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ISSUE 6 ­­· June 2019 · www.energymagazine.com.au

INNOVATION in energy storage

THE ROLE

OF GAS IN THE ENERGY TRANSITION

Where are the opportunities in

WASTE-TO-ENERGY?

Hydro: the backbone for RENEWABLES IN AUSTRALIA


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ISSUE 6—JUNE 2019 WELCOME

ISSUE 6 · June 2019 · www.energymagazine.com.au

INNOVATION in energy storage

THE ROLE

OF GAS IN THE ENERGY TRANSITION

Where are the opportunities in

WASTE-TO-ENERGY?

Hydro: the backbone for RENEWABLES IN AUSTRALIA

Cover highlights our feature on the current wave of interest in hydro power.

5,096 This publication has been independently audited under the AMAA’s CAB Total Distribution Audit. Audit Period: 1 April 2018 – 30 September 2018

Published by

Monkey Media Enterprises ABN: 36 426 734 954 204/23–25 Gipps St Collingwood VIC 3066 P: (03) 9988 4950 F: (03) 8456 6720 monkeymedia.com.au info@monkeymedia.com.au energymagazine.com.au info@energymagazine.com.au ISSN: 2209-0541

Editor Laura Harvey Journalist India Murphy Senior Designer Alejandro Molano Designer Jacqueline Buckmaster Danielle Harris Business Development Manager Rima Munafo Publisher Chris Bland Operations Manager Kirsty Hutton Digital Marketing Manager Sam Penny

EDITOR’S WELCOME

H

ydro is having a big moment in the energy industry, so it’s been a pleasure to speak to some of the biggest players from the sector for this issue of Energy. I’ve often been puzzled as to why hydro didn’t seem to have more buzz or excitement around it in recent years, as we started to realise that renewables need to be coupled with storage if they are to truly develop and dominate the energy mix in this country. The excitement seemed to be reserved for lithium battery storage developments – but as many before me have rightly pointed out, a major pumped hydro development can have the storage capacity of hundreds or thousands of lithium batteries combined. But in recent months, the tide seems to be shifting. There has been bipartisan political support for major hydro projects, such as Snowy 2.0 and Tasmania’s Battery of the Nation. Other commercial developments, such as Genex Power’s Kidston Pumped Hydro project, have achieved financial close with industry backing, showing that the market believes in the future role pumped hydro will be playing in our energy mix.

Pleasingly, we were able to speak to all three of the proponents of these projects for this issue of Energy, and I hope you enjoy the insights they provide into the work that has gone into getting their developments to the point they’re at now; and the next steps ahead for these projects. Another hot topic in the industry at the moment is power purchase agreements (PPAs). It seems that at least weekly we’re hearing news of another major PPA being signed, with some of the most significant ones having the power to underwrite major projects and propel the renewable industry forward. In this issue, we’ve taken a closer look at some of the more recently signed PPAs around the country, and we also ask the question – what can traditional developers and retailers do to become more involved in this emerging sector of the market? We’ve also taken a closer look at the latest news from the networks side of the industry, recent developments in the world of oil and gas, and the latest thinking around the opportunities the waste-to-energy sector represents. As always, I hope you enjoy reading our latest issue. Laura Harvey Editor

We’re keen to hear your thoughts and feedback on this issue of Energy. Get in touch at info@energymagazine.com.au or feel free to give us a call on (03) 9988 4950.

June 2019 ISSUE 6

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CONTENTS NEWS 6

Share economy to assist transition to clean energy

6

ElectraNet to upgrade Eyre Peninsula transmission network

7

Victorian wind farms benefit local communities

Safety first for QLD’s renewable industry

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AGL to build pumped hydro energy storage in SA

EACH ISSUE

7

$10 million for WA microscale LNG plant

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Energy efficiency increasing in Australian homes

8

EUAA: it’s not too late to fix gas

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8

1

EDITOR'S WELCOME

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CONTRIBUTORS

76 FEATURES SCHEDULE 76 ADVERTISERS’ INDEX

25

28

ENERGY NETWORKS

OIL & GAS

INDUSTRIAL ENERGY

10  The grid of the future: we need more interconnection

25 The critical role of gas in the energy transition

28  Power purchase agreements: revolutionising energy retail

14  Surviving a crisis: getting through when the worst case scenario hits

26 Perception the key to oil and gas success

18  Distributed energy in Western Australia: what are the customer implications? 22  The solar surge – networks are here to help

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CONTENTS

32

40

48

STORAGE

HYDRO

WASTE-TO-ENERGY

32  The lynchpin that makes future energy markets reliable

40  Underpinning Australia’s renewable energy future – powering ahead with Snowy 2.0

48  Where are the opportunities in waste-to-energy?

36  Looking beyond lithium batteries: innovation in energy storage

FUTURE ENERGY

44  Hydro power: the backbone for renewables in Australia

38  Balancing a changing energy mix

54 TRANSFORMERS AND SUBSTATIONS 54  Enhancing electrical supply in the ACT 56  Redefining the benchmark for optimised substation asset testing

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50  Making a move in the new energy frontier 52  ResourceCo steps up its delivery of alternative energy solutions

72

SOLAR

SECURITY

68  Aerial imagery: the best kept secret in solar

72  Why wait for a cyber catastrophe to prepare for a cyber attack?

AUTOMATION 70  Automation – the key to unlocking the future of the energy industry

VEGETATION MANAGEMENT 58  Working to improve vegetation clearance outcomes near powerlines 61  Managing the environment around our networks

WOMEN IN ENERGY 62  The changing face of construction: Angela Klepac

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June 2019 ISSUE 6

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CONTRIBUTORS

Phaedra Deckart

General Manager, Energy Supply and Origination, AGL

Phaedra Deckart is a senior executive with over 20 years of experience in the global energy sector. She began her career in law before segueing seamlessly to the oil and gas industry upon joining Santos Limited, where she held a variety of commercial, corporate, gas and LNG marketing positions. Phaedra’s career at AGL has traversed leading AGL’s wholesale gas supply portfolio as Head of Wholesale Gas and now as General Manager, Energy Supply and Origination. Phaedra leads the transformation of AGL’s energy supply portfolio through this dynamic time in the energy market.

Steve Masters

Chief Executive Officer, ElectraNet

Steve is a resources industry executive with more than 20 years’ experience, including a solid background in Australian energy markets, primarily associated with large oil and gas joint ventures, corporate strategy, and business and corporate development opportunities. Appointed as Chief Executive of ElectraNet in December 2014, Steve previously held a number of senior and executive roles with key Australian energy companies, leading commercial, marketing and corporate development functions. Steve’s formal qualifications include a Bachelor of Science (with Honours) and a Graduate Diploma in Applied Finance And Investment. He has attended University of Chicago Business School’s Executive Program in Corporate Strategy, and Oxford University’s Advanced Management and Leadership Program.

Paul Broad

Chief Executive Officer, Snowy Hydro

Paul Broad was appointed Managing Director and Chief Executive Officer of Snowy Hydro Limited in July 2013. Before being appointed as a Director, Paul was Chief Executive Officer of Infrastructure NSW, AAPT, PowerTel, Energy Australia Sydney Water and Hunter Water.

Steve Davy

Chief Executive Officer, Hydro Tasmania

Steve Davy was appointed Chief Executive Officer in September 2013 and has been with Hydro Tasmania since 2005. Steve is Chairman of Hydro Tasmania’s mainland retail business, Momentum Energy, selling electricity on mainland Australia and on the Bass Strait islands. He has previously served as Chair of the Australian Financial Markets Association Environmental Products Committee, and is a Director of the Australian Energy Council.

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CONTRIBUTORS

Gabrielle Sycamore

General Manager Gas Markets, Jemena

Gabrielle is the General Manager leading Jemena’s gas business, and she is responsible for making sure Jemena understands the different and changing needs of all its gas customers. Gabrielle is passionate about putting Jemena’s customers first, and enjoys working with customers to change the way Jemena does things to better meet their needs.

Angela Klepac

National Manager – Power, Zinfra

As Zinfra’s National Manager – Power, Angela has particular expertise in leading and managing diverse and specialised teams in the area of engineering and procurement; undertaking strategic operational reviews and providing direction for process improvement; identifying and developing cost saving opportunities; establishing high performance teams who deliver superior results in challenging environments; stakeholder relationship management; change management and identifying associated risks and creating effective controls; and strategic experience in influencing and developing new technology in supplier markets.

Simon Vardy

Utilities Lead, Australia and New Zealand, Accenture

Simon Vardy is the managing director of Accenture’s Utilities Strategy practice across Australia and New Zealand. In addition, he serves as the Accenture Sustainability lead. During his career, Simon has gained extensive experience in strategic business transformation, growth strategy, performance improvement, strategic cost reduction, investment analysis and regulatory issues analysis. Simon works with some of Australia's leading energy and utility companies (electricity, gas and water), government departments and industry associations and has a specialisation in energy and water market reform, and strategic business model development. Prior to working in consulting, Simon held line management positions in mining, manufacturing and IT services. Simon holds an MBA from the Melbourne Business School, a Bachelor of Information Systems from Monash University and has published a number of public reports, research papers and thought leadership.

Scott Davis

Policy Adviser WA, Australian Energy Council

As the Australian Energy Council’s Western Australian policy expert, Scott has a strong background in the state’s energy and mining industries. He has significant experience in product development, marketing and price reform roles in the electricity sector. He had a pivotal role in developing, advocating and delivering demand based tariffs for Horizon Power customers. Scott has a particular depth of expertise in energy systems modelling, electricity pricing, energy storage and integration of renewable energy into isolated power systems.

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NEWS

SHARE ECONOMY TO ASSIST TRANSITION TO CLEAN ENERGY

A

recent study from RMIT University and Monash University researchers has found energy sharing platforms may effectively assist the transition to new energy technologies, cleaner energy, and better consumer outcomes. The findings state that Australian households are adopting new energy technologies, and are excited by the idea of platforms similar to Airbnb and Uber, which would enable them to trade and share their excess power. This would enable Australians to reduce their electricity bills, reduce their environmental impact, and help stabilise the grid, without the complicated processes which can discourage pursuing opportunities to participate in the energy market. “People were widely enthusiastic about generating and storing their own energy, but complexity and distrust in the energy sector limited their potential as participants in an efficient electricity grid,” lead author, Dr Larissa Nicholls from the RMIT Centre for Urban Research, said. “In the age of the sharing economy, consumers’ relationships with the electricity system are changing,” she said. “The concept of sharing or donating energy is appealing as a response to this widespread concern for vulnerable people, who may struggle with the cost of energy or be unable to access renewable power.”

The research also found that households are already considering feeding their electricity into the grid for collective use as a form of sharing energy with other households – but they want to be confident their clean electricity benefits people who need it, rather than boosting energy company profits. Report co-author, Associate Professor Yolande Strengers from Monash University, says householders’ relationships with the electricity grid and market are changing. “The energy sector expects households to become active participants in the energy system – shifting and shaving their energy use and navigating a complex energy market or agreeing to more automation of their home appliances,” she said. The research team warns that energy sharing will need to be carefully introduced. “As has been reported in cities with high uptake of Airbnb and other sharing platforms, there is potential for some people to miss out or be disadvantaged in the sharing economy,” Dr Nicholls said. “Programs and platforms need to ensure that consumers are the primary beneficiaries, and rules and regulations need to address equity concerns.” The RMIT and Monash University researchers will be releasing an engagement strategy for the sector later in 2019.

ELECTRANET TO UPGRADE

EYRE PENINSULA TRANSMISSION NETWORK

T

he Australian Energy Regulator (AER) has approved a proposal from ElectraNet to build a new transmission line on the Eyre Peninsula. The project involves constructing a new double-circuit 132kV transmission line from Cultana to Port Lincoln, via Yadnarie, with the ability to upgrade the Cultana to Yadnarie section to 275kV at a later date. ElectraNet Chief Executive, Steve Masters, said news of the project’s approval was great for the region with the new transmission line to provide Eyre Peninsula with a more reliable and secure electricity supply into the future. “In close consultation with key stakeholders across the Eyre Peninsula, ElectraNet has been working diligently to

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secure regulatory approval to construct a new transmission line which delivers benefits to homeowners, businesses and the region,” Mr Masters said. “This new line will meet the immediate supply needs of the Eyre Peninsula and will future proof the network to cater for increased capacity if and when new mining developments and renewable energy projects proceed. “Once operational it will remove current network constraints, allowing the market to benefit from more low cost energy from existing wind farms on the Eyre Peninsula. It will also provide greater opportunities for new demand and renewable energy developments on the Eyre Peninsula. “Throughout the project’s development we have been mindful of the need to keep costs as low as possible for customers.

“The cost of the new transmission line is fully offset by avoiding the cost of replacement works on the existing transmission line and annual generator network support payments, resulting in almost no price impact for a typical residential customer. “The regulator’s approval of the new power line is great news for all involved and I thank everyone for their input during the project’s development and regulatory approval process.” Following approval by the regulator, the project is still subject to receiving other relevant approvals. The new transmission line is estimated to cost approximately $240 million and works are planned to begin during 2020.

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NEWS

$10 MILLION FOR WA MICROSCALE

LNG PLANT

VICTORIAN WIND FARMS BENEFIT LOCAL COMMUNITIES

T

he WA Government has teamed up with The University of Western Australia (UWA) and the LNG industry to develop the world-first microscale LNG plant. The State Government will provide $10 million over ten years and grant suitable land in the Kwinana industrial precinct to support the development of the LNG Futures Facility in Kwinana. The facility is expected to create up to 1,400 jobs for Western Australians, and will position the state as a global leader in developing and testing new LNG technology. The industry-led initiative has been backed by UWA, Chevron, Shell, Hyundai Heavy Industries and National Energy Resources Australia. It is a priority of the LNG Jobs Taskforce. LNG companies, contractors, service providers and small to medium businesses would be able to test and refine new processes in a live plant environment. It is expected the plant would have the capacity to produce ten tonnes of LNG per day. "This is a major investment to further position Western Australia as a global LNG hub,” Western Australia’s Premier, Mark McGowan, said. "Western Australia has the local talent and expertise to help shape the LNG jobs and operations of the future, and this facility will only strengthen the state's unique advantages.”

B

enefit sharing programs by two new Victorian wind farms show that community expectations when it comes to new developments are being met, according to the Australian Wind Alliance. The 300MW Delburn Wind Farm and the 700MW Hexham Wind Farm will create structured cash payments, community funds and investments opportunities as part of a benefit sharing program. The Delburn Wind Farm plans to distribute over $3 million per annum into the local area, and the Hexham Wind Farm plans to pay neighbours $1000 per year (indexed with CPI) for each turbine constructed within three kilometres of their dwelling and $100 for each additional turbine constructed between three and six kilometres of the dwelling. “Sharing financial benefits equitably is crucial for community acceptance,” Australian Wind Alliance National Coordinator, Andrew Bray said. “The new wind farms appearing throughout Victoria actively fight climate change and move us away from polluting sources of power but they need to deliver for host communities as well.”

ENERGY EFFICIENCY INCREASING IN AUSTRALIAN HOMES

T

he CSIRO has found that Australian residential homes are becoming larger in size and more energy efficient, thanks to new data from its Australian Housing Data (AHD) portal. Around 11.4 per cent of Australia’s emissions can be attributed to households, and with construction continuing at a steady pace, the AHD Portal can pinpoint where energy efficiency efforts are on track, and where they may need increased focus. Key findings drawn from the data (based on apartments and houses) includes: »» 195,000 new homes were built in Australia in the past year »» There is steady progress in building of high-performance homes, especially in Tasmania and the ACT »» Overall, Australian homes are increasing in size, with an average floor area of 132m2 (this includes houses and apartments) »» Average dwellings were most likely to have a metal roof, brick veneer walls, and a concrete floor »» The average newly-constructed home had an energy rating of 6.2 stars. This is an improvement since the introduction of star ratings in 2001, when the average home was estimated at 1.8. This translates to an annual saving of approximately

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»»

$560 in energy bills and 2.3 tonnes of CO2 equivalent (tCO2-e) in greenhouse emissions per house.

CSIRO Grids and Energy Efficiency Research Director, Dr Stephen White, said the data shows steady progress in residential sustainability efforts. “In order to meet national challenges of sustainable energy and resilient cities, it’s vital that we track progress. As an independent research agency driving innovation in energy, particularly residential energy rating, CSIRO is well placed to do this,” Dr White said. “Tracking these changes is an important step to ensure emissions goals are met, while seeing where more attention is needed across the industry.” The portal contains data across states and climate zones and can be further broken down by design (e.g. dwelling class and floor area), construction (e.g. type of walls and roofing) and fixtures and appliances (e.g. solar PV and heating/cooling systems). The construction of homes varies somewhat from state to state, reflecting the flexibility of the NatHERS software to meet both the variations in climate and product availability in each jurisdiction. CSIRO will update dashboards within the AHD Portal monthly, ensuring it is a relevant and accessible tool for the benefit of residential energy efficiency stakeholders, nationally.

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NEWS

EUAA: IT’S NOT TOO LATE TO FIX GAS

T

he Energy Users’ Association of Australia (EUAA), which represents many of Australia’s largest gas users, has released a National Gas Strategy Discussion Paper, posing a range of potential solutions to the gas crisis gripping Australia’s east coast. “Solving the gas crisis must become a priority before we run out of time and options,” said EUAA Chief Executive Officer Andrew Richards. “It’s not too late to fix this, if we act quickly and decisively.” Since Australia has commenced exporting gas via the east coast LNG terminals, the cost of gas for Australian users has gone up by as much as 300 per cent. While the market has softened in the last twelve months, gas costs are still 200 per cent higher today than they were four years ago. Supply constraints including state-based moratoria, a lack of genuine competition, low liquidity levels, poor transparency and

lingering issues with pipeline pricing are all issues that need to be addressed. “We need to recognise that mistakes have been made in the past and that we have failed to strike the right balance between maximising LNG exports and maintaining a reasonable price for Australian gas users.” Many industrial gas users are reporting that if costs do not come down to more sustainable levels we are highly likely to see significant demand destruction, job losses and higher prices of many day to day items used by every Australian. “The EUAA acknowledges the Federal Government has taken some actions to address this situation but unfortunately it has not been enough and clearly more needs to be done.” The EUAA discussion paper seeks to kick start the gas market reform conversation that seems to have fallen off the political radar over the past twelve months. It puts forward options ranging from a COAG Energy Council-led market reform process through to direct government assistance and market intervention. Many of the policy and regulatory options put forward in the discussion paper borrow heavily from initiatives either already in place or being seriously contemplated in electricity markets, such as asset underwriting and funding assistance. Many of the issues facing gas markets are similar to those in electricity markets so using these existing initiatives makes perfect sense. “While people may baulk at some of the options put forward in this discussion paper, the EUAA suggest that some different thinking is required. Given the gravity of the situation, we need a step change in policy, not more incremental changes. “Big solutions are required to solve big problems, including the potential of governments stepping in for a period of time to ensure the viability of many of our gas intensive industries such as food processing and building products manufacturing. “We are confident that the gas crisis can be resolved if governments, industry and gas users act quickly and decisively. We think our discussion paper is a good starting point.”

SAFETY FIRST FOR QLD’S RENEWABLE INDUSTRY

A

new code of practice and electrical safety regulations will be implemented in May 2019 to enhance safety in Queensland’s commercial solar farm industry. The new regulations mean only licensed electricians can mount, locate, fix or remove solar panels on solar farms with a total rated capacity of at least 100kW. Industrial Relations Minister, Grace Grace, said the Construction and operation of solar farms Code of Practice 2019 and the Electrical Safety (Solar Farms) Amendment Regulation 2019 would become law on 13 May and cover all Queensland solar farms. “These new regulations are all about ensuring we keep pace with new and

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emerging technologies and keep workers safe,” Ms Grace said. Minister for Natural Resources, Mines and Energy, Dr Anthony Lynham, said Queensland remained firmly on track to achieve its target of 50 per cent renewable energy by 2030. “Based on strong growth of renewable energy in the state it is estimated Queensland will reach 20 per cent by 2020. “The new code and regulations can only enhance the industry – ensuring the safety of workers and the highest safety standards.’’ Electrical Safety Commissioner, Greg Skyring, said health and safety was the key priority for the electrical industry.

“The new code of practice and regulations will provide guidance and clarity for solar farm developers, owner and contractors when it comes to their electrical safety duties,” Mr Skyring said.

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NEWS

AGL TO BUILD PUMPED HYDRO

ENERGY STORAGE IN SA

A

GL has successfully secured the right to develop, own and operate a 250MW pumped hydro energy storage project at Hillgrove Resources Limited’s Kanmantoo copper mine in South Australia’s Adelaide Hills region. AGL’s Executive General Manager of Wholesale Markets, Richard Wrightson, said, “This is an exciting project, which is consistent with our plans to continue to invest in our core energy markets business as customer needs and technologies evolve. “If we proceed and the project is approved, it would be an important addition to our technology mix in South Australia, where we have significant wind and thermal generation.

“It would help us to meet the changing needs of the South Australian energy market, in which energy storage assets are likely to be needed to provide dispatchable capacity as renewables generation increases over coming years.” Mr Wrightson said the signing of binding agreements was the start of a multiple stage process to progress the project, including the lodgement of a development application in 2020. AGL would buy the land required for the project from Hillgrove shortly after a final investment decision, which is expected to be made after the completion of processing at Kanmantoo. “If all approvals are received, we expect the project to be complete and operating by 2024,” Mr Wrightson said.

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June 2019 ISSUE 6

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ENERGY NETWORKS

THE GRID OF

THE FUTURE: WE NEED MORE

INTERCONNECTION

by Steve Masters, ElectraNet Chief Executive It’s been touted as providing the missing link for Australia’s electricity network as we transition to a decentralised, renewables-focused grid, and here, ElectraNet Chief Executive Steve Masters explains why an interconnector between South Australia and New South Wales is the project we can’t afford not to build.

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ENERGY NETWORKS

O

n current lists of the world’s most rapidly changing industries, renewable energy sits alongside, if not above, cybersecurity, biotechnology, virtual reality and artificial intelligence. While the global automotive industry might like to claim that there will be more technological advancements in its sector in the next five years than in the past 50, it doesn’t even rate a place in a countdown of the fastest growing industries. The global energy transformation is currently gripping the world’s power systems, as we move toward low emission and decentralised supply sources – and nowhere is this being felt more strongly than in South Australia. In Australia and in particular, South Australia, our energy market supply chain – encompassing generation, transmission, distribution, retailers and consumers – is undergoing transformational change as the sector transitions to lower carbon emissions and emerging technologies. More decentralisation requires more interconnection The importance of the electricity industry to the Australian economy cannot be overstated. Safety, reliability, affordability and the impact of emissions reduction policies are front and centre in our minds at ElectraNet, reflecting the priorities of the wider community. Affordability issues are widely reported and impact all of us, and it is a little known fact that transmission costs in South Australia represent only around six per cent of a typical residential bill. And when the lights go out, for whatever reason, the expectations of our community are amplified and the finger pointing begins.

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What is clear from the transitioning Australian energy market is that we can’t afford to be “just in time” with transmission. As the Australian Energy Market Operator (AEMO) recognised a few years ago, a more decentralised grid must be a more interconnected grid. Critical transmission infrastructure needs to be in place and ready earlier; and we need to be there before new replacement generation is turned on, not playing catch-up after. The same goes for new generation. This required shift in thinking and planning is obvious on face value, but at times difficult to implement against recent examples of some large-scale generation retirements, and a regulatory framework made for a different paradigm. Australian Energy Market Operator’s (AEMO) 2018 Integrated System Plan (ISP) acknowledges the fundamental transformation of eastern Australia’s power generation and electricity grids, representing the National Energy Market (NEM). Large amounts of coal generation are expected to close over the next 20 years to be replaced with wind, hydro and small- and large-scale solar generation. The ISP identifies significant investment in transmission, energy storage, flexible thermal capacity and distributed energy resources, will be required to support this transformation, and in particular to fully harness the diversity and intermittency of the future generation mix.

What role can SA play? Approaching the past three years, ElectraNet has been investigating options to deliver greater energy connection between South Australia and the eastern states. This work, backed by extensive modelling, independent analysis and significant stakeholder engagement, has been described as the most

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comprehensive regulatory investment test for a transmission (RIT-T) project ever undertaken in the NEM and to go before the Australian Energy Regulator. Our cost benefit analysis is consistent with AEMO’s conclusion that a new interconnector between South Australia and New South Wales is an important element of a NEM’s roadmap, and one of its immediate priorities that would deliver positive net market benefits as soon as it can be built. Project EnergyConnect – the preferred option identified in the Project Assessment Conclusions Report (PACR) published in February 2019, is a 900km interconnector between Robertstown, in South Australia, and Wagga Wagga, in New South Wales, via Buronga, jointly delivered by ElectraNet and TransGrid. An additional 24km connection from Buronga to Red Cliffs would also enable access to renewable generation in north-western Victoria. The key findings in the PACR and accompanying reports and modelling, demonstrate a new, double-circuit 330kV interconnector between South Australia and New South Wales is expected to: »» Deliver net benefits of approximately $1 billion over 21 years, including wholesale market fuel cost savings in excess of $100 million/year as soon as it is commissioned (primarily from avoided expensive gas-fired generation in South Australia) »» Reduce annual residential bills by about $66 in South Australia and $30 in New South Wales, and annual small business customer bills by $132 in South Australia and $71 in New South Wales »» Provide diverse, low-cost renewable generation sources to help service New South Wales demand going forward, particularly as existing coal-fired generators retire »» Avoid substantial capital costs associated with enabling greater integration of renewables in the NEM »» Generate sufficient benefits to recover the project capital costs within 14 years »» Generate over 200 regional jobs in South Australia and over 800 regional jobs in New South Wales during construction, and create around 250 and 700 ongoing jobs in South Australia and New South Wales respectively »» Improve the ability of parties to obtain hedging contracts in South Australia and help relieve the tight liquidity in hedging markets currently ElectraNet has engaged widely with key stakeholders during this RIT-T process, and it is vitally important this project is thoroughly examined by the Australian Energy Regulator in order for the community to have confidence in this investment. As the electricity sector transitions, coal generators are expected to continue to retire from the market over the medium to longer term. The retirement of coal generation is expected to be most rapid in NSW, and all eyes are currently focusing on the upcoming coal-fired Liddell power station retirement in 2022. Project EnergyConnect is scheduled to be in place around the time of this closure, providing timely additional transfer capacity to allow for the sharing of reserves between states. Going forward, the progressive retirement of around half of the New South Wales coal fleet by 2035 (or sooner) means that alternative low emission supply sources will be required to fill this gap whilst meeting Australia’s policy commitments. Our assessment shows that a new interconnector between South Australia and New South Wales allows greater exports 1 Based on independent modelling by ACIL Allen. 2 Based on independent modelling of broader economic benefits by ACIL Allen.

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from existing and new high-quality renewable generation sources in South Australia and western New South Wales, that enables supply requirements in New South Wales to be met at a lower cost than if New South Wales was required to draw on other generation sources, including new gas generation, to fill the gap. Any earlier retirement of coal generation in New South Wales would accelerate delivery of these benefits. The preferred option provides a benefit through being able to avoid the transmission investment that would otherwise be required to unlock additional renewable generation resources in the Murray River and Riverland renewable energy zones (REZs), which have been identified by AEMO in the ISP as being priority areas to assist NEM transition. Since late 2018 for example, over 600MW of solar generation has reached committed status west of Wagga Wagga.

Where to from here? A different generation map is emerging across Australia. It is obvious that a large amount of new generation will be built in areas that have not previously hosted such assets. As we move to a lower carbon economy with renewable generation taking a greater share of the market, the reality is that current transmission highways do not align with where the best generation sources are to supply Australia’s future needs. Interconnectors that coincide with REZs support ease of connection to the grid; it is cheaper for these generation proponents to be more proximal to transmission highways. Not surprisingly, Project EnergyConnect is attracting interest from potential new proponents. The European Commission recognises the widespread benefits from well-interconnected energy networks: increased security of supply, affordable prices via market integration and decarbonisation through increasing levels of renewable generation. The Commission views interconnection as an essential precondition for realising an integrated, competitive and sustainable European electricity market, and has a target of achieving an interconnection capacity of at least ten per cent installed electricity production capacity across its members by 2020 – with a view to eventually achieving a single, European energy market. The South Australian and New South Wales Governments are both strong supporters of Project EnergyConnect, with a Memorandum of Understanding signed by both parties in December 2018 and financial underwriting of early works by the South Australian Government to accelerate some activities in advance of awaiting regulatory outcomes. Total renewable energy resources in South Australia exceed its combined minimum demand and current export capability, putting it at the forefront of renewable penetration levels in power systems across the world. South Australia also has among the most abundant and highquality renewable energy resources in Australia and has seen an unprecedented, and highly publicised, uptake of renewable generation over the last decade. Harnessing this competitive advantage in a transformational market setting for the long-term benefit of customers and communities across eastern Australia is a national imperative.


ENERGY NETWORKS

SURVIVING A CRISIS:

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GETTING THROUGH WHEN THE WORST CASE SCENARIO HITS All energy utilities have a plan in place for when any range of natural disasters hit, but what do you do when you’re facing a one-in-500 year event of unprecedented magnitude? This was the challenge facing Energy Queensland after the devastating Townsville floods in February, and they share their insights into surviving and thriving after this event here.

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ENERGY NETWORKS

T

he community of Townsville is still picking up the pieces after one of its worst natural disasters in living memory. In February, North Queensland’s largest city was suffering from the effects of drought when an unprecedented monsoon event dumped a year’s worth of rain in just over a week. While floods are part and parcel of a normal wet season in North Queensland, the relentless deluge took the community by surprise and tested the mettle of Energy Queensland’s Ergon Energy and Energex emergency response teams. The Ross River snakes through the city and many denselypopulated suburbs were in the firing line when it broke its banks, peaking at 42.99 metres, while the dam reached 244.8 per cent and the flow of water was 2000m3/second. More than 3300 homes and businesses were inundated during the record flood, along with critical infrastructure, including the power network operated by Ergon Energy. At the peak of the 1 in 500-year event, more than 17,000 customers were without power, many of them de-energised for public safety reasons. Safety comes first Energy Queensland’s Executive General Manager for Distribution, Paul Jordon, said community safety was at the heart of the response. “Once we knew the city was facing the worst case scenario, we did everything in our power to protect the community, reduce the risk of damage to the electricity network that supports them and keep customers informed of impending outages. “This involved invoking/enacting our flood plans, including preemptive de-energisation, dismantling and removing vital equipment such as switchgear and SCADA systems from substations in the firing line, and sandbagging equipment that couldn’t be readily shifted to higher ground. “In a rapidly-evolving disaster, keeping an eye on the weather, working closely with emergency services and communicating with customers was critical. “Through direct contact, traditional media and social media, we urged people in the flood zone to be prepared for protracted power interruptions and enact their household emergency plans, especially our life support customers. “The frequent delivery of electrical safety messages to the community was also vital,” Mr Jordon said. A unique event needs a unique approach While the Ergon team is well-versed in disaster response, this highly unpredictable and protracted flood event required a different approach. “When a storm or cyclone hits a region, our crews have a clear understanding of what type of damage to expect, and once the weather front moves on you can generally move troops in immediately to commence restoration,” Mr Jordon said. “Floods are incredibly frustrating compared to a cyclone or

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super-cell storm, because the damage occurs slowly and you know that every litre of water entering each padmount, pillar box, substation and meter box is bringing with it debris, soil and silt. “With around 50 per cent of Townsville’s flood-affected areas being supplied by an underground network, you know every piece of equipment will have to be methodically opened, cleaned, tested and repaired and dried before we can safely re-energise. You know the task ahead will be painstaking, and massive.”

Bring in the troops With that in mind, Ergon mobilised troops from across the state, including reinforcements from South East Queenslandbased sister company Energex, to support local crews in what would be an around-the-clock restoration effort. Mr Jordon said bringing in additional crews to a disaster area is not about throwing as many people at the problem as possible. Given the nature of the event, it was important to consider the best skillsets required and actually getting resources into the area as soon as possible before access was completely cut. “From a social perspective you have to be aware that every person responding to a natural disaster, while undoubtedly carrying out an important task, must also have as minimal impact as possible on the limited resources, such as accommodation and food, Mr Jordon explained. “From an operational perspective, you have to have an extremely good understanding of what damage crews are likely to find, and only deploy staff with the specialised skills required to get the power back on. For example, knowing we were facing significant damage to the underground network, we needed to move additional staff with these skills into the region. “At the same time, we were providing support to local team members who had been personally affected by the disaster, which obviously had a devastating impact on the community.” While restoration crews were keen to get out and help get the community back on its feet, they were faced with a frustrating wait for floodwaters to recede. “The problem with flooding on this scale is it takes time to subside and much of the damage is hidden under the water’s surface. “It’s frustrating for crews who are ready to respond, but cannot begin inspecting the network until floodwaters recede and in this case it was days before the true extent of the damage was revealed,” Mr Jordon said. The view from above In the meantime, aerial inspections gave crews some insight into the challenges ahead. The Australian Army provided Ergon chopper flights, enabling crews to scope damage in areas that remained cut off because of floodwaters, debris and structural damage to a bridge. Drones, which have become a vital weapon in Ergon Energy’s arsenal, were widely used to find faults amongst the devastation. Mostly, fault-finding meant a hard slog on foot for crews in hot, humid and muddy conditions. Mr Jordon said once Ergon had a clearer picture of damage to the www.energymagazine.com.au


ENERGY NETWORKS

network, it was time to devise a meticulous restoration plan for the community. “Planning is everything when it comes to natural disasters and there’s only so much you can do until you know the full extent of the damage. “We had a good idea what to expect, but we needed the waters to fully subside to know exactly what would be required in terms of staffing, spares and equipment to enable us to devise an accurate restoration plan timeline,” he said.

Working towards a goal Ergon set an ambitious restoration target: to have every property that was safe to re-energise back on the grid ten days after the peak of the flooding. “The plan also included a street-by-street restoration timeline, which we released to the public via our website, social media and traditional media, and delivered to the Local Disaster Management Group. “This detailed public plan gave everyone an idea of when power would be restored to their properties and allowed them to plan their lives around it. Ultimately, it gave the community a form of certainty in a very difficult time,” Mr Jordon said. The restoration plan also gave crews a goal and it wasn’t long before they were aiming to exceed the community’s expectations. “Within hours of us going public with the document our crews said they wanted to achieve the goal a day earlier. “Although we’d said we’d have power available to everyone by the Tuesday evening, crews had it restored on Monday afternoon. “Their drive was nothing short of incredible and we could not have been any prouder of their efforts. Above all else, the meticulous planning, resourcing and restoration planning, combined with outstanding commitment from staff, saw this result achieved without a single recordable injury. “They were inspired by the support of members of the

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community, who often greeted our crews with cold drinks and snacks as they worked in temperatures tipping 40 degrees with stifling humidity and often ankle-deep in mud,” Mr Jordon said. In challenging conditions, Ergon and Energex crews ticked off an impressive to-do list: »» »» »» »» »» »» »» »»

Restored power to 17,000 customers Assessed, cleaned and repaired all the city’s inundated substations Assessed, cleaned and/or repaired nearly 1700 pillar boxes Assessed, cleaned and repaired around 180 padmount transformers and high voltage switchgear Replaced two damaged padmount transformers Pumped, cleaned and dried dozens of pits Replaced two switching stations Replaced four poles

It was a massive undertaking by crews, which went a long way to helping restore a sense of normality to a community in crisis. From every disaster response, there are valuable lessons, and Paul Jordon observed a few keys at the heart of the success of the Townsville flood response. He said it was imperative to empower crews with ownership of the disaster response by ensuring they were safe, well-resourced, had clear work plans each morning and were kept informed of the holistic restoration process. “Keeping the community and key stakeholders informed throughout the event also went a long way to quelling any angst about the power situation. “Getting the restoration plan out early also gave customers the information they needed to get on with life, while at the same time rallying our crews with a goal. “At the end of the day, we all want the same thing – the safe and timely restoration of power.”

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ENERGY NETWORKS

DISTRIBUTED ENERGY

IN WESTERN AUSTRALIA: by Scott Davis, Policy Adviser WA, Australian Energy Council The proliferation of distributed energy resources, such as rooftop solar, is continuing around Australia at a rapid case, and this is particularly the case in WA. Here, Scott Davis from the Australian Energy Council considers the implications of increased distributed resources, particularly in the context of Western Australia’s “islanded” electricity market.

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istributed Energy Resources (DER), such as rooftop solar and batteries, have the potential to offer customers lower cost, reliable, efficient energy, and the possibility of energy independence. However, while there has been a growing focus on DER1 benefits, they also come with some challenges. What are the customer implications? And what are customers looking for from the energy supply changes that are currently underway? Here we take a look and consider it from the perspective of changes underway in Western Australia’s wholesale electricity market. The energy transformation The Wholesale Electricity Market (WEM) operates in the 261,000 square km South West Interconnected System (SWIS) and provides around 18 million MWh of electricity to 1.1 million households and businesses annually. The SWIS has an ‘islanded nature’ – it stands alone from the National Electricity Market (NEM) and therefore needs to be more secure and reliable than a power system with interconnections2. Collectively, rooftop DER is the largest energy source in the SWIS, according to the Australian Energy Market Operator’s

(AEMO) most recent Integrating Utility-Scale Renewables and DER in the SWIS report. There is now over 1000MW of rooftop photovoltaic (PV) DER installed behind the meter in the distribution networks. AEMO estimates that installed rooftop DER will more than double by mid-2028 to 2400 MW3. The take up of solar in WA has been accelerating and it now has three of the top ten postcodes nationally for the level of solar installations. Mandurah to Perth’s south is the postcode with the second highest number of solar installations nationally. And the size of the solar systems being installed on rooftops has progressively been getting bigger. As noted by WA electricity retailer Synergy, in this evolving electricity system (figure 1), an affordable, reliable, and sustainable energy supply remains what customers want4. Customers want to keep it simple but they also expect increasingly greater choice and technology enablement. However, there is uncertainty as to how simple DER will remain for customers – and it is concerning when proposed future DER models have a range of new players involved in the mix, with multiple parties developing and offering customers a new suite of products and services. These scenarios must not only consider added complexity for the customer, but also need to maintain customer protections.

Pricing & the flow of benefits

Customer experience and the utility value proposition

Business models and enabling technologies

Appropriate customer protections

Figure 1. The evolving electricity system. Source: AEMO. 1

Definition of DER: By ‘distributed’ we mean connected to consumers on the distribution network, and we imply small scale and a diversity of locations and technologies. ‘Energy’ refers to both the release and absorption of energy. ‘Resources’

means being put to a useful purpose. Some examples therefore could include inverter-based generation, batteries, controlled small loads and electric vehicles.

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2

AEMO, Integrating Utility-Scale Renewables and DER in the SWIS, March 2019

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AEMO, Integrating Utility-Scale Renewables and DER in the SWIS, March 2019

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Synergy presentation, WA Electricity Reform: Have we got DER Covered? panel, 7 March 2019

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ENERGY NETWORKS

WHAT ARE THE CUSTOMER IMPLICATIONS?

Scott Davis.

www.energymagazine.com.au

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ENERGY NETWORKS

Technology view only one part of the whole: »» Underpinned by standards and common protocols (IEEE, AS4777, AS4755 etc) »» Installer base skill development required Other parts include: »» customer engagement »» incentive design including transaction framework »»

contractual and regulatory framework

Figure 2. The Onslow Microgrid – technology view. Source: Horizon Power, from the WA Electricity Reform: Have we got DER covered? forum.

The Australian Energy Market Operator (AEMO) says that the many different forms of DER, with new and varying business models, “can provide a range of grid, essential, emergency reserves, and network support services. Unlocking these new value streams in addition to the consumers’ services must be supported by markets and competition to support the investment choices delivering the best value.”5 To provide equitable access to the benefits of DER, a strong holistic market design, backed by a strong regulatory framework, is imperative. A substantive framework is already in place with existing retailers that covers various consumer laws, privacy protections, and regulated contracts. And while tweaking this framework will no doubt be required, retailers are seemingly in a strong position to continue to provide customer protections when offering future DER services.

High DER future The impact of a high DER future is already being felt in Horizon Power’s service area. The utility is “bringing the future forward” by accelerating the uptake of DER in the town of Onslow . The pilot program aims to generate 50 per cent of the town’s electricity from renewable energy sources, by providing residents and businesses with access to low-cost solar and battery storage systems6. Horizon Power has developed a framework where controllable DER is linked to centralised control and dispatch via a DER management system (DERMS), as outlined in Figure 2. However the Onslow trial is looking beyond getting the technology architecture right. It is aiming to understand how customer engagement, incentive design (including the transaction framework for the services that customers are providing), as well as how contractual and regulatory frameworks support a new supply model. From a technology perspective, all the pieces are there, but it is complex to get end-to-end commands from the control room to a customer device. There's as many as nine different vendors involved in Horizon Power getting a command from end-to-end. So it will be important to consider open standards and protocols to ensure the necessary interoperability exists for reliable communications. Potential challenges are becoming apparent to Horizon Power in relation to applying DERMS in markets such as the National Electricity Market (NEM) or WEM. For example, a command dispatched to a DER might be intended to achieve a certain outcome for the distribution operator, but that may run contrary to the objectives of the retailer. It raises the question of how the 5 6

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customer’s individual investment is factored into an analysis of optimal customer outcomes. It is likely to take a lot of time and effort to get all of the fundamentals of DER orchestration in place for it to bring system wide and society wide benefits.

Understanding customer needs While decisions about where and when to install DER and how to operate it are increasingly consequential, many electricity customers lack the information, time and control to efficiently direct investment in, and operation of DER. As part of its annual retail competition review, the Australian Energy Market Commission (AEMC) polled 2000 respondents about a range of energy technologies such as solar, batteries, smart devices, and energy services. Initially the participants had trouble understanding energy services and their benefits. The participants were shown an advertisement of a typical day of an average family, and how the family interacted with energy services. Afterwards, they showed increased interest in energy services, particularly in relation to what energy technology to purchase next, and services become the most valued offer. EnergyOS is also focused on the theme of energy services. To really engage with the full suite of DER opportunities, the tech start-up believes that consumers must first become familiar with the new generation of services available. They say that this requires a different way of thinking: services are fundamentally different from products, and therefore, require a different mindset. Western Power is looking to further understand customers' future energy needs through utilising energy scenarios – like the uptake of different technology, macroeconomic and demographic factors – and how these determine future energy requirements of customers. They are modelling 50 scenarios and 50 future grids to determine what would be the most efficient grid to serve the most likely future energy need. From that, they pose the question of how to transition to that new grid. A lot of the modelling uses automated tools and systems, and it is currently a proof of concept that Western Power is looking to develop further. It is clear that the benefits of DER need to flow across the value chain for retailers to sustainably offer a compelling value proposition to customers. To support this, reform is needed in relation to network tariffs and other pricing signals. Such reform may even encourage further product development, with the possibility of energy products coming to mirror Telco products. So while the customer challenges of a high DER future are evident, there is also confidence that solutions can be developed.

AEMO, INTEGRATING UTILITY-SCALE RENEWABLES AND DER IN THE SWIS, MARCH 2019

https://horizonpower.com.au/our-community/projects/onslow-distributed-energy-resource-der-project/

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ALL THE BIG ISSUES ALL THE KEY PLAYERS ALL UNDER ONE ROOF

11-14 June 2019 Melbourne Convention and Exhibition Centre | Australia

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Audrey Zibelman Chief Executive Officer AEMO

Michelle Shepherd Commissioner AEM

Paula Conboy Chair AER

Brett Redman Chief Executive Officer AGL Energy

Mark Twidell Managing Director APAC Tesla

Sara Bell Founder and Chief Executive Officer Tempus Energy (UK)

Paul Italiano Chief Executive Officer Transgrid

Merryn York Chief Executive Officer Powerlink Queensland

Aidan O’Sullivan Head of Energy and Artificial Intelligence Research University College London (UK)

Jeff Dimery Managing Director and Chief Executive Officer Alinta Energy

ENERGY readers receive 10% off the registration fee, quote ‘ENR10’ at registration

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ENERGY NETWORKS

THE SOLAR SURGE — NETWORKS ARE HERE TO HELP by Andrew Dillon, Chief Executive Officer, Energy Networks Australia With the expansion of solar energy already impacting our electricity grid – and with the volume only increasing in the years to come – the impact on our networks is going to be significant. How we continue to manage the transition to bidirectional energy flows will have a critical impact on our networks, and networks are working to deliver the best path forward. Solar saturation The expansion of solar and other distributed energy resources (DER) has changed our grid, a distribution system originally designed for unidirectional power flow but now required to accommodate two-way flows that can fluctuate significantly within relatively short time periods. The risk of reverse demand/power flows associated with high rooftop solar adoption has been a growing national issue, identified as a clear priority in the 2017 Energy Networks Australia and CSIRO Electricity Network Transformation Roadmap (ENTR). With the rapid uptake of DER such as household solar and, increasingly, storage devices, a substantial proportion of Australia’s zone substations will reach reverse demand/power flows significantly earlier than previously thought. This is a problem for the grid because, if unmanaged, it can cause voltage fluctuations resulting in localised power outages, damage to appliances and potentially even compromise electricity system security. The indicative threshold for when reverse flows occur is when penetration of rooftop solar adoption reaches about 40 per cent – although this can vary, depending on the hosting capacity and topology of the electricity network. The Open Energy Networks project, being delivered by Energy Networks Australia and the Australian Energy Market Operator (AEMO), has used updated data to map how soon zone substations will reach this threshold. It shows almost a quarter of zone substations will likely hit 40 per cent solar penetration by 2025. This is slightly more pronounced in the populated areas of the coast, but not exclusively so. How do we manage it? In managing traditional distribution networks with unidirectional flow, there was limited need for control of the feeder as it was typically set up so that the range of anticipated voltage excursions did not exceed the allowable voltage limits. However, with increased DER penetration, this is no longer possible in many

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cases without dramatic excursions outside the allowed voltage limits (with subsequent rooftop solar inverter tripping), unless dynamic control is implemented. Given the relatively low level of monitoring and control that was implemented to cope with what was a relatively predictable operating regime, significant enhancement of monitoring and control functionality is required to provide for the robust connection of DER within the safe technical range of the network’s capacity, and to allow for the optimisation of the performance of the integrated network with its connected devices. With the updated outlook, the enhancement of monitoring and control functionality required to manage the system when it goes into reverse demand will be required earlier for some sections of the network than previously thought. Through the Open Energy Networks project, Energy Networks Australia is taking a lead role in this adaption by redesigning the management of DER in partnership with AEMO. The best way to manage voltage issues and integrate increasing levels of solar and storage into the system is to develop a smarter and more flexible grid. Electricity networks are working towards being coordinated and optimised both locally and across the wider energy system – Open Energy Networks is examining how best to do this.

Demand shift The rapid growth of household solar means far more electricity is now generated in the middle of the day and supply often exceeds demand. This is called a solar trough, or the back of the ‘duck curve’. It can cause grid instability and reliability issues. In the evening, when the sun goes down but everyone gets home from work, demand spikes – again putting pressure on the grid – and wholesale prices rise so all customers are impacted by higher bills. Managing these shifting sands by simply investing more in infrastructure is one way of dealing with this, but that also results in all customers paying more. www.energymagazine.com.au


ENERGY NETWORKS

Slow DER scenario Updated projected decade in which the zone substations within each Australian postcode within the NEM and WEM will reach a threshold penetration of rooftop solar adoption (40 per cent) indicative of reverse demand/power under the ESOO Slow DER uptake scenario (Source: Open Energy Networks 2019).

Moderate DER scenario Updated projected decade in which the zone substations within each Australian postcode within the NEM and WEM will reach a threshold penetration of rooftop solar adoption (40 per cent) indicative of reverse demand/power under the ESOO Neutral DER uptake scenario (Source: Open Energy Networks 2019).

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ENERGY NETWORKS

Fast DER scenario Updated projected decade in which the zone substations within each Australian postcode within the NEM and WEM will reach a threshold penetration of rooftop solar adoption (40 per cent) indicative of reverse demand/power under the ESOO Fast DER uptake scenario (Source: Open Energy Networks 2019).

Time of use tariffs Everyone’s heard of time-of-use tariffs. They’re intended to price services (typically utility-type or publicly funded/subsidised) to manage demand and congestion – and are therefore more expensive during high-use periods and cheaper in lower-use periods. This incentivises more efficient consumption patterns from customers. For energy customers, this type of pricing offers significant potential benefits. It makes far more sense to implement pricing signals to smooth out the ever-growing trough and peak periods, encouraging less electricity use at peak demand times and more at lower demand times. If enough customers use less energy at peak periods by shifting their consumption to other times of the day or by simply using less, network augmentation can be delayed or prevented. This means cheaper prices for customers.

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If customers can easily shift their consumption away from peak periods, then they can take advantage of a retailer’s time-of-use offer and save on their electricity bills. The South Australian Power Network estimates a customer with an electric vehicle on a time-of-use tariff and charging the electric vehicle in the middle of the day could save as much as $500 per annum compared with a flat retail price. The reality of an increasingly distributed energy landscape presents challenges that must be managed not only with engineering solutions, but by influencing and managing consumption behaviour. Time of use pricing structures are as essential as engineering innovations to not only avoid the network infrastructure investment that would otherwise be needed, but to improve pricing equity and maximise the benefits of the DER evolution for all end-use customers.

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OIL & GAS

THE CRITICAL ROLE OF GAS

IN THE ENERGY TRANSITION by Phaedra Deckart, General Manager, Energy Supply and Origination, AGL In a rapidly evolving energy market, AGL’s Phaedra Deckart argues that gas has a critical role to play as we transition to future fuel sources that are clean, reliable and affordable.

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nergy is an industry in great transition, moving towards reliable power for customers that’s lower cost and lower carbon. At AGL, we believe that gas will play a critical role in this transition. Right now, we have $1.9 billion worth of energy supply projects under development, with a further $1.5 billion subject to feasibility. These projects range from upgrades to our existing sites to new renewables projects. Three are gas projects worth $945 million, which we see as playing an important role in this transition period to ensure clean, reliable and affordable electricity. There are several reasons why we believe gas is critical in the transition. Firstly, it’s the most cost-effective way to ‘firm-up’ renewable sources like solar and wind power. Renewable energy is now the cheapest form of new-build generation in Australia, so firming it up cost-effectively is critical for energy affordability. It’s also accessible – whether that’s from domestic resources or through LNG imports – and it’s flexible, and is the cleanest burning fossil fuel. There’s the availability of the existing large gas storage and pipeline networks, particularly in our southern states, which can manage the variability in demand. These assets, along with potential future storage associated with LNG import projects, can provide the necessary capacity to meet the growing peak summer gas demand requirements.

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Gas-fired power generation has proved to be a relatively lower cost, low emissions source of synchronous generation, and has provided critical network stability, along with other technologies. We understand that gas is only a medium-term fuel, and while some would like us to jump straight to battery storage and large renewables, we need a reliable supply of lower emission fuel to generate the firming capacity needed while battery costs continue to decline. Most pressing is access to gas, which was backed up by the Australian Energy Market Operator’s report recently released at the end of March, which is forecasting a gas shortage from 2024 without a new source of supply coming to market, and which shows that the east coast will see tight supply from 2021. AGL supports initiatives that bring more supply and a diversity of suppliers to the market, including domestic gas resource development and potential imports of gas and LNG. To facilitate this, we support State and Federal Governments in making informed policy decisions based on scientific

evidence to ensure that necessary development and investment can occur while also protecting our environment. A stable regulatory environment is also important to facilitate investment in energy and ensure Australians have access to reliable, clean and affordable energy in the years ahead. We also believe another significant factor is increasing the depth and liquidity in gas markets, and growth in gas forward markets, as a way of managing risk, offsetting potential price volatility with increasing linkage between electricity and gas markets. Clearly, there are challenges to address, but we believe the benefits for customers and Australia’s productivity are clear and gas provides an important way of transitioning to a clean, cost-effective and reliable power.

Phaedra Deckart is a senior executive with over 20 years of experience in the global energy sector. She began her career in law before she transitioned seamlessly to the oil and gas industry upon joining Santos Limited, where she held a variety of commercial, corporate, gas and LNG marketing positions. Phaedra’s career at AGL has traversed leading AGL’s wholesale gas supply portfolio as Head of Wholesale Gas and now as General Manager, Energy Supply and Origination. Phaedra leads the transformation of AGL’s energy supply portfolio through this dynamic time in the energy market.

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OIL & GAS

PERCEPTION THE KEY TO OIL AND GAS SUCCESS International experts and Australian industry leaders will provide up-to-date analysis, case studies and technical know-how on the big issues facing our industry, as they converge in Brisbane this May for the annual APPEA Conference and Exhibition. Ahead of the event, Russell Curtin, Partner & Oceania Oil & Gas Leader, EY, discusses industry highlights from the past twelve months and the major issues ahead we all need to consider.

In your view, what have been the key highlights/successes for the industry in the past 12 months? The past twelve months have seen a number of exciting developments in the oil and gas industry that all underscore the importance of gas in the regional energy mix, and create great opportunity for Australia in general. We have seen great progress in brownfield LNG developments including Scarborough, Browse and Barossa Caldita driven by the regional demand opportunity. And at home, assuming high rates of penetration and advances in technology of renewables, we still see strong demand for gas. The domestic gas landscape has seen Beach integrate Lattice, Mitsui acquire AWE and Santos acquire Quadrant. And while we have seen some progress on advancing the badly needed and politically stranded resources in NSW and the Northern Territory, there has been much activity to firm the east coast domestic gas supply with LNG import terminals progressing their investment cases. Finally, in the midst of a low exploration spend this country, what little exploration drilling there has been has seen success in the Dorado discovery – the largest oil discovery in Australia for decades. What do you predict will be the major issues that the oil and gas industry will be dealing with in the coming 12–24 months? Critical to the success of industry in Australia is that old intangible “perception”. Intangible in nature, it’s hard to define the cost of the current issue and is better considered an opportunity to harness in shaping the nature and extent of future success. The findings of the Hayne Royal Commission into the financial services industry are a stark reminder of this. The findings set out principles for guiding financial services companies on their obligations to customers and the broader community. These principles have broader applicability and it’s worth considering how the findings might apply to all industry including the oil and gas industry. Hayne questioned the fundamental pillars upon which organisations are built. He has called into question what is valued, how organisations are governed, what is produced, how products

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are sold, and how individuals can be held to account. This thinking on culture and values has also been reflected in the recently released ASX Corporate Governance Council revised guidelines which set out thinking on best practice corporate governance. To be successful in addressing this challenge we must consider alignment of the levers of culture including the complex interplay between them. This might include the following key questions. »» Do you have a structured, organisation-wide view of current culture? »» Is your current culture supporting you to meet your purpose and strategy? »» Are you clear on your desired culture, and has the Board endorsed this target? »» To what degree are you measuring and reporting culture to your leaders? »» To what degree do you perceive cultural tension in your organisation?

As a key contributor to the event, the APPEA Conference is clearly a major strategic conference in EY’s calendar. What do you anticipate APPEA 2019 will deliver to delegates at such a crucial time for the industry? APPEA 2019 is a chance to celebrate the industry’s crucial position in supplying secure, affordable and sustainable energy to Australia and the region. We can all reflect on the commercial and technological successes and breakthroughs which have made Australia’s oil and gas industry among the most innovative and competitive in the world. It has long been forecast that commodity price volatility was likely to be sharper and more frequent than in the past couple of decades, and that forecast is holding true. And with a Federal Election looming, there will be volatility and uncertainty in the media too. Resilience remains a key characteristic of future success. Oil and gas makes a significant contribution to the Australian economy and will continue to do so for the foreseeable future. The APPEA conference provides a connection to robust parts of our economy and offers delegates the opportunity to remain informed, insightful and relevant. Not only can we help the industry remain strong, we can also play a leadership role in the energy future for Australia.


OIL & GAS

Russell Curtin will be at the EY Collaboration Centre in the APPEA 2019 Exhibition to discuss the hot topic of Reimagining the energy future at 1pm Tuesday 28 May. For further information on APPEA 2019, visit www.appeaconference.com.au

Russell Curtin.

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INDUSTRIAL ENERGY

As prices across the National Electricity Market become increasingly volatile, and as business and community expectations move users towards renewable sources of energy, industrial users around Australia are increasingly turning to Power Purchase Agreements (PPAs) to meet their energy needs. We take a closer look at some of the PPAs recently signed in the Australian energy market, and consider the role traditional energy industry suppliers can continue to play in this new paradigm.

POWER PURCHASE AGREEMENTS:

REVOLUTIONISING ENERGY RETAIL By India Murphy, Journalist, Energy Magazine

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INDUSTRIAL ENERGY

P

PAs provide consumers with an alternative to purchasing from traditional retailers and instead enable consumers to negotiate a longer term contract with a stable price for the supply of renewable energy. Purchasing power at a consistent rate is obviously an advantage in the current fluctuating market, and provides a much needed sense of security for buyers. Against a background of sharply rising electricity prices, particularly since the closure of the Hazelwood coal-fired power plant in Victoria in 2017, corporate Australia’s desire for more certainty and lower energy prices has contributed to a sudden spurt in the corporate PPA market. Since taking off in 2016, almost 30 PPAs have been signed, supporting solar and wind projects with a combined capacity of nearly 3600MW1. These have contributed to the recent boost in renewables investment, a positive outcome as Australia pushes towards a more sustainable future. At the time of print, 48 per cent of current Australian corporate PPAs are solar, eight per cent are a mix of wind and solar, and the remainder of the PPAs are wind2. Let’s take a closer look at some of the most recently signed PPAs in the Australian energy market. Viva Energy and Acciona Australia Victorian projects currently dominate the share of PPA projects, accounting for 47 per cent of the renewable project capacity3. This statistic includes Viva Energy, who entered into a PPA with Acciona Australia to secure stable pricing on approximately 100GWh per annum of electricity from Acciona’s Mt Gellibrand Wind Farm in February 2019. The Mt Gellibrand Wind Farm in Victoria produces 30 per cent of all wind farm generation in Australia, and was completed late in 2018. Viva Energy supplies around a quarter of Australia’s liquid fuel requirements, and their Geelong refinery is one of the state’s largest electricity users. The PPA will enable the refinery to begin the transition to renewable energy, with the wind farm currently powering one third of its electricity load. Viva Energy CEO, Scott Wyatt, said that the PPA was a “win-win outcome” for everyone involved. “Access to reliable and affordable electricity is critical for our refining operations which need to operate continuously and be able to compete with large scale refineries overseas,” Mr Wyatt said. Acciona Energy Australia Managing Director, Brett Wickham, said they were pleased to be working with Viva Energy on the corporate PPA and that they shared their commitment towards greater energy productivity and the environmental benefits. “Companies like Viva Energy understand the value alternative energy supply solutions, such as this wind-backed corporate PPA, offer in reducing electricity price volatility and costs,” Mr Wickham said. Jacana Energy and NT Solar Investments The Northern Territory is benefiting from a PPA which will enable it to be powered by ten per cent renewable energy by the end of 2019. Jacana Energy and NT Solar Investments’ PPA will generate energy from two 10MW solar farms which will be developed by Australian renewables developer, Tetris Energy, in collaboration with Infigen Energy. The farms at Batchelor and Manton Dam are expected to generate enough energy to power 5000 homes after they are completed in the second half of 2019. The Director of Tetris Energy, Frank Boland, said, “The Northern Territory has enormous opportunity for renewable energy and Tetris Energy is excited to be a part of the Territory Government’s initiatives to enable this private sector investment in new renewable energy projects. “Jacana Energy customers located all over the Darwin-Katherine network will receive the benefits of clean renewable electricity. By using the latest in single axis tracking Solar PV technology, it will allow the plants to generate more power in the mornings and evenings.” “In sourcing competitive, renewable energy, these projects represent real value for both Jacana Energy customers and the Northern Territory,” said Jacana Energy CEO David Brown. Flow Power and BayWa r.e. PPAs also allow smaller scale energy consumers to purchase lower-rate, renewable power, which is the case with Flow Power’s recent agreement with BayWa r.e.. Their agreement will see Flow Power purchasing 40MW from two of Northern Victoria’s

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largest wind farms, Yatpool and Karadoc, and will enable a greater number of local businesses to access the wholesale power over an extended period. The agreement also marked a milestone in Baywa r.e.’s development of the Yatpool solar farm, which will be the company’s second largest farm in Australia and is due to be completed later this year. Director of BayWa r.e. Solar Projects, Daniel Pearsons, said that PPAs are fundamental to the success of solar energy projects of larger scale. “We’re very pleased to find a partner in Flow Power, who, in a restricted PPA market, will help us to bring renewable energy to businesses of all sizes across Australia.”

Edify Energy and Delta Electricity Octopus Investments and Edify Energy are investing more than $450 million to build Australia’s largest solar power station in Darlington Point, New South Wales. The project is underwritten by a ten year PPA with Delta Electricity, which will take 55 per cent of the output. Once the Darlington Point power station is operational, it is estimated it will

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generate 685,000MWh of renewable energy each year, which is enough to power approximately 115,000 homes. Octopus Investments Managing Director, Sam Reynolds, said Darlington Point ticked the right boxes for them. “Projects need to stack up economically, not just environmentally, for our investors.” Edify Energy developed and structured the Darlington Point Solar Farm and are retaining an equity stake in the project. Edify will work with Octopus through construction and will undertake the long-term asset management service for the solar farm through operations. “Bringing projects like this to life shows how the solar industry has come of age in Australia as a mainstream choice for investors, retailers and consumers of energy,” Mr Reyonlds said.

Westpac and Spark Infrastructure Westpac is the latest major player to sign a PPA, recently committing to source 63GWh of renewable electricity annually to power its operations globally. The PPA follows Westpac’s pledge to source 100 per cent of its energy from renewable sources by 2025, joining a growing band

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Corporate Renewable PPA Deal Tracker, Energetics’ Knowledge Centre, Energetics https://www.energetics.com.au/insights/knowledge-centres/corporate-renewable-ppa-deal-tracker

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Corporate Renewable PPA Deal Tracker, Energetics’ Knowledge Centre, Energetics https://www.energetics.com.au/insights/knowledge-centres/corporate-renewable-ppa-deal-tracker

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Corporate Renewable PPA Deal Tracker, Energetics’ Knowledge Centre, Energetics https://www.energetics.com.au/insights/knowledge-centres/corporate-renewable-ppa-deal-tracker

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INDUSTRIAL ENERGY

of big businesses moving away from traditional power sources amid the global push to a lower carbon economy. Head of Westpac’s Energy and Utilities property team, Ceri Binding, said, “One of the most exciting things about the PPA is that we’re effectively underwriting the development of a new solar energy facility. “It will create incremental renewable energy capacity, generating enough electricity to power the equivalent of 36,000 homes, and employment opportunities in the local area.” In simple terms, the PPA will see Westpac pay Bomen Solar Farm for an amount of renewable energy it will put into the grid, and the equivalent amount consumed by the bank will be recognised as having zero emissions. “The PPA would deliver 45 per cent of the bank’s 100 per cent clean energy target by 2021 and a range of options including rooftop solar installations on its larger buildings and further supply agreements would be assessed to hit the 2025 target,” Ms Binding said. “It is economically the right thing for Westpac to do.” The Bomen Solar Farm project, to be operated by listed utilities player Spark Infrastructure, will feature high-efficiency photovoltaic modules expected to produce more than 240GWh of renewable energy each year – or enough to power the equivalent of all the homes in the local Wagga Wagga region. Ms Binding said the bank chose the Bomen Solar Farm project and partnership with Spark Infrastructure as it ticked boxes not only in regards to electricity supply, but also social outcomes for the local Wagga Wagga community, including a community fund to

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develop student scholarships, youth facilities and vegetation and habitat regeneration.

PPAs are here to stay With an increased number of PPAs flooding the energy retail market, the industry should expect that this model for the sale of energy is here to stay. The industry should also realise that with PPAs offering customers a choice for their energy supply, which offers both a renewable alternative at a stable cost, energy consumers will expect to see more retailers offering these same conditions in their contracts. So how can traditional energy retailers get involved, and ensure they don’t get left behind? There are many opportunities for traditional retailers to provide a service element of a PPA contract, particularly in the complex areas of billing and regulatory compliance. Just like the current energy network environment, the retail market is rapidly evolving, and it’s likely that the years ahead will see a combination of traditional energy retail contracts alongside PPAs in the marketplace – it’s not a question of one or the other, it’s about how both of these models of energy retail can best co-exist together. Like with many things in the energy market today, it’s the companies that are best able to adapt and pivot to the changing needs of customers that will be best prepared to embrace, and tackle this new mode of energy retailing head on. June 2019 ISSUE 6

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THE LYNCHPIN THAT ENERGY MARKETS There’s no longer any doubting the fact that communities, government and industry overwhelmingly support moving our energy sources towards ones which are renewable. With this shift will come a huge boost for energy storage technologies, allowing us to enjoy the benefits of clean energy, regardless of whether the sun is shining or the wind is blowing. Genex Power, led by Founder and Executive Director Simon Kidston, may be a relatively new player in the Australian energy market, but they have their sights firmly set on utilising energy storage to develop the renewable energy hub our future energy market will need. We caught up with Mr Kidston to learn more.

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ince they first burst onto the energy scene in 2011, Pumped hydro moves to the fore Genex Power has been focused on making a major With stage one of the project now complete, Genex has turned impact on the way the energy industry thinks about its sights firmly to the main prize, the Pumped Storage Hydro renewable energy developments. For Genex, element of the development. renewable generating assets, such as wind and solar, “Right now is probably the most exciting time in the company's must be linked with some form of storage, whether history, as we embark on this next stage,” said Mr Kidston. that be in the form of a lithium battery, or in the form of a pumped Genex has just signed an agreement with a joint venture of hydro element, as is the case at their major Kidston development McConnell Dowell and John Holland (MDJH-JV) for the two in Far North Queensland. companies to immediately commence the early works associated Comprising a separate 50MW solar farm, as well as a 270MW with the hydro development. solar farm linked with a The early works 250MW Pumped Storage program will focus on work Hydro Development, the surrounding the hydraulic project is a testament to design and related activity the company’s philosophy for the hydro turbines, one that renewables and of the longest lead time storage must co-exist. items in the construction “Essentially, in our mind, program. This will then be you can’t have renewables followed by preliminary without storage,” said electrical design work and Simon Kidston, Founder other project preparation and Executive Director of activities. To this end, the Genex Energy. “Right from joint venture has already the start, we really viewed secured a supplier for the Kidston as a Renewable hydro turbines, European Energy Hub, where we turbine supplier ANDRITZ. produce solar power and The other critical couple it with a pumped moment for the project hydro element to be able came in December to store that power for last year, when Genex when it’s most needed.” Remnants of the site’s history as a gold mine signed a Term Sheet with can be found throughout the project site. The initial 50MW solar EnergyAustralia, which will farm, which formed the first see the big three gentailer stage of the development, was completed in December 2017. The potentially purchase energy from the hydro element of the project, company was very clear in its decision to prioritise this element of and take a stake in it as well. the Kidston Renewable Energy Hub, for two main reasons - first, According to Mr Kidston, Genex sees this transaction as being completing this project, and connecting it to the National Electricity the important and defining transaction to deliver the project for two Market (NEM), provided them with a cash-generating asset which main reasons. would contribute to the next stages of the project. Secondly, Firstly, EnergyAustralia will potentially take a 50 per cent stake getting stage one of the project up and running sent a clear signal in the project, which is an important acknowledgement from a big to potential investors, demonstrating the company's credibility, industry player about the viability of the project. track record, and capacity to take on large projects.

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STORAGE

MAKES FUTURE RELIABLE

The combination of solar plus pumped storage hydro is critical to the Kidston Renewable Energy Hub.

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The other important part is that EnergyAustralia will provide a very long-term revenue arrangement for the project, enabling Genex to secure finance through the Northern Australian Infrastructure Facility (NAIF). This government body required the project to be aligned with one of the big gentailers before it would agree to lend the debt to the project, and the EnergyAustralia Term Sheet now successfully fills this requirement.

The crucial role of hydro For Mr Kidston, who has a background in the world of finance, the move into the world of energy is one that has been born out of a long-time fascination with energy and the way the markets work. This fascination with energy, and a desire to make a mark within the industry, has evolved as the industry itself has evolved in recent years, and it’s a thrill for Mr Kidston to be so close to getting the Kidston Renewable Hub – and in particular the pumped hydro element – close to the construction phase. “If you look at energy storage globally, 98 per cent of all energy storage globally is by hydro, with the balancing two per cent in batteries and other technologies,” said Mr Kidston. “So clearly hydro is a mature technology, it's been around for a hundred years. But in terms of the people on the street, when they think of energy storage, they think of batteries. I can certainly understand that, but really, the function of pumped storage is identical to the function of batteries. It just stores energy by virtue of water and elevation.”

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According to Mr Kidston, the reason the concentration of hydro has a much higher penetration is the fact that it’s a more established technology - it has been around for over one hundred years compared to the much more recently established lithium batteries. In addition, the economics heavily favour hydro, which is about 15 times cheaper than lithium batteries and has an economic life of a hundred years, versus a typical battery life of around ten years. What batteries do have over hydro storage is the fact that they aren’t location specific in the same way that hydro projects are. A very unique set of circumstances need to be in place for a hydro project to be viable, from elevation, to rock type and more. Whereas for batteries, they can be installed virtually anywhere. “So in our view, we don't see it being one or the other, we actually see hydro and batteries as being complementary storage technologies.” Ultimately what will be needed in the next ten years is a range of energy sources to fill the void left by retired coal-fired generators. These new sources will largely be renewable, and while they can’t be relied upon when the wind isn’t blowing, or the sun isn’t shining, energy storage options which offer a quick start-up time (the Kidston hydro project will have an estimated start-up time of 30 seconds), will become critically important. “Batteries and hydro will be the lynchpin technology to make the energy markets reliable in the future, as they have been in the past.”

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To 50MW solar farm, which is already producing revenue for Genex.

The next steps for Genex The key focus for Mr Kidston and Genex in the coming months is securing the finance for the hydro element of the Kidston project and getting construction underway. But beyond this, the company is already exploring future renewable energy projects which it can develop around the country. “We’ve actually secured the rights to a solar development in New South Wales called Jemalong, which is located near Parkes in New South Wales. That project, we believe could commence construction in the next three or four months, so we’re quite excited by that. “Really, our business focus is always going to be energy storage and renewable energy generation, so we see ourselves as technology agnostic. So we would look at a battery type situation if the economics justified it. “We won’t just be a hydro company; we see ourselves as an energy storage company more than anything. “We just want to build on the learning of the last three years, and use that to continue to add value to the Australian energy market.”

The Eldridge Pit, part of the 250MW Pumped Storage Hydro Development.

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STORAGE ENERGY PARTNER CONTENT

LOOKING BEYOND LITHIUM BATTERIES: INNOVATION IN ENERGY STORAGE Universities around Australia are taking a leadership position when it comes to how they source their energy needs and it’s no different at the University of the Sunshine Coast (USC) in Sippy Downs, Queensland. The University has adopted an ambitious target of becoming carbon neutral by 2025 and in order to do this they recognised that innovative, forward-thinking solutions were needed. Enter the water battery – a unique solution that highlights the fact that when it comes to energy storage, lithium batteries are not the only solution.

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ENERGY PARTNER CONTENT STORAGE

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he University of the Sunshine Coast’s (USC) journey towards carbon neutrality began approximately five years ago as an initiative of a Sustainability Management Committee. It was tasked with the goal of making USC a carbon neutral university and achieving proper certification across all of the University’s seven campuses. Led by Dennis Frost, USC’s Manager of Energy and Infrastructure, and Iona Beauly, USC’s Director, Asset Management Services, work commenced on a comprehensive carbon abatement management plan, analysing sources of electricity use and emissions. This work followed an established method that looked at direct and indirect sources of emissions, and the boundaries USC would draw, among many other things. From this work, USC determined the most significant source of energy consumption on its campuses is the cooling of their buildings – hardly a surprise for a university based in Queensland – so naturally, this was the first thing the

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University investigated when it came to cleaning up the energy being sourced. USC then developed a carbon abatement cost model, looking at all the potential actions that could be taken to reduce the grid electricity used in the cooling of its buildings. For each of these actions they then looked at the average cost per tonne of emissions. USC’s building cooling systems run on chilled water; and by undertaking this optimisation research, a natural starting point was to invest in reducing the energy required to chill said water.

The best path forward Once the target focus area was identified, USC began working closely with environmental solutions provider Veolia to determine the best path forward. “There was a lot of really detailed, technical analysis of what specifically we would build, how we would do it, and how quickly it would pay itself off,” said Dr Graham Ashford, Deputy Head of USC’s School of Science and Engineering. “That’s where the partnership with Veolia has been so innovative in my mind. Together, we developed the solution to install solar PV across the University and use the energy from this PV to chill the water; essentially turning our water tanks into thermal batteries.” “It’s been a really great process to be involved in over the last couple of years, to see how it’s progressed and come to fruition.” Together, USC and Veolia developed a system involving 2.1MW of solar PV, which produces enough energy to cool 4.5ML of water, meaning this water effectively acts as an 8MW battery. It is expected that the water battery project will reduce the campus’s grid electricity use by 40 per cent and lead to an estimated $100 million saving over the 25-year life of the project. According to Dr Ashford, the decision to develop the water battery, as opposed to turning to a traditional storage method such as lithium-ion batteries came down to one simple factor – cost. “What I liked about this process was that we were pragmatic about it,” said Dr Ashford. “We were looking for the lowest cost way that we could reduce emissions from our cooling operations, purely because the less money we spent here, the more money we would have for other abatement initiatives.” Life expectancy and degradation of the different storage options were also key factors influencing the improved cost

outcomes of the thermal battery option. While traditional electrical batteries will degrade over ten to 15 years, the solution developed by USC and Veolia will last 40 years – and not degrade at all. Another benefit of the thermal battery option relates to the nature of when USC uses its electricity. “When we looked at the thermal battery option, we saw that the solar PV could chill our water during the day, and because it would remain cool overnight, the economics and practicality of the thermal battery meant it came out clearly as the superior option,” noted Dr Ashford.

A meeting of the minds According to Angela Cooney, Veolia’s Sustainable Solutions Manager for Energy, the company and the University share a number of the same values, which has provided the two organisations with a solid base from which to build their business relationship. “We have so many aligned values, especially in relation to sustainability and social responsibility,” said Ms Cooney. “It’s USC’s project, but because we’re both working on something we are genuinely passionate about, it’s quite symbiotic from that perspective.” Andrew Darr, Veolia’s Regional Queensland Energy Services Manager, couldn’t agree more. “Getting to a point where you’ve got alignment between the two organisations’ cultures to work together, and create something new, is extremely important. You need to have that true and open and honest dialogue to work through the challenges.” And now, with a solid foundation established, USC and Veolia plan to continue working together to bring about more energy initiatives to the University. “There’s huge things there in the pipeline, and some really cool, innovative solutions,” said Mr Darr. “USC are also very keen to explore living lab environments, involving students with the work being done with the water battery and other projects we’re working on – it gives the University a competitive edge in terms of the learning that they can offer their students, while also helping to achieve their carbon abatement goals.” With the water battery project, USC is at the beginning of its journey towards carbon neutrality, and what is set to be a long and mutually beneficial relationship with Veolia.

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FUTURE ENERGY ENERGY PARTNER CONTENT

BALANCING A

CHANGING Southern Pacific Sands is taking control of its energy mix with gas, electricity and solar all playing a role.

by Ann-Maree Andritsakis, APPEA

APPEA, the voice of Australia’s natural gas industry, has introduced a new initiative called Brighter to promote the success stories and benefits of the product to the country. Here we explore the continuing role of gas in Australia’s quickly changing energy mix.

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usinesses around the country are taking control of their energy mix as Australia looks towards a more sustainable future, but what role does natural gas play in working with newer energies and creating a reliable energy system? With solar and wind energy entering the market at a rapid pace, Australian businesses are going green, opting for renewable energy as part of their energy mix for a variety of strategic, economic and sustainability reasons. However, as market operators have pointed out, the evolution of our power system to renewable energy can cause volatility in the grid, and solutions need to be identified to remedy this. Aurecon Managing Director for Energy, Resources and Manufacturing, Paul Gleeson, says that businesses should embrace renewable energy, and at the same time look at the role other energy sources, such as natural gas, will continue to play in the energy system. “Natural gas can be an enabler of renewable energy, as one of the options for providing firming and backup in a volatile market. “As more intermittent renewable energy is fed into the wholesale market, we are seeing larger peaks and troughs in the system as our supply and demand profiles don’t necessarily align throughout the day or throughout the year. “From the consumer’s perspective, we are also contributing to those larger peaks through our choices and behaviours, much of it because of our increased dependence on technology and the electrification of so many of the devices and appliances in our lives. “We are still in the early stages of our transition to a low carbon future, and the system still relies on having some synchronous generation in the mix. Natural gas is an obvious choice – it has lower emissions than other traditional fossil fuels, and can be brought online within a matter of minutes.” But how does this affect everyday businesses? Natural gas serves to support the renewable energy that businesses are adopting. Not only will it back up solar and wind

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energy, more importantly, it does still play a part in the day-to-day operations of manufacturing processes which require its specific technical properties. Queensland sand mine and quarry business, Southern Pacific Sands, is planning to invest in a 30MW solar farm at its Ningi site. “Currently, at peak, we are consuming less than 5MW of energy per annum. With the available land on site, we’re planning to build a 30MW solar farm and export the extra power back to the grid,” said Will Harrison, Chief Operating Officer at Southern Pacific Sands. “However, while we are striving to use as much as renewable energy as possible, the reality is that we still need gas on site and still need to remain connected to the grid. “The use of propane gas is the only way of drying our sand, which is the most value-adding part of our manufacturing process. For that process, there’s no substitute for gas.” Material changes are occurring in the way we use and manage energy, both on an individual and a business basis, alongside renewable energy targets being set, state by state. Natural gas is ideally suited to balance an overloaded and volatile electricity system while continuing to meet specific technical feedstock requirements for business operations the country over. A future with hydrogen and battery energy is certainly on the cards, but while these sources and their respective technologies continue down their cost curve, natural gas serves as the ideal transition fuel to a cleaner, greener future in Australia.

ABOUT BRIGHTER

Brighter is an initiative of APPEA, the voice of Australia’s oil and gas industry. The program is a new way of talking to Australians about the role this naturally occurring and abundant resource plays in their everyday lives. For more information and to sign up for updates visit bright-r.com.au

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19 TH ENERGY IN WESTERN AUSTRALIA CONFERENCE Delivering In Uncertain Times 18th – 19th September Hyatt Regency Perth The Energy in WA Conference is the State’s premier energy event, offering excellent speaker programs and value for money since 1996. The 2019 theme is Delivering in Uncertain Times. Speakers will assess the state of play on a range of energy matters, such as fuels, technology, market and legislative developments, supply and security, emissions, and consumer trends while looking to the future. The event provides excellent networking opportunities, with more than 200 participants attending the 2018 Conference. 

Who attends? The Energy in WA Conference sees a diverse group of Energy Industry Professionals attending the conference each year with delegates attending from a range of sectors within the industry including Energy Retailers, Consultants, Energy Providers and Government Services. Industry professionals attend with a wide range of experience at every industry level. The graphs below contain figures on the industry experience, industry level and industry sectors of the Energy in WA 2018 Delegates.

19%

9%

4% 9% 18%

41%

Industry Sector

Industry Level

Industry Experience

Mid-level Manager

0-1 year

Operations/Analyst

1-2 years

32%

3-5 years

18%

20 years plus

Energy Customer

5%

Energy Generator

7%

15%

11-20 years

Consultant

16%

Senior Manager

50%

6-10 years

21%

Energy Infrastructure Energy Retailer

13%

5%

Energy Service Provider

18%

Government Services Others, including Academia

Registration Pricing Early bird registration must be booked and paid before 15th July 2019 Early Bird Standard Member

$1,340

$1,500

Non-Member

$1,500

$1,660

New Member

$1,500

$1,660

1 Day Registration

$795

$795

Student Full Registration

$440

$440

1 Day Student Registration

$330

$330

PROUDLY ORGANISED BY:

We thank our sponsors that have already committed to support the conference this year.

Platinum

Silver

EVENT COORDINATED BY:

Bronze

Sponsor

Email: promaco@promaco.com.au Phone: (08) 9332 2900

www.energywa.org.au

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HYDRO

UNDERPINNING

AUST RALIA’S RENEWABLE ENERGY FUTURE – POWERING AHEAD WITH

SNOWY 2.0 by Paul Broad, CEO of Snowy Hydro Limited

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n 2019, as the mighty Snowy Mountains Scheme celebrates its 70th anniversary, it is fitting that another era for this iconic engineering and construction marvel begins. We are embarking on the next chapter of the remarkable Snowy story with Snowy 2.0, a major pumped hydro project that will underpin Australia’s renewable energy future for generations to come. We believe the National Electricity Market (NEM) has passed the tipping point. Last year Snowy Hydro contracted 888MW of wind and solar projects, which gave us incredible insights into the changing energy market and future pricing. This process confirmed many of the assumptions of Snowy 2.0’s business case, including that renewables are now the most economic form of new generation (even when firmed by hydro or gas). Snowy 2.0, like the original Snowy Scheme, is vital to Australia’s economy and our energy transition, by providing the massive storage and on-demand generation needed to balance the growth of wind and solar power, and the retirement of Australia’s aging fleet of thermal power stations. In short, it will underpin the stability of our energy system as Australia moves into a lowemissions future. The project Snowy 2.0 is a major pumped hydro expansion of the Snowy Scheme. A nationally-significant project, it will add 2,000MW of energy generation and large-scale energy storage of 350,000MW hours, or up to 175 hours at full capacity.

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The project links two dams, Tantangara (elevation 1,222m) and Talbingo (elevation 546m), through a series of tunnels and an underground power station with pumping capabilities. Large volumes of water will be stored in the upper dam as “energy in waiting”, and then used to generate on-demand to power homes and businesses within minutes, at peak times. As Snowy 2.0’s pumping capabilities operate in a closed system – water is recycled between the upper and lower dams – the same water can be used to generate power repeatedly, making the most of available water resources. Without reliable, large-scale storage, excess energy in the system is wasted. The efficiency of the NEM is improved by pumped hydro, which absorbs and stores surplus energy at times of low demand. This might mean pumping with surplus wind energy overnight, and from solar plants in the middle of the day, so that water is available for generation at the times of peak demand. Snowy Hydro has plenty of experience with pumped storage. We have been successfully operating pumped hydro at our Tumut 3 Power Station for decades, and it has been invaluable for energy consumers, especially in years of drought.

Why the NEM needs Snowy 2.0 The Snowy Scheme, with its 16 major dams, can already store huge amounts of energy. While this is sufficient for the current NEM, it will not be enough in a lower emissions economy, powered by wind and solar generation that is cheap, but with supply patterns that are difficult to predict and that don’t always coincide with the www.energymagazine.com.au


HYDRO

The Tumut 3 Power Station, which forms a part of the existing Snowy Scheme. © Snowy Hydro Limited 2019

energy demands of households and businesses. As the fourth-largest player in the NEM, Snowy Hydro already The cost and zero emission advantages of renewable energy provides much-needed competition in the NEM – Snowy 2.0’s will only be realised if a sufficient amount of energy from these fostering of new renewables, and additional supply of hydro intermittent renewable energy sources can be stored for later use generation, will create further market competition to help drive the when required. This is where Snowy 2.0 comes to the fore. best outcomes for consumers. Snowy 2.0 and its fast start, clean hydro-power and large-scale The storage capacity of Snowy 2.0’s dams will help ensure the energy storage will work together with renewables to fill the stability and reliability of the NEM even during prolonged weather gaps in generation events, such as and manage wind or solar system instability. droughts. Snowy The combination 2.0, along with the of intermittent existing Snowy renewables, firmed Scheme, will more by on-demand efficiently deliver generation from electricity to the Snowy Hydro and major load centres Snowy 2.0, will of Sydney and help ensure that Melbourne at times households and of high demand. businesses have Independent Snowy 2.0 cross-section illustration © Snowy Hydro Limited 2019. reliable, stable and economic analyses affordable energy prepared by into the future. leading energy market modellers Marsden Jacob Associates Of course, the ability for hydro, gas or diesel peaking energy to shows Snowy 2.0 is the least cost large-scale energy storage firm renewable energy, turning wind and solar into a reliable end solution for the NEM as the economy decarbonises. product, is already occurring and Snowy Hydro is a market leader We understand that while Snowy 2.0 will provide huge amounts in these developments. of storage, more will be required into the future. Snowy 2.0

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The Talbingo Dam, which will be part of the Snowy 2.0 Scheme. © Snowy Hydro Limited 2019.

A map of the existing Snowy development, showing where Snowy 2.0 will fit in. © Snowy Hydro Limited 2019.

could act as a model for further pumped hydro expansion projects in the area in between Tantangara and Talbingo, increasing the Scheme’s capacity by up to 8,000MW. That’s why we are already planning for a Snowy 3.0. Other pumped hydro projects across the NEM, commercial and household batteries and demand management will also have a role to play.

Project activities – current and ongoing After a two-year journey of research, planning, project design, preparation and a lot of hard work, we are excited and incredibly

proud to be underway with the Snowy 2.0 project. Snowy 2.0 Exploratory Works have started in the Snowy Mountains, with pre-construction activities and access road upgrades being carried out by Australian contractor Leed Engineering and Construction. We have appointed Future Generation, a joint venture between Australian construction company Clough and international tunnelling specialist Salini Impregilo, for the civil works and Voith Hydro to deliver the latest hydro-generation technology in the new Snowy 2.0 power station. We expect first power from Snowy 2.0 in late 2024. The energy sector supports the Australian Energy Market Operator’s proposed Integrated System Plan, which has identified transmission system upgrades needed for the shared network to connect the proposed renewable energy zones and new projects coming online. We believe that bringing forward the build of some of the key routes will bring benefits to consumers sooner. Building new transmission routes now will not only deliver constrained Snowy Scheme energy capacity to the NEM, but it will also connect many new, geographically-dispersed renewable energy and storage projects, including Snowy 2.0, to the shared network. There is plenty of information about Snowy 2.0 on our website www.snowyhydro.com.au including a comprehensive project overview and business case document, the latest MJA energy market report, an interactive map, videos and much more, and I encourage you to check it out.

Snowy 2.0 at a glance »» »» »» »» »» »» »»

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Up to three tunnel boring machines, as well as drill and blast techniques, will be used for Snowy 2.0 tunnelling and excavation About 40km of tunnels, including 27km of power waterway tunnels about 10m in diameter, will be excavated A power station with pumping capabilities will be located approximately 800m below ground Snowy 2.0’s machine hall, about 240m in length, will house six reversible pump-turbines and motor-generator units. Three units will be synchronous (fixed) speed and three will be asynchronous (variable) speed Each generator rotor, when assembled, will weigh over 400 tonnes A single, concrete-lined, inclined pressure tunnel will divert water into six steel-lined penstocks that feed water into the generating units At full generation, the water flowing through Snowy 2.0 power waterway tunnel will fill an Olympic swimming pool in just seven seconds

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HYDRO

HYDRO POWER:

THE BACKBONE FOR RENEWABLES IN AUSTRALIA by Steve Davy, Chief Executive Officer, Hydro Tasmania

Hydro power, and the role it will play in Australia’s energy system, has moved to the front and centre of mind of the industry as we seek out solutions that will help smooth the path to a future that is clean, affordable and reliable. Here, Steve Davy outlines the reasons why hydro power has moved from fringe player to a technology that could quite literally act as a “battery of the nation”.

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HYDRO

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ydro power is re-emerging as a serious contender to help solve the nation’s future energy challenges. For so long the renewable energy source taken for granted on mainland Australia, hydro power actually represents the largest current source of flexible and controllable renewable energy generation in the National Electricity Market (NEM) and offers terawatt hours of long duration energy storage. Its value was there for all to see during the recent heat waves that saw the people of Victoria relying on hydro power – some of it from Tasmania – to keep the lights on and the air-conditioning units working where possible as state-based generation failed to cope with record summer temperatures. Tasmania could have actually done a lot more at the time with over 450MW of unused hydro generation not being utilised because of a lack of enough interconnection with mainland Australia. The resurgence of hydro power in Tasmania, in the public’s mind at least, began with the announcement of plans for a massive expansion of Tasmania’s hydro power system announced in April 2017. Hydro power has served Tasmania well for over 100 years, but what was being proposed was for the nation’s smallest state to play a much bigger and more crucial role in Australia’s energy future. The Battery of the Nation concept was a bold vision that pitched Tasmania as a clean energy leader of Australia. The State would play a key role in filling the gap left by the retirement of coal-fired power and provide a solution to the unprecedented transformation of the NEM as it grapples with a rapid change of its generation mix.

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That transition is bringing significant uncertainty and risk to both generators and customers. The announcement helped kick-start a debate that Australia had to have. This centres on how best to use existing sources of renewable energy such as hydro power, along with pumped hydro energy storage and new sources such as wind and solar, to help maintain energy reliability, stability and security, and help to ensure future reliability while minimising price issues for customers. It also considers how this should be supported by the Federal Government, particularly through the Australian Renewable Energy Agency (ARENA). All this was clearly on the mind of the Federal Government in February this year when it put hydro power front and centre of a number of major announcements. Firstly was the welcome support for a proposed additional 1200MW of interconnection capacity between Tasmania and Victoria. This was quickly followed by support for work to identify a pumped hydro project in Tasmania that could be ready to go when a second interconnector comes online in 2025. More interconnection between Tasmania and Victoria can unlock the full potential of Tasmania to support the NEM as it transitions over coming decades. In its 2018 Integrated System Plan, the Australian Energy Market Operator (AEMO) forecast that up to 17,000MW of utility storage will need to be developed as part of a least cost transition of the electricity sector by 2040. Much of this could be needed sooner if the retirement of coal-fired generation occurs earlier. Storage is an efficient way to match generation with load. This will become increasingly important as our generation becomes

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more variable (through increasing wind and solar). The two main forms of viable energy storage are batteries and pumped hydro. Both will be required in the future. While batteries are ideal for short-term system response, pumped hydro is ideal for long duration storage. Pumped hydro is very much front and centre of Hydro Tasmania’s plans. It provides the flexible, responsive and dispatchable capacity and storage needed to meet Australia’s growing energy needs and there are thousands of megawatts of pumped hydro potential just in Tasmania. We have natural advantages with an existing hydro power system and landscape suited to pumped hydro development. Pumped hydro represents the next generation of Tasmanian hydro power, and will let us re-use our hydro water again and again to create clean energy. Pumped hydro, wind and solar will work together like a giant renewable energy battery, providing a stable and reliable clean energy system. When the wind blows and the sun shines, but people aren’t using much power, excess power can be used to pump water back up into storages. When the wind and sun aren’t generating enough power to meet demand, the pumped hydro system swings into action and makes up the shortfall. Pumped hydro will be particularly important if these highs and lows of energy last for many hours, even days. Pumped hydro also delivers

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many of the stabilisation services needed by the system. With the amount of coal power that’s likely to be decommissioned in coming decades, it’s clear that large scale hydro power storage projects like Battery of the Nation and Snowy 2.0 will be needed, and much more. As part of the Battery of the Nation initiative and supported by ARENA, Hydro Tasmania’s analysis shows Tasmania has a competitive and cost-effective solution to Australia’s future energy needs. And Tasmania has what the rest of Australia needs - low cost, reliable and clean energy. The Tasmanian Government recently described plans for a second interconnector, TasNetworks Project Marinus, pumped hydro investments and the wind resource unleashed as “the single biggest economic opportunity for our state over the next 15 years”. While undoubtedly true, there is a lot of work to do. It is crucial for the market to start addressing the challenges now as these projects take time to design and construct. Investment decisions are needed over the next two years to ensure solutions are available in advance of a market shortfall. Most importantly, we need to set the scene for a co-ordinated approach, involving government at the federal and state level and industry, to combating future energy challenges, with hydro power front and centre of the necessary solutions.

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assetmanagement FOR CRITICAL INFRASTRUCTURE

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CONFERENCE HIGHLIGHTS MULTIPLE SPEED NETWORKING SESSIONS DEDICATED TOPIC STREAMS EXHIBITION SHOWCASE INDUSTRY PANELS

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Interested in sponsoring or exhibiting? email

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WASTE-TO-ENERGY

WHERE ARE THE OPPORTUNITIES IN

WASTE-TO-ENERGY? During recent customer consultations across the Jemena Gas Network in New South Wales, customers said they expected the energy industry to innovate and plan ahead so that they can continue to use gas in a net zero carbon future. So how does an energy company like Jemena start to consider ways to make its network greener to meet industry and customer expectations? Gabrielle Sycamore, General Manager Gas Markets at Jemena explains. Greening the gas network As a country, Australia has committed to transitioning to a low carbon future, and the Federal Government has set a target to reduce carbon emissions by 26-28 per cent by 2030. The New South Wales government has committed to achieving net zero carbon emissions by 2050. Our challenge is to continue to supply safe and uninterrupted gas to customers, while ensuring this gas is clean and sustainable. Jemena has already begun this process with a $15 million power-to-gas trial, called Jemena Project H2GO, in partnership with the Australian Renewable Energy Agency (ARENA) which will demonstrate the capability of our 25,000km gas distribution network to store renewably generated, low emission, hydrogen gas. Now, waste-to-energy in the form of biomethane is also firmly on our radar as a potential decarbonisation solution. Sustainability through circular economies Jemena’s interest in waste-toenergy is rapidly advancing. We are working with customers, industry associations, biogas businesses and industry partners to identify suitable biomethane projects. Biogas is mostly a mixture of carbon dioxide and (bio)methane, which is produced when waste matter is broken down in the absence of oxygen. The

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biomethane could be injected into our network and used for heating, cooking and energy. It appeals to us because it is scalable and reliable, and we have the infrastructure to support it. We are looking at domestic and international commercial models and technology to assess suitable projects in New South Wales. We are also becoming increasingly aware of our potential role in the circular economy. The circular economy is when “waste” or end products are recycled or regenerated so they become the inputs for the next stage of the cycle. In the circular economy, resources are not a negative by-product, but an opportunity to develop sustainable economies. By unlocking the value of agricultural, food processing, and/ or municipal waste, and using it to generate energy instead of throwing it away, we can make sustainable and renewable biomethane accessible for our gas distribution customers. This whole of lifecycle approach brings multiple benefits. In addition to the commercial advantages, the circular economy underpins investment in local infrastructure, creating jobs and supporting local businesses. Additionally, these projects bring further environmental benefits by reducing landfill, providing thermal energy for local use and provide digestate (fertilisers) for agriculture.

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WASTE-TO-ENERGY

International learnings – local opportunities Australia lags behind international comparisons of biomass activities. A recent Bioenergy Australia report1 found Australia to be in the bottom quartile for bioenergy contributions, placing 19 out of 24 OECD countries reviewed. There are unique circumstances in Australia which may explain some of the disparities, however, we could clearly be doing more to learn from global case studies. For example, Vera Park in Helsingborg, Sweden2 is one of the most comprehensive circular waste management industry parks in the world. Everything on the site is reused, and businesses on the former municipal waste facility now use waste as their raw material for commercial activities. Sønderjysk Biogas Bevtoft in Denmark3 treats over 600,000 tons of biomass per year. The methane produced is upgraded to 99 per cent biomethane, which is directly injected into the gas grid. More than 51,000 tonnes of CO2 has been reduced, the equivalent annual energy consumption of 15,000 households or 10,000 cars. The potential for Australia to implement some of these technologies is exciting and we want to be part of it. Working with the waste industry Jemena has commenced discussions with NSW waste-to-energy stakeholders to explore opportunities and we have connected with industry bodies such as Bioenergy Australia and the Future Fuels Cooperative Research Centre. Waste-to-energy is exciting from a technology perspective, and also from a customer viewpoint. Early signs are that it can complement our portfolio and help deliver access to sustainable energy for homes and businesses. We are aiming to become an active player in the waste-to-energy sector in the next twelve to 18 months.

1 Bioenergy State of the Nation Report, produced by KPMG. 2&3 The role of anaerobic digestion and biogas in the circular economy. IEA Bioenergy Task 37

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WASTE-TO-ENERGY

There’s been quite a bit of attention on the topic of wasteto-energy lately, with a number of organisations making moves to either develop projects in this space or explore how they can be involved in this emerging sector. To get the inside word on how the energy industry can best take advantage of the opportunities that come with wasteto-energy technology, we caught up with Gayle Sloan, CEO of the Waste Management and Resource Recovery Association of Australia (WMRR).

MAKING A MOVE IN THE NEW ENERGY FRONTIER

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WASTE-TO-ENERGY

efore talking about waste-to-energy projects, it’s useful to take a step back and think about how the waste management and resource recovery industry thinks about waste and the way it is processed. The key framework underpinning waste management policy and practice in Australia is the Waste Management Hierarchy. This hierarchy prioritises specific waste management processes over others. It is based on environmental outcomes and ranks them in order of preference, from avoiding the creation of waste as the most desired outcome, and disposal to landfill as the least desired outcome. Materials such as clean plastics and paper or cardboard, which are placed into residential yellow lidded and commercial bins, can be recycled. Green lidded bin material can also be recycled, through composting or digestion processes. Currently in Australia however, red bin material is generally disposed of to landfill without additional value being recovered (other than landfill gas). It is at this stage that diverting this residual material to a waste-toenergy plant for energy recovery can provide better environmental outcomes. Gayle Sloan, CEO of the Waste Management and Resource Recovery Association of Australia (WMRR), is excited about the opportunities that will come with waste-to-energy technologies. “There is a genuine role for waste-to-energy for dealing with those residual materials that we can’t get value from in other ways,” said Ms Sloan. “Where I think it will be particularly effectively deployed is in the manufacturing sector, in places like paper mills, where they can develop an energy source that is quite complementary to their existing energy needs.” For example, Australian Paper is proposing to construct a thermal waste-to-energy plant adjacent to its Maryvale Paper Mill site in the Latrobe Valley, Victoria. This technology creates energy from the controlled combustion of non-hazardous waste materials that would otherwise go to landfill, with the end goal of meeting energy needs for their manufacturing processes while reducing their landfill to almost zero. The proposed $600 million waste-to-energy plant would process up to 650,000 tonnes of residual municipal solid waste, as well as commercial and industrial waste. It will allow Australian Paper to attain a sustainable, long-term and stable alternative baseload energy source to produce steam and electricity for the Maryvale Mill.

Diversion from landfill As well as meeting the energy needs of proponents taking on waste-to-energy projects, these projects also have a significant role to play in diverting waste which would otherwise be going into landfill. According to Ms Sloan, Australia’s policy settings require the diversion of approximately 80 per cent of waste that would have gone into landfill to other sources by 2030. With our current national annual waste tally at approximately 67 million tonnes, this leaves about 12 million tonnes still going into landfill – a huge number in itself. Ms Sloan estimates that waste-to-energy has the potential to reduce this figure of 12 million tonnes of waste in landfill by a considerable amount. Where Ms Sloan says more work needs to be done in Australia is in the area of building community awareness and knowledge about these technologies, as well as ensuring that we gain the social licence to operate waste-to-energy plants. “Waste-to-energy has not been widely deployed in Australia yet, whereas in other parts of the world, it’s a well-developed technology. One of the keys to achieving this will be building social licence and acceptance of these facilities.” There are more than 2000 facilities operating safely across North America, Europe, Middle-East and Asia – with more than 200 of these constructed between 2011 and 2015. The energy can be created by a number of processes (thermal and non-thermal), including manufactured fuels derived from waste, anaerobic digestion, combustion and gasification. “There’s definitely a perception around waste-toenergy that it’s not good. So we need to educate the market and the community that waste-to-energy is about complementing the existing energy source, and ultimately reducing reliance on it.” Complementing existing operations Apart from establishing the licence to operate, when looking at what the industry needs to consider next when it comes to the waste-to-energy sector, Ms Sloan urges the industry to think about the purpose of the energy developers might be looking to reinforce with a waste-to-energy product. “If you look at a paper mill type product, they need energy, obviously, but they also need the heat, steam and water that is a by-product of the energy production process. So the energy production is quite a complementary process to their existing manufacturing processes. “When you have the right type of waste, with the right calorific value – that’s where I see a lot of potential in this industry.”

POWERING CHANGE With waste-from-energy becoming an emerging part of the waste recovery chain, as well as the energy industry, WMRR will be hosting their third bi-annual conference on the topic in Canberra from 26-28 August 2019. For more information, head to the WMRR website: www.wmrr.asn.au

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WASTE-TO-ENERGY ENERGY PARTNER CONTENT

RESOURCECO STEPS UP ITS DELIVERY OF ALTERNATIVE ENERGY SOLUTIONS ResourceCo, a leader in the recovery and re-manufacturing sector, has further boosted its credentials in the delivery of lower cost alternative energy solutions across Australia with the appointment of a new CEO.

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enry Anning has been named Chief ResourceCo has been operating alternative fuel Executive Officer of ResourceCo’s plants for over ten years, working with major specialised energy arm, which companies including Adelaide Brighton Cement, supports the manufacturing SUEZ, Cleanaway and Boral. industry and high-energy The company manufactures process users with long-term, lowengineered fuel (PEF) from residential cost, renewable energy solutions. hard waste, commercial and industrial Mr Anning recently led Clean Energy (C&I), residuals from recycling and certain Finance Corporation’s (CEFC) bioenergy and construction and demolition (C&D) energy from waste financing programs, and materials. These are primarily waste timber is a former Associate Director at Low Carbon materials and also include non-recyclable Australia, focusing on bioenergy sector finance and plastics, cardboard, paper and textiles. industry engagement. ResourceCo’s state of the art alternative fuel plants Mr Anning’s experience and expertise will assist recover more than 90 per cent of all incoming materials ResourceCo to elevate its behind-the-meter waste-toHenry Anning. that would otherwise be sent to landfill. energy solutions. Mr Anning says ResourceCo is looking to develop “I’m delighted to be joining the leading provider of alternative new energy plants with biomass boilers to use the waste timber waste fuels in Australia at a time when manufacturers and highPEF, which effectively reduces reliance on fossil fuels while also energy users are crying out for real solutions,” said Mr Anning. reducing emissions. “The waste-to-energy sector is entering an exciting growth “It’s about providing a unique solution to the requirement for phase, with businesses looking for genuine alternatives to rising heat in manufacturing, and providing businesses with an over 90 gas and electricity costs, which have stung them over the last per cent renewable heat source as an alternative to gas, coal or five years. Some businesses have experienced a 400 per cent electricity. increase in gas prices. “For example, we can deliver a real solution for businesses with “ResourceCo provides a quality, long-term energy partner that existing boilers using between 100,000 gigajoules and a petajoule has a proven track record in helping businesses reduce costs of natural gas – simply by installing between a waste wood boiler while demonstrating responsible environmental management,” Mr of between five and 40 megawatts. Anning said. “These energy plants provide a critical piece of long-term infrastructure that delivers a fixed cost solution for our customers. It’s a win/win in terms of business and environmental outcomes.” ReseourceCo offers a model where they fund, build, own and operate energy plants, taking the risk and capital cost away from the user. Large energy users will be provided with lower cost, renewable heat or electricity under a long-term agreement with ResourceCo. Alternatively, ResourceCo can provide the fuel only under a long-term agreement. Having re-purposed over 50 million tonnes of materials, ResourceCo has proven credentials in delivering tailored solutions across a wide range of industry sectors including industrial and manufacturing, energy, construction, defence, demolition and rehabilitation, government, major infrastructure projects, mining, transport, waste and water. Its alternative fuel complies with the requirements of the Australian Government’s Clean Energy regulator under the Process engineered fuel (PEF) manufactured by ResourceCo Emissions Reduction Fund. is used to power energy plants with biomass boilers.

DID YOU KNOW? The manufacturing sector uses approximately 390 petajoules of gas for heat each year. This is the same amount of energy as the electricity used in 16 million Australian households each year. (Source: Department of the Environment and Energy, Australian Energy Update August 2018.)

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TOMORROW’S SOLUTIONS. TODAY


TRANSFORMERS AND SUBSTATIONS

ENHANCING ELECTRICAL SUPPLY IN THE ACT T​ o ensure the safe and reliable supply of electricity to the ACT, and support the future growth of the region, TransGrid has undertaken a joint project with the ACT Government and ActewAGL called the ACT Second Electrical Supply Project. The project includes the construction of a substation and will ensure TransGrid’s electricity supply meets the reliability level prescribed by the ACT Government.

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s transmission network service provider for the ACT, TransGrid must comply with licence conditions which require provision of two independent The standard includes the provision of two geographically separate 330 kV supplies to the ACT by 2020. TransGrid currently supplies the ACT load via its Williamsdale and Canberra substations. However, the Williamsdale substation is dependent on the Canberra substation. The requirement for a second, fully independent supply point is being met by the construction of a new substation located at Stockdill Drive. The project involves construction of a: »» 330 kV substation at Stockdill Drive »» New 330 kV transmission line that links the new substation to TransGrid's existing Canberra and Williamsdale substation, including some line rearrangements at the Canberra substation »» New ActewAGL 132 kV transmission line connecting the Stockdill drive substation to the existing A1 Woden to Canberra 132 kV transmission line Site works for the project commenced late last year, and it is expected that the project will be completed by December 2019. Selecting the site A number of factors influenced the decision to proceed with the Stockdill Drive substation site. The site needed to meet a range of criteria, including: »» Security of supply »» Impact on urban development potential

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»» »» »» »»

Environmental and heritage values Cost of infrastructure construction Land use planning, amenity and co–location Technical requirements

After a rigorous site selection process and collaborative working group with ACT Government agencies, the Stockdill Drive was identified, and then approved by the ACT Government in March 2015. Historically the ACT and surrounding areas have been supplied by a 132 kV transmission network emanating from the Canberra 330/132 kV Substation. While there is adequate capacity to supply the area, its location presented some challenges in efficiently supplying urban growth areas to the south-east of Canberra. In considering the need for a second supply point, TransGrid also determined that the infrastructure should be located at a reasonable distance from the existing Canberra Substation to ensure that no single “catastrophic event” could disable both sites. This would ensure that the supply into the ACT would be maintained in the event of any one site being damaged. As the project has evolved, it has also become apparent that there will be an opportunity to address the need to replace the aging 330/132kV transformers at Canberra Substation that have reached the end of their serviceable life.

Bringing the plans to life 2019 has been a busy year for milestones for the project. The year commenced with TransGrid obtaining leasehold on the site and shortly after the Department of Environment and Energy approved the Environmental Impact Statement. www.energymagazine.com.au


TRANSFORMERS AND SUBSTATIONS

In April, TransGrid received approval of the Construction Environmental Management Plan allowing construction to commence. At the time of print, TransGrid was planning to commence works on the transmission line and substation in the very near future. Planning and design of this project has taken into account a range of forward-looking energy demand forecasts for the ACT, and working in partnership with the ACT Government has allowed TransGrid to understand the energy needs in the area with a lot of detail. There have also been some ancillary works identified to help support future energy growth in the ACT, including line modifications and switchbay installations to support Evoenergy’s planned Molonglo Zone Substation (planned for construction in 2021) and Strathnairn Zone Substation (planned for construction approximately 2026) which will play a big role in supply to growing areas of the ACT.

Innovation in the substation TransGrid has plans to utilise a range of innovative design and construction techniques through the development of this project. Across the board, TransGrid is transitioning towards digital substations, having completed the Avon 330kV Switching Station in early 2018 using IEC61850 technology. This was achieved by digitising the control and protection signals from the yard with the use of outdoor merging units into the Secondary Systems Building. The benefit of using this design is reduced auxiliary power load and cables, resulting in significant savings on civil works associated with trenching and secondary systems buildings. Further, the use of redundant merging units and Ethernet www.energymagazine.com.au

infrastructure improves reliability through the use of virtual duplicated protection systems. For example the loss of a merging unit doesn’t impair the capability of the network and triggers an alarm. Stockdill Substation is also atypical of TransGrid substations, with the ‘rain garden’ system incorporated into the drainage design. The use of earthen swales lined with pebbles, and a variety of native grasses, filter nutrients out of the soil and release clean water off the site. The rain gardens are a result of collaboration with the ACT Government, and TransGrid’s environmental consultant WSP, and reduces the construction impact on the site.

Working in partnership The project is being jointly undertaken by TransGrid, the ACT Government and Evoenergy, which has provided a unique set of challenges to work within. All three stakeholders have formed strong working relationships as they moved towards site work commencement. The hurdles along the way have been well managed and continually followed up by TransGrid to minimise any critical milestone delays. TransGrid has a greater level of understanding of ACT requirements from the lessons learnt in the preparation of site works for Stockdill Drive and the required approvals processes when working in the ACT. With construction now imminent, and completion scheduled for the end of the year, the project will provide Canberrans with an enhanced security of supply, critically important as we move towards a future that is more reliant on clean electricity delivered through our networks.

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TRANSFORMERS AND SUBSTATIONS ENERGY PARTNER CONTENT

REDEFINING THE BENCHMARK

FOR OPTIMISED SUBSTATION ASSET TESTING Assets in a substation represent a large investment, and their condition and continued reliability is essential. Testing assets in a substation has long required the use of significant resources in manpower and time to obtain reliable and comprehensive results while ensuring the maximum safety of the workforce. OMICRON’s new approach to substation asset testing is proving that efficiency gains, without compromising safety and accurate results, are not only possible, but ensured. The challenges of substation asset testing Power transformers are widely considered the most crucial components in electrical transmission and distribution networks. Due to aging of transformer fleets in the field, regular diagnostic testing and condition assessment becomes increasingly necessary. Maryam Khallaghi, OMICRON’s Regional Manager for Australia and the Pacific, says that this can represent a big challenge for businesses. “Transformer designs can be very complex and measuring a variety of different parameters can be a time and cost intensive job. When performing different diagnostic tests, multiple devices and a frequent change of test leads are required. Individual phase measurements and multiple tap changer positions further increase the testing effort and outage time. “On average, an entire working day needs to be scheduled for the full range of routine tests, usually making it the most time-consuming asset to test in the substation. We realised that solving these problems would require a special solution.” Innovative solutions In 2017, OMICRON released the TESTRANO 600, a highly portable,

three-phase test system providing all common tests on power transformers. Its three powerful amplifiers keep testing time to a minimum, while delivering the highest measurement accuracy on the market. Intelligent algorithms ensure fully automated testing on all three phases simultaneously making testing three times faster than using single-phase devices. Florian Predl, Primary Application Engineer at OMICRON Australia, says TESTRANO 600’s simple connection concept enables its users to perform multiple tests using the same test set-up. “This not only reduces the physical rewiring effort, but also further reduces overall testing time and increases safety for the operator.” At the same time, an on-load tap changer (OLTC) can be fully controlled by the test set. This allows for a sequence of measurements to be executed with just the push of a single button.

Field testing A practical test case, provided by Protección Control y Medición (PCM), a leading service provider in Guatemala, illustrates TESTRANO 600’s effectiveness. Manuel Matinez, Electrical Test Engineer with PCM, described how his team was able to test eleven transformers in one

day. “We started testing at 7am and had to test power transformers with 10MVA and 22kV including the de-energised tap changes (DETC). Numerous parameters were measured such as power factor, capacitance, short-circuit impedance, excitation currents, turns ratio and DC winding resistance. “In between we also had to demagnetize the transformers – the effort for which was minimal given that no rewiring was necessary. “We were impressed with the TESTRANO’s performance – by 4.30pm, only seven hours later, we were finished testing and all eleven transformers were ready to be reconnected to the grid.” “These are exactly the kind of results we want our customers to be able to achieve,” Maryam Khallaghi says. “Reaching this new benchmark in reduced time and effort coupled with increased accuracy and safety means asset owners, and those that ensure their reliability, can make more informed maintenance decisions, more often.” OMICRON has optimised testing solutions for power transformers, instrument transformers and circuit breakers, helping asset owners achieve minimum outage time with maximum diagnostic output and safety.

For more information on the TESTRANO 600 and other OMICRON solutions, visit www.omicronenergy.com/en Image of TESTRANO 600 set-up with Transformer.

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Cornelius Plath Product Manager

Quicker and easier transformer testing than ever before ‌ ‌ was our vision for our new powerful and lightweight test set. The TESTRANO 600 is the world's first portable, three-phase test system which supports all of the common electrical tests done on power transformers. With just one setup for multiple tests, TESTRANO 600 significantly reduces the wiring effort and testing time. It's specially designed power amplifiers ensures a new level of accuracy, and the multi-touch colour display enables smart and comfortable operation. www.omicronenergy.com/newTESTRANO600 info.australia@omicronenergy.com Australia: 03 9473 8400 | New Zealand: 0800 6642 766


VEGETATION MANAGEMENT

WORKING TO IMPROVE

VEGETATION

CLEARANCE

OUTCOMES NEAR POWERLINES

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VEGETATION MANAGEMENT

Vegetation and trees form a fundamental and much-loved part of our urban and rural landscapes, but also pose very significant issues for energy utilities. As such, ongoing pruning programs to minimise the risk of outages and bushfire starts caused by the interaction between trees and powerlines are a major operational expense for utilities across Australia.

SA Power Networks, the main electricity distributor in South Australia, has undertaken a journey over 15 years to reduce ongoing clearance costs and better balance community objectives with the need to ensure reliable supply, bushfire mitigation and community safety. In the process, it has developed and transformed relationships with stakeholders, moving from an adversarial approach to one that sees a high level of collaboration to achieve best-possible outcomes. Under the Electricity Act, SA Power Networks is required to inspect and clear vegetation from around powerlines at regular intervals not exceeding three years. This vegetation management program is undertaken by contractors, who operate to specific legislated and contracted requirements. “In South Australia in the decade leading up to 2010, there was growing concern regarding tree trimming practices and the clearances required to meet legislated requirements. Customer complaints and media headlines highlighted growing anger at what was perceived as ‘butchery’,” Paul Roberts, Manager Corporate Affairs at SA Power Networks, and who as media spokesman was often defending the company’s tree trimming program, said. “For some time, we had argued that we had no choice but to trim trees to the very specific clearances set out in the Electricity Act.

These clearances had been established in the mid-1980s after the Ash Wednesday bushfires, and were understandably focused on minimising the risk of bushfire starts from electricity infrastructure (with falling trees and tree limbs a major cause). “We recognised that the regulations were so highly prescriptive they would not be sustainable in the face of growing community desire for the protection of trees in our streetscapes. “Initially, in an attempt to reduce the number of complaints through community education, we focused on improving relationships with Councils, meeting face-to-face to explain our obligations. Councillors often received complaints and were the ones who would talk to the media about the issue.” However, it was a review of the regulations in the latter part of the last decade that allowed SA Power Networks to start talking about the opportunity to adopt a more risk-based approach to tree trimming in the metropolitan area (where bushfire risk was not a concern). “We undertook a lot of consultation and the risk-based approach was adopted in 2010. It has certainly assisted in reducing complaints,” Mr Roberts said.

Developing stakeholder relationships Mr Roberts said SA Power Networks also recognised the value of developing much stronger relationships with Councils and other stakeholders who have an interest in vegetation trimming. “Our long-term plan has been to shift from a ‘tree trimming’ strategy to a ‘vegetation management’ strategy, and that’s been driven by our network assets team.” Steve Wachtel, Manager Network Assets, said, “SA Power Networks needed to move away from a one-size-fits-all approach, to a range of approaches that suit different regions or environments, align with risk and take the local community into account.

INDUSTRY EXPERTS DELIVERING SPECIALIST TRAINING Power Safety Training is a leader in the delivery of specialist vegetation control training for the electricity supply industry in Australia. We provide training in nationally-recognised and industry-specific qualifications and units of competency as required of the electricity network providers for their vegetation control staff and contractors. • Certificate II in ESI (Powerline Vegetation Control) (UET20312) Including all ESI stream units for Groundline, EWP, Climbing, Scoping, Specialised machinery, LV switchboard rescue • Close Approach Vegetation Control (CAVC) training for qualified workers to work within safe approach distances • Chainsaw training: Beginner to Advanced • Machinery training: Chipper, mulcher and skid steer • Chemical licence training (QLD & NSW) • Provide First Aid and Provide CPR Come to our training facility in Tamworth, NSW or we can travel to you.

Contact us today for training rates and to book your next company course (individuals also welcome):

training@powersafetytraining.com.au www.powersafetytraining.com.au ph 07 3288 8800 Registered Training Organisation 45198

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VEGETATION MANAGEMENT

“One of my key objectives was to reduce the cost of the vegetation program to the business, and ultimately consumers. “I also had a very strong belief that the legislation that we were working under meant that we were pruning far more trees than was necessary to achieve safety and reliability outcomes. “Over the past five years, we have been talking to, and working with, our key stakeholders on a range of initiatives to deliver improved outcomes. Alex Lewis, our Stakeholder Engagement Lead, has worked tirelessly to establish a structure for consultation on immediate improvements and long-term change.” This has included the establishment of two consultative groups: »» Arborist Reference Group – an independent group to provide horticultural and arboricultural expertise on strategic vegetation management initiatives »» Local Government Association (LGA) Working Group – a working group with the LGA and several member Councils to improve how SA Power Networks manages vegetation near powerlines “Our operational team that manages the vegetation trimming contract and our contractors, Active Tree Services (ATS), have been

very much on board with the strategy,” Mr Wachtel said. A protocol for vegetation management near powerlines was developed in 2016 in consultation with Councils and the Local Government Association (LGA). “The protocol provides a framework for consultation between SA Power Networks and Local Government, landholders and the community. The protocol was endorsed by the LGA Board in 2016 following extensive consultation with Councils (including forums attended by representatives of most of South Australia’s 68 councils),” Mr Lewis said. “SA Power Networks has committed to reviewing the protocol with stakeholders every two years and a revised protocol will go to the LGA for endorsement by mid-2019.”

Tree removal and replacement Programs for tree removal and their replacement with appropriate species are critical to developing a sustainable vegetation management plan that reduces the need for tree trimming over time. “We have undertaken a number of tree removal projects in partnership with councils and key stakeholders in recent years.

Delivering vegetation management to the pipeline industry

Vegetation Management Tree Lopping & Weed Control Environmental Services Mulching Machine Hire

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ENERGY PARTNER CONTENT VEGETATION MANAGEMENT

MANAGING THE ENVIRONMENT The initiatives have shown the value of tree removal and replacement programs in both bushfire and non-bushfire risk areas, and targeted the removal of inappropriate trees that required ongoing clearance,” Mr Lewis said. “In 2018, in partnership with the Adelaide Hills Council, we also undertook a trial to remove saplings in the Gumeracha area, which has had significant re-growth following the Sampson Flat fires. “Much of the clearance work we are undertaking today is a result of a legacy of planting inappropriate species under powerlines. “To address this, we have conducted trials of growth retardants for reducing tree growth and clearance costs, and the potential of extending pruning cycles for existing plantings. Looking to the future, we have developed, with stakeholders, a list of species for planting under powerlines in non-bushfire areas for each of our state’s climate zones.”

Changes to the Regulations governing vegetation clearance The Electricity (Principles of Vegetation Clearance) Regulations 2010 is the key legislation governing vegetation clearance near powerlines in South Australia. The Regulations expire in September 2021, so SA Power Networks is exploring a number of amendments that would deliver improved outcomes to the community, improve or maintain safety outcomes and reduce costs. The amendments relate to tree removals, customer notifications, visual amenity, bushfire/non-bushfire boundaries, mapping requirements, and the species list. “During 2018, we consulted broadly on our proposed amendments, including issuing a preliminary discussion paper (June 2018); holding a series of stakeholder workshops in October 2018; and issuing a final discussion paper (December 2018),” Mr Lewis said. “We found broad support for key initiatives and the next step will be formally lodging a submission with the Office of the Technical Regulator once they call for submissions on the ten-year review in mid-2019.” In 2010, the legislation was amended for metropolitan Adelaide recognising the lower level of risks associated with vegetation around low voltage (LV) powerlines. As the level of risk allows reduced clearance requirements, vegetation can be allowed to grow through LV powerlines, improving visual amenity. From mid-2019, this approach will be applied in the regional cities of Mt Gambier, Port Pirie, Port Lincoln, Port Augusta, Whyalla, Victor Harbor and Murray Bridge, and the towns of Gawler, Goolwa and Mt Barker. As part of the 10-year review of the Regulations, SA Power Networks will investigate other areas suitable for the adoption of the ‘risk based’ approach.

AROUND OUR NETWORKS

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ustralian energy utilities are faced with the incredible challenge of having to manage networks that exist in conditions as varied as dry, arid desert to windy, wet coastal regions. Each region has very different implications for network infrastructure and requires varied responses. This is true not only for network assets themselves, but also the environment that surrounds them. After another long, hot summer, it’s clear that vegetation management has to be at the top of the agenda as network owners work to prevent situations where the devastation of bushfires can occur. The winter does not provide a reprieve, as strong winds bring down trees and pose another risk to powerlines. Vegetation management in the energy sector is a highly specialised skill and companies in Australia and New Zealand have reported increased difficulties in attracting and retaining talent. With utility arborists being in such short supply, there is an increasing trend towards outsourcing and growth in the number of niche service providers. Vegetation management around powerlines could be considered even more risky than normal powerline work. Arborists have to deal with the unpredictable combination of trees (often in difficult weather conditions) and moving power lines. Altec has been supplying equipment into this market for almost 90 years and has purpose built, insulated equipment that helps get the job done. Altec’s units are built to withstand tough conditions and are a favourite amongst arborists due to their robust nature. Vegetation management clients often request Altec units to be mounted on 4x4 chassis to allow access into tough terrain. In some of the most extreme cases, Altec units are available on track mounts and with sophisticated engineering, and can help arborists undertake their work even at the most awkward angles. The flexibility and manoeuvrability of the Altec units are another reason for their popularity with arborists. Most arborists opt for the Altec AT37G (13m) or AT30G (11m) as these are the perfect height for tree care work. Altec units are compliant with Australian standards and are built to deal with the challenges of varying environmental conditions. Altec is proud to work with leading vegetation management companies in Australia and New Zealand, and indeed around the world, and to be counted as a core member of their team.

Community awareness and information SA Power Networks has also developed a range of vegetation management information to improve how it engages with and informs stakeholders on its vegetation clearance program and legislative requirements. This includes the development of an animated video to help educate the public about managing the risk of trees around powerlines, starring Trev the Tree and Stan the Stobie (named after South Australia’s unique Stobie poles). Altec units are becoming a favourite of arborists around Australia and around the world.

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WOMEN IN ENERGY ENERGY PARTNER CONTENT

THE CHANGING FACE OF CO ANGELA KLEPAC

The latest research suggests innovation and diversity go hand in hand. For Zinfra, bringing together different skills, languages and generations to create a diverse employee base is a huge advantage because it allows the company to engage more effectively with the communities it serves. Here, Angela Klepac, National Manager – Power at Zinfra, reflects on her career and overcoming the challenges surrounding diversity in the power industry.

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ENERGY PARTNER CONTENT WOMEN IN ENERGY

ngela Klepac has been in the power industry for almost 30 years, commencing her career while she was still studying a Bachelor Degree in Electrical Engineering at the University of Technology in Sydney. “As I look back on my career I think I have been very fortunate to have worked with some great people and have been involved in some very interesting projects. When I initially started I was given an opportunity to get some work experience in an apprentice training workshop for about six months. At the time I was completing some very manual projects, such as building battery chargers and building a workbench engineers vice (of which I gifted to my dad when I completed).” After completing her six months’ work experience, Ms Klepac secured a cadetship with the Electricity Commission of New South Wales (today known as TransGrid). “As an undergraduate and a cadet, I spent the next four years working and travelling around NSW working in power stations while living in the country. It was here that I really started to be embedded in the power industry and started learning more about substations and transmission lines,” Ms Klepac said. “I have worked as a Network System Planning Engineer, I’ve also been a Transmission Line Design Engineer, a Substations High Voltage Design Engineer, an Engineering Manager looking after a group of 70 highly professional engineers, a Procurement Manager and a Project Manager. “I’ve had many different roles over the last 30 years, and I’ve been quite fortunate because I was given the opportunity to develop and grow as an individual with an organisation that provided diverse areas of work.” Delivering a successful power portfolio Ms Klepac is currently Zinfra’s National Manager of Power, and her main responsibilities include delivering electrical infrastructure projects for key electrical utility clients and power projects in the transport sector. “My primary role is to establish, develop, and maintain relationships with target clients, developing a collaborative relationship to be able to identify, develop and secure profitable opportunities, as well as successfully delivering those opportunities. For CY19 the power projects group has a portfolio of over $100 million worth of work.” Ms Klepac loves the challenges of the diverse projects in her portfolio and especially enjoys working with people, where she has a great network that supports her. “I’ve got a very supportive and technically very strong team that reports to me, that I manage and lead to ensure that we can successfully deliver our projects. They’re all very experienced individuals, and we all respect each other’s ideas and thoughts. I think that’s what makes my working environment so much more enjoyable. “When I reflect on why it works so well, I think it’s because no-one ever claims to know it all. We understand that we’re subject matter experts in the areas that we’re responsible for but at the same time we all challenge each other to get the best from each other, and make sure we've got the best outcome for the project, for Zinfra and for the client. There’s a real underlying respect and a great culture here, and I find that the most enjoyable part of working at Zinfra. “The other thing that I really enjoy is the diversity of work that we deliver. As Zinfra is a national business, all of our clients have their own unique ways of doing things. It’s about having a strong understanding of the industry and our clients' work portfolio, and how we can actually assist and support them to deliver safely and efficiently. “I’m currently working on the Granville Harbour Project, where our key client is TasNetworks. Zinfra and TasNetworks have a well-established relationship that has been nurtured and developed over many years, so it’s very important to me and this project that we

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WOMEN IN ENERGY ENERGY PARTNER CONTENT manage the relationship in a professional and collaborative manner to not only successfully deliver the Granville Harbour Project but ensure that our existing relationship continues to strengthen and grow. ”

Inspiring the next generation Ms Klepac is proud to see Zinfra building a strong and positive reputation in the market. “People are looking at us as leaders in the design and construction of infrastructure projects. That reputation doesn’t come easy, it’s something you need to focus on, plan for, work hard and earn. It’s not just about communicating with our clients but communicating internally with our own staff and ensuring we all have the same vision and understand where we are going and how we will reach those goals. “Having high standards and a strong emphasis on safety definitely places us in the best position with our clients. That goes without saying. We can do everything else, but unless safety is there, it’s pointless.” According to Ms Klepac, the market is shifting and young engineers entering the field need to be prepared. “There’s a real drive and increased interest in renewable energy, which is changing the market skill set. We need the technical knowledge to assist us in system network planning, design and procurement and delivery of solar, wind and battery storage projects. There’s also a real demand for capacity and capability to deliver major projects worth over $100 million over the next two to five years and longer. “The young professionals of today need to be able to build their own personal resilience because they will be challenged with difficult situations, whether it be demanding clients, complex projects or solving technical issues. They need the resilience and determination to solve problems, network with other subject matter experts and not walk away from them. “The other issue facing us also is the transfer of valuable knowledge gained over many years of experience and the retirement of a mature workforce. How do we ensure that this knowledge management is kept in-house for future generations? “Ultimately, we need to be positioning ourselves in the market, understanding what the drivers are, continually looking for ways to improve the power industry. We need to be smart leaders – not just following and accepting the status quo. Following becomes too late and you end up missing the boat or just getting it wrong. We need to have strong leadership

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so we understand how the market is changing and set the future up for the next generation of Power Engineers to be successful.”

Celebrating different viewpoints Ms Klepac is mindful that she works in a male-dominated field, and that during her 30 year career this has not changed significantly. She is mindful that while we are trying to attract more young women into the field of engineering, that once they have commenced their degrees we need to ensure they are provided with the right support, with mentoring programs being a key part of this.

“I think mentors are extremely valuable. It’s important you find somebody you can actually connect with, someone who is open and trustworthy and can offer you advice from a professional perspective but also someone you can confide in when you need help juggling that work/life balance,” Ms Klepac said. “All my mentors have been really down to earth and always given me honest feedback. They’ve always encouraged me from a professional perspective to reach above and beyond what I could achieve, but they’ve also been very respectful of my own family obligations. They were all male mentors, and they all stood by my side and were my absolute greatest supporters. It’s a funny thing, I still have those mentors from back in the early days when I was just starting out who still ring and ask me how I am going. I am very grateful and thankful that these mentors are still here to support me. “The demands on women are a lot greater today than they ever were before. My advice would be you've got to stay focused on the task as well as leading and collaborating with your team to solve

the engineering problem. Don’t give up when the going gets tough, you’ve got to reach out to your peers and other subject matter experts. It’s really important to communicate and build a strong professional network. Don’t expect so much of yourself either. If you end up making a mistake, so what? Don’t be too hard on yourself. Be thankful that you have learnt something new, pick yourself up and keep going and become smarter and stronger.” For Ms Klepac, diversity is about having people in an organisation who can bring about a different way of thinking or a different perspective on doing things while still maintaining a high standard of professionalism in what we have been engaged to do. “Diversity is about having people in an organisation who can bring about a different way of thinking or a different perspective on the way we do things, they enable us to grow as an organisation to become more open minded , broader in our thinking, and richer in accepting new ways of doing things and thereby encouraging teams to work together in a more diverse way to ensure we have best practices in our workplace. It just brings a balance to everything that we do so we don’t get stuck always doing things the same way. You don’t just have one answer or one solution for every problem, sometimes you need to come up with different options to be able to select the best option to resolve the issue,” Ms Klepac said. In her spare time Ms Klepac has also had the privilege of being involved for the past ten years with CIGRE (The International Council on Large Electric Systems – a global organisation in the field of high voltage electricity) as the Australian Study Committee Convenor for substations, and currently now as a director on the board of CIGRE. Balance is also essential to meeting the demands of a challenging professional life. Ms Klepac has plenty to keep her busy outside of work, with family being her number one priority. “What keeps me really balanced in my life is my family, they’re always watching out for me. I love cooking for the family — it just brings everyone back to the table and reminds us of what is important, especially as we are a very busy family. “I take every opportunity I can to squeeze in ten to 20 minutes of reading the newspaper every day. The other thing I like to do is a ‘power’ walk with my husband down by the beach nice and early on Saturday and Sunday mornings. It allows us to start the weekend by just switching off completely and re-establishing what’s important in life by coming back to family.”

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ENERGY EVENTS

BRINGING THE ENERGY VALUE CHAIN TOGETHER

A new event taking place in Melbourne in August aims to bring together all elements of the energy supply chain, resulting in a holistic industry event. The all new Power & Utilities Australia Conference and Exhibition will be held at the Melbourne Conference and Exhibition Centre on 14-15 August 2019. Power & Utilities Australia, to be co-located with several established power and utility events, focuses on strategies and solutions along the entire electric power supply chain – power generation, transmission & distribution and digital transformation. The event aims to be apolitical and will feature discussions on industry solutions that allow for affordability, sustainability and reliability. The power industry is undergoing a dramatic transformation as variable/renewable power is rapidly introduced into the system; and as distributed generation and microgrids take on increasing significance as an energy solution. Power & Utilities Australia is designed to examine the challenges and opportunities created by this unprecedented disruption in the industry. The event is the result of a combination of several event brands including Australian Utility Week, POWERGEN Australia, DistribuTech and SolarVision, effectively creating a single event covering the industry from end to end. The Power & Utilities Australia Conference will have an audience of C-level executives discussing at the highest levels strategies and frameworks to meet the challenges of providing reliable, affordable and sustainable power to Australia. Some of the most important industry organisations are participating, including GE, Ausgrid, Hydro Tasmania, Western Power, Ausnet Services, Australian Energy Council, Energy Networks Australia, CS Energy, The Energy Charter, Jemena, AVEVA, AEMO, AEMC, Zinfra and Telensa. Confirmed speakers include John Cleland, Chief Executive Officer of Essential Energy; Andrew Bills, Chief Executive Officer of CS Energy; Rebecca Kardos, Chief Executive Officer of Aurora

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Energy; Paul Simshauser, Executive General Manager of Infigen Energy; Scott Strazik, Chief Executive Officer of GE Gas Power; Dave Johnson, General Manager Development & Construction of AGL; Tony Wood, Energy Program Director, The Grattan Institute; and Andrew Dillon, CEO of Energy Networks Australia. The Power & Utilities Australia Exhibition will feature 150 exhibitors and 3,000 visitors from across the industry spectrum. Additionally, the exhibition floor will have three knowledge theatres – Generation, T&D and Digital Transformation – offering high quality content free of charge to qualified visitors. The Generation Theatre, will focus on the challenges of balancing traditional energy with clean energy, and will feature case studies on topics such as asset management, utility scale solar and storage, emissions control and demand management. The T&D theatre will focus on new challenges and opportunities for network companies as they manage intermittent power on a grid built for a different era. Additionally, microgrids, community energy and edge of grid intelligence are explored. The Digital Transformation Theatre will look at deployment case studies from utilities that have invested In IoT, AI and customer facing strategies to gain efficiency and reduce customer churn. Power & Utilities Australia will also include exciting additional features such as breakfast forums, industry roundtables, business matching services and a start-up and innovation pavilion.

For more information on Power & Utilities Australia please visit our website https://www.powerandutilitiesaustralia.com or contact Michael Silber, Michael.silber@talk2.media or Patrick Baker, Patrick.baker@talk2.media.

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SOLAR

UNPRECEDENTED PARTNERSHIP SEES VICTORIAN WATER SECTOR GO GREEN Thirteen of Victoria’s water corporations have launched a new energy partnership, the first of its kind for Australia’s water sector, to minimise the sector’s greenhouse gas emissions whilst maintaining affordable water bills.

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rom October 2019, the companies will purchase clean energy from the Kiamal Solar Farm in north-west Victoria at a much cheaper rate than would be possible individually, under a new umbrella organisation called Zero Emissions Water (ZEW). Purchasing energy as one large organisation, instead of separately, means the water corporations will procure energy at a cheaper rate, which will translate to reduced operating costs. The initiative will allow water corporations to purchase between 20 to 50 per cent of their total energy needs through ZEW, slashing carbon dioxide emissions by 80,000 tonnes every year. The 13 water corporations that are part of Zero Emissions Water include: »» Barwon Water »» Central Highlands Water »» City West Water »» Coliban Water »» East Gippsland Water »» Southern Rural Water »» Lower Murray Water »» South East Water »» South Gippsland Water »» Wannon Water »» Westernport Water »» Western Water »» Yarra Valley Water

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Tracey Slatter (Barwon Water Managing Director and Zero Emissions Water Board Member), Victorian Minister for Water The Honourable Lisa Neville, and Paul O’Donohue (Central Highlands Water Managing Director and Zero Emissions Water Board Member).

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SOLAR

City West Water Managing Director, David Ryan, said that the deal will allow City West Water to purchase 3.76 Gigawatt hours (GWh) a year of renewable energy which is 30 per cent of its annual energy needs. “This is a key project that will help us achieve an ambitious target of net zero emissions by 2030, while reducing our energy costs and placing downward pressure on customer bills,” Mr Ryan said. “We’re proud to have played a key role in this project, from conception to execution, and will continue to play a strong role in water sector collaboration to reduce emissions.” Victorian Minister for Water, Lisa Neville, praised the initiative, saying it was another example of industries across Victoria leading the way on climate change action, investing in renewable energy to reduce their carbon footprint and help protect the environment. “We’ve seen the effects of climate change on our water storage levels, which is why it’s more important than ever to create solutions that will reduce greenhouse gas emissions,” Ms Neville said. “It’s great to see our state’s water corporations working together on this innovative new model, which will not only help protect our environment into the future but also keep water bills affordable for Victorians.

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Chair of Zero Emissions Water, Paul O’Donohue, said that the Victorian water industry is committed to advancing projects that benefit the environment and create more return on investment for customers. “The security of Victoria’s water supply depends on our response to climate change now. This partnership is a smart way for the water corporations to reduce their carbon footprint, without passing the cost on to customers,” Mr O’Donohue said. “The water sector is helping to lead the way for other industries to reduce their emissions and operating costs through sector collaboration.” The Victorian Government has set an ambitious goal of achieving a 42 per cent reduction in the water sector’s emissions by 2025 and net-zero emissions by 2050. Melbourne’s four metropolitan water corporations are actively working to achieve net-zero 20 years ahead of schedule, by 2030. “The Victorian water industry is working together to meet renewable energy targets whilst seeking to reduce costs for customers,” Mr O’Donohue said.

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SOLAR ENERGY PARTNER CONTENT

AERIAL IMAGERY:

THE BEST-KEPT SECRET IN SOLAR

While solar uptake across Australia continues to grow at an impressive rate, 80 per cent of Australian households are yet to benefit from the savings rooftop solar PV cells can bring, which leaves plenty of room for expansion. Industry-disrupting technologies such as high resolution aerial imagery from Nearmap, are changing the face of the Australian renewables market by allowing installers to identify solar leads without time-consuming site visits.

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t’s official: Australia’s residential rooftop solar market is on the rise, with no signs of slowing down. Last December, the Clean Energy Council marked the installation of rooftop solar power in two million homes across Australia, up from a mere 20,000 ten years ago. The rising number of installations is being fuelled by improvements in large- and small-scale energy storage, and decreasing costs to consumers brought about by improving economies of scale. The trend is also helped by a number of state-sponsored rebates available for household and small business installation of renewable energy systems such as PV or wind, making the ROI for homeowners even more attractive. In a sign that solar is here to stay, several large-scale solar farms are underway, and while clear public policies around renewables are still emerging, the demand for solar across Australia is surging. To paraphrase, the shadow is on the wall — and the solar companies who can most efficiently and accurately service new residential customers will be the most competitive in the new renewables landscape. Retaining a competitive edge will rely on a range of industry-disrupting technologies, including current, high resolution aerial imagery. How does aerial imagery help solar operators? The obvious question is this: How does the view from the top help solar installers on the ground? The answer is staggeringly simple. Current aerial photos help solar installers prospect for solar leads; produce quick, accurate quotes; and confidently estimate labour and material requirements. Top solar providers are already leveraging the power of aerial views of properties to keep up with Australia’s appetite for renewables. Another way solar retailers use current, clear aerial imagery is in visually impressive, polished proposals. With regularly updated aerial maps, solar installers can present a design shown in the context of the client's home — in its current condition. It's a persuasive tool for closing the deal, and is far more professional than a drawing or a design presented on low resolution, outdated satellite maps.

Accurate and efficient technology National Renewable Group (NRG Solar Services) is a solar solution provider in South Australia that's seen the benefits of aerial imagery first-hand. NRG uses aerial imagery from Nearmap, an industry-leading aerial imagery and location data company, to plan and inspect locations remotely – a process which has saved them at least 25 hours a week. The use of aerial imagery has also provided NRG Solar Services with the ability to prepare and present high-quality quotes, with estimates including kilowatt output, for their valued customers. NRG Solar Services State Sales Manager Darren Vonthethoff explained, “With Nearmap’s image accuracy and powerful solar tools, we can quickly develop a high-quality quotation via a web browser instead of relying on manual calculations. This has enhanced our credibility as a leading solar solution provider.” The use of Nearmap aerial imagery can help streamline solar projects by allowing providers to design the most suitable solar solution for their customers, including accurate estimates for material and labour requirements. A wider reach By accessing Nearmap via a web browser, NRG Solar Services can extend their reach to rural customers and provide precise quotes over the phone. The ability to provide exact quotes over the phone cuts down on labour costs and makes the sales team more efficient by cutting down time-intensive site visits. “Labour is the major expense for our business. But with Nearmap, we are much more efficient,” Mr Vonthethoff said. “It is a very rare event to get our estimate wrong with Nearmap. Our staff can spend more time on valuable tasks rather than fixing issues or doing non-paid jobs.” Solar providers such as National Renewable Group will continue to use innovative technology from Nearmap to maintain a competitive edge in the growing Australian solar energy market. “I would not want to go back to the days without Nearmap,” said Mr Vonthethoff.

If you’re considering adding updated aerial maps to your solar lead workflow, there are four key things to keep in mind when choosing an aerial imagery solution: Currency. Current imagery guarantees that you’re seeing the real condition of the home and roof — so on-site surprises are minimised. Accuracy. Your aerial imagery solution should be as high resolution as possible, to ensure that measurements you make on the imagery are accurate. Ease of access. Cloud-based aerial imagery that you can view in a web app — as opposed to one-off imagery datasets that you have to integrate into your own software — means that your aerial imagery is “always on.” Coverage. An aerial imagery source with wide-scale, consistent coverage of Australia’s most populated areas means solar companies can instantly survey the solar hot spots and identify the areas of greatest opportunity.

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Captured: 14/12/2017 Joondanna, WA


AUTOMATION

AUTOMATION – THE KEY TO UNLOCKING THE FUTURE OF THE ENERGY INDUSTRY by Simon Vardy, Utilities Lead, Australia and New Zealand, Accenture

The automation of processes within the energy industry is already having a profound effect on how we operate, and the impact of automation will only continue to grow in the future. Here, we take a look at how Australian energy businesses can take advantage of the rapid march of technology, and ensure they’re not left behind.

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eliability, affordability and regaining consumer trust will drive the agenda for the Australian energy industry in 2019, a response dictated by consumer demand for fair electricity costs and the unstoppable trend towards integrating renewable energy. With the spotlight firmly on them, the future is DARQ – that is, Distributed Ledger Technology (DLT), Artificial Intelligence (AI), Extended Reality (ER) and Quantum Computing – a set of technologies required for success in the post-digital era. According to Accenture’s Technology Vision 2019 research, 89 per cent of Australian businesses are already experimenting with one or more of these DARQ technologies. Australian energy providers must find new ways to improve business processes and create engaging and positive customer experiences, and the way out of the abyss is by utilising DARQ. Automation is impacting the industry now Of these technologies, AI ranked highest amongst Australian executives as having the greatest impact over the next three years (39 per cent); followed by quantum computing (21 per cent); DLT (18 per cent) and extended reality (19 per cent). From the grid to the end consumer, automated technologies are well placed to transform the Australian energy industry. By harnessing the power of Robotic Process Automation (RPA) and AI, retailers can automate routine tasks in the front-office, back-office and enterprise function, as well as offering a more engaging experience for consumers. AI and automation is already proving its ability to create real business value in the energy sector globally. For example, Google announced it used AI-powered software to make energy produced by wind farms more viable. By using

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machine learning algorithms by its London-based subsidiary DeepMind, Google can now predict the wind output from the farms, and uses it for its green energy initiatives. With the power of AI, Google can now schedule to set deliveries of energy output, which are more valuable to the grid than standard, non-time-based deliveries. Accenture’s research also found that consumers are equally open to receiving automated services from their energy provider, with 88 per cent of consumers saying that they are ready to use a digital agent, such as a chatbot powered by AI, if it was offered. American Solar Power company, PowerScout, implemented a chatbot that aims to support the growing number of people exploring the potential of switching to cleaner energy sources, or even producing solar energy to power their own comes. The chatbot is designed to assess the customers’ requirements and to connect them with contractors, providing them with optimal customer experiences and reducing backend processes. So how can Australian energy retailers leverage automation to pivot to new ways of working? While there is no single approach to transform these organisations for the future, Accenture believes there are four key steps:

1. Set the automation strategy, leadership and governance An automation roadmap is essential. The roadmap should be a plan to grow the business, incorporating AI and RPA as a critical enabler. As such, it is mandatory for leaders and strategic planners from across the business to have a good grasp of AI and RPA to transform existing business plans, define key decision points and guide appropriate investment decisions. Teams should be integrated into strategic planning, program design and process excellence groups for iterative success.

https://www.theverge.com/2019/2/26/18241632/google-deepmind-wind-farm-ai-machine-learning-green-energy-efficiency

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AUTOMATION

2. Create an open automation culture Corporate culture must adapt to the presence of its new employees that work with technologies such as AI and RPA. Humans and machines will be collaborating, teaching and learning from one another. This demands trust, openness and transparency, just as any co-working relationship. Energy providers have a responsibility to explain the risks and opportunities that a hybrid workforce brings. But they can also shape the culture and guidelines that minimise those risks and maximise the opportunities. 3. Prove simple, pilot big There is also a need to reduce risk by quickly validating and yielding identified business value on simple projects. Energy organisations must see what the dynamics of the team and organisation is like after successfully implementing automation. Based on those lessons learned, optimise the more complex, larger-scale programs that have a greater return to increase the probability of success. Key lessons should drive understanding in areas including technology infrastructure needs, implementation costs and effort, organisational design and talent implications. 4. Iterate, solidify and scale Australian energy retailers must apply lessons learned towards advancing strategy and culture and achieving goals. They need to consider how these capabilities can efficiently and sustainably be established as a standard.

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Further, these organisations need to apply concepts externally and evaluate partnerships between providers and customers to examine how to extract value out of ecosystems.

Making the most out of automation AI and RPA technologies have the potential to increase the accuracy of work, reduce the labour intensity of work and perform new analyses enabled by the ability to process and connect complex datasets. Automation is key to drive agility and value. Through these opportunities, Australian energy providers can enable meaningful change in not only cost competitiveness but more importantly operational strength, which can enhance the company’s competitive position in the industry. Now is the time to boldly embrace disruptive technologies to take advantage of disruption and shape their future. The potential value and growth that AI and RPA can bring when leveraged across the enterprise is a compelling proposition. These technologies have the potential to redefine Australia’s energy industry, reshape their core business processes, transform customer experiences and establish entirely new business models. With automation, energy retailers will have the opportunity to offer a more engaged experience for consumers, with cost benefits to both customers and the business.

June 2019 ISSUE 6

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SECURITY

WHY WAIT FOR A

CYBER CATASTROPHE

TO PREPARE FOR

A CYBER ATTACK?

Mounting threat levels have pushed utilities to take a more robust approach to security, but according to Matt Chambers and Georgina Crundell from EY’s Power and Utilities team, there is still significant room for improvement.

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SECURITY

T Georgina Crundell

Matt Chambers

he power and utilities (P&U) sector is going through one of the most transformative stages since its inception. Behaviours are shifting, governments and consumers alike are demanding cleaner energy, and evolving technologies drive a more decentralised and increasingly digital model. How utilities succeed in making the transition will depend on how effectively they manage their most important risks. According to EY’s Risk Pulse survey, utilities rank business interruption from cyber attack, storms and catastrophic events as the most important risk today and in a future energy world. But security risks are constantly evolving, and it is becoming increasingly challenging for utilities to map the digital environment in which they operate and their interactions with it. Connected devices that can collect vast amounts of personal data (such as smart meters) and the rise of the Internet of Things (IoT) add to the complexity of managing security across the transforming P&U ecosystem. The expected global cost of cybersecurity breaches across all sectors by 2021 is $US6 trillion, according to the Cybercrime Report 2017 Edition from Cybersecurity Ventures. Legacy systems that were designed to operate in internal segregated or closed networks are increasingly interfacing and converging with IP-based networks to improve efficiencies in administration and monitoring. This ever-expanding digital ecosystem, with potentially millions of networked access points, is exposing utilities to more sophisticated and frequent cyber attacks, which have the potential to disrupt critical infrastructure and breach customer and employee privacy. Governments around the world have moral obligations to provide access to power and clean water, and utilities are tasked with fulfilling these obligations. Yet they cannot do so if they leave themselves, and the critical infrastructure they manage, open to attack. Utilities are particularly attractive targets for highly sophisticated state-sponsored actors in politically unstable regions looking to gain a political or monetary advantage. Hacker group Dragonfly 2.0 is an excellent example. A leading security firm recently warned that state-linked hackers were gaining access to US and European power grid operations – to the point where they could produce power blackouts anytime they wanted. The cyber attack surface has significantly increased through advances in automation and connected devices. Combined with the commercialisation of attack tools that were once limited to a nation state’s arsenal, you have the ingredients for significant disruption. Preparing to confront cyber threats Mounting threat levels have pushed utilities to take a more robust approach to security, but there is significant room for improvement, especially in convergence with strategic planning. EY’s Global Information Security Survey (GISS) 2017-18 reveals that only six per cent of P&U respondents are confident that they have fully considered the information security (IS) implications of their current strategy, and that their risk landscape incorporates and monitors cyber threats, vulnerabilities and potential impacts. A further 41 per cent have either made a recent change or are about to make a change to their current strategy and plan to consider IS implications, risks and threats. But worryingly, over half (53 per cent) of P&U respondents either do not appreciate or have only partially considered IS implications, risks and threats in their strategy, and do not have plans to change their current course. In addition, 71 per cent think present IS functions are not meeting expectations.

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SECURITY The GISS digs deeper with 62 per cent believing that an attack that didn’t cause harm would be unlikely to prompt an increase in budget. Yet, according to a recent report, it takes an average of 99 days for organisations to detect an intrusion. To confront cyber threats, utilities should assume that all attacks cause harm, even if the impact is not immediately obvious. At the very least, there will be a cost associated with responding to the event. Often, the people responsible for security lack influence with senior management and struggle to articulate the risk in order to obtain additional investment. This reinforces the need to elevate security to an enterprise-level risk and become an integral part of the utility’s overall strategy.

Understanding the complex cyber threat landscape The first step for utilities seeking to enhance their security ability is to develop a better understanding of the threats they face and what they mean for the business. Enterprise domain risks Utilities are using advanced systems for real-time business intelligence and predictive analytics to fully tap the wealth of actionable information available in the growing volumes of data they manage. Threats associated with the collection, storage and analysis of big data, and the growing interdependencies between physical assets and information and operations technology (IT and OT) systems, have elevated the importance of security as an enterprise-level risk. Grid and network infrastructure risks The increasingly connected and complex nature of industrial control systems (ICS), including supervisory control and data acquisition (SCADA), makes them challenging to secure and vulnerable to cyber threats. OT assets that need to maintain 24/7 up-time face challenges with applying security upgrades and mitigating vulnerabilities. In addition, the growth in smart electric, gas and water networks and associated digitally-enabled technologies are creating new points of entry for cyber attackers. Customer domain risks Growth in disruptive behind-the-meter technologies, including electric vehicles (EVs), smart appliances, the IoT and Future Internet of Things (FIoT), distributed energy resources (DERs) including web-enabled solar, batteries and home energy management systems, is further expanding the cyber attack surface across the P&U ecosystem. The use of smart metering data to enhance billing systems, better understand consumption patterns and ultimately improve user experience also increases the amount of information held by organisations, including utilities, third parties and aggregators. This multi-ownership of data is making management of customer privacy even more challenging, especially with increased

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regulatory pressures such as the European Union’s General Data Protection Regulation.

To build resilience, utilities must assume the worst can happen According to the GISS, employees, hacktivists and statesponsored attackers are seen as the greatest immediate threats. Utilities are also increasingly fearful about nefarious actors exploiting vulnerabilities within new digital channels and tools. Utilities face enormous challenges in identifying suspicious behavior, tracking who has access to their data, and finding hidden and unknown “zero-day” attacks. In addition, P&U organisations are not sufficiently addressing their ability to recognise and manage this new enterprise risk – 63 per cent of P&U respondents say they don’t have a dedicated role within the security function focused on digital and the IoT. In addition, each device connected to the network represents a target for attackers that needs to be secured, and each social media interaction with customers creates vectors for potential phishing attacks or other malicious targeting. According to the GISS, 49 per cent of P&U respondents consider IS around social media to be a high priority. In fact, almost half (48 per cent) agree that their risk exposure has increased over the past twelve months. This is a significant uplift versus the previous year when only eight per cent agreed, reflecting the growing importance on the role that social media plays in a utility’s communications strategy. With growing interdependence and interconnectivity of critical infrastructure across multiple sectors, cybersecurity is becoming increasingly challenging. A majority (58 per cent) of P&U respondents find it hard to monitor the perimeter of their ecosystem versus 36 per cent across all sectors. The rise of microgrids and DERs, as well as an increasingly fragmented energy value-chain with multiple new entrants and systems, often spanning numerous countries, make it difficult to understand and manage the risk, including where responsibility ultimately lies. Also, separate organisational governance of IT versus OT can lead to a disjointed approach where security monitoring is often overlooked. Fighting back against the threat To be cyber resilient, utilities must embrace an enterprise-wide risk management strategy. Utilities may feel more confident about confronting the types of threat that have become familiar in recent years, but still lack the capability to deal with more advanced, targeted assaults; they may not even be aware of emerging attack methods. To be cyber resilient, utilities must embrace an enterprise-wide risk management strategy that includes review and adoption of leading


SECURITY practices against evolving threats. This requires a multilayered approach across a proven framework for managing cybersecurity.

Connecting the components required to regain cybersecurity for utilities Establish a risk-enabled culture: Enterprise risk management deepens an organisation’s understanding and awareness of risk across the entire business. Identifying risks within the internal and external environment becomes the responsibility of every employee from the CEO down. Much as a safety culture encompasses shared attitudes, perceptions and values that form part of an organisation’s corporate culture to “do the right thing,” organisations need to create a security risk culture of awareness and vigilance that is equally embedded into the cultural fabric. Advance strategic thinking: Cyber resilience requires an in-depth understanding of the disruptive drivers of change across the business and operational landscape. This is an opportunity for utilities to identify and assess risks that impact business strategy and to consider the implications of chosen approaches on risk and performance. Adopt an agile and resilient operating model: Cyber resilience requires an end-to-end framework to prepare for threats and respond to the impact of a breach when it occurs. Such a framework for managing cyber risks will minimise the effect on dayto-day operations, the bottom line and the company’s reputation. Invest in technology and innovation: Risk-enabled utilities are investing across multiple areas, including real-time defense, knowledge sharing and regulatory compliance. Future operating models may also be influenced by the rise of new and enabling technologies, such as blockchain and robotic process automation. But the GISS results also indicate that utilities will need to better understand the security implications of these technologies before deployment, particularly given that a significant majority of P&U respondents don’t have a dedicated role focused on the impact of such technologies. Focus on the risks that matter most: Utilities need to go beyond compliance and focus on managing the risks that matter the most. Rather than being in reactive mode each time new cyber standards are announced, organisations need to adopt an agile approach that supports the incorporation of changes as they arise. Manage the risk appropriately and compliance will follow. Developing a more robust response Utilities should operate on the basis that it will only be a matter of time before they suffer an attack that successfully breaches their defenses. However, the GISS suggests different levels of readiness among organisations. Having a cyber breach response plan (CBRP) that automatically kicks in when the problem is identified represents an organisation’s best chance of minimising the impact. There are key strategic questions for utilities to consider: »» Cybersecurity – how will you ensure you can withstand attacks, isolate and assess the damage done, and shore up defenses to prevent similar breaches in the future? »» Operating model optimisation – what is the right balance between managing risks in house and outsourcing or co-sourcing?

»» »» »»

»»

»» »» »» »»

Business continuity planning – how will you continue to operate as normal while remedying the attack? Compliance – what are your duties in reporting the breach to the appropriate authorities, and how will these be discharged? Public relations and communications – how will you communicate clearly and effectively with all potential stakeholders, including employees, customers, suppliers and investors, both directly and via the media and social media, where there is public interest in the breach? Litigation – how will you assess what potential litigation the attack leaves you vulnerable to, or even whether you have any recourse to legal action itself? How will you forensically record and maintain evidence for use by law enforcement agencies? Insurance – do you have cyber insurance and is the incident covered? In which case, what can be claimed? Maximising investment – have you built rate cases or responded to performance-based incentives that would recover cyber investments and withstand regulatory scrutiny? Digital investment – what do you see as the biggest benefits of investing in secure digital platforms and new ways of interacting with a growing, empowered customer base? Collaboration – what are your competitors seeing as their greatest cyber threats? Are you stronger working as a community to counter threats than working alone?

Cybersecurity as everyone’s business Understanding the threat landscape, and detecting the potential risks on the horizon, is the groundwork of good cybersecurity. It allows utilities to limit the time they spend outside normality, to understand when and why they have moved into stress, and pre-empt the development of a full-on crisis. Fighting back and protecting the enterprise from cyber risk builds on this groundwork. It gives utilities the skills and confidence to deal with stress and crisis more effectively, with tools and processes that provide a framework for responding to attackers. Having a robust response plan is the final piece. Utilities capable of employing a well thought-out and tested CBRP in which everyone understands their responsibilities, will de-escalate the crisis much more quickly. By pulling these strands of cybersecurity together, utilities can respond in a more agile and resilient way, even in the face of the significant and increasing risk posed by diverse and often sophisticated cyber attackers. The tools and technologies required to meet threats are already available. In fact, many of them have developed innovative policies and processes for optimised use. This leading practice now needs to become the industry standard.

Matt Chambers and Georgina Crundell are from EY’s Global Power and Utilities team. You can get in touch with them at matt.chambers@ey.com and georgina.crundell@au.ey.com.

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FEATURES SCHEDULE

FEATURES SCHEDULE September 2019

Deadline: 12 July 2019

November 2019

Deadline: 18 October 2019

MAJOR FEATURES

Wind Nuclear energy Gas pipelines Energy efficiency

MAJOR FEATURES

Grid integration and stabilisation Disruption Biofuels Inside power plants

SPECIAL FOCUS

Microgrids Asset management Distributed generation

SPECIAL FOCUS

Electric vehicles IoT & cloud communication Mobility

EQUIPMENT & MACHINERY

Asset inspection & drones/UAVS

EQUIPMENT & MACHINERY

Switchgear

EVENT DISTRIBUTION

EECON 2019

EVENT DISTRIBUTION

March 2020

Asset Management for Critical Infrastructure Power + Utilities All-Energy

Deadline: 20 December 2019

June 2020

Deadline: 12 April 2019

MAJOR FEATURES

Solar Domestic gas outlook Hydrogen and future fuels

MAJOR FEATURES

Energy networks Storage and solar Pumped hydro Waste-to-energy

SPECIAL FOCUS

Smart networks (big data, smart meters and smart grids)

SPECIAL FOCUS

Automation Security Industrial energy

Consumer and industrial retail

EQUIPMENT & MACHINERY

Spatial & GIS

EQUIPMENT & MACHINERY

Transformers and substations Vegetation management

EVENT DISTRIBUTION

Digital Utilities 2020

EVENT DISTRIBUTION

TBC

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