Australia’s energy transformation is accelerating, but major challenges lie ahead

Katherine Myers and her husband Ben are fifth generation potato growers.

They live with their children in western Victoria, where a sustainable energy transition is underway, and like the majority of Australianscare deeply about the prevention of climate change.

However, there is one aspect of the transition to renewable energy that could jeopardize their operation: an upcoming energy transmission project will have power lines built through their farm.

Once the lines are up, Mrs. Myers worries that her family won’t be able to irrigate or use airplanes to water the crops.

“This paddock here is… growing certified seed potatoes for the rest of our industry,” said Ms. Myers.

“This paddock will not be suitable for growing potatoes once the transmission line goes through it.”

The Myers family is one of hundreds of people in Daylesford and surrounding areas campaigning against massive transmission lines that will run through their town, 140 kilometers northwest of Melbourne.

Those overhead wires — and the cell towers to carry them — are part of a plan to create a major, renewable energy hub in western Victoria, supplying zero-emission electricity to Melbourne. a project that the energy market operator has now deemed “necessary” for Australia’s energy future†

“Renewable energy is absolutely essential. It’s the way we move forward,” said Ms Myers.

“It’s just the importance of getting that relationship between protecting our food security and managing the introduction of renewable energy.”

‘Congestion’ in the energy grid

The Labor government has a plan to increase the share of renewable energy in the grid to 82 percent by 2030.

“It’s a very ambitious agenda,” said Simon Corbell, former deputy Labor Prime Minister of the ACT, who now represents investors in renewable energy.

“But it has to happen and we will have to mobilize all our resources in both the public and private sectors to make it happen.”

However, many industry specialists and investors say that achieving 82 percent renewable energy will only be possible with a major upgrade of the poles and wires that carry that power across the country.

Renewable investor John Martin knows this better than anyone. After years of working in finance, he started investing in renewable energy in 2017 and has guided the development of dozens of major projects in Australia, the US, Africa and elsewhere.

When he started as chief executive of New Energy Solar, he planned to develop half of its assets in Australia and the other half in the US. But the state of Australia’s transmission network ensured that it never came to fruition.

“We have built 59 solar farms in my investment company and only two of them were in Australia,” said Mr Martin, who is now Windlab’s chief executive.

“We spent more time managing the issues surrounding those two projects than we did on all 57 projects in the US.”

He says a solar farm in central west NSW – Manildra Solar Farm – is encapsulating Australia’s transmission problems.

His previous investment company, New Energy Solar, built the farm in 2018 and initially everything was perfect.

“I always say this is one of the best renewable energy projects I’ve worked on. And until recently… one of the best performing projects I’ve been involved in,” he says.

Shortly after commissioning, the Australian Energy Market Operator (AEMO) began telling operators not to put the electricity produced on the grid.

It’s a problem called “congestion”: the poles and wires in that part of the network were just out of order and couldn’t safely transport the energy.

“A lot of power is generated by renewables with just not enough transmission capacity to make it charge,” Martin says.

So New Energy Solar sold the farm to Banpu energy, partly because of the congestion problem.

The new owners say that during peak production periods, 60 percent of the energy is simply wasted.

John Martin said that’s why he and many other investors haven’t built more renewable energy in Australia.

“It’s just too risky. If you’re generating renewable energy and it’s wasted, why invest here? Why invest capital here?” he said.

Mr. Corbell said that if the government repaired the transmission network, investors would come to the market.

“The main investor problem that the new government must address is access to transmission,” he said.

Bringing communities on board

That message was heard by Labor before the election and is now central to the government’s climate plan.

“The missing piece was transmission: getting the energy from where it’s produced to where it’s going to be consumed,” Federal Secretary of Climate Change and Energy Chris Bowen told the ABC.

Rather than focus on subsidizing renewable energy generation, the government is investing $20 billion in modernizing the transmission network.

That money is intended to help build 10,000 kilometers of transmission lines, which AEMO said was urgent and essential to unlocking renewable energy zones across the country.

However, it is that mass rollout that could put the government at odds with communities like the one in which the Myers live.

Most of the community there wants the transmission wires buried underground where they are out of sight. They say underground transmission will be safer in the event of severe weather and wildfires, and will have less impact on agriculture.

Ausnet, the energy company that proposes transmission lines in western Victoria, told ABC it will continue to work with affected communities to “understand their priorities and how to incorporate local benefits into this project.”

“The project continues to explore partial underground possibilities as part of the Environmental Impact Statement, which will be submitted later this year,” the statement said.

Few communities would be happy with giant transmission lines intersecting their streets, fields or forests, and Secretary Bowen says he understands the need to improve community consultation.

“Communities currently think that when they are consulted, it is basically a fait accompli: the decision has already been made as to where the lines will go,” he said.

‘And you know what? They are often right.’

Energy shift one of Australia’s ‘biggest changes’

Everyone the ABC spoke to for this story — politicians, investors and community members — said Australia needed to review the regulations governing how transmission projects are decided.

The main change needed, they said, relates to the Transmission Regulatory Investment Test (RIT-T), which outlines considerations for a proposed transmission project.

Before the election, Labor promised to change that, and Secretary Bowen said that was still a priority.

“I am absolutely determined that we improve the process,” he said.

“It’s designed for small additions to transmission, not the kind of transformation [increment] that we need to undertake across the country.

“It’s more important than ever that we get it right.”

Minister Bowen said it is essential to navigate these issues as Australia moves towards net zero emissions.

“It’s one of the biggest changes our economy has ever considered doing,” he said.

Martin said he was optimistic that the government’s goals would be met.

“We will achieve the three magical goals: we will have much cheaper electricity than we see now. It will be much more reliable and we will support decarbonisation,” he says.

“And I think we can really crack this in the power industry in the next 10 years.”