A DAY in The Life:

Matthew war­ren

The Australian Energy Review - - FRONT PAGE -

In Au­gust, Prime Min­is­ter Mal­colm Turn­bull called a meet­ing with eight of the coun­try’s largest elec­tric­ity com­pa­nies as ten­sions ran high amid rising power prices. On the back of this meet­ing, Aus­tralian En­ergy Coun­cil chief ex­ec­u­tive Matthew War­ren spoke to El­iz­a­beth Fabri about how the in­dus­try can work to­gether to drive down prices, and the ur­gency for a na­tional en­ergy re­form to ef­fect change. Q. can you de­scribe your pro­fes­sional back­ground?

My first proper job was as a cadet jour­nal­ist with the Ade­laide News. It was an old school evening tabloid, com­plete with hot me­tal print­ing, type­writ­ers and not a com­puter in sight. I went on to write for The Aus­tralian for a few years, took my­self off to Brus­sels in 1989 as a free­lance jour­nal­ist, came back to study eco­nomics.

From there I spe­cialised in en­vi­ron­men­tal eco­nomics and wrote my the­sis on the im­pacts of con­tainer de­posit sys­tems on kerb­side re­cy­cling.

As a re­sult of that I spent the next decade work­ing in waste man­age­ment, pack­ag­ing and re­cy­cling, end­ing up work­ing for the food and gro­cery in­dus­try.

It be­came in­creas­ingly ap­par­ent that the most im­por­tant en­vi­ron­men­tal in­puts not be­ing con­sid­ered in the life cy­cle of FMCG prod­ucts was the em­bod­ied en­ergy and wa­ter.

I then went to work for the min­ing in­dus­try in New South Wales, and then went back to The Aus­tralian to cover en­vi­ron­men­tal pol­icy, just as the cli­mate change de­bate lit up in Aus­tralia.

Af­ter two in­cred­i­bly busy years back in jour­nal­ism there I got asked to run the Clean En­ergy Coun­cil, and sub­se­quently the En­ergy Sup­ply As­so­ci­a­tion of Aus­tralia and now the Aus­tralian En­ergy Coun­cil.

I think the biggest high­light of my ca­reer is the priv­i­lege of meet­ing and work­ing with some of the bright­est and smartest peo­ple in our so­ci­ety (and spend­ing New Year’s Eve in 1989 on the Berlin Wall).

Q. You joined the coun­cil in late 2015 as its in­au­gu­ral chief ex­ec­u­tive; what does a typ­i­cal day look like for you?

Ev­ery day is dif­fer­ent. Clearly rising en­ergy costs has been a hot but­ton is­sue in the me­dia. It’s also com­plex. So we of­ten find our­selves brief­ing jour­nal­ists and do­ing in­ter­views.

We also en­gage reg­u­larly with our mem­bers and key stake­hold­ers both for­mally and in­for­mally.

We are also con­stantly ex­plain­ing and brief­ing on key is­sues in our in­dus­try. And as it's a na­tional in­dus­try I’m at the air­port a lot too.

Q. There’s been a lot of talk on rising elec­tric­ity costs. How do you think the in­dus­try as a whole can ease the pres­sure on en­ergy pric­ing?

En­ergy prices have been in­creas­ing steadily for the past decade. There have been mul­ti­ple driv­ers for these.

At the end of last decade in­creases in re­li­a­bil­ity stan­dards in­creased the costs of net­works. This was the biggest driver of en­ergy costs, fol­lowed by the costs of green schemes like re­new­ables and so­lar PV feed in tar­iffs.

In the past year there has been a sharp in­crease in elec­tric­ity prices driven by in­creas­ing whole­sale prices. This has come about fol­low­ing the clo­sure of large coal fired gen­er­a­tors cre­at­ing a scarcity of sup­ply.

Scarcity in­creases costs, and is de­signed to stim­u­late new in­vest­ment. But that in­vest­ment is con­strained by the lack of en­ergy pol­icy cer­tainty we’ve seen in Aus­tralia over the past decade. We’ve had emis­sions trad­ing pro­posed then can­celled, then rein­tro­duced, then a tax im­posed, then re­pealed.

A lot of en­ergy busi­nesses have lost sig­nif­i­cant amounts of money on in­vest­ments made on con­stantly chang­ing pol­icy rules. So now for in­vest­ment to pro­ceed banks and other in­vestors want to see that they can be sure they will get a re­turn on that as­set.

The best and fastest way to bring down en­ergy costs is to de­liver ef­fec­tive, durable na­tional cli­mate and en­ergy pol­icy. That is cur­rently be­ing con­sid­ered by the Fed­eral Gov­ern­ment.

Q. What was the out­come of the en­ergy com­pa­nies meet­ing with the prime Min­is­ter in au­gust?

We met with the Prime Min­is­ter and a group of se­nior min­is­ters to talk about retail en­ergy prices and how we could bring down bills by chang­ing retail prac­tices.

We ex­plained that the main driver of higher en­ergy costs was on the gen­er­a­tion side, not retail.

We agreed to look at a range of mea­sures to in­crease trans­parency for cus­tomers. Es­sen­tially the best way for con­sumers to save in a com­pet­i­tive retail mar­ket like en­ergy is to en­gage and shop around.

Q. The coun­cil has al­ready an­nounced its sup­port for Dr Finkel’s Re­view; what’s your take on the clean En­ergy Tar­get?

We think there are a num­ber of dif­fer­ent pol­icy op­tions to de­liver the cer­tainty needed to get new gen­er­a­tion in­vest­ment in Aus­tralia. A Clean En­ergy Tar­get is one of these op­tions.

The de­sign of the CET pro­posed by Dr Alan Finkel cre­ates an obli­ga­tion on re­tail­ers, a bit like the Re­new­able En­ergy Tar­get, only for a broader range of tech­nolo­gies.

So it’s at­trac­tive in that it di­rectly drives new in­vest­ment which in turn will re­duce whole­sale costs.

The CET comes with a re­li­a­bil­ity obli­ga­tion which re­quires all new in­vest­ment to meet the same re­li­a­bil­ity and sys­tem re­quire­ments as the cur­rent grid. This is a use­ful and im­por­tant de­sign fea­ture to make sure we are re­build­ing a re­li­able and sus­tain­able new grid. So we think it can work.

Q. are you con­fi­dent the Fed­eral Gov­ern­ment will com­mit to the CET, and how soon does it need to take ac­tion?

“we have been wait­ing A DECADE for Durable en­ergy mar­ket re­form, AND The Con­se­quences Of This DE­LAY Are be­ing felt now in higher prices AND in­creased risk Of BLACK­OUTS.”

We hope so. We re­ally hope so. We have been wait­ing a decade for durable en­ergy mar­ket re­form, and the con­se­quences of this de­lay are be­ing felt now in higher prices and in­creased risk of black­outs. We need this re­form ur­gently.

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