Meeting the Challenge: Australia’s Poor Energy Systems Resilience

This report is a part of a program of work on national resilience through the lens of the COVID-19 experience. It is one of the products of the National Resilience Project being co-led by the Institute for Integrated Economic Research-Australia and Global Access Partners.

We are highlighting the conclusion to the report as the lead in to those who wish to read the report in full.

Energy resilience is not just about the fuel security and electricity generation system examples discussed in this report. It underpins our sovereignty, national security and resilience, economy, transport, industry, supply chains, maritime trade, and is a critical factor in addressing climate change. Unfortunately, there is no strategy and plan for this complex and interconnected national resilience challenge; our assumptions regarding our energy resilience are, frankly, naïve.

In 2021 Australians are faced with concurrent, and in some cases existential, challenges. These include climate change and the urgent need to reduce emissions, growing global and regional security risks, a global pandemic which will have persistent societal and economic impacts, a global energy transformation where we are lagging the developed world, and a global market model that has resulted in reduced resilience, as evidenced in the face of recent crises.

At the beginning of this report, we highlighted three key characteristics or attributes that we need to strengthen in our society to improve our national resilience. These are shared awareness, teaming, and preparedness. How do we in Australia rate with respect to these three areas with respect to the Energy domain?

Shared Awareness

The Government has not conducted a comprehensive risk analysis of our energy dependencies nor updated the 2011 National Energy Security Assessment despite being in power for the past eight years. The Energy Minister has not published the Liquid Fuel Security Review that was provided to him by the Energy Department at the end of 2019. These are fundamental failures to build shared awareness of critical risks in our national energy system. Meanwhile, fossil fuel industry lobbyists have continued to maintain that the market can manage the risks … nothing to see here.

Without shared awareness we cannot build consensus on shared goals, so we will continue to react to crises as they occur, rather than invest in our national resilience. Sadly, our reactions are often too little, too late and too short-sighted, and we risk repeating the mistakes of the past.

Teaming

Our federal government is not structured for, nor currently capable of, addressing the range of complex interlinked issues as a whole system; it works in stovepipes. In the case of our energy systems, we will need State, Territory, business, and community leaders to collaborate to help drive the transition and to determine the required trade-offs, not just for the sake of their individual or group or State interests but for the sake of our nation. In the case of emissions reduction goals, they are already doing that.

Unfortunately, the pandemic has exposed a fundamental lack of teaming and collaboration across our nation. We will not be able to address our energy resilience unless we find mechanisms to collaborate more effectively.

Despite the technologies available to our power system designers, a system will not be resilient unless the governance frameworks and processes are appropriately designed. The call to reset the NEM has not been implemented; there is much still to do. This will be a demanding team effort.

Preparedness

Without shared awareness and an ability to team and collaborate, a nation cannot prepare for, and then mobilise effectively, in the face of a crisis. This is our situation in Australia today.

As stated at the beginning of this report: Politics in Australia “is now a very short-term game, characterised by point scoring and blame shifting, rather than developing evidence-based policy or solving problems or meeting challenges.” 1 The reality is that energy security, like national security, can only be addressed with consistent bipartisan political support. That also does not exist today.

A question that requires further examination is, “what does being prepared mean for our energy systems?” Clearly, both our fuel and electricity systems have vulnerabilities. Preparedness in the case of our energy system starts with assessment of these system vulnerabilities through a current NESA. This has not been done.

There will need to be compromise between economics and engineering as resilience cannot be achieved without some cost penalty. Therefore, the public will need to be engaged in a process, a ‘democratisation of the grid,’ so that communities and individuals will support the necessary investment in our energy infrastructure and the asssociated cost impact. This will be challenging in the current environment of misinformation often motivated by partisan business interests.

The actions we need to take are not beyond our ability to design and implement. We have considerable expertise and resources in this country. We need to refocus our efforts to build societal consensus and trust to enable the collective action necessary to prepare and to adapt to the reality of our changing world. We need leadership from all aspects of Australian society but particularly our most powerful leaders in business, government, and politics.

The cost of inaction is much greater. We have seen courageous political and business leadership in the past; we need to find that again to deal with the future. We, the Australian people, need to act and to demand more of our socio-political system, and of ourselves.

The discussion we largely avoid …

We now find ourselves in a position where the Government has committed to the purchase of nuclear submarines for which we will have no industry base to provide support. It is an opportunity to have a rational discussion about the role of a peaceful nuclear energy industry in Australia. As custodians of over 30% of the world’s uranium resources, it is an essential discussion to be had. However, we choose to export it unprocessed, without adding value to our economy, our energy security, nor to our sovereign capability.

In a similar manner to the debate on climate change in Australia, any discussion of the potential role for nuclear energy generation to provide some baseload power capability, leads to both political point scoring and public vitriol.

The COVID-19 pandemic will hopefully shock the nation out of a state of complacency. We must be prepared to consider all options, including the value of having some level of sovereign nuclear energy capability, if we are to address our significant national resilience issues.

The PDF version of the report can be downloaded at https://www.jbcs.co/iieraustralia-projects.

Or it can be read in e-book form below: