Why I’m joining Tempus Energy

Tempus

This article first appeared on my LinkedIn blog

I’m joining Tempus Energy to develop their business in one of the most interesting electricity markets in the world – South Australia. Many of you know me as a climate change policy maker but energy policy was my first love. In the 90’s I worked in industry as an energy auditor and project manager of co-generation projects. Ever since that time, I’ve been an advocate for energy efficiency, decentralised systems and renewables.

Integrated Energy Systems also did demand management projects, mainly by using ice storage to pull load from day to night. In Belfast, the utility used to fax the large industries to reduce load during peak winter demand, and industry responded because they could save about half their winter charges. I could never get traction for a useful load shifting conversation in Australia. The differences between peak and off peak charges weren’t stark enough or consistent enough. The network price signal was too blunt and the retail price signal too opaque.

Until now.

Tempus’ software offers the change to forsee the cheap and expensive periods on the electricity market and optimise when we use our energy. The business model offers a chance for both large and small customers to share the savings with their retailer. With a bit of planning (or better still, smart Tempus automation) many loads can shift a few hours – away from a price spike and into a period of surplus, cheap (usually solar) energy. But the truly exciting thing for me is that we have a model that values shifts of even half an hour.

When the market sets up for five minute pricing, the opportunities will be even better. The latter is being driven by the entrance of large scale batteries into the market – 5 minute time-frames are where they can truly make a difference. But do you know what is a whole lot cheaper than batteries? You guessed it, flexible load!

Tempus has plenty to offer South Australia and South Australia has riches to offer Tempus. We have a poorly utilised fleet of energy assets[1], we are well down the road of distributed energy and customer empowerment[2], we have a very high penetration of renewable energy for a stand alone energy market[3]and we have a liberalised energy market[4]

So have I abandoned my work on community energy? Not at all.

There is an underlying tension in the electricity market between local individual ownership of energy assets and large, utility-scale investments. Solar is going Mega, in case you hadn’t noticed, with hundreds of MW proposed in the Riverland and around the Upper Spencer Gulf. And what of the businesses that are being crippled by electricity costs? Do they all need to find the funds to invest in rooftop solar? This is not the business modus operandi – save precious capital for core business and rent what you can, is the way businesses prefer to operate.

I believe that the missing piece of the puzzle here is local, neighbourhood scale optimisation. When individuals can’t use their own solar power, there are others who can, especially if we’ve unlocked the load flexing capacity throughout the neighborhood. Community energy already has emerging models for delivering the assets communities want to see and I am confident we will see this sector grow in South Australia.

Tempus have kindly agreed to me working part time with them so that I can keep the community energy and energy optimisation conversation alive in other circles.

  • You can find me supporting Community Energy Action SA over on the Facebook group: https://www.facebook.com/groups/communityenergyactionSA/
  • I’ll be keeping my work real by delivering energy advice through Tandem Energy. There are a bunch of great energy companies in South Australia, with new solutions for this market. Working with Tom and Rachel allows me to keep my ear to the ground and I’d love to see these companies collaborating through some sort of Clean Energy SA industry association.
  • I will be blogging at https://changingweatherblog.wordpress.com/
  • And please get in touch at heather.smith[at]tempusenergy.com if you know someone who needs to reduce their energy costs and discover what load flexibility they have at their disposal.

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[1] In the 90’s I bought into the idea that distributed, neighbourhood-scale systems were the cheapest economic model for an energy system and I have never seen any evidence to contradict this assertion. We have invested in 3000MW of capacity in our power stations and networks and our load averages about half that level. A local transformer might be five times bigger than its average load, in order to manage the summer peak. From an asset utilisation point of view we have a very inefficient system.

[2] In the 90’s I never forsaw that SA would build the beginnings of a distributed system and customers would start to take control of their energy costs through cheap solar energy. We have seen over 25% of households invest in solar in less than a decade. And this is not the case worldwide. When I traveled on my Churchill Fellowship last year, I saw policy systems that incentivised community scale and utility scale solar before individual investment.

[3] our distance from the rest of the NEM means that only 25% of our peak load can be provided through interconnection and we need to be able to operate on our own.

[4] I saw markets that have not liberalised to the extent we have in the National Electricity Market here and that makes a difference too because the changes happen more quickly and are driven financially. (note difference between Coalition rhetoric on the future of coal contrasted with statements by AGL, Origin and the like)


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Energy Transition, lessons from South Australia’s energy crisis

Over a year ago, I compiled a list of lessons from South Australia’s renewable energy leadership. At the time, I cast my mind back over the past decade and highlighted the ways that rapid change had caught out the policy makers – suggesting that other jurisdictions could be smarter than we were.

So much has happened in the past year that we are due for an update. The lessons we should learn, depend on the warnings one thinks we should have heeded. So I need firstly to summarise where South Australia finds itself:

We’ve gone from an energy transition to an energy crisis. The goals for an energy system – secure supply, affordability and climate change commitments are not being met adequately. No one agrees on causes or solutions. Governments have commissioned the Finkel Review which could be the most important piece of work this year but a centrepiece to the review, a clean energy target has not met with bi-partisan support.

At the heart of the problem has been governments’ trust in market solutions without a sharp eye on the shortfalls in market performance and without adequate leadership on the long term outcome the market should be tasked to achieve. ‘Lack of planning’ has been cited by numerous commentators as a failing but the fact is, markets don’t plan. My suggestions a year ago include a number where the real failing is seeing renewable energy as an add-on to the market rather than significant changes to be integrated as part of becoming the market itself.

Lesson 1: Supporting an energy transition needs to be a full time, iterative process.
With so much uncontrollable and rapid change, the outcomes of a good process – better technical design (cheaper, cleaner and more robust) and strong support from customers, governments and energy companies – should be enough to justify that the energy transition is funded by the energy system itself. But Government, the market operator or the utilities cannot own the process and rather need to be co-opted into something bigger than themselves. (I’ve written about such a process here and here.)

South Australia, with almost 50% renewable energy, has become the whipping boy for the energy crisis and the most vulnerable state in terms of price shocks, blackouts and pressure to slow or stop the energy transition.

david pope.pngLesson 2: Politicians won’t waste a good crisis and you need to be prepared to make the most of it too…
…while also countering the rubbish. The climate lobby in Australia was sent into overdrive to counter the anti-renewable energy and clean coal push from the Federal politicians. This fantastic David Pope cartoon captures the benefit of having something, ready to be dusted off in your bottom drawer.

As a result, politicians have created energy policy on the run – in the space of a few short months and with social media abuzz. As an example, Elon Musk offered 100MWh of battery storage, “in 100 days or its free” to South Australia via tweet on a Friday. He spoke to the Premier on Saturday and the Prime Minister on Sunday while Adelaide enjoyed a long weekend. By Tuesday, less than a month after promising to intervene in the market, a $550m Energy Plan was launched by the State Government. The Federal Government upped the ante on Wednesday with a $2bn pumped hydro announcement and on the same day the State Premier and the Federal Minister for Energy openly criticised each other in front of the cameras at a battery project launch. By this stage, after most of the state has been subjected to the 4 month debate about what is wrong with our energy system and a few oversimplified solutions, there is little criticism about the expense and the decision making process. Voters are relieved that something substantial is being done.

Lesson 3: Unprecendented resourcing and quick fixes follow crisis.
It may not be your bottom drawer they’ve turned to (see Lesson 2). Keeping longer term outcomes in the public mind is challenging. The public consent our state government has achieved is only short term and crisis driven. Our energy transition demands that we build a stronger consensus on long term action. Time will tell in South Australia – will our politicians keep energy in mind and grapple effectively with longer term issues such as growing inequality in energy outcomes? And what does it take for the solutions to be suitable for a new paradigm, such as significant decentralised generation with localised optimisation and control?

It’s worth noting that two announcements from the state energy plan might not see the light of day in their original form. An energy security target has been deemed simply a subsidy for gas (and there is an ongoing debate about inertia). A new state owned peaking generator has been delivered as a series of engines that might be swapped for a gas turbine later on.

Each event we’ve experienced in the past 6 months has highlighted opportunities to improve the way we operate from the statewide blackout to the involuntary load shedding event.

Some improvements are being made quietly, behind the scenes and away from the blame game. To some extent the hostility of the debate hampers the ability of agencies to get on and make changes, preferring to defend the modus operandi because making changes could be seen as accepting the blame. Some improvements are only ideas at this stage, needing still to run the gamut of consultation, debate and knee-jerk policy making. The process for these latter ideas is fraught (and would benefit from a commitment to the process suggested in Lesson 1).

Lesson 1.b: Getting the right folk to work together is hard, there is plenty of culture change involved too.
My thoughts on this go back to a book I devoured while on my Churchill travels, where Vineet Nayar characterises 10% of an organisation as transformers – these are the people sprinkled throughout the energy regime that need to be empowered to understand and lead our energy transition.

It’s hard to know how much of what has been experienced can be generalised as lessons – but I’ve had a go.

We have seen much of the energy policy debate occur on the East coast where utilities and energy institutions have their head offices.

Lesson 4: National electricity market means the conversations happen at a national scale. It won’t happen in your jurisdiction unless you build a local conversation that can’t be ignored.
Danny Price, the architect of the State Energy Plan has even suggested the system needs to go back to state based control. I would argue that we will ultimately need to consider much more local control and optimisation.

We have seen volatile electricity market prices, potential gaming by incumbents on the market and a business sector openly weeping about the difficulty contracting on the market at a reasonable price. Mark Wakeham wrote an excellent piece after the Hazelwood coal fired power station closed in Victoria. One of his lessons, ‘owners lie about their closure dates’.

Lesson 5: Utilities will work hard to maximise their positioning in the market.

We have seen storage investments everywhere. Every utility scale investment is now required to include storage. Elon Musk will deliver his battery and you can bet that the regulators are scrambling to work out how to control it and reward its energy security value – because if he can put it on the line in 100 days, they need to respond equally quickly by summertime.

Lesson 6: The gap between planning and market driven decisions is messy.
Let’s not forget that the electricity market is creation of Governments and changing it to accommodate batteries highlights that policy makers need to understand the limitations of the old paradigm and the possibilities of the new.

We have seen many proposed investments, large and small. AEMO keep track of the large projects which are larger than our actual consumption by a factor of 2 or more. At the customer end, energy startups like LO3 and Tempus Energy have come to South Australia to participate in projects. Homegrown startups are emerging everywhere (the list is long enough that it needs to be the subject of another blog)

Lesson 7: The energy sector, new and old, will come to investigate the opportunities in your jurisdiction, when your ‘crisis’ is advertising itself loudly enough.
I think there is an opportunity here to stimulate the classic clustering model. Businesses compete, collaborate and innovate and over a decade or so, SA has a world class energy technology sector.

And finally, we have seen the announcement of a solar thermal power station at Port Augusta. This has been a community driven ask for at least 5 years. The numbers didn’t look like they would stack up, but the numbers couldn’t put a value on the jobs that could flow from becoming involved in solar thermal technology. The State Government and final project developer appear to have worked hard to strike a deal that will be commercially acceptable.

Lesson 8: Community advocacy is long hard work but it gets there in the end.

At this point I need to conclude that there is probably another lessons blog needed in about 12 months time.

There is no doubt a rocky road of continuing uncertainty for everyone who buys electricity and invests in assets, including small scale solar panels and batteries.

We still live with the tension between the old system and the new. The end game of 100% renewable energy isn’t integrated into decision maker’s thinking yet. Transport and heat energy is barely on their radar.

Changes are happening faster than anyone is prepared to predict. Finkel and the Electricity Networks Association happily discuss changes taking until 2050 to occur.

Despite my efforts, we have very little discussion of community energy in South Australia. I think we are too complacent because our transition to renewables is well underway and we are not angry enough.

I think we’re missing the broader narrative too. Sooner than we think, we will have an abundance of cheap renewable energy and we need to think about future economic decisions to make the most of our relative abundance.

How is the energy transition progressing in your home state?

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Co-design, for an energy future

Energy Action LabOne of the conclusions from my Churchill Fellowship was that every place will have its own unique energy solutions and we need to do the work of understanding ours.

How exactly? is a question I’ve been grappling with for the past year.

I made the case for a greater role for ordinary voices in, ‘why we need broader voices shaping our energy transition‘. and I argued in my Festival of Ideas talk that ultimately citizens would find themselves demanding long term change that politicians and new technologies can only drive part-way toward.

I looked at governance structures and processes – the DIAD process mentioned at the bottom of this post. (Diversity, Interdependence and Authentic Dialogue) and the self-organising nirvana described by the constellation process, the swarmwise technique and creative coalitions.

Ultimately a safe, liminal space, well resourced heart that is independent and can be ‘owned’ by the stakeholders appears to be key. Business Models inc are trying to get that very thing up in SA through their Energy Action Lab that will run as part of the Open State Festival. This model has been tried in Canada and seems to strike the right balance between stakeholder commitment and resourcing but also neutral territory for real problem solving conversations.

This proposal  based on the constellation process, outlines some of the stakeholders that need to underpin the funding of such an exercise. I’m keen to give the Energy Action Lab a go and optimistic that the initial workshop will lead us to the longer term conversations and experiments that we need to support.

To that end, I’m keen to see ideas emerge for the low income sector (its not an energy transition if we leave folk behind), for the community energy sector and for alternative energy solutions.  If you want to see changes too, please book out the date and come along.

 

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Communities creating power across the world

sustainability drinksI had a great opportunity to talk to the Sustainability Connectors this evening – about my Churchill Fellowship, about community energy taking off in Australia and about creating a flex market in South Australia through my new role at Tempus Energy.

We had two great icebreaker questions:

what is your favourite energy gadget? and what do you understand by the term community energy? Vidia nominated a very smart credit card like monitor that sits below your smart meter (Voltaware) and after a few days machine learning, tells you everything you need to know about your energy consumption. Heidi highlighted that as a solar owner, being able to give her surplus away and contribute to her community in kWh was part of the great transition journey we are on.

Thanks for everyone’s questions. Here are my slides – enjoy

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A community energy movement in Southern Adelaide

19679147_10158873127345007_4692568216392955829_o.jpgI love talking to local groups about community energy. At Marion tonight the Common Thread crowd were full of questions and discussion. And the home made soup made for a very inviting atmosphere.

I gave a presentation  but when asked which organisation should take the lead on community energy and which projects to start with, I opted not to answer. After all, one of the main conclusions of my Churchill Fellowship was that each place has its own unique energy solutions and each community needs to do the work of developing the package of changes that will best work for it.

For the record, it is clear that wind and solar dominate our renewable energy mix (contrast that with a similar climate of NZ and their answers are often geothermal and hydro). But our energy use is also part of the packaging that we need to think about. I imagine a future with plenty of decentralised supply through rooftop solar and plenty of flexible load to soak up the energy whenever it is in surplus.

As always, some interesting ideas emerged tonight. New Renewal SA developments around Morphetville could be prime targets for modelling different forms of energy supply and communal energy use/optimisation. When asked if Council could bulk purchase energy on behalf of residents, I wondered if the regulator would allow it – although there are plenty of models out there where retailers are trying to capture customer loyalty. The more interesting and long term question is probably about groups of residents optimising their load profile and being rewarded for it – both by the wholesale/retail market and by the network operator.

So my thanks to my wonderful audience. For those interested in getting started straight away, please consider CORENA for funding solar and energy efficiency projects on the buildings of all your worthy community organisations. We are always looking for projects and you can find the EOI form here.

The Document here captures many of the ideas we discussed. Please add your own.

I’ve created a Facebook group – Community Energy Action South Australia in the hope that we can support each other in getting started. I know of a number of projects humming along in development, many from those who attended the Community Energy Congress. I am keen to deliver workshops that could bring the learnings from the Congress to South Australia and help groups work through the financial and legal models that are suitable for their situation.

Mark Henley has challenged me to get two projects up and running in the next few years so we have something real to point to. The Group will help us share ideas, inspiration and support for each other’s projects. Please join if you’re interested.

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Firing up Port Adelaide Enfield with solar

torrens islandIt was so great to speak at the Port Adelaide Enfield Environment Forum last week. I gave a presentation and they got me thinking about how to crack open the opportunities  in the area.

I was deeply impressed that a small group represent so many activities around the area – History, National Trust, friends of Torrens Island and marine conservation, to name a few. And when it came time to share updates from each group, I was reminded of the Bristol Energy Network meeting I attended on my Churchill Fellowship – another great group in a great city making great progress.

We had a wide-ranging discussion about community energy projects that might suit the Port. It has much new development at the moment – Renewal SA has a major project around Port Adelaide at the moment and another in Kilburn. Step 1 – get introduced to developers.

There have already been some successful Bulk Buy projects and it would be good to see something targeted at folk on low incomes.

I took the opportunity to promote CORENA of course. We should be looking at energy efficiency and solar opportunities for every community building we find.

CORENA have also been exploring Tenant/landlord schemes (given that split incentives is one of the great market failures) and keeping track of Adelaide City Council’s journey with their solar saver scheme.

We talked about under-utilised land and whether solar could be a 5-10 year solution until land becomes used. Personally I prefer to start with opportunities where there is a load to buy the electricity.

And the main theme of the night was finding those partners with some community momentum – existing groups? the 170 households who organised their bulk buy in Semaphore? the owners of roofspace and community housing organisations – plenty to start with there. If you have ideas, please add them to the Document here.

Inspired by this start – I’ve created a Facebook group – Community Energy Action South Australia. I know of a number of projects humming along in development, many from those who attended the Community Energy Congress. And Mark Henley has challenged me to get two projects up and running in the next few years so we have something real to point to. The Group will help us share ideas, inspiration and support for each other’s projects. Please join if you’re interested.

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Alternative currencies leverage new value – lets build one for SA

bristol-pound3.jpgI’m slow to the game on this one. Alternative currencies have been experimented with for many years. Many communities are looking for local value to be the first stop for shoppers. Michael Schuman is not convinced and left it out of his book although he conceded that the Bristol Pound, supported well by local government and in widespread use across Bristol, was a good example of local currency.

My interest is in the hidden economy of unpaid labour. As you can see from my recent post on value there are many ways that value becomes paid but much of the time volunteerism is a hidden value to social progress. Kate Raworth puts it well in donut economics – we simply aren’t visualising the whole economy unless we recognise how much work is unpaid. Volunteering, for example, has been valued at $200bn to the Australian economy.

But more than that. My interest is in some of the entrepreneurial activities that some people value – particularly causes and the work of activists and changemakers. Yes, the mighty dollar is going to drive rapid change because it can shift resources and capital overnight and in enormous lumps BUT there is a social dimension too. If we can shift people en mass we can also drive change because many people = power.

If I translate that last sentence to my world of energy transition: The corporates, backed by Government, can spend $100millions overnight on renewables and market fixes (Lyon group just announced a solar array in the Riverland that is over 10% of our peak load in SA) BUT if communities demand that the same amount of power is built locally on the rooftops in their communities, we will ultimately have a cheaper and more resilient energy system and the Lyon investment will be undermined by this social movement.

So I am on the hunt for an alternative currency. It must create recognition of unpaid labour, much of which is a labour of love and therefore can include high and low value activities. I think it would be nice for the basis of the currency to be time. Intrinsic motivation can be undermined by attempting to compare it to dollars. To paraphrase Marx – each to their ability and to every ability for its effort. Marx believed that everybody’s time was valuable and it was society’s obligation to allow everyone’s abilities to grow to maximum capacity, flourish and be well used.

I do plenty of cause related effort, some of which is experimental and may or may not be worthile. I know others who believe in my cause are putting their hard earned cash into more practical efforts, much of what I do will only ever be unpaid labour.

So as I understood blockchain over time I was interested in a number of aspects.

  • The currency can be decentralised, self organising and with a publicly accessible data interface.
  • The full transaction record is included in each chain – each block of the chain could include feel good information about the valuable effort that has been made, who has made it and why.

Imagine if politicians could understand people’s care factor about different issues as measured by the number of hours spent and valued in transactions. Imagine if they could be guided by the data to contribute back to the community in the best way. Like the maxim, “put your money where your mouth is”, this system could identified where people are putting their precious hours.

I mocked one up so you too can experiment with this concept:

sample blockchain

There is a whole suite of detailed design parameters that need to be thought through but I’d be keen to hear what you think of the initial idea. I’m hoping to put something like this into the Government’s Share challenge.

Resources:

hoping to include a bunch of timebanking and timetrading platforms here – I’ve been doing my research…

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