This week (on Tuesday 6th May 2025) I’ll be at the CEC’s ‘Wind Industry Forum’ in Melbourne, which I am very much looking forward to attending …
… the Clean Energy Council does organise great events, and we try to take these opportunities to get out of the office to hear some content that’s sometimes useful for us, and to engage in the conversations with the audience.
However before we jump into that event, I wanted to piece together this quick article from my scribbled notes during the inaugural Clean Energy Investor Forum (CEIF) by the CEC in Sydney on Thursday 3rd April 2025
… which was auspiciously the same day (NEM time) as the big ‘Liberation Day’ announcements over in the US
What follows are my recollections from the event (what jumped out at me), so please don’t take this to be an official CEC Record!
‘Let’s talk about Gas!’
That was an introduction voiced by a CEC Staff Member in a panel session on the day … and I nearly fell off my chair!
… though some might see this as just a by-product of what Margin Call in the Australian termed ‘something of a boardroom coup’ later in April in their article.
Coupled with this, one of the speakers (not from the CEC) made a comment along the lines of:
‘The (new) NEM needs to have a lot of gas available, but to use it very little’.
… which seems quite logical. I remember thinking that it was refreshing to hear this type of pragmatism in a CEC organised event.
Following the same conference:
- Over on RenewEconomy, Giles Parkinson referenced the comment by Anthony Fowler (CEO of Tilt Renewables) in his article title ‘“I could never find a business case:” Renewable bosses say gas power will require its own underwriting scheme’.
- … and I saw David Close pick this up over here on LinkedIn.
- Unless I missed any dissention, there seemed to be the case made at the conference that:
- Gas-fired generation would need its own support mechanism; but that
- At the same time, the audience seemed to be of the same view that it would need to be separate from the Capacity Investment Scheme.
- I’d have to say I don’t really understand this:
- why not use the same procurement frameworks but (similar to the case for long-duration storage support for hydro) create a particular RFP process looking specifically at gas?
- what am I missing … why do we need to create a whole new parallel process to support something that most people acknowledge is an insurance policy that’s going to give much higher confidence of the lights staying on?
Speaking about Coal?
Yes, there was even a few references to coal … though certainly not from any CEC team member that I recall. Which is understandable.
Coal, and deep storage
With a reference to one aspect of the ‘Keeping the Lights on Services’ currently provided by the thermal fleet (particularly coal), and pointing to the ‘how much deep storage do we need?’ question, one of the speakers made a comment along the lines of:
‘We have 30-40 times the depth of Snowy 2.0 in energy stored in coal stockpiles and gas linepack across the NEM currently’.
… which is part of what we were trying to convey in writing ‘The Rise of Just-in-Time’ in Observation 5 of 22 within GenInsights21 some years ago now.
‘Coalkeeper was a silly campaign!’
One panel member made a comment along the lines of:
‘Coal Keeper was a silly campaign … it was about keeping the lights on!’
… which was no doubt controversial for the audience – but more understandable when viewed through Lens #4 here . Whilst the campaign was politically effective for those who organised the campaign (I don’t think this was the CEC?), I do wonder what incidental damage it might have done* … for instance:
(a) in contributing to the Victorian Government:
i. seeming to be almost scared of its own shadow that it felt obliged to keep any details of its confidential ‘safety net’ agreement for Yallourn,…
ii. or many details about a similar one for Loy Yang A,…
out of the public domain
(b) wouldn’t it be better for the market as a whole (including those building new projects to increase the share of VRE) to have had the courage to make transparent decisions:
i. such as in the case of the NSW Government and Eraring.
ii. or as was announced for Callide B by the Energy Minister at Queensland Energy Club.
* I’m certainly aware that there are those on the rabid right of the Emotion-o-meter who’d see any temporary extension to the life of coal as just one step towards a forever extension. My sense is that that whole campaign was mainly people at both extremes shouting at each other – drowning out the pragmatic considerations of those not at either end.
Where were the Energy Users?
That’s a question that was bugging me through the day (and in other similar supply-side focused conferences):
- It was good to see Andrew Richards (CEO of Energy Users Association of Australia) on a panel – doing what he could to remind the audience about how energy users are the focus of the NEO.
- Also worthwhile for Anita Stadler to provide a few slides at the start of the panel she chaired on the topic of ‘The forgotten market and its critical role in Australia’s transition to clean energy’ (the article she published for us back in February 2025);
- and it was also worth noting that attempts by some newer entrant generators to provide a bundled offer to energy users (albeit meeting challenges in the 2024 Q2 Wind Drought) were also discussed (including in private conversations).
… but in general terms there was not enough focus on the needs of Energy Users (in my view) … which is a segue into …
‘There’s a role for Government?!’
There were quite a few comments about ‘there being a role for Government’ that there was a role for Government …
1) There’s clearly a role for Government in helping to bridge gaps that emerge due to uncertainties in the policy (and political) space;
2) But I wonder if the mantra that ‘there’s a role for Government’ becomes a crutch to cure all ills. For instance:
(a) there were several speakers who made comments along the line of ‘to reduce cost of capital, provide more certainty’ …
(b) noting that the rivers of funding looking to find a home in the space were looking for low risk investments
(c) which seems fundamentally at odds with what we’ve noted before about ‘the level of risk increasing in the NEM’
(d) So…
i. we need to be very, very careful that this is not just clever words in one more attempt to ‘socialise cost and risk, but privatise profits’.
ii. for (at least in some cases) my spidey senses were tingling, warning that the speaker could have been trying to pass on all the risks of the project (including those related to supply and demand dynamics … i.e. ‘the market’) onto the Government, and hence the Taxpayer.
Let’s hope that the people running the Nelson Review retain focus on this risk, and help to bolster the ranks of (genuinely helpful) intermediaries between developers of generation projects and the eventual energy users.
About risk
We’ve already written some articles about how the level of risk in the NEM is increasing. So it was welcome to hear some comments on this topic, including:
‘Don’t buy insurance, sell risk’
This was a comment made by Cameron Shield of Lockton … I’m hoping he will expand on this in an upcoming article for us here on WattClarity®.
Can’t contract away weather risk.
This was one factor that (I inferred) was on the minds of some speakers when mentioning the role for Government … but others noted that it was a risk that just needed to be managed.
Transmission tapped out?
Amongst the comments that jumped out at me was some anecdotes about some transmission companies perhaps getting to the limit of what their shareholders were comfortable investing in.
We’ve a long way to go, to get to that magical ‘10,000km of transmission’ vision …
An update from Tim Nelson
We gained an update on the Nelson Review (with the update at that time being moreso) ‘this is what some of the submissions are saying’ rather than ‘this is what we are thinking’ … but now that the Federal Election is out of the way, and unambiguous in the result, we might hear more on the latter.
One noteworthy comment I wrote down was words to the effect of ‘the spot dispatch is efficient, and working well’ … which I take to be a sign of a ‘don’t throw the baby out with the bathwater’ perspective.
Where is the ‘Clean Energy Operations Forum?’
As a parting thought, I’ll just leave you with the question that was the same one provided in feedback to the organisers … with a whole day conference devoted to investment (i.e. with much focus on getting projects over the line), where’s a similar whole-day dedicated forum focused on operational challenges in a VRE + Firming world?
Worth flagging that one speaker spoke to the realisation that ‘there’s no such thing as a set-and-forget asset’ … which is a segue into the Operations Forum (and reminds me of James Tetlow’s analogy of the glider and the plane to explain different operational challenges).
We’d definitely be attending that one!
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