Energy crisis: Australia needs AEMDSO not just AEMO, 27 March 2017

Media Release

“The Australian Energy Market Operator (AEMO) Gas Statement Of Opportunities (GSOO) released 9 March 2017 failed to factor in significant demand side opportunities, including lowest cost first steps to address expected gas shortages that will result in power shortages. All Australian energy customers will continue to pay a fast-rising premium until the Council of Australian Governments (COAG) rewrites the rule book.  We desperately need an Australian Energy Market Demand Side Operator (AEMDSO). An AEMDSO would be the essential counterbalance that could pump life blood into a critically restricted system,” according to Energy Efficiency Certificate Creators Association (EECCA) President, Hamish McGovern.

The GSOO states that, without increases in gas production to fuel gas-powered generation, or a rapid implementation of alternative non-gas electricity generation sources, there could be electric supply shortfalls between 2019 and 2021 of approximately 80 gigawatt hours (GWh) to 363 GWh across South Australia, New South Wales and Victoria.

“The AEMO and its predecessors have historically focussed on supply side solutions with virtually no consideration for demand side solutions. For market players, the focus has rapidly shifted over the past two decades as fuel shortages have pressured end customers with higher prices and power outages. While energy market complexities have kept the issues largely out of the mainstream news, many of the solutions are within easy reach of households and businesses. Unless the blueprint of energy market operation organisations is rewritten, these options will remain untapped.

“The GSOO claimed that, to deal with the expected gas shortages, ‘the most efficient solution, to meet price, safety, reliability, and security of supply objectives in the long term interest of gas consumers’ are a combination of six supply options ranging from redirecting LNG exports to new gas fields. There are countless reasons why there should have been several other dot points in the GSOO pinpointing demand side options. Demand side options would help alleviate the immediate energy crisis and assist with other long term objectives. These options would complement the vision of the Turnball Energy Trifecta: security, affordability and emission reductions,” said Mr McGovern.

 The range of possible ‘low hanging fruit’ demand side options to reduce gas and electricity consumption that can help to immediately alleviate the energy crisis include:

• assisting businesses to implement equipment upgrades including boiler upgrades, air conditioning, refrigeration, lighting and insulation;

• assisting households to install more efficient stock including energy efficient whitegoods, lighting, weather sealing, low flow shower heads and solar hot water;

• battery storage (small and localised or large and centralised);

• enabling a demand response by:

  • using standby generators; and

  • voluntary load shedding by paying customers.

“An AEMDSO would be interested in an International Energy Agency (IEA) Energy Efficiency Market Report 2016 which states that many governments are now looking at energy efficiency as the ‘first fuel’ - a source of energy in its own right, in which they can invest ahead of other more complex and costly energy sources,” Mr McGovern concluded.

The EECCA continues to work with governments across Australia to demonstrate that Australia’s energy supply shortfalls could be significantly and increasingly mitigated, at lowest cost, rapidly in the short term and continually in the longer term, by proven and tailored energy efficiency schemes. This has been exemplified by schemes in Victoria, New South Wales, the Australian Capital Territory and South Australia.

… Ends

Media please contact:     

Hamish McGovern - EECCA President, m 0416 296 827, Ric Brazzale - EECCA Policy Sub-committee, m 0419 522 659 or Jessica Lynch, EECCA Communications, m 0417 539 377, comns@eecca.org.au, www.eecca.org.au

Gas Statement of Opportunities for Eastern and South Eastern Australia - Report, AEMO, 9 March 2017,

AEMO Media Release 9 March 2017

(PDF)

Schemes