Utilities

The Utilities Industry provides an essential service to Australians. The Industry has moved quickly to support its continuation through implementing workforce protection measures and engaging with suppliers, and to reassure the users of their services. Of concern to the industry has been the large volume of customers who have been impacted by the COVID-19 pandemic and may not be able to pay their bills. The Australian Energy Regulator released a Statement of Expectations of energy businesses, updated on 28 July, extending protections to energy customers. Energy retailers must not disconnect, refer to debt collection agencies or credit default listing until at least 31 October 2020. To prevent multiple retailer failure, the Australian Energy Market Commission formally agreed in August to allow some retailers to defer network bills for 6 months to help keep the energy market resilient.

Australia’s future energy needs have attracted a considerable amount of attention from governments, industry, associations, interest groups and the media as a means of promoting recovery from the economic effects of the pandemic by attracting investment and creating employment opportunities. While many of the projects announced and promoted have potentially long lead times before they commence, they emphasise the concerns raised in the Industry Skills Forecasts that training entrants and upskilling the current workforce in renewable and new technologies needs to begin promptly to be ready to adapt to thes changes and those that have already begun. A report published by PwC states the pandemic has made Australia’s skills challenge more complex and urgent. Skilled migration has traditionally been used to fill skills gaps, but it is expected with border closures migration will be reduced by 85% over the next year.

ESI Generation and ESI Transmission, Distribution and Rail

A high proportion of the recent discussion regarding Australia’s future energy needs and reduction in carbon emissions, accelerated by the recent bushfires and the COVID-19 pandemic, impacts the ESI Generation and ESI Transmission, Distribution and Rail Industries. The Commonwealth government released a discussion paper to seek input to inform its Low Emissions Technology Statement, acknowledging the economic recovery from the COVID-19 pandemic must continue to prioritise investment in technologies that improve productivity and support a resilient economy.

Rystad Energy reported in April that economic factors exacerbated by the COVID-19 pandemic had impacted many projects, with up to 3 gigawatts of utility wind and PV projects postponed or cancelled. PwC Australia released COVID-19 and the Solar Industry in March to help project owners and solar industry participants negotiate impending legal and financial implications of the disruption and delay of manufacturing and supply of equipment materials needed in the construction of solar facilities.

Key findings of the scenario analysis conducted for the Renewable Energy Employment in Australia: Stage One report include the renewable energy industry could create 20,000 new jobs in the next five years or lose 11,000 jobs by 2022 depending on government COVID-19 stimulus measures and wider energy policy. The Clean Energy Council A Clean Recovery report recommends increased government support for rooftop solar, home battery storage, large scale wind, solar and energy storage projects, and a stronger transmission network. The report also highlights clean energy projects primarily benefit regional and remote areas and have many characteristics that reduce the risk factors associated with COVID-19 transmission including household installations are undertaken by small workforces , and large scale project sites are distributed over wide areas in non-urban areas. The Clean Jobs Plan, produced by AlphaBeta for the Climate Council also includes installing utility-scale renewable energy and community-scale grid systems as components of its 12 policy decisions. It also highlights funding education and training to transition workers into new roles would create 1,000 jobs.

Some of the projects for the ESI Generation and ESI Transmission, Distribution and Rail industry sectors that have been discussed or announced as potential contributors to Australia’s economic recovery from COVID-19 include:

• New South Wales announced a plan to develop a second 8,000 MW Renewable Energy Zone (REZ) in New England, which is expected to support 1,300 ongoing jobs. A REZ involves the coordinated development of new grid infrastructure in energy rich areas, to connect multiple generators in the same location. The most promising potential sites for pumped hydro development are in the New England area. Also in New South Wales, the Snowy 2.0 pumped hydro project received Commonwealth environmental approval on 30 June 2020 following planning approval granted by the New South Wales government in May. Approximately 4,000 jobs may be supported over the life of the project, estimated to be completed in 2025.
• The Tasmanian Government has stated renewable energy initiatives including the Battery of the Nation and Marinus Link will assist the economic recovery from the pandemic of both Tasmania and the rest of Australia by driving investment and creating thousands of local jobs.
• The Western Australian Government announced a $66.3 million package focused on renewable energy technologies, including 50 standalone power systems, the installation of nine Battery Energy Storage Systems (BESS) in nine regional communities, and infrastructure upgrades in remote Aboriginal communities, installation of solar panels on social housing properties, transforming up to 10 schools into smart, green Virtual Power Plants and installing solar panels at up to 60 bus and rail stations.
• The Victorian Government announced a market sounding process for hundreds of megawatts of electricity that will test industry interest and capacity for new solar, wind and other renewable energy projects. It will also explore the potential for electricity-reliant industries and businesses to buy renewable energy along with government through this process.
• In Stage Two of the Queensland government economic recovery strategy, a $23 million renewable energy training facility was announced. As part of their economic recovery plan $145 million has been allocated to establish three Queensland renewable energy zones (QREZ) and government support for the deployment of new energy storage.
• The Star of the South project, an offshore wind farm proposed for the ocean off the south coast of Victoria, is awaiting a commercial licence. The Australia Government is developing a new regulatory framework to enable offshore clean energy projects by providing a pathway for their construction and operation.
• The Australia-ASEAN Power Link (AAPL) to be developed in the Northern Territory was given Major Project Status by the Northern Territory Government in July 2019 and by the Australian Government in July 2020. The AAPL will integrate the world’s largest battery, solar farm and a 4,500km transmission system from the solar/storage facility in the Tennant Creek region to Darwin, Singapore and Indonesia, providing dispatchable electricity to the Northern Territory, 20% of Singapore’s electricity demand and 300 operational jobs.
• A proposed $1.53 billion electricity interconnector between Robertstown in South Australia and Wagga Wagga in New South Wales has been given approval by the Australian Energy Regulator (AER). The interconnector will allow up to 30 renewable energy projects to progress. Modelling undertaken by the Australian Energy Market Operator for the South Australian government showed the state was at risk of restrictions on further expansion of rooftop solar installations without the interconnector included as a component of the government’s renewal energy plan.

Gas

The Gas Industry associations have offered recognition that the supply of gas is an essential service, and reassurance on the continuity of its supply. Government recognition as an essential service has enabled the continuation of transport of gas including Liquified Petroleum Gas (LPG), Liquified Natural Gas (LNG), and Compressed Natural Gas (CNG) and continuation of gas supply network operations. Gas Energy Australia reports more than nine million LPG outdoor leisure cylinders, 350,000 light vehicles and 2 million households and businesses are reliant on LPG for cooking and heating. They also emphasised the importance of the gas fuels supply chain including trucking and gas tank and equipment maintainers, repairers and suppliers that support the gas fuels distribution network being recognised as an essential service in the same way as the maintenance of the electricity network infrastructure. The Australian Gas Networks – Response to COVID-19 states their operational focus to safely maintain the reliability of gas supply for their customers and the broader community has not been impacted and they would still be carrying out emergency repairs, performing works and reading meters. The Australian Gas Association has continued its certification and laboratory testing services. On a lighter note, SA Water reported that millions of litres of beer that expired while the hospitality industry was shut down boosted the renewable energy generation of the Glenelg Wastewater Treatment Plant. Adding 150,000 litres of expired beer per week, it generated a record 355,200 cubic metres of biogas in May and another 320,000 cubic metres in June, which is enough to power 1,200 houses.

The Gas IRC's 2019 Skills Forecast reports additional Gas Supply infrastructure will be needed, especially from 2030 onwards, to meet future demand. The Australian Infrastructure Audit 2019: Energy chapter shows many states have high levels of households with gas connections in their capital cities and new or expanded sources of supply are likely to result in a need for new pipelines and processing facilities. While biogas may be injected into the distribution system without causing any issues, a technical report prepared for Gas Vision 2050 shows only a small proportion of the gas used by households for their heating and cooking needs can be replaced with hydrogen. It has been widely reported in the media there is potential for new gas infrastructure to be constructed as part of the government’s COVID-19 recovery strategy. A pre-feasibility study conducted by ACIL Allen Consulting and GHD in 2018 estimated the construction of a west-east pipeline could take four to five years and support up to 1,300 jobs. The Queensland government has committed to investigating the feasibility and options for a new transmission pipeline to connect the Bowen Basin’s gas reserves to the east coast of Queensland as part of their economic recovery plan.

Water

Water Industry associations and suppliers have focussed on ensuring the continuity of water and wastewater services, particularly the work practices of operators and supply of chemicals, and allaying potential concerns of consumers about safety and the financial hardship they may be experiencing (links to examples are provided in the Relevant research section below). Water Services Association of Australia has produced a factsheet to help providers reassure consumers about the safety and continuation of the supply of drinking water in relation to COVID-19. Water Research Australia reports that while it is possible that SARS-CoV-2 may be present in wastewater where COVID-19 infections are present, the same is true for a wide variety of pathogens and the controls already in place to protect persons working around wastewater are based on keeping workers safe from much more readily transmissible and established pathogens still apply, and no special or specific changes need to be made due to the SARS-CoV-2. Water Research Australia has established a Community of Interest to provide a central place for water utilities to stay up-to-date with COVID-19 and the implications for the water sector. Water Research Australia is also leading the ColoSSos (Collaboration on Sewage Surveillance of SARS-CoV-2) Project, collaboration between water utilities, health departments and researchers to track and monitor the presence of the virus in the sewerage network. The Queensland government has included continued investment in water infrastructure as part of their economic recovery plan.