Advocacy in Action - Dealing with disruption in the energy sector

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Western Australians are amongst the biggest energy users in the world, but very few of us actually give thought as to how it’s made, we simply flick a switch and a light comes on. But at our recent Food for Thought Luncheon, Synergy CEO Jason Waters shared with us a very informative presentation, titled ‘A New Energy Paradigm’ that examined the brave new world of power supply in the 21st century.

For many sectors, disruption has changed or is changing the way we think and operate in our workplace. For Synergy, disruption has come in the form of renewable energy and the increased uptake of rooftop solar panels. While Jason said these disruptors are making the business of power generation more complicated, the changing landscape brings with it more interesting and exciting times ahead.

Currently, Synergy generates 55 per cent of the electricity that is supplied to around one million homes and businesses in the South West Interconnected System (SWIS). Traditionally, gas and coal fired power stations have provided us with the bulk of our energy needs. However, as time goes on the role of renewables, including solar and wind energy, is changing everything.

Western Australian’s ongoing love affair with solar will see up to 160 megawatts of rooftop panels installed this year, taking annual total solar production to more than 800MW, which is more than the largest power station currently operating in the SWIS.

Mr Waters explained that while overall scheduled power generation is decreasing, electricity from new renewables and rooftop solar is increasing. Ten years ago, 5 per cent of our energy was supplied by renewables, 83 per cent by Synergy, and 12 per cent by Independent Power Producers (IPPs). This year, 8 per cent will come from renewables, 48 per cent from Synergy, and 44 per cent from IPPs. By 2024, it’s predicted that 27 per cent of our power will be generated by renewables, 37 per cent by Synergy and 36 per cent by IPPs.

Not surprisingly, electricity production from rooftop solar panels peaks in the middle of the day, but demand for power is at its highest after the sun goes down. The issue for Synergy is balancing the rooftop solar power that floods the system when demand is low; with the efficient operation of baseload power that underpins the reliable supply of electricity to the state. The challenge is ensuring that generation within the SWIS can match the demand of households and businesses at any time.

As well as coping with the increasing amount of renewable energy flooding the system, Synergy’s balancing act will become even more difficult when the price of batteries comes down, and more homes and businesses connect those batteries to their rooftop solar panels. This will lead to a number of homes and businesses becoming almost energy self-sufficient, by harnessing the power of mass storage. Managed and incentivised correctly, ‘virtual’ power systems may improve system reliability and enable load smoothing, resulting in a reduction in the cost of energy.

Synergy’s purpose is to provide affordable and reliable energy to its customers. While investing in solar panels is one way customers can reduce their power bills, this option is financially out of reach for some households, with approximately one-in-four customers accessing some kind of concession.

For Synergy, government and policy-makers, the challenges are to not just manage the correct mix of traditional and renewable power with consumer demand, but ensure there isn’t a growing divide between those who can afford to invest in new technology to reduce their power bills, and those who cannot.

We thank Synergy and CEO Jason Waters, a Gold Member of the Committee, for hosting our members at their office.


Other articles from Insight, August 2018 (view email newsletter):