Australia has an energy crisis and a new government. These two facts give us an opportunity for reasonable energy reform, and a government might be smart enough to seize it.
So far, the blame game for the crisis has focused largely on supply-side problems in electricity generation — unreliable coal power plants, and broken supply lines. But that only tells half the story.
If we want to lower energy bills and achieve our climate goals, we really need to think about the demand side. Families and communities – the people who buy and use electricity – must move to the center of energy and climate policy.
Australians know rooftop solar was a good deal, and it’s still getting better. This is why they get frustrated when the government changes their nutrition tariffs.
Australians also know electric cars are coming. They want them and cannot understand why government policy has thwarted their arrival.
Australians understand that once we drive solar electric cars on rooftops, they will be much cheaper. In fact, at just 2 cents per kilometer, driving an electric car would be 90 percent cheaper than a petrol car.
Australians also know that batteries are getting cheaper and will level the playing field in the power system, allowing energy to be stored and used much cheaper than it would be from the grid.
We are also waking up to the fact that using gas in our homes for cooking and heating is not only expensive, but also a major cause of respiratory illnesses. Using electricity in the home with modern induction hobs, hot water and heating is cheaper than burning gas and also healthier.
Reducing household emissions doesn’t mean sitting in the dark and cold. This means using energy smarter, enjoying more comfortable homes, and saving money.
And we’ve never had a better opportunity to help Australians seize these opportunities than with renewables. It’s time to start empowering Australians to take control of their energy.
That’s why the current moment calls for a comprehensive home and community energy package, led by the federal government.
Such a package will consist of five parts.
First: Electricity loans. Australians know that technologies that are cheaper to run in the long run are more expensive to purchase up front. And with everything so expensive, most people don’t have the money on hand to get into the great electricity-saving game. This is where the government can step up. A $10,000 loan to families to install solar power, batteries, reverse cycle air conditioners, solar hot water, electric stoves or double glazing would provide immediate savings to millions of families. As it stands, poorer Australians are stuck paying higher energy bills because they are deprived of renewable energy sources for their homes, or more efficient appliances. The interest-free loans address this disparity as well as reduce the demand for the network.
Second, the government can also give the market certainty by adopting dates for the phase-out of the sale of new fossil-burning machines. The UK will end selling petrol and diesel cars by 2030. Norway will do so by 2025. With our vast distances and a decade of bad politics, perhaps these timelines are too ambitious for Australia. But electric cars are coming, and the 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 of its 8 million homes with electricity by 2050. Every appliance manufacturer that makes gas appliances is also making electric equivalents, so the clear timeline for the transition allows Direct business planning.
Third, we need to secure the grid by speeding up the battery ejection process. The employment community battery plan should be introduced, starting with the most vulnerable communities in network edge locations such as Corryong, which is developing its own micro-grid in response to the 2019-20 wildfires.
Fourth, we need to strengthen 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 renewable energy sources to the regional communities that host them. The government can achieve this by opening up investment in medium-sized, community-owned solar and wind projects through a simple underwriting scheme. Australia already has a few of these locally owned enterprises. We could have hundreds more.
And at the community level, the government must pick up on the successful Victorian Power Hub and roll it out nationally. This program provided dozens of small renewable projects to community groups such as gyms and childcare facilities, and returned $13 in benefits for every dollar invested. Let’s take it nationally.
Fifth: Finally, we need new rules that support homes, not fossil fuel companies.
As the government redesigns the electricity market, it must introduce a set of rules that do not fit the passed world, but the following world: a world in which most of the machines in our lives will be electric, where most of our energy will come from the sun, where the cheapest energy will be the things that come out From the rooftops of our homes.
The rules of the current system were written for the handful of giant coal and gas plants that caused our current crisis. But in a few short years, millions of our homes and businesses will be running a vast network of small power plants, batteries, and flexible loads.
We need them all working together to make our energy more affordable, reliable and more powerful than it has ever been. So we need a fairer system of paying families for the energy they generate, to incentivize vehicles to charge during the day, and to bring community batteries into the system where they can maximize the benefit.
This basic guiding principle is called “grid neutrality” – the idea of all power generators and batteries should be treated equally, regardless of their size, whether they are household or giant wind farms.
Fairer rules will motivate families to get electricity, decarbonize and save money.
None of this is easy, but Australia has a lot to win. Using electricity on a home can save $5,000 a year. Weaning our economy off imported fossil fuels will end our exposure to global price shocks. And we’ll fix our emissions problem to get started.
Australia’s future can and should be as a more self-reliant, low-emissions country powered by ultra-cheap renewable energy sources, where everyone saves money.
With a new government and an energy system in need of rebuilding, now is the time to start making it happen.
Dr. Saul Griffiths is the founder of Rewiring Australia. Helen Haines is the Independent Representative for Indy.