If new Prime Minister Malcolm Turnbull needs guidance on how to get his more conservative Coalition members to embrace change in the energy market, he might use the example of one of their own – current energy minister and treasurer of Western Australia, Mike Nahan.
When Dr Nahan was elected to the WA parliament in 2008, his views seemed pretty much unchanged from the days he headed the ultra conservative think tank, the Institute of Public Affairs.
But since Nahan became the state’s energy minister, in 2013, and then the state’s treasurer as well, he’s had to change his tune.
The WA energy market, he has discovered, is anathema to everything that Nahan has ever stood for. Actually, it is a basket case, created by an ideological blindspot towards renewables, and an equally blind attachment to fossil fuel solutions.
Now, Nahan concedes, solar will dominate the future of the grid. Within a decade, he said earlier this month, the bulk of the state’s daytime demand could be met by solar, most of it generated on the rooftops of the state’s households and businesses.
“It’s low priced, it’s democratically determined, and it’s something we are committed to facilitating,” Nahan declared at a conference in Perth.
Indeed, the state’s Independent Market Operator, which manages the main grid in the south-west corner of the state, predicts that by 2035, 90 per cent of homes and three quarters of all businesses could be producing their own electricity.
Within a decade, there could be 2371MW of rooftop solar capacity in the local grid, more than average demand. The peak would shift from mid to late afternoon until after 7.30pm.
WA – with its ageing infrastructure, dependence on expensive fossil fuels and lop-sided subsidies, is emerging as ground zero for the energy revolution that everyone is predicting.
Everyone is watching with interest with how Nahan goes about his reforms. In broad terms, he wants to remove the government subsidy on electricity bills and throw open competition to the monopoly-government owned utilities. It could be a test case for what happens in the rest of Australia.
Already, networks and retailers are starting to look at battery storage, but only on their own terms, and they want competition to be kept out of the market. The national regulators are also slow moving, postponing reforms that could have saved customers billions in avoided network costs.
They are all likely to get a big shock as solar costs continue to fall and battery storage enters the market. A decade ago, consumers had no choice. Now they do. That should fit into the conservative narrative.
© 2015 Solar Choice Pty Ltd
