Manufacturing News

Visions of a reliable energy future

Duelling proposals for cutting energy prices have squared off at the AFR National Energy Summit.

Speaking at the two-day event, Minister for Energy and Emissions Reduction, Angus Taylor, outlined he saw a heightened need to focus on investing in dispatchable energy, with the rise of intermittent energy generation from wind and solar.

Taylor proposed that day ahead markets be established in the National Energy Market, similar to those in Europe and North America, while baseload coal and gas need to be retained.

Victorian Minister for Energy, Lily D’Ambrosio, highlighted that her state, in contrast, would seek to be exempt from the Australian Energy Market Commission, so that the Australian Energy Market Operator (AEMO) can negotiate longer Reliability and Emergency Reserve Trader agreements, nine months in advance.

For manufacturers struggling with higher power prices, these two alternatives, if implemented would put downward pressure on prices by ensuring consistent pricing, in Taylor’s proposal, or via negotiating long term contracts in D’Ambrosio’s case.

Dr Kerry Schott, independent chair of the Energy Security Board, turned attendees’ attention to other reasons for volatility in prices and energy other than supply. Schott noted that while designing the national market is challenging as differing state and national clean energy targets compete, reliability was on the whole being met.

Instead, what was a cause of concern to Schott was frequency and voltage, which could have a significant impact on the electrified machinery required by manufacturers. While synchronous condensers control the inertia in the network, there needs to be a replacement for the inertia provided by large energy-producing turbines.

Schott, however, did not see coal as being easy to run over the long term, with coal not economically viable when it needs to produce energy throughout the day, even when prices were below the cost of production. Instead, there will be growing markets for storage, hydro, batteries, and gas peakers.

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