1. LAST TIME THE UNEMPLOYMENT RATE WAS LOWER THAN THIS WAS IN AUGUST 1974
Damian Oliver, Assistant Secretary for Pricing and Performance at the National Skills Commission (NSC) delivered an address to the ITEC22 Conference on June 2, 2022, signalled that we may be entering a “world where employees may be harder to find”.
Mr Oliver commenced his speech stating that the current, “unemployment rate was 3.9% in April. The last time the unemployment rate was lower than this was in August 1974, when the labour force survey was quarterly.” Mr Oliver reflected on an array of emerging workforce data that indicates continued labour and skill shortages. These shortages are likely to be with us for some time.
He states, “We expect five out of ten jobs that will be created over the next five years will typically require a bachelor’s degree or higher, while four out of ten jobs would most typically have a VET pathway.
Clearly the VET system has a large role to play in meeting the future needs of the labour market.”
He then focused on the Commission’s work on further developing and refining the Australian Skills Classification, which aims to take an occupation and turns into a collection of skills. “The way we do this is to break each occupation down into three core components:
- technology tools
- core competencies; and
- around 2055 specialist tasks.
By combining occupational based projections of future employment growth with the Skills Classification, we can assess the likely future growth of specific skills across the economy.
We can also compare the skills an occupation uses with that economy wide growth.
Viewing the vertical and horizontal and the size of the bubble together, gives a strong sense of how transferable and in demand specific skills in an occupation might be across the economy more broadly.
For example, Child Care Workers spend a reasonable amount of their time on three very fast-growing skills, ‘assist individuals with accessibility needs’, ‘teach health management or hygiene practices’, and ‘assist and support clients’.
This slide shows intersecting skills between Child Care Workers, Education Aides, and Aged and Disabled Carers. It is not exclusive, of course. That is, I’m not suggesting that there are only a few occupations a Child Care Worker can easily transition into. Rather, I’m just highlighting some skills that might be common across that occupation and two others.”
Several key findings in the speech were:
- Australia’s unemployment rate (at 3.9%) has not been lower since August 1974
- Australia’s unemployment to population ratio at an equal record high, driven by a high participation rate and a low unemployment rate.
- Male and female underemployment rates have changed markedly with the male rate rising from 7.2% in March 2020 to a COVID peak of 12.6% om April 2020, before decreasing to 5.0% in April 2022, the lowest rate recorded since September 2011, whilst female underemployment increased from 10.6% in March 202 to a COVID peak of 15.1% in April 2020, before falling to 7.4% in April 2022, the lowest rate recorded since May 1991.
- Job vacancies have also increased strongly relative to levels prevailing prior to the pandemic whilst wages growth remains sluggish.
- Employment has increased in 11 industries and declined in eight since February 2020. Health Care and Social Assistance, Professional, Scientific and Technical Services, Financial and Insurance Services, and Public Administration and Safety have seen the largest increases in employment growth.
- It appears that labour shortages and a re‑engagement of workers following COVID related disruptions might be more at play; whereas at higher skill levels, and for a number of technical and trade-based occupations, skill shortages have been more persistent over time.
- Female participation rate close to a record high but still below the male participation rate.
- The share of employees in permanent full-time employment has drifted lower from 70.4% in 1992, to 62.5% in 2022.
- Of those employers that were recruiting, 64% experienced difficulty in their most recent recruitment. The nature of jobs that employers are finding it most difficult to recruit for; generally, these are higher skill level jobs – where employment growth has also been the strongest since the start of the pandemic.
- The Skills Priority List (SPL) outlines occupations that are currently in shortage as well as their expected future demand – last year shortages were identified in 153 occupations; shortages were most common in the Technicians and Trades Workers occupation group, with 42% of assessed occupations in shortage. Elsewhere close to a fifth (19%) of assessed Professionals occupations were in shortage, notably IT and health related occupations.
- While employment is projected to increase in all 19 broad industries over the five years to November 2026, just four services industries are projected to provide almost two-thirds (65.4%) of total employment growth. These are: Health Care and Social Assistance; Professional, Scientific and Technical Services; Education and Training; and Accommodation and Food Service
He concluded with the following observations:
“In contrast to the thinking of some future of work theorists, economic agencies are usually inclined to worry not about a shortage of work, but a shortage of workers into the future.
This reflects a number of factors, but most significant is the changing demographic profile of the population. As an example, Treasury’s most recent Intergenerational Report noted:
In 1981-82, for every person aged over 65, there were 6.6 working-age people. In 2019-20, for every person aged over 65, there were 4.0 working-age people … by 2060-61, for every person aged over 65, there will only be 2.7 working-age people.
Similarly, in a 2015 speech the then Governor of the Reserve Bank, Glenn Stevens argued that:
There are no prizes for guessing that the share of services in most economies will continue to increase. Health and aged care are obvious areas for expansion – another effect of demographics. It may be that jobs will be ‘robotised’. But on the other hand, in the long run we may need that to some extent. Demographic factors suggest strongly that, all other things equal, the problem isn’t going to be a shortage of jobs, but instead a shortage of workers.
While I’m not necessarily suggesting that future is with us today, we may nonetheless over coming decades increasingly bump up against labour shortages as demographic factors impact.”
The speech presents a lot of timely information in helping provide a context to the latest labour market issues and more importantly mechanisms the NSC is trialling and developing to help identify possible work arounds to the looming skills shortages across industries.
A copy of the speech and slides Mr Oliver used are available to download at the following link: www.nationalskillscommission.gov.au/news/speech-itec22-conference
2. SKILLS SHORTAGES WILL BE LONG TERM, BUT MORE UNI GRADUATES WON’T HELP
Ronald Mizen, Economics correspondent at the Financial Review wrote an interesting article in the 9th June 2022 edition regarding the likely trend in the labour market composition in the longer term.
The article states, “Hospitality workers, delivery drivers, carers and cleaners will increasingly be harder to come by in coming years as long-term structural shifts in the economy naturally shrink the pool of potential workers.
At the same time, the supply of professional white-collar workers will grow and continue to meet long-term needs of the economy, Associate Professor Janine Dixon told the Melbourne Economic Forum on Thursday.
Australia is experiencing the second-most severe labour shortages in the developed world, according to the Organisation for Economic Co-operation and Development, with almost 3 per cent of available jobs, or about 420,000 positions, now unfilled.
Workforce trends mean the supply of workers each year will not be adequate to meet the demand of certain occupations, particularly for jobs requiring a vocational level education.
That will require either increased migration to fill these jobs, getting more people now outside the workforce into work or drawing workers away from white-collar professions into in-demand areas. The latter option would require a significant rethink on wages, Dr Dixon said.
In addressing the long-term structural shifts still playing out in the economy, Dr Dixon noted that as the economy grows and incomes increase, a greater portion of household spending will be dedicated to services over manufactured goods.
When combined with the rise of global manufacturing powerhouses such as China and the widespread adoption of automation, manufacturing declined from employing about 15 per cent of the workforce in the mid-1980s to just under 7 per cent in 2021. It is forecast to fall further to 6 per cent by 2032.
“As that older cohort retire out of the workforce and the younger cohort come in, it’ll just naturally happen the workforce will become far more heavily qualified with the university level,” she said. This will naturally decrease the pool of workers in other in-demand areas of the economy.”
3. STRATEGIES FOR DELIVERING VET ONLINE – A GUIDE FOR EDUCATORS
NCVER advises that it has released a Part 2 publication offering some practical pointers to the delivery of online learning for educators, organisations and institutions.
The resource provides an array of considerations when designing and implementing training that is fully or partially online.
Key messages from the resource are:
- Keep in mind there is no ‘one-size-fits-all’ model.
Many variables can affect the teaching context. As a result, it is good practice to adapt the balance and nature of training delivery to class size, the discipline or topic being taught, the infrastructure available to educators and students, student needs and expectations, and other factors.
- Incorporate both instructional and participatory content, presented in either real-time and non-real time formats or as a combination.
Instructional content tends to be transactional, with students receiving information and knowledge. In contrast, participatory content is designed for active student engagement. Consider drawing on the benefits of both types of content and using real time and non-real time delivery to support student engagement.
- Never let technology drive the learning design.
Design the ‘best’ way to learn the topic at hand first. Then adopt the simplest applications of available technological tools, in order to implement that ideal learning approach.
High-quality online delivery is important for ensuring that the VET sector remains a reliable source of skills for the Australian labour market during and beyond the pandemic. Good practice involves the incorporation of both instructional and participatory content, presented in either or both real-time and non-real-time formats. Despite training being facilitated online, technology should never drive learning design. Technology should always support good practice.
4. CASE FOR ENDORSEMENT – UET ESI-TDR TP RELEASE 4.0
Australian Industry Standards (AIS) has written to respective State Training Authorities (STAs), advising that the development work to update the Electricity Supply Industry (ESI) – Transmission, Distribution and Rail Training Package (ESI-TDR [UET]) has been completed on the Power and Network Systems and Refresher Skills projects.
The UET Transmission Distribution and Rail Training Package Release 4.0 has been updated to:
- reflect contemporary industry work practices, ENA Guidelines, management and infrastructure of electricity networks and work methods for multiple ESI TDR job roles
- incorporate current industry practices and rescue requirements
- align with Energy Networks Australia (ENA) Guidelines for working with overhead and underground energised live low voltage electrical apparatus
- enable ESI workers to meet work health and safety (WHS)/occupational health and safety (OHS), and mutual aid requirements through Mobility and Portability units, which have been packaged within UET30621 Certificate III in ESI – Distribution Overhead as an elective group.
The ESI Transmission, Distribution and Rail IRC submitted the necessary documentation seeking respective STA support for the Case for Endorsement, prior to submission to the Australian Industry and Skills Committee (AISC). The STAs have been invited to review, consider and provide any requisite response by email by close of business Tuesday, 14 June 2022.
VIEW POWER AND NETWORK SYSTEMS PROJECT PAGE
VIEW REFRESHER SKILLS PROJECT PAGE
The STAs have been invited to visit the project pages to access the Case for Endorsement, Training Package materials, and a mapping document which tracks changes to existing Training Package products.
For more information, please contact the Industry Skills Manager, Erin Knudsen on M: 0418 434 302 | E: email@example.com
5. ASQA SPOTLIGHT ON SERIES 4 WEBINAR – STUDENT SUPPORT
ASQA in its continuing Spotlight Series will be conducting a fourth webinar. This webinar will focus on student support strategies.
Join ASQA staff and guest panellist Serryn O’Regan from Evolve College as we discuss student support strategies, share plenty of insights and answer your questions.
Please note that this webinar does not attract a professional development certificate or a certificate of attendance.
Time: 2.00pm to 3.00pm AEST
Date: 16 June 2022
Host: Webinar – via registration
The webinar will wrap up Series 4, providing guidance on effective student support strategies. If you’ve missed a chapter or would like a refresher for the series, each chapter is available on the ASQA website.
6. FEE-FREE TRAINING AS PART OF 2022-23 NSW BUDGET
The Treasurer and Minister for Skills and Training announced that the 2022-23 NSW Budget will deliver $82.7 million for 70,000 new fee-free training places.
It is envisaged, “This investment will turbocharge the take-up of vocational education and help more people get the skills they need for the jobs they want.
Employer and associated organisations have been instrumental in driving a skills-led recovery from the COVID-19 pandemic and help achieve a record low unemployment rate in NSW of 3.5 per cent.”
The Minister’s Media Release of 2 June 2022 stated, “the 2022-23 NSW Budget would invest $82.7 million over four years to continue accelerating the skills boom and helping to deliver the lowest statewide unemployment rate on record at 3.5 per cent.
“This investment will deliver tens of thousands of new apprentices, trainees and full qualifications to help people get skilled for in demand jobs such as builders, hairdressers, carpenters, chefs, electricians and in the critical early childhood, aged care and disability care sectors,” Mr Kean said.
“The NSW Government’s strong economic management means we can deliver fee-free training which is helping people boost their budget and ensure a brighter future for them and their family.”
This new investment in fee-free training is on top of 100,000 fee-free apprenticeships and 70,000 fee-free traineeships already being delivered by the NSW Government.
This NSW Government’s strong focus on skills led to a 77 per cent increase in the number of people commencing apprenticeships and traineeships in the 12 months to September 2021, according the most recent NCVER report. There was a 91 per cent increase in the number of women commencing apprenticeships and traineeships during the same period.”
7. NECA FEMALE APPRENTICES POWERING THROUGH INDUSTRY GLASS CEILINGS
This week’s edition of Electrical Connection 93 June 2022), Editor Sean Carroll takes us on a journey in the NECA Women’s-in-Power program. The program is designed specifically to remove industry barriers and address the fact that just 8% of licensed electricians are females.
The program is proving to be a success with a group of the graduates making their way through their apprenticeship.
The article states, “The Program provides female high school students and school leavers seeking a career in the electrical industry with the skills and knowledge required to secure an apprenticeship.
NECA hosts a variety of workshops, pre-apprenticeship programs (such as the Women-in-Power Program) and educational seminars to encourage young women to join the electrical industry and tip the workforce scale to balance.
In the final year of her electrical apprenticeship with NECA, Tiana Cameron is just one of many young women who have joined the industry through NECA’s Women-in-Power program: “It’s important to realise that, in a male-dominated industry, you can actually do everything and do it well. It’s not as scary as you think it’s going to be. NECA’s Women-in-Power program was brilliant.”
NECA project manager Michelle Ellis says NECA is excited and proud to be supporting more women, like these skilled Apprentices, to enter the electrical trades: “We commend the ACT Government’s $1 million recent commitment to the Understanding Building and Construction Program for early learning about the construction industry in schools. Being piloted with four ACT high schools, students in years 7-10 will learn about the building and construction industry.”
8. SHARE YOUR THOUGHTS AT NSW WOMEN’S STRATEGY WORKSHOPS
Women in NSW will hold focus groups across the state to seek input and ideas in the next NSW Women’s Strategy. Women in NSW would like to elicit ideas about how they can best support women in your local community. They believe it is important that they hear from you.
Sharing your experiences and priorities helps them to understand what is working well and what areas they need to focus on.
The more women they hear from, the better understanding they have of what they need to do to improve the lives of all women in the state, no matter their age, their background or their postcode.
Join the Women in NSW team for an online focus group to discuss your feedback:
- Hunter/ Newcastle/ Port Stephens – 14 June 2022 at 1:30pm (register here)
- South East and Southern Tablelands – 15 June 2022 at 1:30pm (register here)
- Western and Far West NSW – 16 June 2022 at 1:30pm (register here)
- North Coast and Mid North Coast – 17 June 2022 at 10am (register here)
- Illawarra and Shoalhaven – 17 June 2022 at 1:30pm (register here)
- Or drop into Liverpool Library, on Wednesday 22 June between 12:30pm and 2:30pm for an informal chat.
You can also participate by visiting the Have your say website to complete the survey, answer the quick poll or share a story. Get in quick! Public consultation will close on 5pm, Monday 20 June.
Please share the focus group opportunities and have your say website with your networks and help them make NSW a great place to live for all women.
To learn more about the NSW Women’s Strategy visit https://www.nsw.gov.au/women-nsw
9. 35-YEAR-OLD ELECTRICIAN FATALLY INJURED WHEN CONTACTED ENERGISED WIRES
SafeWork NSW reports in its ‘Incident Information Releases’ webpage, of a 35-year-old electrician who was fatally injured when he handled energised wires whilst completing works on an electrical circuit beneath a house.
Incident information releases are published to inform the community about serious workplace incidents to help prevent similar occurrences. The information can be used to help organisations review their risk management approaches and safe systems of work.
The electrical incident report was released on 6 April 2022.
SafeWork NSW reminds electrical workers and the community that, “Electric shock is the second leading cause of death in the construction industry. It is important to ensure electrical work is either conducted or appropriately supervised by a licensed electrician. Further information on licensing can be found by visiting the NSW Fair Trading website.
Most of the time, work on energised (live) equipment is prohibited. Before making contact with or commencing work on equipment, ensure that it is switched off and test every circuit and conductor to ensure it has been properly isolated. Lock the circuit to prevent inadvertent re-energisation. Work in under floor and roof space areas involves additional electrical risks, including:
- electrical wiring powering various circuits within the property itself such as lighting, power points, hot water systems, ovens, air conditioners etc.
- electrical wiring that may be installed within those spaces that is powering another part of the property such as an extension, garage, granny flat or duplex
- metallised foil ceiling insulation
- electrical wiring from solar/battery storage systems
- exposed electrical wiring
- electrical wiring (consumer mains) that connect from street supply to the electricity meter box
- damaged or aged wiring. Ensure any damaged or aged wiring and appliances found within ceiling and underfloor spaces/surrounds are isolated where possible and reported to the property owner.
The above photos showcase the incident site underneath the house where the exposed electrical cables were located.
10. WORKER FOUND USING A BATTERY-POWERED RECIPROCATING SAW IN AN EXPLOSIVE ZONE
The NSW Resources Regulator reports in the 10 June 2022 edition of Mine Safety New Weekly Incident Report of a worker who was found using a battery-powered reciprocating saw in an explosive zone.
The incident was classed a High Potential Incident (IncNot0042297) in an underground coal mine that could cause a fire or explosion. A summary of the report states, “A deputy found a worker using a battery-powered reciprocating saw in a hazardous zone. The deputy immediately removed the saw and battery from the hazardous zone.”
The Regulator’s comments to the industry stated, “Mine operators must have systems in place to manage portable electrical apparatus used in underground coal mines. Only workers that have been trained and assessed as competent in the management, control and use of portable electrical apparatus should be permitted to use this equipment in the underground parts of a coal mine. For use in a hazardous zone, a task specific risk assessment should be undertaken to determine the appropriate type of tool that can be used safely.”
11. NEW ZEALAND ELECTRICAL REGULATOR ISSUES DISCIPLINARY NOTICES TO TWO ELECTRICAL WORKERS
The Electrical Workers Registration Board of New Zealand reports in its 10 June 2022, Issue 114 ELECTRON of two incidents its Board reviewed and issued disciplinary notices to.
The article states, “In the first, the electrical worker carried out prescribed electrical work in a manner that was contrary to an enactment. He was censured and ordered to pay $250 in costs.
In the second, the Board decided that the electrical worker had carried out prescribed electrical work in a negligent manner in relation to work completed on a switchboard and that he provided a false or misleading Certificate of Compliance. The failings in relation to the switchboard were basic errors, and the experienced electrical worker did not know why he had failed in the manner that he did. He was fined $1,500 and ordered to pay costs of $250.
In both matters, the penalty and costs orders were reduced on the basis that the Respondent had cooperated and had pleaded guilty.
The two cases were examples of what the Board sees all too often. Electrical workers with long and productive careers complete work that is inconsistent with their usual standards. More often than not, they are also at a loss to explain why their work standards slipped, and the complaint comes as a wake-up call. Fortunately, in most cases, no one is harmed. The risk of serious harm or significant property damage can, however, be present in such cases.
The Board’s observations have been that various factors can be at play. They include complacency when doing a task that has become routine, distractions whilst carrying out prescribed electrical work and a failure to be aware of or keep up to date with current standards and requirements. Complaints about others should be a wake-up call for all electrical workers.
12. FREE A2/A2L REFRIGERANT TRAINING RESOURCES AVAILABLE FOR RTOs
The Australian Refrigeration Council (ARC) has issued a Media Release stating that, “in partnership with Refrigerants Australia and selected TAFE Colleges, ‘ARC’ has developed a set of free A2/A2L refrigerant training resources and assessment materials for Registered Training Organisations (RTOs).
In 2018, ARC created a unit of competency for A2/A2L refrigerants, and these new resources build upon that unit of competency to assist RTO teachers in successfully teaching students about A2/A2L refrigerants, in particular, R32, which is rising quickly in popularity.
R32 is mildly flammable and presents significant changes to the service tools, working practices, component standards and workplace safety considerations needed during the installation, repair, service and refrigerant recovery process.
ARC chief executive officer Glenn Evans encouraged RTO teachers to incorporate the unit of competency, training resources and assessment material in their training to ensure technician safety is of highest priority.
“These training materials cover the safe handling of the gas that is rapidly becoming the most commonly used gas in split systems and is beginning to make an appearance in larger AC applications,” he said.
“The resources and assessment materials are Australian Qualifications Framework (AQF) accredited to provide confidence for both training providers and students alike.”
Topics covered include safe handling and transport, tools and equipment, environmental considerations, emergency procedures and incident management, as well as first aid for A2/A2L exposure, cylinders and storage, and installation requirements.
The full set of material can be downloaded free of charge at https://www.arcltd.org.au/media/1132/a2-a2l-resource.pdf
13. WINTER FIRE SAFETY – BE SAFE NOT SORRY
It is that time of the year when we should think about fire safety during winter. Fire and Rescue NSW responds to more than 1100 home fires each winter. A fire can take hold in three minutes, yet it only takes seconds to prevent one.
Fire and Rescue NSW reminds us to take care and this time of the year and consider using the Winter Fire Safety Checklist (attached) to get your home ready for winter.
A few minutes of planning can save years of regret.
- Have a home fire escape plan ready.
- Have your chimney serviced before using it, and use a sturdy fir guard around open fires.
- Keep everything a metre away from the heater.
- Test your electric blanket before use by laying it on top of your bed, feeling the internal wires and inspecting cords for damage.
- Wheat bags can easily ignite or burn if overheated. Never use them in bed or while sleeping.
Need further assistance?
You can register yourself or a loved one for a free safety visit online at www.fire.nsw.gov.au/visits
14. ILLAWARRA RENEWABLE ENERGY ZONE (REZ) INDUSTRY REGISTRATION OF INTEREST (ROI) PROCESS NOW OPEN
EnergyCo has announced that the “industry registration of interest (ROI) process is now open for the Illawarra Renewable Energy Zone (REZ) until Friday 22 July 2022.
The Energy Corporation of NSW (EnergyCo) is coordinating the delivery of this REZ as set out under the Electricity Infrastructure Investment Act 2020.
The Illawarra REZ will ensure the region has a key role in a renewable energy future, powering existing industries and supporting economic growth, including emerging technology in green hydrogen, ammonia and metal production, and electrification of industrial processes.
The ROI is the first step in engaging with industry on the design of the Illawarra REZ. EnergyCo invites energy project developers and businesses with large electrical loads to register their interest to take part in the Illawarra REZ.
Submissions received will be used to inform the best timing, capacity, design and location of the Illawarra REZ in conjunction with ongoing stakeholder and community consultation. This will complement technical assessment and community engagement work already underway.
The ROI will be open for six weeks to Friday 22 July 2022. Please feel free to share with any interested parties and networks in the region.”
15. ELECTRICITY – AUSTRALIA’S FUTURE ENERGY TRANSITION
The 9 June 2022 edition of Utility e-news featured an article from Energy Queensland CEO, Rod Duke. In the article Rod explores the role electricity will play in the future of Australia’s fuels, renewable energy sources, infrastructure and economy.
He states, “I recently had an opportunity to share some of my concerns and observations at a forum hosted by the Committee for Economic Development of Australia, discussing future fuels and Queensland’s energy transition.
It has taken the electricity sector 100 years to develop, design and construct today’s infrastructure – and now we’re going to need to quadruple its capability – or even more – in the next few decades or so just to keep pace.
Why? Electricity will either be the fuel for the future of Australia, or it will be used to power emerging industries such as hydrogen production.
Energy Queensland has a lot of skin in the game.
The company runs Australia’s largest electricity network business with an enterprise value in excess of $26 billion.
Our 7,400 employees deliver an annual program of works worth $1.6 billion.
Our subsidiaries, Ergon Energy and Energex, support one of the world’s largest distribution networks, delivering 35,000GWh of power to 2.3 million premises and 763,000 retail customers from Tweed River to Torres Strait and from Brisbane across to Birdsville.
They’re moving electrons, with around 1.7 million power poles, almost 180,000km of overhead power lines, 29,000km of underground power cable and controlling it with nearly 11,000km of fibre optic cable.
With Queensland and Australia’s commitments to Net Zero carbon emissions by 2050 – forecasts show that we will need to move from having electricity as around 25 per cent of Australia’s primary energy usage to perhaps 80 per cent.
Almost every source of renewable energy ends up manifesting itself as electricity; solar, hydro and wind are the main three.
They are first converted into electricity which is then used to heat, cool, light, and power communities and industries.
Renewable energy, by its very nature, fluctuates depending on the time of day and the weather. Too much power generated during the day and not enough at night causes problems for networks and customers.
There is more than 4.2GW of distributed energy resources connected to Queensland’s networks – two very large power stations – and includes 21 major solar farms and 26 bioenergy generators.
As we connect more renewable generation to the network, there will be greater variability of electricity flows. A new issue of ‘minimum demand’ is creating challenges for managing voltage on the distribution network, and more broadly, causing system stability issues.
This increase in variability requires more network monitoring and controls to be in place.”
16. WILL CUSTOMERS PAY THE PRICE FOR THE NSW ENERGY TRANSITION?
The 9 June 2022 edition of EnergyInsider 9 June 2022, a joint publication of Energy Networks Australia (ENA) and Australian Energy Council (AEC) includes an article that explores whether NSW customers will pay a hefty price for the energy transition.
Verity Watson at Energy Networks Australia (ENA) writes, “Consultation papers and regulation guidelines are coming thick and fast as NSW works to put its ducks in a row to enable the net zero energy transition. While the priority should be ensuring this comes at least cost to customers, is there a risk they’ll be handed too much of the bill? We look at the NSW Electricity Infrastructure Roadmap and the future of NSW renewables.”
“The Electricity Infrastructure Roadmap (roadmap) is the NSW Government’s plan to transform its electricity system into one that is affordable, clean and reliable. It is a seminal policy that embodies the growing trend for states to go it alone, rather than subscribing to the nationalised infrastructure approach of the National Electricity Market (NEM).
The roadmap is enabled by the Electricity Infrastructure Investment Act (EIIA), aimed at coordinating investment in transmission, generation, storage and firming infrastructure as ageing coal-fired generation plants retire. It also includes actions that will work together to deliver ‘whole-of system’ benefits.
The intent of the roadmap is to coordinate generation and the development of the NSW Renewable Energy Zone (REZ). By having a clear pathway, the NSW government hopes to provide certainty for investors and business. The roadmap also seeks to bring forward generation and network delivery to avoid price shocks for customers and enable network projects to be developed faster.
However, aspects of the roadmap are light on consultation, and it appears the first customers will know of the costs will be in their retail bills. Transparency should be at the centre of arrangements to ensure that NSW consumers and other stakeholders are bought along the journey.
The NSW energy corporation, EnergyCo publishes a Network Infrastructure Strategy. The Infrastructure Planner, also EnergyCo, develops the network options (and non-network options), establishes the tender processes to deliver the project(s) and makes a recommendation(s) to the Consumer Trustee to authorise the project(s).
It is not clear how the cost, risk and timing trade-offs in the selection of scopes and vendors will be made by the Infrastructure Planner. While supportive of innovation and flexibility of work scopes, it needs to lead to lower total system costs for all consumers.
The REZ network operator role is also still not clear, it may or may not be licenced and registered in the NEM as a Transmission Network Service Provider (TNSP). The network operator also may own, lease or licence, construct, finance, maintain and/or operate the network infrastructure project.
The roadmap will be paid for by customers, with NSW Distribution Network Service Providers (DNSPs) required to raise their share of the funds through network charges. The AER will decide the amount required to be paid by each DNSP by 28 February each year.
Each of the DNSPs – Ausgrid, Endeavour Energy and Essential Energy – will be provided a contribution order to make payments to fund the roadmap costs. The NSW DNSPs must then recover their respective contribution amounts by passing the costs through to electricity retailers and onto NSW electricity customers on their retail bill.
There are however, clear questions about whether loading the costs of a government policy into an essential service is in the best interest of customers – especially given energy affordability and the increasing cost of living. Perhaps there is a role for the NSW government to fund a portion of its policy costs, so the entire burden doesn’t fall on electricity consumers.
For more, contact Verity Watson, Energy Networks Australia
Giles Parkinson, reports in the 12 June 2022 edition of Renew Economy that the energy sector is being increasingly seen as in crisis. The article states, “The Australian Energy Market Operator has taken the unusual decision to impose a $300/MWh price cap on the Queensland electricity market, after cumulative prices over the past week averaged more than $674/MWh and exceeded a trigger point for the intervention.
The intervention by AEMO on the price settings is big news, because according to WattClarity it is the first time it has happened in the state, although it has happened in recent years in South Australia and earlier in Tasmania.
The price cap was due to expire at 0400 AEST on Monday, but AEMO announced it would be extended for another 24 hours because the trigger point of $1.359 million in accumulated costs remained breached. It’s likely to remain in place for another week.
But the price cap had another, almost immediate consequence. It caused many generators to suddenly withdraw capacity because they did not think they could make money under the price cap.
That forced AEMO to declaring a “lack of reserve 2” situation, which meant there was effectively insufficient back up if a major generation unit was to trip.
On Monday morning, it updated this to an LOR3 event, warning that up to 513MW of load may have to be shed from 1730AEST because of the lack of supply. It then tripled this to nearly 1.5GW, before halving it again to around 800MW.
The price cap in the Queensland market was imposed at 6.55pm on Sunday evening after prices had averaged more than $10,000MWh for more than one hour, thanks to its dependence on a dwindling supply of coal capacity and sky-high gas prices.
But NSW is also in danger of breaching the price cap, with the cumulative total last Friday reaching more than $1.1 million. It is the second most dependent state on coal (after Queensland), although it has a clear plan to switch over to renewables in the next decade.
Queensland has suffered the most in the price surge of the last two months precisely because it is the state grid most dependent on coal and gas. Just 17.8 per cent of its fuel mix in the past 30 days has come from renewables.
This is despite the state having a 50 per cent renewables target by 2030, more than 30 large scale solar farms, the most rooftop solar, and is building the country’s biggest wind farm (MacIntyre), and the biggest solar farm (Western Downs).”