Unleashing New Horizons
Casting a broad spectrum
One hundred eighty energy delegates from around Australia gathered on Wednesday at the State Library of Queensland to discuss the challenges and opportunities for regulation in Australia.
This was a particularly unique opportunity as the guests had the luxury of hearing from the perspectives of consumer advocates, regulators, investors and international experts on the type of challenges we face domestically and globally, but importantly, debated ways to seek to reach net zero at speed and at a low cost, while simultaneously supporting consumers along the way.
As the energy industry faces a defining moment marked by rapid transition and geopolitical uncertainties, ENA’s first regulation seminar since 2019 offered thought-provoking insights and pathways towards a customer-centric, innovative energy transition.
Drawing lessons from abroad
Akshay Kaul, Director General of Infrastructure and Security of Supply at Ofgem, was our first keynote speaker of the seminar and provided a unique perspective from his experience leading one of the most challenging times in recent UK energy history, in the wake of the Russia – Ukraine conflict and the resulting energy crisis across the United Kingdom.
Akshay took the delegates through the journey of navigating this sequence of events and outlined his path forward. He emphasised the need for prompt energy reforms and the scale of the accelerated network build across the UK. Kaul discussed the crucial shift from a market-led to a system-planning regulation model. “Anticipation of generation, not behind it” and “pace not perfection” were two touchstones which encapsulates Great Britain’s proactive pivot towards energy security, value delivery, and the need to maximise new opportunities that are coming into the market and ensuring the challenges ahead are met.
Akshay Kaul, Ofgem
Clare Savage, Chair of the Australian Energy Regulator, presented an Australian regulatory perspective on the energy sector’s imminent challenges, as well as outlining the AER’s key areas of priority. Reflecting on some of the shared challenges and issues faced in Australia, Ms Savage emphasised the delicate balance between innovation and consumer outcomes and stressed the importance of keeping consumer interests at the heart of our discussions and actions: “Networks need to understand and balance different consumer preferences, and we need to balance speed with cost.”
The investors viewpoint
As the seminar progressed, Ray Neill, Managing Director of Infrastructure at Brookfield Asset Management, highlighted the investor’s viewpoint on the energy sector’s transformation. Mr Neill’s insights, including perspectives on the impact of the energy transition across the portfolio of Brookfield’s network holdings, highlighted the significance of regulatory stability and predictability for attracting investment, a sentiment captured succinctly in his statement: “Instability is risky for us; we seek stability in regulation and policy settings.”
Matching pace with progress
Gavin Dufty, Executive Director at St Vincent de Paul, shifted the discussion towards the opportunities for greater value extraction from energy assets, particularly behind-the-meter resources for consumers. Dufty emphasised the urgent need to accelerate policy and regulatory frameworks to match the pace of consumer progress: “Consumers are moving faster than the current policies and frameworks. We must make sure the transition creates value for the customer.”
Striking the balance
Sally McMahon, AEMC
Our final keynote for the day, Sally McMahon, Commissioner at the Australian Energy Market Commission underscored the importance of regulatory perception and balance in the sector. Ms McMahon highlighted the role of networks in delivering a lower cost, lower emissions, secure, and reliable energy system and called for regulatory resilience amidst technology and economic changes. Ms McMahon also observed that the reform of the energy sector starts with ideas from the networks and other stakeholders, observing that “The best reform starts with you.”
Future proofing the regulatory landscape
The day finished with a captivating panel discussion to round off the seminar, led by ENA’s Head of Regulation, Lucy Moon. As Lucy set the framing for the discussion there was a clear theme highlighted across the panel that of the importance of a fair and equitable energy transition.
The panellists stressed the need for collective efforts to ensure that no segment of consumers disproportionately bears the costs of the transition and reflected that the system is designed to minimise risks to consumers.
Akshay Kaul’s quote succinctly captures the essence of the panel’s discussion: “We have to steer a course through the next 15 years so that the proportion of consumers paying charges remains roughly equitable over time.”
Guiding the discussion
ENA also had the fortune of having Michael Dart, Executive Director of Customers & Corporate Affairs at Energy Queensland as MC for the event, which included an incredible acknowledgement of the country to start the day.
The event marked a significant occasion for Energy Networks Australia, with recently appointed ENA CEO Dominique van den Berg setting the scene for the day ahead. Dominique’s perspectives on taking stock of the regulatory settings we have inherited and making sure that as we update them, we take a whole of energy perspective was particularly poignant given the following discussions.
Tim Edwards (CutlerMerz), Dominique van den Berg (ENA), Akshay Kaul (Ofgem)
As we reflect on the discussions that took place on a surprisingly cool and cloudy day in Brisbane, the insights and wisdom shared by our speakers and panelists underline the complexity and nuances of Australia’s journey towards a reliable, affordable, equitable, and value-centric energy transition.
Throughout the day, a thread began to be heard across the speakers: To navigate the complex challenges ahead, we need to adopt a holistic system perspective, engaging stakeholders from across the entire chain to meet our ambitious targets.
So, what’s the key to successfully chartering this course?
Trust, certainty, and effective consultation emerged as the crucial principles, irrespective of one’s position in the system- be it as an investor, consumer, or regulatory body. These principles underscore the need for flexibility, adaptability, and transparency in setting the course towards our shared goals. The challenge lies in balancing the speed and cost of transition while ensuring a fair and just outcome for all. But a wise step as we ‘future-proof’ our path forward would be heeding the advice of Clare Savage: “It’s crucial that we always start with the consumer”.