Remember the 'big stick'?


Hey Reader, in today's edition:

  • ACCC-AER split questions
  • Fuel supply crisis escalates
  • Stronger ring-fencing requested

Taylor’s legacy hangs over AER-ACCC split

The so-called ‘big stick’ legislation introduced by opposition leader Angus Taylor when he was energy minister last decade has never been used in anger.

A departmental review of the law last year found little or no evidence its powers had had any effect on competition or consumer prices but concluded that they might have done so and recommended the government “remake” the Act and extend its operation until 2030.

Who should administer the law remains to be resolved and in July, a long-running policy measure to legally split the Australian Energy Regulator and Australian Competition and Consumer Commission will come into effect.

Responsibility for administering the big stick law currently sits with the ACCC — under Treasurer Jim Chalmers — because Taylor had to go around state and territory energy ministers to include divestiture among its powers.

The AER might be better placed to take ownership, but there’s a lot to work through before that could happen.

Escalating fuel supply crisis leaves Australia at risk

Faced with growing evidence that Australia’s energy market is actually not alright, energy minister Chris Bowen has adopted a pragmatic stance on how the government will plug the growing hole in oil supplies as the Iran war continues.

The government maintains its “opposition to Vladimir Putin’s actions,” he said in a Saturday press conference when asked about the US government’s controversial relaxation of oil sanctions on the country. “We don’t like Russian oil any more than anyone else,” Bowen said, “but we are dealing at the moment with an immediate domestic issue.”

With his authorisation of the release of 20% of the national stockpile and accelerated reporting on the country’s backup fuel stocks to weekly – his latest advice is that we have 37 days reserve ready to tap – Bowen faces an increasingly uncomfortable reality as the conflict’s escalating network effect buffets Australian energy policy.

Stronger ring-fencing guidelines needed to protect consumers

Alarmed by monopoly network businesses extending their tentacles into new energy services with regulatory waivers and pilot programs, Nexa Advisory has lodged a rule change request that has garnered the support of both the Clean Energy Council and the Australian Energy Council.

It would see new protections codified into the National Electricity Rules to prevent regulated network monopolies using their advantages — including access to customer data and regulated revenue streams — to dominate emerging markets that would otherwise attract private investment and innovation.

Catch Up

Capital

Australia could realise more than $290 billion in clean energy investment “if decisive action is taken to deliver a pipeline of 70 projects,” Mission Possible Partnership (MPP) and the Industrial Transition Accelerator (ITA) have argued in a new briefing developed through consultation with more than 50 Australian clean energy leaders. The report, entitled Clean industry Spotlight: Turning Australia’s Natural Advantage into Industrial Leadership, was launched during last week’s Climate Action Week Sydney, with acting DCCEEW branch head Michael Bartlett noting that Australia has the world’s third largest clean industrial pipelines, with 53 commercial-scale zero or near-zero emissions projects and 17 lower-emissions projects in development – yet, Bartlett noted, just one of the nearly 20 advanced projects has reached financial close.


Policy

Western Australia has reportedly launched its own review of the Australian Energy Market Operator’s handling of the west coast electricity system. Energy Policy WA is considering alternative arrangements that increase AEMO’s accountability to the state government, the AFR reported. Options being considered include giving ultimate operational control to the WA government, and a “light touch” model that focuses on “cultural shifts and clear accountabilities”. (AFR)

The government’s ongoing fuel tax credits scheme (FTCS) is putting clean-energy proponents at a “structural disadvantage,” Allegro Energy CEO Thomas Nann said. He has asked resources minister Madeleine King and treasurer Jim Chalmers to reconsider diesel subsidies which have made it harder to deliver clean energy – in particular, microgrid projects in remote communities – because their proponents are competing with subsidised diesel prices on a playing field “that has been deliberately tilted toward fossil fuels”.

The US state of Virginia is expected to sign a newly passed measure allowing consumers to hang solar panels on their balconies to generate up to 1.2kW of supplementary electricity. The unanimous vote to permit “small portable solar generation devices” – the second in the US, after Utah – allows them to be installed without the involvement of utility companies or regulators.

The Australian Institute of Architects has called on the federal government to appoint a Federal Government Architect whose role would be “to champion quality, coordinate portfolios, and ensure public benefit in Commonwealth projects”. The call is in response to Infrastructure Australia’s (IA’s) latest priority list – which includes 68 energy, transport, water, and freight projects including transformation of the SWIS and REZ enabling infrastructure. Given IA’s leaning towards clean energy projects and prioritisation of decarbonisation, the AIA argues that “design quality, material efficiency and whole-of-life performance must be considered from the beginning, not retrospectively.”


Projects

Public comment on the proposed Wak Wak Solar Farm is now open, with feedback solicited on both the project and a range of related ecological issues. Due to commence construction in May 2027, the Darwin-area project will include a 2.7GW solar farm and 6GWh BESS – spanning a 13,000 hectare initial investigation area that includes 900ha of wildlife corridors and a 2,500ha disturbance footprint. Comment is open until March 27.

Funds from the government’s smart batteries subsidy program will be available to more households in the Illawarra region, after the government expanded the Electrify 2515 Community Pilot that it launched in late 2024 to include neighbouring Bulli. More than 100 households in 6 suburbs have so far completed electrification upgrades of household hot water heat pumps, induction cooktops, and reverse cycle air conditioners.


Regulation

The AER has commenced a targeted review of the revenue determination guideline for NSW non-contestable projects, which will be updated to include AEMC’s improving the cost recovery arrangements for transmission non-network options rule (ICRA rule). Designed to “provide cost recovery certainty and timing flexibility” for network operators looking to include non network option (NNO) components in their network infrastructure projects, the amendments include a new chapter to address determinations on NNO components. Submissions are open until April 14.

The AEMC has published a rule change request from the Justice and Equity Centre, which would amend current transmission-centric National Electricity Rules to require AEMO to “co-optimise the augmentation of all elements of the energy system… in its identification of the optimal development path”. The AEMC will publish a consultation paper to facilitate consultation on the consumer-focused measure, likely later this year.

AEMO has opened consultation on a draft discussion paper on proposed updates to the Security Enablement Procedures, in support of the Improving Security Frameworks for the Energy Transition (ISF) reforms. The proposals include updating the approach for stable voltage waveform requirements; clarification of when an ‘always-on’ contract is enabled; a new approach for notifying the market of an IT system outage; and more. Submissions are due by April 10.

AEMO has published a formal report on last year’s intervention into South Australia’s market, when it issued nine directions between June 4 and June 25 to maintain power system security. The statutory report outlines the reasons and nature for those interventions.


Technology

New data centres should be located at “strategic points of congestion along the power grid” and harness “unused solar power” in rural projects that currently face regular curtailment for lack of demand, a new Next 10/University of Pennsylvania report has recommended. The mismatch between demand and supply is forcing data centers to be powered by gas supplies closer to the demand centre, the researchers noted in an analysis that found curtailment in California rose by 23% from 2023 to 2024 – with 70% of curtailed energy due to grid congestion rather than oversupply. The wasted energy could have powered 500,000 homes for a year.

Despite widespread philosophical support for renewables, long lead times for supply of new power infrastructure are leading data centre operators to increasingly view gas as a “reliability hedge against renewable intermittency and connection delays,” AlphaSense director of research, energy & industrials Xavier Smith has argued in an analysis that argues ‘time to power’ is the key determinant – with behind-the-meter generation “becoming strategic infrastructure” as hyperscalers demonstrate “willingness to pay for compressed timelines.”


Research

Digital twins hold great promise for modelling and optimising grid dynamics but existing systems fail to live up to expectations because of lingering shortcomings, according to new research from TU Delft that identified three disconnects – including the separate modelling of building and grid systems; poor flow-through that prevents digital twins’ operational insights from informing infrastructure planning; and intervention strategies that “overlook sequential dependencies.”

Differences in technological innovation and formal institutional structures lead to widely varying outcomes for renewable projects in developed and developing countries, according to a University of the South Pacific study of 91 countries’ renewable policy development over two decades. Subsample analysis revealed that variations in “institutional quality” led to significant variations in the impact of technological innovation and the asymmetry of relationships.


Climate

The downgrading of Australia’s petrol quality emissions could cause worsening air quality, experts have warned in the wake of the government’s decision to suspend tighter fuel standards for 60 days, allowing the diversion of ‘dirty’ fuel with higher levels of sulphur from export markets to domestic supply. Longer-term maintenance of the adjusted standard could, however, cause problems for fuel systems as the increased sulphur combines with water vapour and condensation to form sulphuric acid.


People

Eglantine Etiemble has joined EnergyAustralia as chief information officer after three years leading technology strategy at PEXA. She takes over from Julie Bale, who spent nearly seven years at the firm including three leading its technology strategy.

What's On

March 17
Developing a community stake in renewable energy

The Community Power Agency (CPA) will host a webinar marking its launch of a new best-practice guide for implementing community energy partnerships. CPA’s Dr Anna Berka and Claudia Hodge will be joined by Wambal Bila’s Gavin Brown, Emma Stilts of Manilla Community Renewable Energy Inc, and Stride Renewables’ Cubby Fox.


March 17-19
Energy Networks Australia Conference

Climate Change Authority Chair Matt Kean, Iberdrola Australia CEO Paul Simshauser and Airtrunk Founder Robin Khuda will keynote this event in Adelaide also featuring the leaders of Australia's energy network companies.


March 18-19
Energy Storage Australia

Speakers at this Sydney event include NEM review chair A/Prof Tim Nelson; Modo Energy’s Wendel Hortop; SolaX Power’s Wenyan Sharp; Indigenous Energy Australia’s Michael Frango, Hydro Tasmania’s Erin van Maanen, and the Energy Security Corporation’s Paul Peters.


March 19
Powering the future: Sustainability of mining energy transition materials

The Melbourne Energy Institute will welcome Monash University’s Dr Nikolas Kuschnig for a session exploring the sustainability of mining energy transition minerals. The one-hour session, starting at 2pm online and in person at the Melbourne Connect building in Carlton, will explore the lack of information about artisanal and small-scale mining (ASM) and the impact of uncertainty on the supply of metals critical for the energy transition.


March 24
Powering WA's Regions: Remote and Offshore Renewables

The Clean Energy Council will hold a panel session at Perth’s Golden Ballroom Centre, with speakers including Sabine Powell of DNV Australia, Vi Garrood of Horizon Power, Thomas Friberg of Zenith Energy, Emma van der Velde of GHD, and Nicole Blackburn of Schneider Electric (Australia).


March 24
Energy Dialogue Victoria

A panel of senior industry executives will discuss the future of energy transition, regulation and innovation at a Trans-Tasman Business Circle event. Speakers include Clean Energy Regulator chair David Parker AM, CBA’s Vivek Dhar, and Momentum Energy’s Lisa Chiba.

The Energy

The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.

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