Posted: 13 Oct. 2021 5 min. read

Fast Future – Energy opportunity unleashed

Australia’s energy transition has truly reached a tipping point.

This year’s AFR Energy and Climate Summit was a headline grabber, perhaps more so than ever.

The future energy mix and the place of coal, gas, renewables, hydrogen and nuclear was unpacked  throughout the day.

Our CEO Adam Powick set the scene in his opening remarks noting climate action is rapidly emerging as one of the most important strategic considerations for Australian leaders today. 

We need bold and aspirational targets for carbon reduction and energy transition, we need to work as a connected ecosystem to tackle climate change and we need to actively encourage, stimulate and drive climate technology innovation. 

Head of Deloitte Access Economics Pradeep Philip presented the economic & environmental case for action.

There is a clear choice. While there are great challenges and the transition won’t be costless, there is a great reward if we take action in terms of jobs and economic benefit.

The Business Council of Australia’s Tim Reed acknowledged the shift by his organisation predicated on the demand for action by its membership, Australian industry leaders who are for the main on the path to decarbonisation, with their own targets set and the transition already underway. A business-led transition is driving change & commitment to more aspirational targets.

Federal Energy Minister Angus Taylor stopped short of a commitment to net zero emissions but it’s clear the government is about to move on this as the Prime Minister Scott Morrison declared on the day of the summit it’s a case of how and not if.

Mr Taylor rightly said business has a clear responsibility to step and be accountable by providing reliable energy to customers and delivering on its promises to reduce emissions.

There’s a lot of talk about net zero in the headlines but the minister says Australia needs to focus on the “net” in net zero emissions to protect Australia’s export industries, with a need to examine carbon capture storage, carbon sequestration and gas-generated hydrogen, along with a gas-led recovery.

NSW Energy Minister and newly minted Treasurer Matt Kean and Victorian Energy Minister Lily Ambrosio talked to their states policies.

There were converging views as to the timing of the exit of coal from the energy mix going forward.  Mr Kean said it will remain in the grid beyond 2030 and Energy Security Board chair Kerry Schott predicts coal-power will disappear from the National Electricity Market by the mid-2030s, if not earlier. 

Santos chief Kevin Gallagher pushed back against the suggestion new gas projects should not be supported to achieve net zero.

Renewables and the ambitious Sun Cable project which would use the latest technology and innovation to deliver renewable energy to Singapore & the Southeast Asian markets was also examined.

Sun Cable’s David Griffin says the Australia Asia Powerlink can be delivered right now with existing technology but the challenge is to design a system to deliver what the customer wants.

His aim is to have the technology ready for when they start building the moonshot project, with electricity at the right price, resilience and reliability the key focus.

As the price of renewables continues to drop, coal will inevitably be abandoned as soaring prices of coal accelerate its demise, in the view of climate action champion Mike Cannon-Brookes.

His view is the higher energy prices go, the more the adoption of renewable energy projects will accelerate.

The panel discussion The new energy consumer highlighted the need to protect consumers from electricity price spike, with AGL Customer Service boss Christine Corbett reflecting on the difficulty in balancing the energy transition and prices.

Scope 3 emissions impact the whole supply chain and dealing with the issue by 2030 remains a great challenge.  

Senex CEO Ian Davies said scope three emissions are a global problem that needs to be fixed together.

Deloitte Partner Angela Jaric ran us through the consumer segments – green tech adopters, costs conscious baby boomers, green conscious renters, comfort seekers and the unengaged taking in a Deloitte survey of consumers.

Most consumers fall into the cost-conscious baby boomers and green conscious renters categories.

Yet ten per cent of small business and household consumers remain on the highest default power plan despite engagement by energy companies offering better deals.

Basically customers want simple, reliable and affordable energy.

And the big question is who pays for the transition? 

That is perhaps the most significant challenge in all of this as we set our sights toward bold targets.

And the conversation doesn’t finish as the curtain fell on another successful summit.

It will be front and centre for energy producers and consumers, who are increasingly producers of rooftop solar, alike.

AEMO’s Daniel Westerman said rooftop solar systems now provide energy equivalent to nine Hazelwood power stations into the grid. Integration in both the challenge and the opportunity.

His view is collaborative co-design will deliver reliable, affordable energy today while meeting the needs of the future.

There is much to consider as we increasingly move toward net-zero ambitions. 

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Michael Rath

Michael Rath

Partner, Consulting

Michael is Deloitte’s Asia Pacific Power and Utilities Sector Leader and lead partner of the Power and Utilities team, Consulting Australia. Michael has over 18 years consulting experience serving energy, water and infrastructure clients across the Asia Pacific Region. Michael has extensive industry knowledge having worked for over 18 years in the Power and Utility sectors in line management and executive roles in the areas of asset management, engineering design, and regulatory management. Michael has provided a range of consulting services on business and market strategy, asset and operational optimisation, technology strategy, sourcing and implementation.