The Council of Australian Governments (COAG) Energy Council has met to discuss the energy industry’s response to the COVID-19 pandemic.
The meeting of federal, state and territory energy ministers was held via telepresence on Friday 20 March 2020.
COAG confident the industry is prepared
Contingency plans for a range of natural hazards have already been tested over 2019-20.
Bushfires and the subsequent recovery efforts tested networks in impacted areas. During this time, the entire sector rallied to the cause, offering affected customers financial assistance.
COVID-19 presents many new challenges that the industry has never had to face, yet energy businesses are prepared.
Generators, networks and retailers have pandemic response plans in place to continue providing their essential services.
Communication and knowledge sharing underway
Energy Networks Australia has started regular teleconferences with our network members to discuss logistical responses and to share knowledge and experiences of dealing with COVID-19-related issues.
Regular meetings between networks and the Australian Energy Market Operator are underway to discuss the sector’s response.
On behalf of networks, Energy Networks Australia has been liaising with the office of the Federal Minister for Energy and Emissions Reduction, Angus Taylor, to update the Federal Government on steps taken.
Energy Networks Australia is also liaising with relevant regulators.
Isolating workers to limit exposure
Steps are being taken to isolate portions of the energy sector’s workforce deemed critical to the operation of the electricity and gas systems.
The energy industry has a large workforce. Networks, in particular, have a considerable interface with the general public as part of daily routines.
Connecting customers, fixing faults and reading meters means risks of disease exposure and transmission to other staff.
Many networks and generators have taken steps to lock down control rooms. These areas are already secure and isolated, but further steps are being taken to limit access to non-essential personnel.
Businesses have begun to split teams into separate shifts with half working from home and half in the office on a rotational basis. These steps limit the chance of exposure if a team member becomes infected.
Off-site crews can also be isolated from the main workforce to limit exposure. Some businesses have put in place drive-through style re-stocking protocols, where teams call ahead for supplies and remain in their vehicles while they are resupplied.
Dealing with customers isolated for COVID-19
If a customer is under isolation, has been exposed or tested positive for COVID-19 and requires a network crew to attend their property, the COAG Energy Council has advised that they should contact their network provider so appropriate steps can be taken.
Networks have put processes in place for dealing with such cases.
Key reforms must continue
While planning for the pandemic is essential, so too is continuing work for when the storm has passed. COAG still has several important reforms to discuss on the agenda.
With a large portion of the COAG meeting’s agenda diverted to tackling problems caused by the virus, several other key items remained, including the Energy Security Board’s (ESB) post 2025 review and actioning the Integrated System Plan (ISP).
Creating the actionable ISP with an investable framework
The Energy Security Board (ESB) has developed and consulted on the proposed changes to the National Electricity Rules. This final package of rules is up for COAG approval.
Once approved by COAG, the ESB will make the rules and the AEMO final 2020 Integrated System Plan (ISP), expected to be released in June, will be the first ISP under this new framework.
The new rules also create a more streamlined regulatory investment test and regulatory approval process.
The Australian Energy Regulator (AER) is taking the lead on behalf of the ESB on work to develop a fair cost-sharing approach for the major transmission projects in the ISP. The cost allocation work is challenging and not expected to conclude before the end of 2020. For some large actionable transmission projects, this can’t come soon enough.
While several jurisdictions will seek to create legislative powers to do their own thing faster, it is hoped that this will not undermine a thorough, robust national transmission plan that has undergone significant stakeholder engagement and the consequential robust regulatory processes.
Coordinating Generation and Transmission Investment
The Australian Energy Market Commission (AEMC) has provided a report up to COAG to seek endorsement to pursue further investigation on various framework elements.
The AEMC is likely to lead this work on the refinement of the more detailed framework and development of rules between now and the end of 2020. This work will be coordinated with the ESB post-2025 market design.
The development of renewable energy zones has been taken over by the ESB, which is seeking the endorsement of interim actions to enable these priority zones to move forward ahead of COGATI.
The ESB will be seeking to progress rules by the end of this year to develop more detailed renewable energy zone planning and trialling such arrangements, possibly via a regulatory sandbox approach. There is still much detail to work through on the practical detail level.
An update on reliability and security
In the recent Electricity Statement of Opportunities (ESOO), AEMO proposed that a higher level of reliability standard be considered.
Energy Networks Australia understands the rationale to update the standard is based on the AER’s recent updated Value of Customer Reliability values. Customer representatives said customers did not want to pay more for reliability and were happy with their current reliability.
Ahead markets with two sides
AEMO and the AEMC are understood to have been working for some time on a transition towards a genuine two-sided market.
AEMO is also said to be presenting a paper on a form of a day-ahead market, to address concerns that managing challenges like system strength is becoming increasingly difficult with only a real-time market.
Next steps in uncertain times
While the priority will be keeping the lights on, energy networks will continue business as usual wherever possible to plan for the future of the network.
