The energy transition’s new landscape

As Australia, along with the rest of the world, accelerates its transition to renewable energy, a new energy landscape is emerging – a landscape characterised by themes of microgrids, decentralisation, and digital innovation.

Organisations and individuals alike must adapt to this landscape not only to protect their bottom lines but also to safeguard the planet.

Decentralisation is happening in our energy landscape as renewable energy sources move from the fringes of the power system to the core.Credit: iStock

To keep pace with these changes, companies need to focus on four key areas – generation, storage, electric vehicles (EVs), and energy efficiency – underpinned by digitisation and electrification using renewable energy.

Farokh Ghadially, vice president secure power at Schneider Electric, sums up the shift: “The energy transition in Australia is causing a shift from a centralised way of distributing power to a decentralised system with a multitude of DERs (Distributed Energy Resources).”

This decentralisation comes as renewable energy sources, such as solar and wind, move from the fringes of the power system to the core.

“The emergence of this new energy landscape of connected products and digitalisation, supporting the energy transition to renewable energy sources, has already commenced,” says Ghadially.

Farokh Ghadially, vice president secure power at Schneider Electric.

A crucial component of this transformation is digitisation. It’s necessary for monitoring and optimising energy use, driving efficiency and waste reduction simultaneously.

“Digitisation makes the invisible visible and monitoring enables us to see how we use our energy, thereby optimising energy use and improving business operations.”

The road to a sustainable future is not paved with distant technologies but rather solutions already within reach.

“The technology to harness the new energy landscape is already here. It’s viable, it’s tangible, and it’s available,” says Ghadially. “What we really need is collective action.”

Microgrids and storage are the future

One of the key innovations driving this decentralisation is the rise of microgrids, which allow businesses and communities to generate, store, and manage their energy independently.

Microgrids are versatile, ranging from single buildings to entire neighbourhoods, integrating solar, batteries, and other renewable sources to create a self-sufficient energy system.

“Microgrids are small-scale energy systems generating, storing and distributing their own energy in a local area,” says Ghadially.

He says microgrids can support businesses of all sizes in this evolving energy landscape.

“A microgrid could be just a small building with some solar energy and storage interacting with the grid, or it could be a portfolio of buildings or even a suburb,” says Ghadially.

The South Australian Produce Market (SAPM) offers a prime example of the potential impact of microgrids. Its newly installed microgrid has not only reduced its dependence on the state’s power grid but also lowered its greenhouse gas emissions by one-third.

SAPM is projected to save $4 million over the next decade thanks to its participation in energy markets and the security of its local power supply.

E-mobility and Australia’s lag in EV adoption

The switch to electric vehicles is another critical aspect of the energy transition. However, Australia is lagging behind other developed nations. “Australia is truly behind the eight ball on EVs,” says Ghadially.

“We were only one of two OECD countries, along with Russia, that had not adopted fuel efficiency standards. Great to see that, we now have a new vehicle efficiency standard coming into play in 2025.”

Australia has pledged to reach net zero carbon emissions by 2050, and EVs will play a pivotal role in achieving this target. “Fifteen per cent of reductions are expected to come from the switch to EVs,” Ghadially says, stressing the urgency of accelerating EV adoption.

Now only about 7 per cent of Australia’s car market is made up of EVs, compared to New Zealand, where EV penetration is approaching 20 per cent.

“We need to encourage organisations and individuals to switch, and then we need to charge these EVs, which needs to happen with green power, so we need more renewable power generation,” Ghadially says.

The rise of prosumers and decentralised generation

The shift from traditional energy consumers to “prosumers” is further transforming the energy landscape.

Users of energy are increasingly becoming generators, with rooftop solar playing a significant role. In Australia, more than a quarter of the country’s renewable energy comes from rooftop solar, with over 20 gigawatts of solar power installed on Australian homes.

This prosumer movement, however, extends beyond residential areas. Ghadially says that corporate sectors are also embracing renewable generation and microgrids as part of their operations.

Technology, digitalisation, and corporate sustainability

For companies, adopting renewable energy is no longer just an environmental choice – it is becoming a financial imperative.

Australia’s impending Climate Related Financial Disclosure Laws will expose companies that fail to address their energy consumption and carbon emissions. The pressure is mounting on organisations to transform their operations through digitalisation and invest in green energy.

The firm’s Sustainability Index 2024 highlights the challenges many companies face.

“We found two-thirds of companies are still relying on energy bills or spreadsheets to inform their energy management,” says Ghadially.

This reliance on outdated tools is a significant barrier to improving energy efficiency and sustainability.

However, many businesses are beginning to embrace the role of technology in managing the energy transition.

The survey found that more than a third of companies are using or planning to use artificial intelligence to manage their decarbonisation efforts.

Ghadially says this is a promising trend. “Once power and processes are electrified, the monitoring and control capacity of digitisation can substantially reduce emissions,” he says.

Melbourne’s EastLink freeway offers a compelling case for the energy savings that can be realised through digital upgrades.

The freeway’s ventilation system for its tunnels was upgraded with Schneider Electric’s digital control system, which reduced energy use by nearly 70 per cent and lowered the carbon footprint by 9000 tonnes annually.

Adapting for a sustainable future

“As the world transitions to a low-carbon future, companies must act now to future-proof their operations,” says Ghadially.

“Right now, we’re at a turning point in the energy industry and it’s a great opportunity to unlock new potential for how we use and manage energy.”

The transition to electrification is well under way, with renewable electricity supply on the rise and grid emissions steadily declining.

According to Jarrod Leak, CEO of the Australian Alliance for Energy Productivity (A2EP), the next step is implementing effective solutions to maximise electrification’s potential.

“The foundations are coming for electrification, and now we just need to work out how to best implement the solutions,” says Leak, whose organisation is dedicated to advancing sustainable energy practices across Australia.

Beyond electrification, bioenergy is emerging as a key player in decarbonizing harder-to-abate sectors, such as heavy industry.

Although bioenergy options currently lag a few years behind electrification, Leak remains optimistic about its role in the energy transition.

“The potential for bioenergy is really starting to gain momentum, and we’re seeing that’s going to help with these hard-to-abate sectors,” he says.

Leak says that achieving sustainable outcomes is not only possible but economically feasible, without exacerbating the current cost-of-living pressures.

Jarrod Leak, CEO of the Australian Alliance for Energy Productivity.

“We can do this,” Leak says, adding that sustainability can be pursued while addressing affordability concerns.

“Growing sustainability outcomes economically as well, without an impact on this cost-of-living crisis that we have right now,” he says.

Collaboration and the adoption of best practices are crucial for organisations navigating the shift to cleaner energy. Leak says that businesses working within a broad network of experts are already making successful transitions.

“We continue to see the organisations that use a wide network and work with various consultants for help – they can make the transition economically,” he says.

Despite the challenges ahead, Leak remains positive. He points to the progress being made across industries and believes the momentum will continue to build as new technologies, like bioenergy, catch up.

“That gives me optimism for sure.”

The full Sustainability Index, 2024 report, which provides detailed insights into the state of corporate decarbonisation efforts in Australia and the next steps needed, can be downloaded from Schneider Electric’s website here.