First published in The Canberra Times, July 31, 2022.
Australia has an energy crisis and a new government. These two facts give us both an opportunity for sensible energy reform, and a government that might be smart enough to seize it.
So far, the blame game for the crisis has focused heavily on supply side problems in electricity generation – the unreliable coal power stations, the broken supply lines. But this only tells half the story.
If we are to lower energy bills and meet our climate targets, we really need to think about the demand side. Households and communities – the people who purchase and use electricity – must move to the centre of energy and climate policy.
Australians know rooftop solar has been a good deal, and only continues to get better. That is why they are frustrated when the government changes the feed-in tariffs they have enjoyed.
Australians also know electric vehicles are coming. They want them and cannot fathom why government policy has frustrated their arrival.
Australians understand once we are driving electric cars fuelled by rooftop solar, it will be much cheaper. In fact, at just 2 cents per kilometre, driving an electric car will be 90 per cent cheaper than a petrol one.
Australians also know batteries are getting cheaper and will level the playing field in the energy system, allowing energy to be stored and used far cheaper than it can be from the grid.
We are also waking up to the fact using gas in our homes for cooking and heating is not only expensive, but also a leading cause of respiratory illness. Going electric at home with modern induction stoves, and electric hot water and heating, is a cheaper than burning gas, and healthier, too.
Reducing household emissions doesn’t mean sitting in the dark and cold. It means using energy smarter, enjoying more comfortable homes, and saving money.
And we have never had a better chance to help Australians seize these opportunities from renewables. It’s time to start empowering Australians to take control of their energy.
That’s why the current moment calls for a comprehensive household and community energy package, led by the federal government.
Such a package would have five parts.
First: electrification loans. Australians know technologies cheaper to run over the long haul are more expensive to buy up front. And with the price of everything going up, most people don’t have the cash on hand to get into the great electrification savings game. This is where the government can step up. A $10,000 loan for households to install solar, batteries, reverse-cycle air conditioners, solar hot water, electric cooktops or double-glazing would unlock immediate savings for millions of households. As it stands poorer Australians are stuck paying higher power bills because they are locked out of renewables for their home, or more efficient appliances. No-interest loans address this inequity as well as reducing demand on the grid.
Second: the government could also give the market certainty by adopting phase-out dates for the sale of new fossil-burning machines. The UK will end the sale of petrol and diesel cars by 2030. Norway will do it by 2025. With our vast distances and after a decade of bad policy, these timelines are probably too ambitious for Australia. But electric vehicles are coming, and a clear timeline and incentives for their adoption will make them cheaper for everyone. The Netherlands is phasing out new natural gas appliances by 2025 and will heat all its 8 million homes with electricity by 2050. Nearly every appliance manufacturer that makes gas appliances also makes electric equivalents, so a clear timeline for transition allows for straightforward business planning.
Third: we need to secure the grid by accelerating the roll-out of batteries. Labor’s community battery plan should be brought forward, starting with the most vulnerable communities at edge-of-grid locations like Corryong, which is developing its own micro-grid in response to the 2019-20 bushfires.
Fourth: we need to boost local ownership of renewable energy generation. Australia needs more renewables, and fast. To move at the required speed, we need to deliver more of the economic benefits of renewables to the regional communities that play host to them. The government could achieve this by unlocking investment in mid-scale, community-owned solar and wind projects with a simple underwriting scheme. Australia already has a handful of such locally-owned projects. We could have hundreds more.
And at the community scale, the government should pick up the successful Victorian Power Hub program and roll it out nationally. This program delivered dozens of small-scale renewable projects for community groups like sporting clubs and childcare facilities, returning $13 of benefit for every dollar invested. Let’s take it national.
Fifth: Finally, we need new rules that back households, not fossil fuel companies.
As the government redesigns the electricity market, it must deliver a set of rules suited not to the world that is passed, but the world that is coming: a world in which most machines in our lives will be electric, where most of our energy will come from the sun, where the cheapest power will be the stuff that comes off our roofs.
The rules of the current system were written for handful of giant coal and gas plants that caused our current crisis. But in a few short years, our millions of households and businesses will operate a vast network of tiny power stations, batteries and flexible loads.
We need them all working together to make our energy more affordable, reliable and robust than it has ever been. So we need a fairer system to pay households for the energy they generate, to incentivise vehicles to charge during the day, to bring community batteries into the system where they would do the most good.
This basic guiding principle is called “grid neutrality” – the idea all power generators and batteries should be treated equally, regardless of their size, be they households or mega wind farms.
Fairer rules will incentivise households to electrify, decarbonise, and save money.
None of this is easy, but Australia has so much to win. Going electric can save a household $5000 a year. Weaning our economy off imported fossil fuels would end our vulnerability to global price shocks. And we’d fix our emissions problem to boot.
Australia’s future can and should be as a more self-reliant, low-emission nation powered by ultra-cheap renewables, where everyone saves money.
With a new government, and an energy system that needs rebuilding, now is the moment to start making that happen.
- Dr Saul Griffiths is the founder of Rewiring Australia. Helen Haines is the independent MP for Indi.