Shift to the microgrid can make Australia a world leader

Australia’s transition to a low carbon energy system is being driven by free market economics, not the policy instruments of old. Solar and wind are cost competitive, and the uptake of renewables and energy storage now relies on subsidy.

Propping up uncompetitive fuels through government intervention will only exacerbate the transition and the pain of change.

Often considered to be the sleepier end of an investment portfolio, Australia’s power industry is a sector reinventing itself. Change on this scale does not drive itself. The increasingly influential voice of energy consumers, regulators, shareholders and activists ensure boardrooms and management continue to focus on end-user and community sentiment.

And the rapid proliferation of smart, connected and digitised devices, and the rise of the proactive consumer are facilitating the two-way flow of energy. The classic linear electricity supply model of generation, transmission and distribution networks, and energy retailers is becoming outmoded. Traditional barriers to entry are competed away as consumers seek new and innovative technologies, ideas and business models to achieve their energy preferences and the lines between the various parts of the value chain are becoming increasingly blurred.

From coal relic to digital energy future. Paul Rovere

Australia’s thermal coal fleet is ageing. By 2030, 55 per cent of coal power stations in the National Electricity Market will be over 40 years old. Coal plants will be increasingly expensive to operate and maintain. They will also be vulnerable to significant reliability and efficiency issues.

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