Customers could miss out on benefits of new technologies if regulation doesn’t keep pace with a transforming energy system, according to Energy Networks Australia CEO John Bradley.
A new Network Innovation Discussion Paper was released today at the Energy Networks Australia seminar, Evolving Faster: Regulating Transformed Energy Markets.
The paper seeks feedback on options for an Australian Network Innovation Scheme similar to that used in the United Kingdom to promote breakthrough technologies and systems, while maintaining security, reliability and affordability.
“The United Kingdom has been highly successful reforming regulations to encourage network innovation at a time of rapid change,” Mr Bradley said.
The UK energy regulator estimated its network innovation scheme could achieve net- benefits for customers of between £800 million and £1.2 billion when projects are rolled out by trialling companies and up to £8.1 billion if rolled out across Great Britain.
Mr Bradley said innovation in energy networks through the integration of new technologies, smart grid applications, machine learning and ‘big data’ analytics could reduce long-term energy costs and provide a more stable, reliable energy system.
The Discussion Paper indicates about 1 per cent of Australia’s energy research budget goes into electricity grids, despite the grid representing up to half the cost of an average electricity bill and a quarter of future electricity system expenditure to 2050.
“Australia’s research focus does not line up with the best international experience,” Mr Bradley said.
“For instance, the UK invests three times more on energy network innovation per capita despite being much more densely populated.
“Energy networks must become as agile as the technologies they are connecting in a much more dynamic energy system.
“The Finkel review highlighted an urgent need to ensure market rules and frameworks enable the introduction of emerging technologies and the ability to test them.”
Mr Bradley said innovation would also play a key role in further decarbonising Australia’s gas sector.
“Three transformational technologies – biogas, hydrogen and carbon capture and storage – could provide new zero-emission and low emission fuels that deliver energy to Australian homes, businesses and vehicles using the existing distribution network.” Mr Bradley said.
Stakeholders are encouraged to provide feedback on the paper by September 26, 2017.