Energy Market Disruption

Transcription

1 Energy Market Disruption 1 Fiona Orton August 2015

2 Agenda 2 1 Key market trends Consumer driven & decentralised energy market Decarbonisation of electricity supply Priorities for energy businesses

3 Key market trends 3 > Presentation title > Author > Date (Verdana 10pt)

4 Rising electricity prices Electricity prices have doubled between 2008 and Source: Simshauser & Nelson 2013 (for CEDA)

5 Demand has declined in the NEM Forecast demand growth is fairly flat 5 Annual demand GWh 250, , , ,000 50,000 - Axis Title Industrial Residential & Commercial Rooftop PV Small Non-scheduled generation Energy Efficiency Source: AEMO NEFR 2015, medium scenario

6 Small scale solar PV 1.4 million solar installations nationally 6 Cumulative installations 1,500,000 Installed MW 5,000 1,250,000 4,000 1,000,000 3, , ,000 2, ,000 1, Installations Installed capacity (RHS) - Source: CEC Clean Energy Australia Report 2014

7 Consumer-driven & decentralised energy market 7 > Presentation title > Author > Date (Verdana 10pt)

8 Investing in new business models Integrating technologies to provide an energy ecosystem for customers 8

9 AGL Solar 9 Tailored financing options Pay upfront Low interest 2 or 5 year financing plans Solar Smart Plan: PPA with no upfront costs 7, 10, 12 or 15 year plans Focus on service & quality High quality panels and inverters AGL Solar Command: platform for real-time performance monitoring, solar dashboard, fault alerts and diagnostics For more information, see aglsolar.com.au

10 Australia has a large solar market Lots of room for future growth even with current business models. 10

11 Battery Storage AGL Power Advantage AGL is the first major energy retailer to offer battery storage product. 11 Store excess solar generation, reduce peak demand & provide emergency backup First units sold in 2015 Initially targeting early adopters Very high consumer interest Specifications 7.2 kwh capacity, 6 kwh usable (80% discharge depth) 3 kw nominal power outage 4.5 kw nominal power input Price: under $10,000 including inverter, installation and control system

12 Contestable metering Advanced metering enables new products and services 12 Market led roll-out of smart meters AGL has established a ring-fenced metering business Active Stream Old accumulation meters providing a poor customer experience 1 in 13 reads are estimated Enable the use of emerging technologies: home energy management, storage and EVs Innovative retail products Digital meter enabled offerings Tangible benefits to customers For example: AGL Free Power Saturdays product available in Victoria

13 Innovation in customer service Using technology to improve customer comfort and control. 13

14 Decarbonisation of electricity supply 14 > Presentation title > Author > Date (Verdana 10pt)

15 A national carbon budget for Australia 10 Gt under the most generous of 2 0 C allocations 15

16 Policy induced capacity Policies have been introduced which have created significant incentives for new capacity despite a demand/supply balance not warranting it 16

17 Energy-only markets Price and new capacity 17

18 Investment challenge Modernisation of electricity supply will require significant investment 18 Measured transition to a low carbon electricity supply system will require tens of billions of dollars in investment over the coming decades Policy has been successful at incentivising new electricity generation But demand has declined And old, emissions intensive power stations appear to face barriers to exit Financing new renewables requires sustainable LGC and wholesale markets RET requires complementary policy to facilitate sustainable wholesale market outcomes Policy should be incorporated into broader decarbonisation/modernisation agenda New innovative financing models will need to be developed to facilitate the development of new zero-emissions electricity generation

19 Implications for Australia Is carbon pricing the answer? 19 Carbon pricing debate in Australia has stalled Carbon price of over $100/tonne required to displace coal International experience Moving away from carbon pricing US regulation for new power stations Canadian regulation for old power stations UNFCCC/COP21 and Australian targets 2015 an important year LRMC/SRMC ($/MWh) Economics of new coal, new gas and existing coal Relatively low GHG price alters economics of new plant Black coal CCGT Existing coal GHG emission price ($/tonne) Relatively high GHG price required for new plant to displace old plant

20 Priorities for energy businesses 20 > Presentation title > Author > Date (Verdana 10pt)

21 Energy market policy and regulation Getting the settings right to deliver on community expectations 21 Integrated climate change and energy policies emissions standards for all new power stations regulation which drives the progressive closure of older, emissionsintensive power stations or retrofitting with CCS technology continued incentives for renewable energy (such as the RET) with increased scope to include all zero and near-zero emission energy sources Flexible and light-handed regulatory frameworks for emerging technologies competitive neutrality for new and existing supply arrangements to support customer choice demand side services delivered through competitive markets national consistency Price deregulation to support innovative product and service delivery Appropriate consumer protections (e.g. safety standards)

22 Further information 22