Australian business will continue to pay the price for a “dumb” energy grid that’s no longer fit for purpose, unless an agreement can be reached to upgrade it, the Future Business Council said today.
Ahead of Friday’s COAG Energy Council meeting, the Future Business Council executive director Tom Quinn said the nation’s energy system must be upgraded in order for businesses to unlock new investment, compete in a global market and reduce electricity costs.
“Australian business is hamstrung by an outdated and costly ‘dumb grid’ that must be updated to reflect low carbon and low marginal cost energy generation. Australia has rich, renewable energy resources and, with the right market structures in place, could provide industry with the lowest cost base of power in the world,” he said.
“What we need is a smart grid – one that’s flexible and adaptable in meeting the needs of the growing number of companies and households that produce energy, as well as consume it, and which unlocks new investment, new jobs and an affordable energy future.”
The Future Business Council is calling on COAG to commit to:
- Build additional interconnectors between South Australia and Victoria, and between South Australia and New South Wales.
- Incentivise investment in renewable energy and battery storage (including large-scale solar, pumped hydro, solar thermal and tidal energy).
- Activate the national rollout of electricity smart meters informed by lessons of the Victorian experience.
Mr Quinn said the recent situation in South Australia demonstrated how businesses were disadvantaged by an outdated grid unable to cope with growing renewable energy generation, and diversified generation.
“The future of the national energy market is 100 per cent renewable, and the grid must be reimagined with this in mind so that businesses and households around the country can simply and cheaply import and export power whenever required. The sooner we upgrade the system to cope with technological change, the sooner businesses can benefit from lower prices,” he said.
The Council has submitted a paper to all state and federal energy ministers that outlines the series of challenges COAG must consider in designing a new national energy system including declining aggregate peak demand and consumption, widespread uptake of rooftop solar, increasing focus on greenhouse gas abatement, decreasing costs of low-carbon generation and storage technologies, and anti-competitive behaviour by existing generators.