What makes good energy policy? How do we lead for change? Here's my presentation to the Young Professionals Congress 2013 of the American Nuclear Society. I review Australia's current position in electricity generation and draw lessons on policy and technology; examine the policy failure of artificial constraints of nuclear; demonstrate the just-barely possible task of decarbonising by 2050, and provide my lessons for leaders in energy.

1. Leadership for outcome focussed
energy policy
Lessons from Australia: Successes,
constraints, and cold hard realities
Ben Heard
ANS Young Professionals Congress
10 November 2013
ben.heard@thinkclimateconsulting.com.au
www.decarbonisesa.com
@BenThinkClimate
FB: Decarbonise SA

2. About me

3. Signs of Progress
• Australia and India will begin negotiations for the sale of
Australian uranium to the subcontinent this month (March
7 2013)
• We need abundant, reliable power. Why not nuclear? (Alan
Finkel, Chair of ATSE 28 October 2013
• Agreement a boost for NSW uranium mining (Oct 3 2013)
• (Liberal) MP calls for rethink on nuclear power (November 4
2013)
• Labor MPs urge rethink on nuclear power (22 October
2013)

4. Presentation layout
• Welcome to Australian Energy
– The NEM
– The mix
• Renewable success
– Wind (Renewable Energy Target)
– Solar PV
• Nuclear constraint
• Fossil Reality
• Lessons for leadership

5. Welcome to Australian Energy
•
Australia:
–
–
–
Is the world’s 6th largest country (geographically), over 7.5 million km2
Has 23.1 million people (2013), ranked 53rd in size globally.
Has GDP per capita of $44,000 (9th -12th highest, depending on source), roughly on par with Canada
and somewhat less than USA
I am here

6. The National Electricity Market (NEM)
Geographically largest interconnected grid in
the world.
Covers 90% of Australian electricity supply
Most Aussies are here

7. We suck slightly less than you

8. Wait... actually we suck slightly more

9. Old King Coal...
Source: Origin Energy

10. ...is a cheap and plentiful old bastard down under
2.2 time entire domestic coal sector. Way to go us!

11. Renewable Success

12. Strong growth in Wind
Red is South Australia. Smaller state, major producer
Source: McArdle 2013

13. South Australian Wind- growing contribution
Source: AEMO 2012
Wind generation has increased at the expense of Interconnector (coal) and Coal

14. South Australian GHG emissions falling
Source: AEMO 2012
Wind has worked! Be in no doubt. However...

15. South Australia relying more on interconnection
Source: AEMO 2012
...economic success is dependent on interconnection to import and export from and to
larger market. NEM has been like SA’s battery, and...

16. NEM wide wind is very low
Source: Origin 2012
...recall, rest of the NEM has hardly any wind (yet). High system costs are yet to be
incurred, however negative price events and drop in wholesale average is hurting
baseload suppliers... Which is good because they are coal, but bad because we still
need baseload suppliers...

17. Variability remains an issue
51,000 MWh daily NEM-wide maximum
Source: McArdle 2013
...which is obvious when you look at daily performance...
As little as 50% that amount may be provided

18. Incidences of low output may find a floor
Source: McArdle 2013
... And half-hourly periods of low output.

19. These are not arguments for constraint
•Planning
•Honesty
•Realism
•...does not make one “anti wind”

20. Wind: the policy “How?”
• Renewable Energy Target: 20% generation from renewable sources by
2020
• Retailers must acquire 1 certificate per MWh of mandated clean energy
• Market sets price according to best technology (which is wind and hydro
generation from existing generators above established baseline)
• Certificates around $35 per MWh (have ranged from $10-$60).
• LCOE difference between wind and market average

21. Wind: How much $?
• From 2011-2020, the scheme will require retailers to purchase certificates
with a total value of approx $20.2 bn in 2012 money (Source: Heard 2013,
pretty rough please don’t quote me yet) and attract $18.7 billion in
investment (SKM 2012).
• From 2011-2020 the scheme will increase annual output of clean energy
by 30,600 GWh per annum. Most of the new energy will be wind
• Is this good value compared to nuclear?

22. Compare
$18.7 billion
Wind
Nuclear
GWh per annum
30.6
24.6 (@ $6,000 kW
installed, 90% CF)
Scale
Small, incremental
additions
Large additions
Legal in AU
Yes
No
Intermittent
Yes
No
Additional system costs
TBC, expect high
TBC expect low
Lifespan
25 years
60 years
From a climate perspective I can only argue for both

23. Place outcomes ahead of ideology and tribalism
Wind: NIMBY issues, hated by
the right, demonised by some
nuclear advocates
Constraint will reduce
near-term clean energy
investment and proven
GHG reduction
Nuclear: Illegal, hated by the left,
demonised by most renewable
advocates
Constraint will reduce long-term clean
energy investment and proven GHG
reduction, lock in high technology and
system costs, continued dependence on
fossil baseload and back-up, and high
reliance on political consensus for
climate change action

24. Solar PV – Spike in systems
Source: Origin Energy
Subject to changing and significant subsidies since 2008:
•Cash rebates
•Feed-in tariffs
•RECs, then REC multiples
•Industry grants (50% cost) for large scale systems (99 kW) plus RECs
This has intersected with plunging system prices to create an unstable boom

25. Solar PV – Spike in capacity
Source: Data by DataMarket. Chart by Mike Sandford 2012

26. Solar PV – System impact
Revenue gap
Peak unchanged
Mike Sandford 2012

27. Nuclear Constraint
Australia’s Environment and
Biodiveristy Conservation Act (1999) Section 140:
• 140A No approval for certain nuclear
installations
– The Minister must not approve an action consisting of
or involving the construction or operation of any of
the following nuclear installations:
(a)
(b)
(c)
(d)
a nuclear fuel fabrication plant;
a nuclear power plant;
an enrichment plant;
a reprocessing facility.

28. National GHG emissions since 1999
What success does not look like

29. Cold hard reality: growth has kicked
clean energy’s tail

30. Cold hard reality: growth has kicked
clean energy’s tail
We have a lot of work to do. We need plentiful, cheap, clean energy instead of plentiful,
cheap dirty energy. History has invalidated other ways of thinking about this problem.

31. How fast can we add energy?
Source: Russell 2013

32. Can Australia decarbonise by 2050?
Assuming rapid wind growth to 2025, then rapid nuclear growth, we
need to add clean energy at close to the fastest ever rate per capita,
globally, for 25 years straight!!!

33. The answer is maybe
• It CANNOT be done without a plan
• A sensible plan MUST be formed in national (global) interest so
MUST strive for bi-partisan support
• A sensible plan CANNOT proceed on ideological or whimsical
favouring or disfavouring of technologies
• In Australia I contend that the most sensible plan with the strongest
evidence-based backing would
– facilitate continued rapid, near-term growth in wind and (to a much
lesser extent) solar PV
– Prepare for rapid rollout of nuclear power generation. It will be
essential no matter what
– Maintain an environment of support for baseload-suitable renewables
like solar thermal with storage, enhanced geothermal and biomass
with well-targeted support for R&D
• Political durability is critically required

34. Creating political durability
Clean technology
neutrality
Political
power/consensus

35. Creating political durability
Clean technology
cost-effectiveness
Political
power/consensus

36. Lessons for Leadership
• YOU will probably not end up “powerful” per se
• You can be influential for powerful people. Aim for that. If power comes,
so be it
• Independence from a foundation of strong values is a ferocious weapon of
change
• Occupy the middle and pull both sides forward
• Call bad policy, loudly. Be VERY sparing in criticisms of people
• Conduct yourself as though change for the better is inevitable... You would
just like it sooner not later
• Reward every opportunity with a calculated risk. Safe is useless,
forgettable, no one will thank you, and the opportunities will stop coming
• Who are you upsetting? If the answer is no one, you need to try harder
• You do not need everyone...which is fortunate, as you are not going to get
them
• Be more likeable than the other guys (with thanks to Suzy Hobbs-Baker)

37. More “and”, less “but”
• “And” is the antidote to extremism
– Nuclear power is very safe/ but and new reactors are even safer
– Renewables will deliver more energy in future but/and we can’t meet this
challenge without nuclear power
– Wind power has successfully cut emissions in South Australia but/and
connection to the NEM has been vital for stability
– A solar PV system is a great option for the South Australian home-owner
but/and they are causing real difficulties in the electricity market
– Nuclear power is our best value option for clean energy and it is too expensive
• “And”
– Sets you apart as capable of accommodating complexity and seemingly
competing truths,
– Reinforces your independence
– Builds bridges

38. Conclusion
Ben Heard
ben.heard@thinkclimateconsulting.com.au
www.decarbonisesa.com
@BenThinkClimate
FB: Decarbonise SA