Lessons learned at the All Energy Conference

I’ve spent the last two days at All-Energy’s first Australian green energy conference and exhibition, set in Melbourne. I was sent down to learn as much as possible, and meet new contacts who may benefit from what we do. I didn’t know what to expect, but the conference proved to be informative and a very effective networking opportunity.

General Conference Notes

There were less exhibiters at the conference than I expected, but a lot more delegates. This didn’t prove to be a problem though as most of the time at the conference was spent at the workshops, with time for the exhibition in between. As I was sent down primarily to educate myself at the green energy space I spent my first few visits to the exhibition leisurely talking in depth with the hosts at each exhibit, but by the end of the conference I had run out of time and ended up just grabbing as many pamphlets as possible.

Most of the exhibiters were generation technology based. There were a couple of fuel cell companies, some companies selling electrical parts, and dozens of photovoltaic cell manufacturers. Most of these technologies were focused on smaller generation projects (< 5 MW). On the other hand, the delegates were much more diverse. Many of the delegates I talked to told me that with all the action in the green technology space they had only recently been recruited into the market and were thus taking advantage of the conference for its educational value.

There were three sessions each day of workshops. These sessions generally ran for 1 to 1 ½ hours. There were four “streams” to choose from in each session. The workshops each had a chairman familiar with the topic and three speakers who were each allotted about 20 minutes to talk in. There was question time available at the end of each workshop. I missed the first set of workshops as daylight savings in Melbourne cut into my first day.

At the end of the first day there was a grand networking event. This event was really well done. There was a bar (at which I managed to get 2 free drinks), live music, and a selection of different gambling tables set up. They gave us $2000 worth of chips every time we sat down to play (so there was no real money at stake). I did well at poker, more than doubling my money in one game. However, my luck did not stretch to blackjack or roulette (I was glad to learn this at the convention centre, rather than at Crown casino which was just a minute’s walk away). Gambling was an excellent icebreaker. Each round played was an opportunity to meet one or two people and have interesting conversations with them. I ran out of business cards and started writing down my details on some index cards I had.

The end of the second day was a round table discussion with eight highly intelligent people (mostly fund managers, I believe) and Kerry O’Brien from ABC’s the 7:30 report hosting. There were ABC camera men in attendance as well as several journalists so keep an eye on the media over the next few days. The questions asked by both Kerry and the audience were very good.

In general, I found the conference highly informative and well worth the airfares spent to attend it. I now understand that the problems facing the de-carbonisation of the electricity market are much greater than I imaged but I also witnessed the unstoppable momentum growing behind the sprouting green energy industry.

Some things that I learned

Green Power is about solving more than just global warming

One thing I learned is that the need for green power isn’t just about stopping global-warming (though, it was somehow amusing to hear superannuation fund managers worry about climate change). There a whole host of issues driving the industry:

• Social acceptance of electricity generation technology (even if climate change isn’t man made, the “social licence” to build a coal power station no longer exists)
• Resource depletion (particularly oil, but also water) and it associated price hikes
• Food scarcity
• Transmission capability struggling to keep up with peak consumption
• Rapid growth in electricity networks (particularly in China)
• Equitable access to power supply amongst low income groups
• Air pollution (particularly in Europe)
• Countries ‘keeping up with the Jones’ on Green Technology R&D
• Sustainability of jobs in existing industries (such as all the people involved in the creation of internal combustion engines)
• Oceanic Acidification
• Climate Change

There are a number of barriers facing institutional investment

A lot of the R&D companies were complaining that there wasn’t enough investment in Australia in their technologies (especially when compared with overseas). This was explained as being due to a number of factors:

• Lack of angel investors, philanthropists, and VC funds in Australia. This has meant that the government has typically had to act as a VC fund themselves.
• There is a lot of uncertainty at the moment due to the oncoming CPRS. Where there is uncertainly you can’t evaluate risk or return and therefore can’t invest.
• Due to high levels of competitiveness, it is difficult in Australia for superannuation funds to make investments in technologies that won’t have a return for a long time. If a fund has a bad year, its ‘mum and dad’ investors will change funds.
• Remuneration for fund managers is not set up in a way that incentivises them to invest in green technology.

There was a suggestion that the government may be able to solve some of these issues by (a) passing the CPRS legislation, in any form and (b) working to hedge the risks in these companies. I didn’t fully understand how they proposed to do this, but it sounded a lot like socialising risk whilst privatising returns.

Green Power is covers more than just new generation technology

Whilst clean power technologies made the largest presentation at the event, and represent the largest slice of money available in the industry, green power is about much more than just new generation. It also involves:

• Energy efficiency (there is a lot of money in this, as it is already commercially viable)
• Smart Grids, and transmission losses in general (Cisco expects global smart grids to involve more IT infrastructure than the internet)
• The oncoming hydrogen economy (seems our cars in the future will all run on hydrogen)
• New transport technology (there was a company manufacturing light rail, and also a Honda hybrid car at the event)

There is a lot of hype in the market

There is a lot of hype generated by both the government and the R&D companies. After years of promises that have never come through the general feeling was to take anything both sides of politics said with a grain of salt. A lot of the R&D companies talked as if their technology would magically, and single handedly, create a green power industry but just casual questioning revealed the real technical flaws in their products. In particular I was unimpressed with one of the exhibitors advocating clean coal technology, and that technology was later used as an example of this at the round table.

Green Power has public messaging issues

Dr John Gardner from the CSIRO explained that the general population has an understanding of green power, climate change, and the electricity industry that was statistically equivalent to guessing. People simply don’t understand where power comes from, or that there is a link between their consumption and the amount of greenhouse gases produced. There is also a big difference between the generation technologies that people find acceptable, and the ones that they have knowledge about.

Messages given about climate change have been contradictory. People have been told that (a) they can make easy changes to save the world and (b) that the world will be cataclysmically destroyed unless drastic action is taken by those in power. This has meant that most people are concerned and confused. Green power has also been linked to environmentalists and hippies, who are not viewed positively by the general population.

Finally, the way that retail pricing is done is not informing people correctly about their use of power. For instance, most energy users pay the same price during peak and off peak times yet peak power is much more expensive and growing at a faster rate than demand generally. This has meant that there is no price signal to reduce the peak load. There was also a suggestion that energy efficiency could be encouraged by using a progressive pricing system where the price per kWh increases at set benchmarks, a bit like our tax system.

Hazelwood is playing on everyone’s minds

Hazelwood is much talked about in Victoria. The station is very old and (according to many at the conference) should be decommissioned, but instead will continue running until it becomes unprofitable to do so. Victoria is still dependent on power from Hazelwood and as such needs a new source of power before maintenance or carbon costs shut the plant down. In the current climate, this power can’t come from a new coal fired station so Victoria needs a clean energy solution sooner rather than later.