An overwhelming - but great - introduction to energy

I attended the All Energy Australia conference in Melbourne on 23-24 October 2024. It’s Australia’s largest energy conference with 15,000 people, 450 speakers, and 400 exhibitors.

There is SO much going on in the space and it was great to be at the conference to start becoming aware of all the facets and work being done. Compared with other industry conferences I’ve been too, it’s clear that purpose is a strong motivator for people in this industry, sometimes even above profit.

Being the first newsletter, I'll work out the best way to collate my notes and share, but for now, I'm going to include all my notes as references, with my key takeaways, thoughts and ideas summarised up front.

My key takeaways:

• National coordination of people and resources are necessary so we don’t work in silos and can effectively prioritise to actually get things done. The paradox here is we need to do everything at once, urgently, but that’s impossible to do.
• There is growing policy, frameworks and funding from Governments that are helping to enable investment and action, but more coordination is still necessary.
• Australia can become a Green Superpower – we have the resources, space and conditions, which will lead to huge economic benefit through more exports, making more stuff here, and importing less.
• Barriers to electrifying include high upfront costs, uncertainties and tech integration for businesses, and high upfront costs, fragmented value chains, no strong value proposition, confusing information for individuals.
• Electrical engineers will be at the heart of the transition, but we don’t have enough now, and we don’t have enough trainers to train new people.
• Transport and Energy are intrinsically linked, and today both sectors are decarbonising but there’s a huge opportunity - energy needs batteries to be stored in, and EVs just happen to be batteries on wheels. If we had 1M EVs we could store all the current energy that's lost (when renewables produce too much) without affecting the grid.
• One interesting insight that came out of one the reports was that people are willing to share their energy, but when there’s a crunch (a ‘future peak scenario’), people become selfish and want to be able to manually cut off the automation/ sharing to others.
• It was evident form the exhibition floor that China and Asia dominate battery storage.
• Virtual Power Plants (VPP) have huge potential. VPPs connect DERs to optimise supply and demand of electricity. These are management platforms that link together distributed energy resources (DERs), which include things like home and community batteries, solar, EVs, etc.
• I learnt a bunch of new terms – see the glossary.

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My thoughts, questions and ideas:

• How do we make energy part of the everyday conversation?
• How do we make pepe think of EVs are part of the home, not a male/macho conversation about just the car?
• IDEA: Could you have a DAO-based energy company?
• IDEA: Could you help reduce EV purchase costs by funding 50% of the cost but owning the battery?
• IDEA: Why don't electric planes have solar panels on their body and little wind turbines to generate power while they're flying? It's always sunny and it's always windy!

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Carbon Tax

Professor Ross Garnaut has a new book called out called “Let’s Tax Carbon”. He said Australia would be the most damaged country with unmitigated climate change, but it would also benefit the most as we can become a green superpower.

He also said a carbon tax would be impossible to implement in Australia, however it would also help alleviate the current level of stagnation in living standards (worst decade in a long time), and if living standards stagnate for too long in a democracy, it leads to trouble.

He said it would negate the need to include environmental triggers into new projects because it would already be baked in and force decision makers to consider the economics of new projects.

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Coordination is necessary

There are many aspects to the energy transition, but we can’t work in silos, we must coordinate resources and people, across Govt, industry, academia, startups and communities.

We can’t do everything at once, we need to prioritise resources and people.

And we can’t just talk about things, we must do things.

This reminds me of how many large corporations work and it takes a strong vision, good culture and intrinsically motivated people get the momentum going.

Some of the speakers said in the next 3 years we have to setup a national action plan (that coordinates things), setup energy precincts, and to get confident with the fact that we have (our mix of renewables) will get us to 2035.

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Government Support

Despite the continuing need for better coordination, there are many programs and steps in place:

• National Energy Transformation Partnership - a framework that promotes collaboration between all levels of government to transform Australia’s energy system.
• Capacity Investment Scheme – a framework to encourage new investment in renewable capacity (ie. producing more renewable energy) and clean dispatchable capacity (ie. more stored energy we can tap into on demand). The goals are to deliver an additional 32GW of capacity by 2030 and to deliver the Australian target of 82% renewable electricity by 2030 (we're currently sitting at around 40%)
• Rewiring the Nation - $20bn financing program to make clean energy more accessible and affordable, aimed at areas like the grid and transmission infrastructure.
• The National Safeguard Act is the Fed Govt policy for reducing emissions at Australia’s largest industrial facilities who emit more than 100,000 tonnes of CO2e per year.

Australia as a Green Superpower

Australia is well placed to become a renewable superpower - we have the physical resources (top 5 reserve holder of critical minerals), low population density (ie tonnes of space), and the right conditions (lots of sun and wind).

The economic opportunity is huge by increasing the value of exports and reducing imports.

From an export standpoint:

• Australia receives 400 times the renewable energy it needs each day, some of which can be exported
• Instead of exporting the raw materials (to a country that doesn’t use green energy), we can move further up the value chain and process materials (such as green iron) or manufacture products and then export green products.
• Further, with a renewable grid we can become a destination for investment in building factories or supply businesses. One big opportunity here is that the global energy demand associated with AI, data centres and blockchain is forecast to double by 2026, and so building them in Australia can help them reduce or offset their energy consumption.

And from an import standpoint, think about vehicles - we currently spend $50bn per year on petrol and diesel that mostly goes offshore (since we import it), but with EVs we’ll spend $20bn that stays in the country (while also saving $30bn in the process).

The Federal Govt’s Future Made in Australia plan (Govt bill, website). The 2024-25 Federal Budget committed $22.7bn over the next decade to support Australia’s ambition as a global renewable energy superpower.

The Net Zero Economy Agency is responsible for promoting orderly and positive economic transformation to ensure Australia, its regions and workers realise and share the benefits of the net zero economy.

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Public vs. Private Ownership

Private investments mean each project will have their own economic and other goals but may not necessarily be to the benefit of the broader system, which is probably part of the problem around not coordinating resources and people.

There is a trend in Europe towards publicly owned energy companies.

I think this is an interesting concept, and it could probably be further divided by centralised vs. decentralised generation of energy. At the centralised end you have a power plant of some source but is at least co-owned by the public, while at the decentralised end you have virtual power plants.

Thought/Idea: in blockchain world you have a DAO – a decentralised autonomous organisation – which is an emerging organisational structure/entity with no central governing body and whose members share a common goal of acting in the best interest of the entity (for more). Is there an opportunity to somehow use a DAO structure to own an energy business?

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Barriers to investment in electrification / renewables

For businesses, barriers include high upfront costs, uncertainties and tech integration.

• There are the usual budget and resource restraints and priorities, which compete against strategic initiatives and goals, such as those around sustainability. And unfortunately, money usually wins over everything else, while short-term goals are prioritised because they’re measured and rewarded against vs. longer-term goals.
• Regulatory uncertainties still exist, though increasingly more policies are coming out.

For individuals, barriers are around:

• Upfront costs are too high, despite often a lower total cost of ownership compared with their current situation. As an example, the average Victorian household can reduce their annual energy bill by around 32% by switching to all-electric, and to around 62% if they also added solar.
• fragmented value chains with not a lot of coordination, making it harder to have to piece everything together themselves,
• no strong value proposition, despite climate being well understood and a sense or urgency, again, money usually wins out and the value isn’t seen, and
• not enough / confusing information – and I totally agree with this one, it’s not only a whole new language, but there are new products, mis/dis-information, etc.

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Skilled workers

Electrical engineers will be at the heart of the transition.

The skilled worker pipeline has three areas - secondary schools, uni/TAFE and existing workers (transitioning to new roles). There is no ‘brand’ for people who want to be in the net zero trade, so there’s a lot of work that needs to be done to get people to recognise the value in being an electrical engineers.

But there are capacity issues in finding enough trainers. Organisations could play a part here by training people

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Apartment Buildings

There are 2.5 million Australians living in apartments, but:

• many landlords lack the motivation to invest in solar and electrification/ efficiency upgrades, which could save tenants on their energy bills, even when free solutions exist.
• Policy gaps - A lack of political will is holding back essential policy changes for renters that could support these upgrades and make solar and efficiency upgrades accessible to more renters and low income households more broadly.
• Plug-and-play solutions exist – there are solar & battery systems from Europe that can plug directly into a standard power socket with a temporary moveable installation, which enables renters to bring their energy generation with them to their next apartment.

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Alternative fuels

• Hydrogen – it’s bad as a widespread replacement for natural gas – it will always be more expensive to product and isn’t as efficient as electricity. The analogy is that it’s like “washing your floor with imported Italian mineral water; it’ll do the job, but it won’t be cheap”. It will become the fuel you use when you can’t use electricity, like high temp heath in smelting, chemical manufacturing, so it will have a niche, but it will still be a big niche.
• Nuclear - Most didn’t think nuclear makes sense – an Institute for Energy Economics and Financial Analysis (IEEFA) report found it will raise energy costs by avg $665 per year per household, has high upfront financial costs, won’t complement the planned renewable energy mix in 2040, and it won’t be ready til 2040 anyway
• Gas – it is more damaging than carbon, but is still used as a backup in a lot of cases. It’s a particular issue in Victoria where 80% of homes are duel fuel (electricity/gas), compared to somewhere like NSW which is at 50%.

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The intersection of transport and energy

Transport and energy have always been linked – you feed a horse to move, you put petrol in an ICE vehicle, you put electrons in an EV.

Tesla just put in its 100th fast charger in Australia and now has 100k vehicles in Australia, that together consume around 150 to 200 gigawatt hours of electricity a year. Josef Tadich, regional director of Tesla Energy APAC, said “That is about 0.1 per cent of NEM (National Electricity Demand),” Tadich told the All Energy conference. “So if we go to a million vehicles in Australia, that’s going to be a bit less than 1% of annual demanded. “If you think about that in context of the Australian electricity system … that’s a lot less than the amount of renewables we’re curtailing.

“So the energy is in the system, and we can tailor it right now, because there’s negative prices during the day, and we’re flooding the system (with solar) that could go quite easily into the fleet with a million vehicles with in my opinion.”

Chau Le, the head of e-mobility at Origin Energy, says the growth of EVs is presenting a unique opportunity to transform two major industries. “We’ve got an energy system that needs to decarbonise, and EVs provide such a valuable energy asset to support that decarbonization journey,” she said. “So if we can connect all of these millions of batteries on wheels to the energy system to soak up all of that excess renewable energy that is otherwise curtailed and then feed that back into the grid during periods of high demand, that is massive value that the transport sector can add to the energy sector.

Australia needs 50% of new cars sales to be BEV/PHEV by 2030 for a chance at net zero.

Leading EV market overseas show where the next of policy should be – used EVs, EV-Grid integration and public charging

Monash University Emerging Technologies research lab has recently released a couple of reports on this intersection – Digital Future Energy Project (website, 23 min doco), and Future Home Demand report. I haven’t time to read these in full yet, but will add them to my notes next week.

One interesting insight that came out of the data was that people are willing to share their energy, but when there’s a crunch (a ‘future peak scenario’), people become selfish and want to be able to manually cut off the automation/ sharing to others.

On EVs:

• There are now 1000 fast charger sites and 2000 charging points in Australia – was 583 in 2023
• EV sales might get to 100k by end of 2024
• EV car park expected to reach 250k by end of 2024 and 400k by end of 2025
• The top 3 EV brands are Tesla, BYD and BMW. BMW do it well because they have an equivalent EV for each ICE vehicle (for not much more money). So having cars that are familiar helps.

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Two questions came from this session:

• How do we make energy part of the everyday conversation?
• How do we make pepe think of EVs are part of the home, not a male/macho conversation about just the car?

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Thought/Idea: an EV battery is half its cost, and we know purchases costs are still relatively high. Could you start a company that “goes-halfsies” in the car purchase but owns the battery and earns money from capturing excess energy (negative pricing) and releases energy when needed to pay it back? It would almost be like the owner of the car is “leasing” the battery. Could this this work for home solar/battery too where you buy the solar but lease the battery?

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Batteries and Battery Storage

The exhibition floor was huge and I reckon 75% of it was some kind of battery storage. More interestingly, I reckon about 75% of that were Asian companies, primarily Chinese. I was aware of the Chinese dominance in batteries through my job, but I was surprised at how much this showed on the fllor.

I went to the CATL stand (China’s/the world’s biggest battery builder) and they have a really cool process for the full lifecycle of the battery – check it out. They’re just starting the full cycle, but apparently they have a recycle rate of 50.4% of used batteries within China and a 99.6% metal recovery rate for the main elements!

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Virtual Power Plants (VPP)

The simplest definition of VPPs I heard was that VPPs connect DERs to optimise supply and demand of electricity. ?DERs is another term I learnt that means Distributed Energy Resources – these are things like batteries, solar, EVs, at household level but also community and business level.

ARENA forecasts that over 40% of energy consumers will use DER by 2027, rising to 60% by 2050. Effective DER integration is crucial for the energy transition.

Virtual Power Plants are growing - these are management platforms that link together distributed energy resources, which include things like home and community batteries, solar, EVs, etc, and optimise the supply and demand of electricity. They’ve been around for a little bit, but it feels like they’re really starting to come online and will be a critical element to the transition. And better yet, owners will earn money from them.

Residential energy consumption accounts for around 30% of total grid usage

Tesla is doing a lot in this space - they have 100,000 systems on VPP worldwide and 30% of Tesla’s batteries installed in Australia are on VPP. However, their system isn’t currently scalable – it uses a centralised command and control system to do all the forecasting and management then sends decisions back to be executed. Their long-term scalable solution is to have site-level orchestrated optimisation.

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Technology and startups

• 30% of the abatement technology we need is all in technology that is really only at demo phase and needs lots more research and development.
• Amped (no website yet) – an online subscription platform that lets users book micromobility or other EV needs from local suppliers using in-app credits.
• Everty – manages EV charging infrastructure
• Tasmanion – developing new low-cost aluminium-ion battery technology
• Beyond Zero – an independent, solutions-focussed think tank. They’re building a National Action Plan that will focus on decarbonising key industrial centres, and accelerating the production of clean commodities such as green iron to meet rising demand
• Icarus RT - uses the by-product of thermal heat from solar panels to deliver 13-20% additional energy. US-based and minimum 250kW solar panels, so only larger projects at this stage.
• Adoxima Pty Ltd is using renewable energy to create a low-cost material used in batteries, and it’s by-product produces hydrogen – every 9kg of material = 1kg of hydrogen. They’re then using that hydrogen as a fuel for other things
• Amber energy is a company that uses a wholesale pricing method to sell to customers.

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Glossary

• LGC = Large-scale generation certificates
• NEM = National Energy Market
• Green Premium - the additional cost for a product or service that doesn't emit CO2
• C&I = Commercial and Industrial (sector)
• DER - Distributed energy resources – these are things like batteries, solar, EVs, at household level but also community and business level.
• CER – Consumer energy resources are consumers’ resources that generate or store electricity and include flexible loads that can alter demand in response to external singles. A subset of DER
• DERMS – distributed energy resources management system – platforms that help system operators manage their grids that are mainly based on DERs.
• BESS – battery energy storage systems
• HVAC – heating, ventilation and air conditioning
• REGOs – renewable energy guarantee of origin certificates. Need to look this one up a little further
• Firming – electricity facilities that can generate and/or deliver electricity to the market when demand is high or when renewable energy is not meeting demand
• Curtailing - where an electricity generating system stops exporting to the grid or even temporarily shuts down, effectively wasting energy that could have been used
• FCAS market – Frequency Control Ancillary Services (layman guide here)

I encourage you to reach out if:

• I've said something wrong or partially wrong,
• there's an additional thing I should know about something,
• you think it would be valuable to talk you, or
• you know someone I should talk to!

Cheers,

Dan