Reflections & Predictions: The Season Ahead

[Sarah] (00:00-00:37)
 

Welcome to Wired for Good Conversations for a Better Energy Future. The podcast exploring how we can achieve a faster, fairer, and more affordable energy transition. Brought to you by Ausgrid, this podcast aims to make the complex energy industry more accessible and address how the energy transition can unlock greater benefits for all Australians. Join us as we bring together leaders and experts to tackle the big questions on what's needed to achieve an energy future. We're proud to leave as a legacy for the next generation.

[Sarah] (00:37-01:44)

Hello and welcome back to Wired for Good Conversations for a Better Energy Future. The podcast where we explore the people, ideas and innovations shaping Australia's energy future. I'm your host, Sarah Aubrey, and I'm thrilled to be kicking off season two with you.

Last season we heard from energy experts across the energy landscape from innovators and policy makers to customer advocates. And this season we are going deeper into a space that doesn't always make headlines but absolutely matters. The middle. That's right. This season is all about why the middle matters, how we unlock the most value from the assets we've already built, our polls, wires, local grids, and the communities connected to them.

Today I'm joined by Tim Jarratt, Ausgrid’s Group executive Market Development and Strategy to help reflect on what we've learned so far and to look ahead, to where we're going next. Welcome, Tim.

[Tim] (01:44-01:46)

Thank you, Sarah. It's great to be here.

[Sarah] (01:46-01:51)

What are your reflections on season one? What's your big takeout from that?

[Tim] (01:51-02:22)

Well, I was really impressed by the range of guests we were able to get, covering all aspects of the energy system, electricity system in Australia. I was particularly pleased that we were able to get a retailer with Frank Calabria from Origin came in to talk to us on one of the episodes, and we also had people representing different kind of consumer groups, Brendan French from the ECA, and also, Gavin Duffy from Vinnies, so really good to get their perspectives. And we are also able to touch on lots of different aspects from home electrification, EV charging, and also start thinking a bit more about storage.

[Sarah] (02:22-02:48)

When I started this, the thing that I learned was a transmission line is different to what you guys look after, which are the poles and wires within our cities. So, I've said to people, who is your DNSP? And they're like, what? And it's like distribution network service provider. And it's like, are you with Ausgrid? And they're like, oh no, I'm with AGL. And they're like, oh no, no, that's your retailer. So I think people get those two things confused. So, if a tree falls over and takes out a power line, you're the people that come and replace it.

[Tim] (02:48-02:55)

Absolutely, and I think the road analogy is very good because, you know, if a tree fell over and blocked the road. Someone's got to come and chainsaw the tree up so that traffic can go down the road again.

[Sarah] (02:55-02:55)

Yeah.

[Tim] (02:55-03:04)

The same thing with us. So we are the people who own and operate the roads, but who actually drives down them is dictated by the retailer.

[Sarah] (03:04-03:05)

Right.

[Tim] (03:05-03:13)

So if you are, you know, wanting to kind of order food or whatever, or delivery, you kind of deal with your retailer. They deliver it to you, but we make sure the roads are open for that to happen.

[Sarah] (03:13-03:32)

So many people say to me, I'm renting, or I live in an apartment, I can't get access to solar. And there's an inherent unfairness as there is, potentially, if you don't have a driveway and you have to only use public charges, that's more expensive than if you can charge at home. So it's spreading that across the community so people aren't left behind.

[Tim] (03:32-03:46)

We really see that in the Ausgrid service area here at Sydney all the way up through the Central Coast in Newcastle and theHunter. And we have a disproportionately large amount of renters in our area. And then obviously, as you can imagine, being a large city, an awful lot of apartment dwellers too.

[Sarah] (03:46-03:51)

Do you think the conversations we had last season reflect an industry that's pulling in the same direction?

[Tim] (03:51-04:52)

[00:03:51] Tim: I think generally speaking, yes. I think, you know, I've been in Australia since the beginning of last year, 2024, and my kind of observations coming in fairly fresh has been that, generally speaking, everyone is heading in approximately the same direction, which is great to see. And obviously not everyone has got exactly the same ideas about what the right solutions are, but actually I think that's very healthy. I think you do need people suggesting slightly different ideas and using that challenge to pressure test solutions to make sure we aretrying out a range of things and finding out what the best end solutions are.

You know, as I said earlier, it's not just one position of batteries is going to be the right solution, the right idea. It's not just behind the meter batteries. We need batteries in a range of places, and that's just the same with other technologies and other business models. We need a number of options to see how they go. So, it's great to see different parts of the industry suggesting different things, trying different things out and collaborating to move things forward.

[Sarah] (04:52-05:45)

I think that's what surprised me as well. It was really interesting being right at the front part of this, where you're going, this is, these are our ideas we would like to put, you know, charges on poles or in terms of the net, the community network that you guys are working on now as an idea. It's bringing all of these fresh things going. We can't just keep things as they are with the grid. This traditional idea of coming from a coal generator that's gonna go, how do we electrify everything and make it all work? I'm really fascinated and I do think the passion that I've really witnessed of people wanting to make this happen and to move forward and to innovate and to just see, just let's try it. That's exciting. As a consumer, it's really exciting to see that.

Tim, there's a sense that something's shifting not just in technology or investment, but in how the sector works together. I wanna get your thoughts on that.

[Tim] (05:45-06:37)

Yeah, I think people are much more open to trying new things out. There's no one size fits all solution, and people are also very aware that where we are today and the setup, the way the industry's organized today is not going to be how we need to arrange things in 10, 20, 30 years' time if we want to achieve the targets. We have to, as a country, decarbonize. And so, there is definitely a willingness to experiment, trying new things out and see what we learn.

I think a great example of that is the way the Australian energy regulator, theAER, has really pushed its sandbox program. It's a mechanism to try out new business models, new thinking, insert technology in slightly different ways to see if there are better outcomes that can be achieved for consumers with, you know, lower bills, more reliability, things like that.

[Sarah] (06:37-06:40)

What's different now to even two or three years ago?

[Tim] (06:40-07:27)

I think the thing that surprised me the most is, whilst the actual technologies we're talking about are still the same, so rooftop solar, batteries, EVs, it's the speed of which the costs are coming out of those, which we are seeing,  cost declines, whether it's rooftop solar, whether it's in terms of batteries, the performance improvements we're seeing are also very, very impressive. And I think that's given me a lot of confidence that, in the direction of travel, how are we gonna get there? And again, as you look at the battery rollout for the residential subsidy that's coming through at the moment with a thousand batteries a day approximately being installed across Australia is really, really impressive. So, I think for me it's that sort of speed element is starting to really kind of take effect.

[Sarah] (07:27-07:33)

Was Ausgrid actually shocked by the uptake of that? It was something like 40,000 batteries in just the first month alone?

[Tim] (07:33-07:40)

I wouldn't say we're shocked because we certainly know there was a lot of desire for those batteries. But from our point of view, it's great to see that.

[Sarah] (07:40-07:44)

How does that benefit Ausgrid? Or how does it help you in terms of managing the grid?

[Tim] (07:44-08:27)

So, it helps us in a number of ways. Probably the most obvious one is it puts a little bit more storage at the grid edge to soak up power, excess power, that's coming off people's rooftops. So during the middle of the day when the sun's shining and you know, people are often at school, at work and things like that, there's a lot of power sloshing around the grid edge, which is being generated from people's roofs, but it's not going anywhere, it's not being used, and you definitely don't want to waste that. It does need to be stored up. And if it's stored at people's homes, it means it's not back feeding or flowing back into the network and causing us issues in terms of how, how we deal with it. So, from a sort of grid management point of view, having some more storage at the grid edge, behind the meter in people's homes is, is very, very helpful.

[Sarah] (08:27-08:35)

How can this new spirit of cooperation help us to create a faster fairer, more affordable outcome for customers?

[Tim] (08:35-09:36)

So as Ausgrid, we've been really excited to respond to the challenge laid down by the AER, the Australian regulator, to ask the industry for suggestions, for ideas to go into their sandbox mechanism. And we put together a proposal called a Community Power Network to really address those issues around equity and access and affordability. And we put that forward to the regulators for consideration. It's out for public consultation at the moment as we record this conversation. So, we're really kind, excited to see what feedback we get and whether we can take that idea forward and test something at scale in the marketplace. And again, it's very much one of those ideas around what's going on at the grid edge? How can we bring in, encourage more solar? How can we use batteries to soak up the excess power that solar creates in the middle of the day? And alter the role of the distribution company from just being a distribution company, distributing things over distance, as we talked about earlier, to distributing over distance and time, so that's moving from the middle of the day to the evening.

[Sarah] (09:36-09:44)

The transition needs to be accessible and equitable, not just technically sound. Can we talk about fairness in this transition.

[Tim] (09:44-11:29)

Absolutely. I think this is a crucial topic. Rooftop solar has been a massive Australian success story. You know, you look at the cost of putting solar on people's houses, it's half the cost of doing that in the US. It's been a phenomenal rollout. Well over a third of homes in Australia have solar on the roof. You know, I heard an interview with the CEO of SAPN the other day talking about it was going up kind of four percentage points in the matter of months out in South Australia and they've already cleared 50%. So, over half the houses in South Australia now have rooftop solar. So a huge, huge success story for Australia.

But it's important to remember if on average a third or just over a third of people have it on the roof, two thirds don't. And we really need to think why they don't have that because those people who don't have it on the roof are missing out on what a phenomenally cheap power source rooftop solar is. You know, from our numbers, we think the price of putting it on your roof and the energy you get from that when you're paying off the, the down payment for the sales themselves, it's about 6 cents a kilowatt hour. It's phenomenally cheap compared to what you pay with a normal retail offering from one of the main retailers. So it's a great advantage if you can get it on your roof. If you're one of the people who isn't able to access it, that may be because you're renting, you don't have the spare capital to put on the roof, maybe live in an apartment with no roof. And it's also worth remembering lots of people who do have roofs often don't have suitable roofs, they can often be shaded, things like that. So, there are a whole number of reasons why lots of our society cannot get access to what a phenomenal technology rooftop solar is. And we need to think about how can we make things fair for them? How can we let them have access to this great opportunity?

[Sarah] (11:29-11:32)

And that sandbox trial that you are planning on doing, it's about that, isn't it?

[Tim] (11:32-11:37)

Absolutely. It's there looking to suggest a mechanism that could address those issues.

[Sarah] (11:38-11:51)

Great. Tim, you recently returned from a trip to the UK, and you'll be going to the US soon. What stood out to you from that UK trip? What can Australia take from that market and also from the US when you go there?

[Tim] (11:51-12:38)

So, I was over in the UK for London Climate Week, which is the back end of June into early July. And a number of things stood out for me. Um, and I'll maybe just touch on a few of those. Firstly, I was very kind of lucky to be able to speak at Octopus Energy's Energy Innovation Summit, and it was a really fascinating event. Thousands of people there, really dynamic, buzzy environment. And actually, one thing that was very interesting there was they did a big launch for a new product that Octopus was, is offering in the UK. So what they wanted to announce there was Octopus is now going into partnership with BYD, the Chinese car maker to offer a bundled product to consumers in the UK and it's based around the concept of V2 G and really utilising the Battery on Wheels concept.

[Sarah] (12:38-12:40)

Which is vehicle-to-grid for anyone

[Tim] (12:40-13:06)

Yeah. From the buzzword bingo. So, they were offering a vehicle to grid concept in conjunction with BYD, the big Chinese EV maker. And it was really interesting how it was a combination of technology coming together with a business model coming together with a consumer proposition.

And for 300 pounds a month you get a BYD dolphin. You get a vehicle-to- grid charging box installed at your home, and you get the power for free.

[Sarah] (13:06-13:07)

So, no energy bills?

[Tim] (13:07-13:11)

So, for 300 pounds a month you get all your mobility in an EV.

[Sarah] (13:11-13:14)

People would pay that just as a car loan, right?

[Tim] (13:14-13:38)

Absolutely. And if you compare it to, you know, if you translate that into Australian dollars, it's probably 620ish Australian dollars a month. And if you look at what it costs to rent a Dolphin or equivalent car over here, it's very, very competitive. And I think for me, what was really striking was it's the introduction of the vehicle-to-grid element, so that as part of the the deal, you have to connect your car up. So you can't just get home and forget to plug it in. You get home, plug it in.

[Sarah] (13:38-13:39)

What was it? About 20 times.

[Tim] (13:39-14:20)

20 times a month. Yes. Then obviously Octopus with their Kraken software will control the battery, work out when you want to travel next, what the local kind of grid requirements are, and therefore use the battery to support the local grid and trade in the marketplace. So really interesting advancement in terms of a business model coupled with technology, coupled with sort of consumer, marketing and consumer acceptance. So, for me that was really exciting to sort of see that launch and really hear the buzz around that. And it'd be fascinating to see how that rolls out over the next year or two. And so, whether those sorts of models come here, because obviously, we know that, lots of people are thinking about vehicle-to-grid and kind of EV rental type models over here.

[Sarah] (14:20-14:22)

I think we'd be a no brainer for that, right?

[Tim] (14:22-14:29)

You would assume so given the rooftop solar and the ability to, kind of, connect up those two technologies together.

[Sarah] (14:29-14:29)

I'm here for it.

[Tim] (14:29-16:08)

So that was one aspect, which was great, and it was a really interesting kind of conference anyway, but that was a real highlight. I also attended a meeting at the Energy Transitions Commission, which is a global think tank that Ausgrid is a member of, and what I found very interesting joining that meeting was how people are really looking to Australia. People talk about postcards from the future and all the activity that's going on at the grid edge with rooftop solar, with community batteries, those sort of things, Australia is really, really leading the way and the rest of the world is looking at Australia.

So I find it's quite an interesting conversation you have when you're abroad. People look at the huge amount of coal we still have on our system, which is generating power centrally. When you have conversations with people abroad about the energy situation in Australia, it splits into two very different sorts of conversation.

First up, they acknowledge the fact that we have a huge amount of coal still on the system that is generating away, whether it's down in Latrobe Valley in Victoria, or in New South Wales. And you know, we still have a long way to go. We are about 50% still coal generation in the mix as of last year. And so, in that sense, Australia's a bit behind the rest of the world or certain other countries.

But then the other part of the conversation is where Australia's leading, and that's around rooftop solar. It's around batteries at the grid edge, whether it's behind the meter or community batteries with its Energy Storage as a Service type products. People get really excited about how Australia's leading the way, and that's something where Australia is, is doing really, really well. And you look at the different states in Australia, especially South Australia, there's some absolutely world leading stuff going on.

[Sarah] (16:08-16:12)

I feel like the other states are watching South Australia, aren't they? That's the feeling I get.

[Tim] (16:12-16:32)

Absolutely. It's an awful lot, we could learn from there.  I was out in Adelaide last week visiting SAPN for a knowledge exchange to really understand what they're doing around things like dynamic operating envelopes and how they are leaning into the rooftop solar revolution to make sure they can give customers as much flexibility as possible while still able to manage the grid.

[Sarah] (16:32-16:35)

[And what about your trip to the US? What are you expecting to learn from that?

[Tim] (16:35-17:35)

We're really looking to learn in a number of areas from the experience of fellow networks over in the US. So as everyone's aware, AI is a huge topic at the moment. Both from an element of what can AI do for network management, so how can we operate with thousands, if not millions of different micro generators with rooftop solar, with batteries, with EVs, but also what does AI need from the grid, because around in terms of power demand. So people talk often about what does AI give to the grid and what does the grid give to AI? And certainly, it's that latter piece around power consumption is huge because as you're probably aware, lots of different parts of the US are seeing a real boom in AI data centers, and we're really keen to understand what's that meant in terms of load, In terms of management of the grid and so on and so forth. Secondly, we're obviously, we're keen to learn what can we see in terms of techniques that AI can bring in terms of everything from vegetation management, asset management.

[Sarah] (17:35-17:35)

Hmm.

[Tim] (17:35-17:38)

Do I have to explain what vegetation management is?

[Sarah] (17:38-17:38)

Yeah, go on, please do.

[Tim] (17:38-18:11)

So, we're very keen to understand. So,one of the biggest issues we can have with running a a distribution network is trees, branches, things falling onto the power lines. Trimming back the vegetation that surrounds our network is a really crucial thing to do, and it goes in waves as we have growing seasons. But we need to be very, very aware what's overhanging part of our network, some of our poles and wires and what could potentially grow there in the future. So, in the past it was very blunt. You just went down a street or down a strip of poles and wire and you just cut everything back

[Sarah] (18:11-18:11)

Tree.

[Tim] (18:11-18:42)

And whereas now we can be a lot more targeted, understand what, what trees are there, how they're growing, how quickly they’re like to grow over the next six to 12 months, whether we need to intervene now or whether we can actually leave that. Save the money and redirect those kinds of tree cutting crews elsewhere. So that whole thing is called vegetation management and it's an area which is ripe for the benefits of AI using drones and other sort of images you can get to assess what needs to be done where.

[Sarah] (18:42-18:43)

That's cool.

[Tim] (18:43-19:08)

I should also add, it's not just around trees falling on power wire. Also, we need to consider bushfire risks and things like that.So that's another area where vegetation management reallykicks in. And so, we're going to visit one of the big networks in California, Pacific Gas and Electricity. And they've had huge issues with fires as I'm sure many people are aware. And so, we're very keen to learn what their experience is and what can we translate and transfer back to Australia.

[Sarah] (19:08-19:17)

That's great. Excellent. In terms of above ground versus below ground, why aren't our wires underground versus above ground?

[Tim] (19:17-19:38)

So, it's often about cost because we've got the network, we have, because of history, how it was set up originally. We always have to think about the kind of cost benefit trade-offs.So, an above ground network is much cheaper to put in, actually much cheaper to repair, you can see where the faults are, you don't have to dig anything up. It's a much simpler network to operate.

[Sarah] (19:38-19:49)

You only have to look at Sydney's light rail to know how long these things take, that it's probably a bad idea. I would assume as well that because it costs more to put it underground, that would then be passed on to the consumer. Is that right?

[Tim] (19:49-20:06)

Absolutely. The network is a shared asset that everyone who connects to the network helps pay for. So again, we always have to think about cost when we're looking at designing new bits of the network, but also how we upgrade old bits of the network. Is it cost effective for everyone?

[Sarah] (20:06-20:22)

[I would also assume that if a storm hits and something gets taken out, it's a lot easier to see the problem right there on the wire and go, okay, something's been taken out by a tree versus something going wrong under the ground where you've got to dig everything up then and it would just take so much longer to fix, right?

[Tim] (20:22-21:27)

So, yeah, maintenance is typically harder for an underground network than an overhead network. Clearly in a massive storm where you've got trees falling everywhere, it's actually, generally speaking, you get less impact underground during a big storm than, than above ground. But, um, as you say, it's a lot more visible. You can see the network, and you can gain access, just through sort of climbing and using elevated work platforms rather than have to get backhoe loaders to dig big holes in the ground, trying to find where the cable may have been damaged.

So, as we think about our network, resilience and reliability is a constant theme, and it's something we are measured against. We think through the cost benefit of whether we should underground, small, specific parts of the network. So we have some areas which really do get battered by high winds during storms, and in those particular areas, there's always a question. Would it be better off if we were able to bury a short section of the network, making it more resilient to survive the storms, and absorbing the cost of doing that, because that lowers the cost of having to fix the network when it gets damaged.

[Sarah] (21:27-22:16)

This brings us to season two and the idea behind the middle matters. We hear a lot in the media about household solar and batteries, and even about big renewable energy zone projects, but of course, there's a large grid sitting in the middle of these two ends of the energy spectrum, and it's that grid in the middle that's really gonna be the focus of this series. When we talk about the middle, we're talking about infrastructure that connects everything, distribution networks, local grids, substations, even the way communities interact with energy. So, this season we're asking how do we unlock more value from what we already have? And how do we ensure that value flows fairly across the system? Why is focusing on the middle so important at this stage of the transition?

[Tim] (22:16-22:59)

I think for me it's two reasons. One is cost, and the second is speed. Because if we've got a a network, we're not making the full use of, that's not cost effective. And secondly, if we really do lean into the middle and build and leverage what we've got, then we should be able to get the transition going quicker and also de-risk other things that may be going slower. So, we know that some of the renewable energy zones out in the bush and well away from the cities are being delayed for various reasons, a lot of it around social license, but also around the supply chain. So, any delays and cost increases there can be de-risked by really looking at what we can do closer to home.

[Sarah] (22:59-23:23)

Yeah. Yeah, we already have it. It's already built. Everything's so much more expensive to build and it's far away. And those big transmission lines as well are getting a lot of pushback, aren't they, or new transmission lines. So it makes total sense. The middle isn't new; networks have been at the heart of the energy system for over a hundred years. What's changing that's prompted the industry to focus on the middle?

[Tim] (23:23-24:18)

I think almost it's a natural movement. So, you know, people are focused very much on the big end and the small end. And by that, I mean when I say the big end renewable energy zones, how to take large coal units off and replace them with large solar farms, large wind farms.

 And then, as we discussed earlier, there's an awful lot going on behind the meter on people's roofs with batteries in the home. And given the attention that both of those ends have received, naturally, people haven't had as much time to look at the middle. But I think now that we understand the issues and benefits with kind of the big and the small end, as we've discussed earlier, people can now see that the middle can help solve some of those issues. You know, de-risking any kind of delays or cost blowouts, renewable energy zones, but also help absorb the huge amounts of rooftop solar that's coming in off the grid edge. The middle can really play a pivotal role in supporting both of those ends.

[Sarah] (24:18-24:30)

Does that make our cities more independent, energy independent, as well? If we're not getting our energy or as much of our energy regionally, we're actually creating it, generating it within our own cities. That makes us more resilient as well, doesn't it?

[Tim] (24:30-25:16)

It will help. It's, um, again, it's all part of the puzzle. There's no single one thing that's going to be the silver bullet, do that, and everything will miraculously solve itself, but it's a critical part of the puzzle. If you can do more locally at the distribution network level, then your requirement to move power, bulk power over long distances from far, far away does drop slightly. But also on the flip side, if things like the AI boom really does take off as some of the techno-optimists really think it will, you're gonna need all the power sources you've got. So, if you are overlooking the potential nearer to home in the distribution networks in the middle, then you really are missing a trick, and we'll end up spending far more on bringing power long distances than you need to.

[Sarah] (25:16-25:27)

Actually, I have a question. As a consumer, you've talked about the middle. How do we as consumers have confidence that distribution networks are being run as efficiently as possible?

[Tim] (25:27-25:36)

So, the network cost is featured on everyone's bill, and it makes up at about a third of the kind of average consumers' electricity.

[Sarah] (25:36-25:37)

Does it really?

[Tim] (25:37-26:07)

So, about a third is the network charge, and that's distribution and transmission. And then the rest of the things are wholesale markets, buying the power and so on and so forth. So, we are very aware that we are a significant portion of people's bills, and the networks are regulated monopolies. So we have a regulator, the Australian Energy Regulator, who oversees all our, what we do, all of our actions and it looks at our proposals for investing in the network and it does an awful lot of benchmarking, checking that what it costs us to do something. How does that stack up?

[Sarah] (26:07-26:08)

Against each other?

[Tim] (26:08-26:24)

[00:26:08] Tim: Each other. So, you know what it costs Ausgrid to do something, how does that stack up with other networks, both in New South Wales and across the whole country. So, it's very much looking at keeping costs as efficient as possible and making sure that the networks are as productive as possible.

[Sarah] (26:24-26:26)

So, you compete with each other?

[Tim] (26:26-26:29)

It's one of these things, it's like we are peer networks. We don't directly compete.

[Sarah] (26:29-26:30)

No.

[Tim] (26:30-26:32)

We have, you know, we have areas in territories.

[Sarah] (26:32-26:34)

But who gets the gold stars versus silver and bronze.

[Tim] (26:34-26:46)

And there are a number of different factors that the regulator will compare against. And it can be everything. It can really detail things from, you know, what it costs to do a certain activity on the network to broader measures.

[Sarah] (26:46-26:58)

We've covered a lot today from reflections on last season to the possibilities ahead. Before we go, I'd love to get your final thoughts on what gives you the most hope for the energy transition over the next 12 months.

[Tim] (26:58-27:15)

For me, I think it's around the speed of which we're gonna see, uh, batteries rolled out and  we talked earlier about the speed, whether it's coming in the residential space now with the government incentive, but also how it's going to really roll out with community batteries  and other batteries across the whole of the network.

[Sarah] (27:15-28:01)

Me too. I'm so excited about it. 40,000 in the first month. Unbelievable, unbelievable.

Thanks again, Tim, for joining me today and sharing your insights. This season we'll explore everything from digital innovation to local energy sharing and reducing the impact to communities. We'll also be getting some international perspectives and speaking to individuals making a difference at all levels of the energy system, as well as exploring the contributions of policy, technology, and people.

Thanks for listening to Wired for Good Conversations for a Better Energy Future. To learn more about what's going on, head to wiredforgood.com.au.