Australia in 2016, Colin Hansen, now of Kansas Power Pool, and Bill Gaines, formerly of Tacoma Power, attended on behalf of APPA/public power and wrote a comprehensive and informative blog about their experience. We’ll work with the latest public power attendees — Dave Osburn of Oklahoma Municipal Power Authority, Nick Lawler of Littleton, MA, and Paul Lau of SMUD —to relay their experiences in more depth in the coming weeks, but I wanted to highlight a few of my high-level takeaways from the trip while they are still fresh in my mind.
We spent about half the time in Sydney and half the time in Melbourne – both cities on the East Coast, but with different feels. As I understand it, there’s a strong rivalry between the two, which is understandable – both have a lot to offer in different ways. Our days were filled with briefings by reps from academia, industry, and government, but we had a couple of pockets of downtime/networking time. In Sydney, we spent an evening at its renowned zoo, after traveling there by water taxi, with the famed Opera House on prominent display during the short trip. We got to see koalas, kangaroos, a wallaby, a Tasmanian devil, and a unique bird called a cassowary (I definitely suggest looking this one up on YouTube!). Given that the Southern Hemisphere is now approaching summer, there was an atmosphere of pleasant, relaxed anticipation – the schools are almost out, vacations are coming, and the beach is calling – coupled with the more frenzied preparations for the holidays. These two worlds don’t collide for us in the Northern Hemisphere, and I found it fascinating.
In Melbourne, we got to get out of the city one afternoon and see the countryside, which was vaguely reminiscent of parts of Texas or Northern California. The weather was gorgeous, the people were lovely, and the food was simple and delicious (goat cheese and honey on farm-fresh bread was my favorite, with a close second being the French fries – paprika seemed to be the key ingredient). We also spent an evening in downtown Melbourne, where the river played a prominent role – cute restaurants were built out onto the water, and they were packed.
Now, back to the substance of the trip, which, in keeping with SEPA’s mission, was intended to help us understand how the Australian utility industry is tackling clean energy/energy transition/climate change. Following are my key takeaways.
Australia’s recently enacted goal of net-zero greenhouse gas emissions by 2050 is more of a challenge for them than it would be for the U.S. (if we had such legislation), or will be for the individual utilities or states with a similar goal, for several reasons:
- Australia is the only G25 country that has banned nuclear power.
- Australia is the flattest populated continent (Antarctica is the only one flatter) and, therefore, has minimal hydropower.
- Currently, in some Australian states/territories, coal and natural gas comprise about 70% of actual generation. Coal-fired power plants are, however, retiring sooner than expected, causing concerns about reliability.
- Most of the Australian states/territories fully deregulated their retail electricity markets years ago. Still, now those same states/territories have some of the highest overall penetration of behind-the-meter solar PV in the world. The operators of the distribution grids lost their direct relationships with those PV owners (and all their retail customers, to boot), so there is little to no collaboration with customers about how to enable more efficient and reliable use of those resources to the benefit of everyone.
- The wholesale market is also deregulated and is energy-only (like ERCOT). Precipitous price spikes have occurred recently as supplies have tightened. Similar to price spikes in ERCOT during Winter Storm Uri, but without the outages (so far, at least).
- Australia is exporting vast amounts of coal and liquefied natural gas to China and Japan.
- Permitting and siting are challenges, as they are in the U.S., but given their limited options for net-zero GHG emissions, transmission buildouts are even more important there, and in a shorter timeframe, than they are here.
- As in the U.S., Australian utilities have a significant cybersecurity challenge given the need to increasingly add various digital (“smart”) components to their grids – distribution and bulk power – which, in turn, carry greater potential cybersecurity risks. Increased collaboration between our two utility sectors could help mitigate these risks.
On the bright side, “necessity is the mother of invention,” and Australians are responding by seeking to develop interesting and innovative solutions to their limited baseload resources and high levels of current and future intermittent sources – solutions related to inverters, long-duration battery storage, hydrogen, and microgrids, among others. We will certainly benefit from those developments.
I look forward to visiting Australia again when I have more time to see the beautiful country and meet more of the people, but I greatly appreciate SEPA giving my colleagues and me this glimpse into the land down under and interacting with a cohort of Americans facing our own challenges and opportunities North of the equator.