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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Staring down trust challenges
Published 1 day ago • 11 min read
Hey Reader, in today's edition:
No quick fixes in big buildout
Insight into NEM review recommendations
Copper smelter lobbying
‘Heartbreakingly hard’
Winning trust and support at the local community level has entered a much more challenging phase as people feel they’re taking on a disproportionate burden to achieve national goals, delegates heard at the Australian Clean Energy Summit (ACES) in Sydney.
“When you’re building transmission as well as large-scale renewables you’re reaching into further areas of society and I think that trust, we can’t assume as we sit in this room, that everyone feels about it in the same way. What do they genuinely feel the benefits are? We have to stare into that and it’s a multi-decade environment.”
Mark Collette
EnergyAustralia Managing Director
Origin Energy (ASX: ORG) CEO Frank Calabria said the strength of the victory for the Labor government gave him some confidence. Key policy reviews will play out over the next six months - the gas policy review, work on the EPBC Act, the NEM review and a review of the DMO as a regulated reference price - which he said offered a good chance of creating an enduring policy framework.
“That’s a good place to be relative to the other outcomes that may have emerged,” Calabria said, providing long-term confidence to make investments with enough lead time to allow the retirement of existing assets.
“You’re certainly going to build out a new energy system much more cheaply than with a series of short term interventions,” he said. “Clearly we’re focused very much on the suite of services that we’ll need when we close Eraring.”
Calabria said Origin’s large gas peaking fleet would do the job and the market would need more of them to provide longer-duration firming.
Hydro Tasmania CEO Rachel Watson put in a plug for hydro instead of more gas peakers, to tackle what AEMO CEO Daniel Westerman described as the two challenges of system strength: the retirement of coal plants which take synchronous generation out of the market and periods of minimum demand when rooftop solar are doing their job in abundance.
“One of the beautiful things about pumped hydro and batteries is that they switch on as load in those moments - that’s one of the things we need to keep thinking about in this efficiency discussion around we put together an electricity system that really works for us. Industrial customers also become very important in that equation,” Watson said.
But the transmission that Australia requires so badly has further complicated the “heartbreakingly hard” development of renewables, adding to the work needed to get communities on board, she said.
Foreshadowing the soon-to-be-released initial report of the NEM review, Tim Nelson and fellow review panellist Ava Hancock honed in on potential recommendations to get more liquidity and price transparency into medium-term markets, and also send long-term investment signals.
Speaking at ACES, Nelson said the mechanism the panel had been theorising would focus on services, not technologies and would include demand-side and small-scale resources. Beyond that, it would facilitate the delivery of essential system services (ESS), like system strength and inertia,
It would price signal from 1 through to 15 or even 20 years, in a similar way that bond markets price money for a time frame of that period.
Expert view
“What does this type of mechanism look like? It's a hybrid of centralised and decentralised. It deals to the risks that the market can't deal to, and it lets the market deal to the risks that it can deal to, in particular, that front end of any particular project. It solves for new entry, but it does it in a way which is competitively neutral with incumbent investments.
So a wind farm would be selling the same type of contract from a new plant that a wind farm across the road would have already been selling through its existing investment. It only addresses the tenor gap, it doesn't remove all of the risk from the market participant, and it returns it back to the market when the market is able to bear that risk.
We think that by using standardised fungible derivatives contracts we can better address that liquidity being returned in the medium term, as you get closer to that time period manifesting. It would be focused on services, not technologies, and three services that we see being critical for meeting consumer demand into the future: bulk zero emissions energy, shaping and firming.”
Tim Nelson
Chair, Review of the NEM
Asked about concerns of monopoly pricing behaviour currently seen in the NEM, Hancock said the draft recommendations the panel was looking to make for the medium-term horizon would boost price transparency.
“Some of the recommendations actually pertain to a market-making type mechanism, which is actually going to really encourage and potentially require more participation in those derivative markets, which would really increase transparency in that horizon,” Hancock said.
Mount Isa Mayor Peta MacRae is in Canberra to secure a deal to save the Mount Isa Copper Smelter and Townsville Refinery – and the 17,000 jobs that depend on them.
Resources giant Glencore has confirmed preparations are underway to place both assets into care and maintenance until they return to commercial viability. Despite this, the government response continues to deflect to Glencore, insisting the company “needs to be good to Queensland.” Mayor MacRae says that line misses the mark, calling on the Queensland and federal governments to back Mount Isa’s future.
“Mount Isa is my home – and has been for decades. This community are humble and hardworking people who rarely ask for help. But right now, we are staring into a void of fear and uncertainty. This is our moment to ask. We need leadership. We need a deal. And we need it now,” she said.
“This is not just a Mount Isa issue – it’s a national issue. Copper is essential for our clean energy future. If Australia walks away from refining and processing it here, we are handing over control to others who do not share our values or strategic interests.”
Catch Up
Capital
Coal generator outages, low wind output, cold weather, interconnector limitations and rebidding behaviours saw 66 high price energy events in the NEM in the June quarter - the second largest on record, the Australian Energy Regulator (AER) said.
The AER’s latest wholesale markets report showed volume weighted average wholesale electricity prices increased in all regions of the NEM this quarter compared to the previous quarter, with increases ranging between 33% in Queensland and 132% in Victoria.
In contrast, East Coast downstream gas market spot prices fell 10.1% quarter on quarter due to lower-than-usual demand. A combined 1,456 megawatts of new generation capacity from wind, solar and batteries entered the NEM in the quarter – 535 megawatts more than last quarter. Batteries played an increasing role in setting the price, particularly in the evening peaks, as can be seen in the chart below for Victoria.
Price setter by time of day, Victoria, Q2 2024 and Q2 2025 Source: AER
Quinbrook closed its first investment in Ireland with the acquisition of the Wexford Synchronous Condenser Project. Wexford, originally developed by Green Frog Power, was awarded a long-term revenue contract under a Low Carbon Inertia Services (LCIS) tender in June 2024. The project is configured to provide critical services including inertia, short-circuit level, and reactive power that are essential to maintain stability in the Irish electricity grid.
Projects
The US clean energy industry is still expanding, but 34 projects collectively worth more than US$31 billion have either shut down, delayed timetables or shrunk in scale since Donald Trump took office, according to Professor Jay Turner’s latest Big Green Machine report. The research also found disadvantaged communities were being hit hardest by the slowdown in clean energy manufacturing investments.(Politico)
Policy
Australian union leaders called for more speed in diversifying our economy, pointing to a chronic lack of corporate investment in research, development and innovation. Australia is ranked 105th in the world for economic complexity - below Botswana and Panama. Unions will go into next month’s Economic Reform Roundtable advocating for a new national approvals system for renewable energy and transmission projects to get them faster to a clear ‘yes’ or ‘no’ decision and a fairer share of benefits for workers and communities.
“A faster, fairer path towards a net zero economy, including an improved development approvals process and new production tax credits for green iron and green alumina projects can take us a long way down the road. By diversifying our economy, we will do more than just dig things up and ship them off. We’ll be able to turbocharge our advanced manufacturing sector, creating good quality jobs and lifting research, development and innovation.”
Michele O’Neil
ACTU President
Voter support for the energy transition to renewables is on the rise, according to a poll of 1855 Australians, conducted from July 8-16 by SEC Newgate. It found 64% of voters (up from 56%) backed the 2030 target to reduce carbon emissions by 43% and 59% (up from 53%) endorsed the commitment to achieve net-zero emissions by 2050. Support for rooftop solar rose to 89% ahead of hydroelectric power (75%), solar farms (74%), onshore wind (63%), offshore wind (60%), gas-fired power (35%), nuclear power (31%) and coal-fired power (31%). (The Australian)
New York became the first US state to commit to all-electric new buildings. The 2025 rules will apply to new structures up to 7 stories tall and, for commercial and industrial buildings, up to 100,000 square feet. Buildings bigger than that will need to be built all-electric starting in 2029. (Canary Media)
Separately, the state also invited bids for a gigawatt of grid-connected energy storage facilities.
Regulation
With the cheaper home battery program seeing 1000 batteries installed per day, “distributed energy is no longer at the fringe, it is here to stay,” Clean Energy Council distributed energy GM Con Hristodoulidis told the Australian Clean Energy Summit. But the regulatory environment is yet to catch up, experts say, be it on performance and interoperability standards for VPPs, streamlining of battery registration by installers, or making it easier for consumers to navigate the value of their home battery.
UNSW Energy Institute Professor and AGL non-exec director Mark Twidell posited an interesting idea to help deal with these issues and get CER recognised by government as an alternative investment to large-scale generation.
“One (way) is to put a similar amount of effort into the institutional arrangements for CER than we do for mainstream generation. So the CER roadmap is a great document, but it remains a document. And really we’ve got this crying need for a decision maker…to come in and adjudicate on some of these things.
We already have a CER, a clean energy regulator, just change what the C stands for and build the resources necessary.”
Mark Twidell
Industry Professor of Practice, UNSW Energy Institute
Technology
MGA Thermal’s thermal energy storage (TES) technology is economically competitive with traditional fossil fuel technologies at an industrial scale, according to a pre-feasibility study with Tronox and GHD. The study investigated the feasibility of a 180 megawatt-hour TES project capable of delivering 20 tonnes per hour of steam to an industrial site. The project will be connected to Western Australia’s South West Interconnected System (SWIS) and can deliver network benefits, including load shifting and a future pathway for large processing plants in the resource-rich state.
Dutch startup Ore Energy connected the first iron-air battery system to the grid. The ‘100-hour batteries’ charge and discharge electricity through a reversible rusting process and can discharge energy for multiple days. (Latitude Media)
Climate
Squadron Energy joined the ‘Business for 75’ campaign, calling for Australia to adopt a 75% by 2035 emissions reduction target.
“As a developer and long-term owner of renewable energy and low emissions infrastructure, we know the critical role this sector plays in building the new energy system. A legislated target aligned to 1.5°C will give investors and industry the confidence they need to get on with the job.”
Rob Wheals
Squadron Energy CEO
Analysis by Carbon Brief explored the impact of Trump's tariffs on global carbon emissions, forecasting a reduction of just 0.3% in 2025.
People
Solar energy pioneer and CEP Energy chief strategy officer Andy McCarthy received the Clean Energy Council’s Outstanding Contribution to Clean Energy Award.
Research
Global coal-fired output could be surpassed by renewable generation as early as 2025, the International Energy Agency said, with coal’s share in total generation expected to drop below 33% for the first time in a century. The IEA’s Electricity Mid-Year Update reported Australian average wholesale electricity prices fell by 6% year-on-year, despite periods of extreme weather. Grid-scale solar and wind set Australian prices in 15% of intervals in Q1 2025, up from 10% of intervals in Q1 2024, contributing to a lower average wholesale electricity price.
Targeted interventions to enable more lower-income households to improve energy efficiency would enhance the benefits on offer for peak loads, health, and energy equality, according to a New Zealand study published in Energy Policy. The study modelled the costs and benefits of energy efficiency interventions in 400 houses and found space heating interventions had the largest financial benefits, but peak demand changes were larger in higher-income households.
Random
Asked at ACES about the social license risks of offshore wind, British Consulate ANZ Energy Lead Ben Jowett remarked on something he’d recently heard:
“Don't shoot the messenger…but somebody told me in Melbourne recently that NIMBYism (Not In My Back Yard) is one thing globally, but in Australia we've got BANANA which is ‘Build Absolutely Nothing Anywhere Near Anyone’.”
Meanwhile, European energy giant Vattenfall tapped Hollywood superstar Samuel L. Jackson to help promote the environmental benefits of offshore wind farms.
What's On
August 6 The NEM review - what it's shaping up to mean
NEM review Chair Tim Nelson, Clean Energy Investor Group Head of Policy and Advocacy Marilyne Crestias and Baringa's Peter Sherry will speak at this webinar moderated by The Energy's Advisory Board Chair Simon Corbell.
August 7-8 2025 ACCC/AER Regulatory Conference
Former chair of UK energy regulator Ofgem Professor Martin Cave, AEMC Commissioner Sally McMahon, Treasury Assistant Secretary - Competition Taskforce Anna Barker, Essential Services Commission Chair Gerard Brody, and Marinus Link Chair Sandra Gamble are among the speakers at this event in Brisbane.
August 11 RE-Alliance Briefing for Industry and Government
Bridget Ryan, author of the RE-Alliance report Retirement age renewables – delivering for Australian communities, will discuss required management responses at this online event.
August 13-14 2025 Australasian Emissions Reduction Summit
Victoria’s Minister for Climate Action, Energy and Resources Lily D’Ambrosio, Climate Change Authority Chair Matt Kean, Carbon Market Institute Chair Dr Kerry Schott, Co-Founder and CEO of CORE Markets Chris Halliwell, Investor Group on Climate Change CEO Rebecca Mikula-Wright and BHP Australia President Geraldine Slattery will speak at this event in Melbourne.
August 14-15 First Nations Clean Energy Symposium
Government, industry, academics and regulators will join over 200 First Nations leaders from around Australia at this event on Kabi Kabi country (Sunshine Coast).
August 18 National Press Club
Productivity Commission Chair Danielle Wood will speak on the “Growth imperative: How to fix our productivity problem” at this event in Canberra.
August 26-27 Australian Renewable Heat Conference
Climate Change Authority Chair Matt Kean, ARENA investment manager Peter Haenke, and AGL sustainability expert Brendan Weinert will speak at this event in Sydney.
August 26-28 2025 New Zealand Wind Energy Summit
NZ Minister of Energy Simon Watts, Secretary-General of the World Wind Energy Association Stefan Gsänger, Global Wind Energy Council CEO Ben Backwell, Commerce Commission Chair Dr John Small, and Transpower Executive General Manager - Future Grid John Clarke headline this event in Wellington, NZ.
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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