TRANSCRIPT: Interview with Paul Bevan 1233 Newcastle ABC Radio

Mar 1, 2017






SUBJECTS:  Committee on the Environment and Energy inquiry into modernising the power grid

PAUL BEVAN, ABC NEWCASTLE: Today the House of Representatives Standing Committee on the Environment and Energy has launched a new inquiry. They are enquiring into modernising Australia’s energy grid. The Chair of the inquiry is from the National Party, the Deputy Chair is from the Labor Party and he’s one of our locals, he’s the Member for Shortland and Pat Conroy thanks for joining us this afternoon.


BEVAN: There’s your problem solved ANU has done the work for you, you need stronger interconnections between the states and you need pumped hydro.

CONROY: Well that’s certainly one view. The key point there is that renewables already are cheaper than replacement coal fired power generation in this country. Without any intervention, without any carbon price or anything else, we’re going to be facing a grid that’s got a lot more renewable power going into it and our inquiry is looking at what does that mean for our network. Because our network was built for very large coal fired power stations close to coal mines, leading into major cities and big manufacturing areas, and the network has to change as technology changes.

BEVAN: The question you’re asking the community is you want to know from the community what are their priorities from the grid. If you simply ask the community that question they’ll go ‘I want my lights to go on when I flick the switch,’ so how do you take the next step in getting a more informed input from the community?

CONROY: Well we’ve got a survey which will go through those issues in detail and we’ll be having roundtables with experts from the power industry, from academia, from government to really get to the nub of it. Your example of people wanting the lights to come on when they flick the switch is very apt, but people need to understand we’re paying very high electricity prices because of network costs which were driven mainly by a design to have very high reliability standards. Which means we’re paying for the gold plating, so to speak, because of that particular issue, so when you pose to people; you always get the lights always coming on but it leads to very high electricity costs that might lead to a slightly different response from individuals.

BEVAN: As I understand it the gold plating has already happened but you’re saying that we need to modernise the electricity distribution networks, isn’t that what we’ve done?

CONROY: Well what we’ve done is we’ve ramped up investment to build up reliability. So reliability is much higher than it was ten years ago. It’s still built on having a few very large coal fired power stations generating electricity and then distributing it. We’ve now got over a million homes with rooftop solar PV instillations, we’ve got more and more wind and that leads to challenges and opportunities our grid isn’t built for. So one of our real tasks is to make recommendations about how the grid can be modernised to deal with renewables. They have challenges; they don’t provide what’s called inertia or synchronicity of electricity generation. There are ways around it and other countries around the world are using those changes to stabilise their grid, but we haven’t really embraced that. We have an electricity operator and a market regulator that’s really grounded in the 1990s.

BEVAN: One of the difficulties is of course we’ve sold off the poles and wires in NSW, so isn’t this the job of private operators don’t you simply say ‘in your contract is says you have to meet certain standards and it’s now up to those private operators to make sure they get there?

CONROY: Well in NSW obviously, they’re half privately owned and half publically owned, in Victoria their privately owned. In other states they’re publically owned so there’s a real mish-mash around the country. But it’s a very regulated industry anyway it’s an industry where if you’re a network provider, you go to the network and say ‘I want to put in a new distribution line and this is why I need it’ and they get approval to basically build it and charge people 10 per cent profit on whatever they build. So it’s still very regulated, so there’s still a really strong role for government to make sure it works properly.

BEVAN: One of the people I imagine that will be banging on the door first of your inquiry is Matt Howell, the CEO of Tomago Aluminium. He was very vocal recently at being told by his electricity provider, AGL that he had to shut down his three pot lines sequentially so that he would cut a third of his power for a period of I think three and a half hours, which is beyond his capacity to do. He was yelling foul on a number of different levels. One, he was kind of implying there may be a push to keep prices high in our entire electricity system. Are you going to looking at that kind of thing?

CONROY: We’re mainly focussed on how the network works rather than power generation but we will canvass security issues and on that particular issue, I spoke to Matt on the afternoon when they were forced to shut down and he was rightly very angry and very concerned about the future of his plant. But there are things that can be done; that have been done in other countries. For example, there are companies that sort of aggregate supply and when it’s very hot, in demand and energy generation is very short, they work with lots of other companies and even household who agree to switch off their power to ease the stress on the system which means we don’t have to do this very dramatic cutting of an aluminium smelter. Now, under our current network rules that’s not allowed to happen in Australia whereas other countries do that and they do it very well, and it may be that 2000 or a large number of homes agree ‘right-o we’re all going to turn off our pool pumps and we’re going to turn off our air conditioning for half an hour,’ and they get income in return for easing the stress on the network. But that can’t happen under the current rules in this country and that’s something we’re very interested in exploring.

BEVAN: The reason I stress that the Chair of the committee is from the Nats, Andrew Broad, you’re the Deputy Chair from the Labor Party, is that this is a very, very, very political issue and we know that as soon as the grid failed in South Australia it became a political hot potato. Do you think the makeup of the committee can cut through the political pushing one way or the other? 

CONROY: I’m optimistic, the reason we’ve come up with this inquiry is we’ve said ‘right-o we’re not going to argue about how much renewables we have in the system, the facts are that both sides of politics have agreed to a minimum of 23.5 per cent renewable energy by 2020 and in terms of pure economic cost they’re getting cheaper so more and more are coming in. So we’re going to park the argument about how much should be in the generation mix, we’re going just to look at the network and how to modernise the network so it’s safe, reliable, affordable and sustainable. A lot of people don’t understand that network costs make up 55 per cent of their electricity bill, generation only makes up 25 per cent. I’m hopeful that we can make some bipartisan recommendations that will carry a lot of weight to help these issues.

BEVAN: Can you do that can you go ‘renewables are one thing, we’re looking at the grid’ and if you do, doesn’t it undermine the viability of the inquiry? And I note also that Andrew Broad has said new technology such as renewables and energy storage are already transforming the grid. So you can’t ignore them when you’re looking at the grid they’ve kind of got to be the focus of what you’re looking at haven’t they?

CONROY: We’re parking to one side arguments about how much renewable energy should be in there – Labor says 50 per cent by 2030, the Coalition obviously say a lot less. We’re saying we’re not going to talk about how much is in the grid, we’re about how to change the grid to adapt to renewable energy. So hopefully we can come up with some bipartisan recommendations that will actually cut through the argy-bargy in Canberra and there are areas we can work together in the national interest. Hopefully this will be an example for the broader energy debate which has been overly politicised and which is against the national interest.

BEVAN: Okay great to talk to you, thank you very much.

CONROY: Thanks Paul any time.



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