Labor must fix the energy policy mess left by the coalition

For nearly a decade, the Coalition failed to develop a national energy plan, even though such a plan existed before it took office.

Since energy is of national importance, a national policy, national rules and regulations are necessary. At the same time, we are facing massive changes in the energy sector.

States and industry were well aware of this and did what they could, but without a national plan, it is difficult to make national investments. During this most critical period of energy transformation, the national government was absent.

As a result, Australia was ill-prepared when the current crisis hit. We could not have avoided the crisis, but as a country we could have been much better prepared and would not have had to resort to the dramatic government interventions that we see today.

We had to wait a decade and a few weeks after the election, suddenly we have a national energy plan.

In the early 2000s, I started the Smart Grid Smart Energy Australia Association. This industry organization looked at new forms of infrastructure that would make our use of energy smarter.

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We have also linked this to smart city policies, looking at combinations of communication and energy infrastructure to deliver new services. With the help of smart technologies like the Internet of Things (IoT), it’s been estimated that you could run these networks 30% more efficiently. This would represent a huge saving in both cost and carbon emissions.

Smart Energy Australia successfully onboarded the then Labor government and launched the $100 million Smart Grid Smart City project.

The plan was to use pilot projects in New South Wales for smart grids, electric vehicles and renewable infrastructure as models for deployment across the country. Unfortunately, the final plan was just ready and presented before the 2013 federal election. The Coalition entered.

Similar to the “kill the NBN” plan, they also killed the Smart Grid Smart City project. It cost the country dearly.

Interestingly, at that time, all the electricity distribution companies were on board, as well as the entire energy industry. Several cities were also ready to get involved in the following projects.

All in vain.

While state governments, many cities, and industry were all on board, energy regulation is a federal responsibility. In order to launch smart energy projects, regulations needed to be adjusted so that these projects could be launched within the existing electricity industry infrastructure in the most effective and efficient manner.

For example, due to the lack of regulatory support, it was impossible for transmission companies to build their grids for new solar power plants.

They could only do that if they established new, separate trading companies. In this way, new infrastructures could not be built on the basis of a sustainable business model. Only when it can be integrated or built on a cost basis (and not on a commercial basis) can such smart projects be developed. The reason for doing so must be based on public interest, not profit.

Rather than seeing it as a national good, the coalition government has treated it as a kind of luxury item.

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Transgrid in New South Wales was, as far as I know, the only one that finally bit the bullet and set up a trading company. A national policy could have saved them many years and millions of dollars.

At the same time, in the late 2000s, a carbon emissions plan was agreed with energy companies. However, the coalition opposition at the time called it a carbon tax, and the coal industry also criticized the plan in full-page national advertisements. This plan was torpedoed.

With Abbott in charge, any national energy policy has now been successfully destroyed. During the entire time that the Coalition was in power, they could not obtain sufficient internal support to propose an alternative.

They failed to create a national plan, which made it very difficult for companies to invest in new energy technologies. All of these organizations were keen to work towards a more sustainable energy grid. Not just for environmental sustainability, but because it made economic sense.

If we would have had a national plan ten years ago, we would have been in a much better position.

The new Labor government and the states agreed on a national plan within weeks. It was a clear indication that the States were more than ready. States and private industry circumvented the federal blockade. Now, with a national plan in place, we will see an increase in smart energy developments across the country.

Unfortunately, the results of this will be in a few years, while the crisis is now. The energy crisis will get worse, but more importantly, it will get better over time.

Paul Budde is a freelance columnist in Australia and Managing Director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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