Davos: Can the Elite Influence the World?

The Davos annual World Economic forum was in attendance a couple of weeks ago and its president Borge Brende didn’t sugar coat the information when he noted it was occurring against one of the most complicated geopolitical backdrops to date. I assume this was the thought process behind the motto of the summit, which was “re-building trust”.

Now don’t get me wrong I am not retracting any of my previous comments about the shear irony of the summit, especially last year where their discussions on environment was starkly contradicted by the number of private jets bringing in the top 1% of the world global elite and the bare snowcapped mountains, signifying what many came to realise, that 2023 was indeed the warmest year on record. But maybe, just maybe the economics of the current global situation may create a sharper focus for those in attendance this year. Money does tend to focus the mind in that way!

With increasing interest rates, commodity prices increasing, disruption from the red sea starting to show small ripple effects and rising global debt, could this group of money makers have enough influence to quell some of the tensions in the Ukraine, Israel or Africa and bring stability back to the global economy at the same time?

With the UN anticipating in excess of 40 foreign ministers attending the summit, as well as over 500 financiers and global executives. These are certainly the players who have the means and imperative to influence world events.

The covid shock has passed but global growth remains low, some placing it at 2.3-2.7% this year, down from the original WTO 3.3% forecast, but that will not be enough to recover from the body blows issued since 2020. Whilst it was acceptable to still be in a period of licking your wounds last year, the boards of the multi-billion-dollar conglomerates will not allow it to continue.

To add some spice to the mix, the world is acutely aware that with elections in the USA, UK, several in Asia including Bangladesh and Azerbaijan and India, and Uruguay and Mexico amongst many in South America, the risk of political change before the group meets again is extremely high. This has dominated many discussions with the role of AI in misinformation campaigns and possible threats it could pose. However, with economic concerns dominating little to no outcome on this is expected. I wouldn’t however bet against its prevalence increasing in the next few years.

But ultimately it is the concerns around security growth and potential global recessions which still dominate, and no one is in doubt that consensus must be reached on global policy this time, simply said champagne and catchups won’t do it this year.

Many are hoping for a lighter touch on the interest rate hikes we have seen; but most conservative players are aware this will not come quickly. Many anticipating no movement until at least the third quarter of 2024. Yet the messaging was strong, trade and investment was the only option for recovery of the global economy. The WTO  Director General Ngozi Okonjo-Iweala, stating “Without a free flow of trade, I don’t think we can recover.” No doubt she sits in the free trade camp then.

But I don’t think any pre-canned, stakeholder buy in statements will be the outcomes that the world needs this year. More so it will be the question of if this group of highly influential and incredibly powerful people can, through their combined influence, affect real change. Can they stimulate growth, control inflation and not rock the boat so much that upcoming elections lead to significant political unrest. That will be for the post-spin hindsight piece, but we have to hope that significant goals are set and met following this round of talks, otherwise the relevance of such a lavish and elite autocracy must be questioned.

End of 2023 Energy and Climate News Wrap

There was lots of news that came out during the Christmas break, so please see our wrap of the end of 2023.

European Grid Resilience: Denmark-UK Link Operational

Further underpinning the resilience of the European grid, the 1,400MW DC link from Denmark to the UK came online on 29th December. However the capacity has been restricted to 800MW in the first instance as the electrification of the grid and hunger for power in the Danish region is not high with strong wind output (54% of the Danish grid) and the link into the power hungry Germany is not yet in place.

NSW’s Energy Manoeuvre: Orderly Exit Mechanism

The NSW minister for Energy and Climate Change, Penny Sharpe, gave herself and anyone in her seat the power other states have in their pocket; at the end of last year, she granted the “Orderly Exit Mechanism” power. Which means that with or without the consent of Origin in negotiations she now has the power to order Eraring to stay on as she backdated the powers to 2021. With the deadline to keep Eraring on or not this could shift the scales of negotiations and may be an indication of the noose Origin held around the NSW government loosing.

Queensland’s Ambitious Climate Target

QLD government strengthened its climate targets with a new target of 75% below to the 2005 baseline by 2035. This is due to be legislated in the new year.

Record Power Demand and Prices in December

Friday, 29th December, was indeed a scorcher, with demand topping over 9,750MW over the evening peak and pricing topping out around the $15,000/MWh price over the evening peak and prices averaging $448.97/MWh for the day. Showing how solar penetration can create huge volatility in prices on high demand days.

Coal Seam Gas Regulation: Draft Framework

The Department of Resources released a paper looking into a risk framework for regulation around Coal Seam Gas subsidence. Feedback has closed but the draft proposed legislation is due early 2024.

Queensland Revives Polluter Pays Legislation

Polluter pays legislation is back in the spotlight, with the Queensland government releasing a consultation paper on “Improving the powers and penalties provisions of the Environmental Protection Act 1994”

ARENA’s Industrial Emission Reduction Initiative

ARENA has launched a $40m fund called the “National Industrial Transformation (NIT) program” assisting existing plant and industrial facilities to reduce their scope 1 and scope 2 emissions.

COP28 More of a Fizz Rather than a Bang

Logo for COP 28 UAE event featuring a circular design with intricate yellow patterns on a green background, symbolizing sustainability and environmental themes, displayed over a dark brick wall texture.

With just 2 days of negotiations left at the COP28 summit, it is clear that world leaders are not entering into the summit with the same sweeping mandated as seen in Paris in 2015. In fact, it is becoming increasingly clearer that the Paris 1.5-degree target is unlikely, never mind strengthening the resolve on these targets.

Despite this year, 2023, already being declared the warmest on record by November, and having six record breaking months and two record breaking seasons, world leaders as squabbling over texts which will have little to no impact on emissions or targets.

With the head of this year’s COP, Sultan Al Jaber, the head of the Abu Dhabi National Oil Company (ADNOC) in the position many thought would create a conflict of interest, he is indeed between a rock and a hard place. With over 80 countries, many at the forefront of climate change pushing for an end to the use of fossil fuels, a topic every previous COP has been careful to avoid, the Sultan is now being lobbied from both sides, with OPEC now pressuring members and the chair to reject any deal which targets fossil fuels directly.

Reuters, who broke the news shared a letter from December 6th sent by OPEC Secretary-General Haitham al-Ghais “It seems that the undue and disproportionate pressure against fossil fuels may reach a tipping point with irreversible consequences, as the draft decision still contains options on fossil fuels phase out … I avail of this opportunity to respectfully urge all esteemed OPEC Member Countries and Non-OPEC Countries participating in the CoC and their distinguished delegations in the COP 28 negotiations to proactively reject any text or formula that targets energy i.e. fossil fuels rather than emissions”.

The Sultan is therefore walking a very fine line, as evident by his calling of the majlis, elders conference, on Sunday. In there, the main focus was two pronged, one the aforementioned fossil fuels phase out or abatement, and the second on financing.

Climate adaptation funds is not a new concept, it was raised pre-the-Paris agreement, and every year since. However, despite UN reports released in November, Adaptation Gap Report 2023, showing 2021 funding fell 15% year on year to a cumulative $24.6bn, but more than $200 – 350bn is needed, and 2023 is likely to only be around the $100bn mark. The idea of now increasing the burden on fossil fuels emissions to be phased out and not abated will leave many countries, especially in the African continent behind. As emerging and expensive technologies, which will allow other countries to continue producing, will not be available to them.

I once again argue, with politicians and special interests lobbying, the value of the COP is diminishing. Energy policy should not be in the hands of those who are worrying about re-election in 1, 2 or 4 years but those who understand the science, industries and financing of the projects required to make the change. We cannot just turn off coal, the Eraring “closure” has shown us that in bright bold lights (or blackouts), so there has to be balance. But that cannot be done by those who are not in that world or influenced by only one side of an argument.

However, with Azerbaijan the COP29 hosts, a country with at least 7bn barrels of commercial oil, and 1.3 trillion cubic meters of natural gas and one of the world’s largest gas fields I am sure will fly the flag for phase out of fossil fuels and strong targets for all nations attending.

With Statements due in the next 48 hours, I may be proven incorrect, and the Sultan is absolutely making the right noises, “I want everyone to come prepared with solutions … I want everyone to come ready to be flexible and to accept compromise. I told everyone not to come with any prepared statements, and no prescribed positions. I really want everyone to rise above self-interests and to start thinking of the common good.” But as always, the proof is in the packages which come out of the talks and with only two days to go and no consensus the clock is absolutely counting down.

Domestic Demand Management: Lessons to be Learned?

Smart energy monitor displaying real-time electricity usage in kilowatts and cost per hour in pounds on a desk with a coffee cup, smartphone, and money.

As the artic blast moves down throughout northern Europe and negative overnight temperatures are expected throughout the UK, including London. The UK’s National Grid, our AEMO, has activated the Energy Blackout scheme.

This was introduced in 2022 during the height of the Russia / Ukraine conflict and the idea was to allow demand side response from domestic participants who have smart meters installed in their properties. Once you have signed up, and 1.6 million households were in the first wave of signups, you receive a notification that states a date and time for the event which will be under the scheme – currently this tends to be around the peak of 17:00 – 18:30 on evenings. Participation provides a buffer for the grid in terms of capacity.

This doesn’t mean those household have to return to the dark ages with candles, you can keep lighting on, but you are encouraged to reduce high demand intensive loads such as washing machines which use high quantities of energy.

In the northern winter 2022 / 2023 period the scheme was so successful it was estimated by the Centre for Net Zero and the National Grid that 3.3GWh of power and 681 tonnes of CO2 were avoided over the 22 activations. Your retailer assesses your average use and the use over the “blackout period” and you are rewarded with a reduction in your bills for the energy not consumed.

Payments totalled £11m, or $21mAUD with one SME business saving $1,726 or $3,298AUD in one event and the average household will save around £100, $191AUD in total.

So, can the Australian grid benefit from these types of events? The answer is an an-doubtable yes, however with reports stating that outside of Victoria uptake of smart meters is at the 30-35% level, which is significantly below the AEMCs target for 100% upgrade by 2030 and a compulsory roll out to begin in 2025 being pushed at the moment, the likely introduction of these schemes is significantly behind those of the UK.

However, with increasing UFE charges, increasing home regulation systems, solar and batteries, and smart appliances the change could come from within consumers rather than via regulation. This would present challenges for retailers though, the traditional view of peak, off-peak and shoulder would need to have a dynamic element to allow these homes and businesses to take advantage of their flexibility and Time Of Use tariffs will need significant refinement.

From a regulatory point of view, ensuring customer protections over those periods are kept, that the metering is fair and that they are fully aware of their responsibilities will no doubt cause some further concerns and delays, yet with numbers like 3.3GWh, $21mAUD and customer engagement on the table this can’t be an idea only for long.

Transmission Requires Community Engagement Realisation

Back view of two children and an adult walking towards wind turbines, the adult holding a colourful pinwheel up in the air

With the government ploughing ahead with the re-wiring the nation rhetoric and discussions about $10,000/km costs for land the attention of the AEMC and others have naturally been drawn to the requirement for community engagement.

Many panels and speakers at this years’ All Energy conference in Victoria honed in on the requirements for the local communities to be brought into the fold regarding Renewable Energy Zones, Transmission and the benefit this could bring to those communities.

The AEMC have taken this a step further and on Thursday released the final requirements which are required for any transmission projects to get through the regulatory investment test (RIT-T). They are expecting for this engagement to be across all affected parties from councils to local landowners and will ensure they not only have clear information about the proposals but they are aware of the rights they hold.

Taking directly from the AEMC announcement the main changes being made include:

  • Stakeholders are to receive information that is clear, accessible, accurate, relevant and timely and explains the rationale for the proposed project.
  • Engagement consultation materials, methods of communication and participatory processes must be tailored to the needs of different stakeholders.
  • The stakeholders’ role in the engagement process must be clearly explained to them, including how their input will be taken into account.
  • Stakeholders are provided with a range of opportunities to be regularly involved throughout the planning of ‘actionable’ or ‘future’ Integrated System Plan (ISP) projects and Renewable Energy Zones (REZs).

This is timely given the announcement from Chris Bowen who was speaking at the Future Energy conference in Adelaide this week who amongst his optimistic speech stated that “a properly constructed renewable grid is a reliable grid… is one that we can count on in difficult times,” and that access to transmission or delays in building new infrastructure would be the main contributor to Australia not meeting its targets.

These targets are now set to 82% of Australia’s energy coming from renewable sources by the end of the decade, and GHG emissions cut by 45% (in comparison to 2005 levels) by the same time.

However, with the focus of the government squaring in on transmission as the key messaging to Australia missing its targets and not the lack of cohesive renewable energy strategy for the past 10 years or the governments approvals of new gas fields, you do wonder if that is part of the reason our Minister for Climate Change and Energy is ducking the hard questions at this years COP28 in Dubai which starts at the end of the month.

The announcement that he is dispatching his Assistant Minister, Jenny McAllister has not gone unnoticed, especially by the pacific islands our Prime Minister is trying to woo this week. With those nations key to Australia being announced as the COP31 hosts, Turkey is stating they would also be interested, they intend to firmly hold Australia to its climate promises and pointing the finger will not wash with their nations at the forefront of recent climate disasters.

 

Australia’s Safeguard Reforms: New Amendments and the Path Forward for Emission Regulations

Interlocking metal gears with words such as 'RULES', 'REGULATIONS', 'COMPLIANCE', 'STANDARDS', and 'POLICIES'

On Friday the Department of Climate Change, Energy the Environment and Water released the amendment to the Safeguard rule which was largely expected, but still another blow to large emitters. This came into force as of the 7th October 2023 which was the day after it was registered.  

In the latest update to the regulation default emission intensity numbers have been updated and new production variables established. This will be another blow to those Safeguard entities who will now be set to international best practice standards for the default emission intensities.  

Further to the above and also on Friday, the Climate Active certification process had a paper released, following its roundtable and workshop earlier this year. In this consultation paper they are looking to strengthen the certification process which has slipped against industry standards since its inception in 2010.  

One key concept the reforms are looking to address is that currently there is no mandatory gross emission reductions (i.e. reduction of emissions prior to offsetting) required under the legislation.  

The proposals are looking to enforce that “meaningful direct emissions reductions” are undertaken and strategised before offsetting occurs. It would also look to ensure they are tracking their performance against meaningful targets to assist them in this. This requirement will form part of the audit and will be required for them to meet and maintain their Climate Active certification.  

Interestingly they are including all scopes (1, 2, and 3) within their boundary and emission reductions although the “boundary” for this will surely be amended to allow for those outside of their direct control, especially for those within the Scope 3 targets.  

The second part of the consultation paper is looking to tighten the availability of international credits as per the Chubb review paper in late 2022. The proposal will be met by the green lobby as a half measure I am sure as they are stating that vintage requirements on international certification is put in as 5-Years which is loose to say the least. But let’s see if that has any impact at all on price or requirements before we make that call.  

The other interesting proposal is that any ACCUs used as a voluntary requirement will count towards Australia’s national emissions reduction target under the Paris Agreement. It does make you wonder how we will meet these targets at all if this is a scramble for a few voluntary certificates.  

What will be a real key item to watch is if this could this be the first step towards vintage limits on all Carbon Credits, and if so, what will that do to an already tightening supply market. With Safeguard reforms coming in and baselines declining the market is anticipating strength and vintage limits may be the catalyst to the government $75/tonne cap.  

Consultations close on this paper on the 15th December with implementation of changes from 2024 expected.  

Could We Finally Have a Post-2030 Plan?

Wind turbines at sunset overlooking a coastal landscape

You would be forgiven for missing the nuances released in the multiple papers released by the Department of Climate Change, Energy, the Environment and Water in late September. Under the heading of ‘Australian Hydrogen News’ there was a glimmer of hope we may indeed have some post RET certainty on the horizon.

In what was the smallest of the 4 papers, was the Renewable Energy Guarantee of Origin (REGO) scheme paper, which is associated with tracking renewable electricity generation.

Following on from the December 2022 paper which set out a framework for the REGO scheme, this paper is seeking views on timing, implementation and design of the scheme which is looking like it will come into effect in January 2025.

But it goes further, it strongly insinuates, that the aim of this new legislation is to provide certainty that the scheme will allow for the creation of renewable energy certificates, as per the current LGC and STC legislation but with additions post 2030. Thus, the REGO scheme will enhance the Renewable Energy Targets (RET) post 2030 when it will supersede the current legislations, but co-exist for the 5 years prior, “noting there are benefits to moving towards a single, enduring certificate creation framework.” and further it confirms the CER will continue to be the body which will administer it.

This news will be welcomed by many as the concerns around a combined “carbon equivalent” scheme both brought back memories of the old carbon taxes as well as concerns for the demand of ACCUs under the safeguard reforms exacerbating that value of carbon. If you were to include the Scope 2 emissions into that demand mix the governments proposed ceiling of $75/certificate (escalating annually) would in no doubt be reached.

Now the REGO scheme will not be changing any requirements under the RET scheme before 2030. But it is likely to remain in place until at least 2050, as such the investment certainty the market has been looking for may soon be in place. The two will co-exist with the RET liability still being required to be met by the LGC / STC component of your liability, but any voluntary surrenders above that level could be met via the REGO scheme. This could be beneficial as the changes could allow many more of these REGO certificates to be produced and thus hold the price at a softer level than the under demand LGC market. With voluntary surrenders also able to be moved out of this LGC market the demand for these certificates could also be reduced, with the hope these additional certificated could bring the value back to pre-social licence demand levels.

The changes being proposed will allow all electricity generation to be eligible to produce a REGO. This would include below baseline generation. It is noted whilst the REGO may be produced under this certain accounting methodologies, such as GreenPower would not use any of these certificates and schemes such as RE100 are likely to make changes which include further exclusion provisions for older generation power stations.

Another interesting inclusion into the REGO scheme is the further information around the inclusion of STC’s. With the increase in aggregated VPPs and orchestrated DERs the likelihood is post 2030, when most STC deeming periods expire, there is an opportunity to include these smaller schemes within the larger REGO scheme which could in turn create further issues. The reason being is a REGO will have a time stamp and the likelihood of us moving to a hourly matching requirement, is becoming much stronger in some industries. As such the consideration that the REGO is produced when 1MW is reached will not ultimately “match” the offtake it is matching which may cause issues for some stakeholders. However, it has to be assumed that if that is such a strong consideration for your internal stakeholders, they will not be matching their offtake from an aggregated small site portfolio?

One throw away comment in the paper but directly linked to this is “once the REGO scheme is in place with locational and temporal attributes, this could be used as the basis for further refinements to the NGERs market-based methodology.” Could we see post 2030 a requirement for NGERs reporting to move to hourly matching and if so at what cost to businesses? This is absolutely one to watch for in future papers.

Another interesting area being discussed is around offshore generation or export of generation which may be outside of Australia’s territorial waters. Whilst the paper defers a decision on this to the future paper “Electricity and Energy Sector Plan” they cannot defer for long as Sun Cables development shows the scenario will be emerging possibly before the legislation.

The one area they did elaborate on in slightly more detail is the position around how storage will have eligibility within the scheme. We are all acutely aware that no renewable grid can exist without significant increases in storage capability but with this comes significant opportunity for the owners of these facilities to participate in schemes such as this. The Department have on a high level proposed that the certificates produced will be “proportional to the certificates surrendered relative to the charging debit”. A fair definition, but as with all things the devil is in the detail, and we will be watching for the subordinate legislation which will outline this more comprehensively.

Overall, the paper offers little additional substance to what we knew in December, it offers slight clarifications but with the anticipated enactment of the legislation in 2024, and commencement on the 1st January 2025 businesses need to be aware of the changes being discussed and that they are not only applicable to the Hydrogen Industry, regardless of where the Department have decided to place them in consultation.

Retailers, Retailers Everywhere, and not a Lesson Learned

In August, AEMO received five registrations for new customer status customers to come into the market as a Market Customer, the latest and most publicised of these being Tesla Energy Ventures Australia Pty Ltd. Now, this wouldn’t be their first foray into the energy markets, they already have their energy arm out of the US and are expanding rapidly within the Australian space.

But Tesla is not alone; the AER has seen 22 new electricity retail licence applications since 2020, including the newly formed Ampol Energy, Smartest, and Telstra.

Now whilst competition is great for any market, I am absolutely not a monopolist, I do view this market penetration with slight concern.

With the UK seeing over 27 Energy Suppliers going under since January 2021, unregulated and “low cost”, usually spot exposed participants, with little to no risk profiling, can cause burden and costs to our market, never mind eroding the confidence of consumers. The UK offers a valuable lesson in this space and is one I fear has not been headed by our regulators.

With the cost of Retailer of Last Resort passed through to consumers who have had no dealings with those companies, but the market operator forced to share the burden, where does the responsibility for the failure sit? I would note the AEMC have released improvements papers to try and address some of these questions, but with the increasing number of these retailers entering the energy markets is it going to be too little too late.

With this summer promising some significant volatility, between RRO in SA, the ESOO stating the risk of shortages in both Victoria and South Australia now exceeds the strictest benchmark this coming summer, an all but certain El Niño bringing heat and reduced wind generation, and AEMO searching for Reserve Energy Markets across the NEM, including TAS for the first time, the volatility could expose some of these participants to more credit calls than their cash flow can handle.

Only time will tell, and luckily most of these retailers do not have a significant market share at this time, but this summer could be the spotlight the regulators need to tighten the requirements for new retailers. Or maybe not.

And the Best Horror Story of 2023 Goes to…

No need for Stephen King, the ESOO (Electricity Statement of Opportunities) is this year’s horror bestseller, and it comes out this week.

In WA this week we have seen the power of the AEMO reports. With the WA WEM ESOO showing the government’s ambition to phase out coal by 2030 would result in shortfalls. This week the WA government scrambled to cover the shortfall and quickly announced the Muja 6 plant was given an extension until at least April 2025 under ‘reserve outage mode’ conditions. With WA planning to remove 1,366MW from the system by 2030, the transition was showing shortfalls of just below 1GW by FY26 and a terrifying 4GW by FY33. The noises coming from the state are therefore all about how to “manage the transition” and no longer how to meet the targets.

Over in the NEM (National Electricity Market), even before the release of the ESOO this week, this was the week in which we saw announcements in Victoria and an expected announcement from NSW looming. The question is no longer will Australia meet its Net-Zero target, but by how far we will miss it and what impact will closures have before renewable uptake comes onto the grid?

The Victoria government has pre-empted its requirements and moved forward to strike the “structural transition deal” with AGL to continue the operations at Loy Yang until 2035. Despite the pressure from certain board members, even they have to concede that the uptake in renewables is not at pace to orderly transition the market away from coal.

Energy Australia followed this announcement with the news that through its “Climate Transition Action Plan” the Yallourn power station will close in 2028, with the Point Piper remaining available until 2040.

This has been flanked by the NSW government strategically leaking, no doubt to soften the announcement, that the Eraring plant will remain online. The question now is in what form and at what cost.

With Australian renewable uptake at one of its lowest levels in years, hindered by the huge subsidies in the US and massive European demand. Increasingly vocal opposition to transmission upgrades, especially from rural communities, and no certainty on policy post the RET expiry in 2030, there is no doubt this week’s ESOO will make scary reading.

With the COP28 looming at the end of November, I think the hot potato in Canberra is going to be who goes, as there is no doubt when the ESOO is published we will be back in the naughty chair.

The question, therefore, is not will we miss our energy transition and therefore climate targets, but rather by how much?”

Victoria’s Gas Ban: Gas is gone so how to stay warm in Victoria

With the UK announcing this week that they are opening up 20 new Oil and Gas fields to assist in meeting at least three weeks of supply for the country, the UK is pinning its decarbonisation and supply hopes on the Gas market. Being a country which is heavily reliant on imports of gas, and the reliance being costly and not certain in the Russian dominance era, this seems like from a business, not climate, perspective a smart move.

This therefore makes the contrast a stark one in comparison to the Victoria announcement also this week to ban all new Gas connections in homes and government buildings. With this being under the premise of cost savings I am not sure everyone is buying what the States Energy Minister, Lily D’Ambrosio, is selling.

Without diving into that political black hole, there must be a thought going through many Victorians heads though, with Gas gone how do we replace the gas boilers with something equally as effective without blowing out our electricity consumption.

Well, this is something which has been looked at in depth within the wider market at the moment, and the most effective solution is a heat pump. Sales of heat pumps, according to the IEA, have increased globally 11% in the past year alone and 49% in Europe.

So what is a Heat Pump? The traditional Heat Pump is an air source heat pump. Similar to your air con unit, the unit is fitted to the outside of the house and will pull the air into its refrigerant system. This turns the refrigerant into vapour which is compressed and creates – yes you guessed it – heat. This process can work in all temperatures, even below zero and therefore could be an effective solution for Victoria.

This all sounds great but ultimately is it costly and how effective is it? Well, a gas boiler is around 90-95% efficient, whereas the heat pump is 350% efficient. They actually produce 3.5 times more energy to use as heat than the electricity to run them. This could be the solution as even if the electricity is more expensive than the gas, sorry to the Vic government but you can’t spin that any other way, the amount required is less and therefore it could reduce those bills, you may get your wish after all!

This concept hasn’t been completely lost on the Victorian government as after the initial announcement they followed with a $10m grant to electrify new homes, with developers able to apply for rebates for solar panels, solar hot water systems and … heat pumps. However, with electricity prices rising, the new Victorian Government Owner corporation stalling, and electrification legislation being pushed through, at what point does the equation not add up in time for the grid to be able to take all this new load?

The ESOO and next years ISP will no doubt make interesting reading as all state’s electrification, degasification and net zero plans start being incorporated into the final view of our grid and its requirements.