Green renewable vision needs urgent execution: ex-AEMO boss Audrey Zibelman

The former boss of Australia’s power grid says the green energy transition is admirable. But investors must be part of the ride and execution of the vision is now imperative.

Audrey Zibelman, adviser to Alvarez and Marsal.

Energy expert Audrey Zibelman wants to attract private capital and transform Australia’s electricity grid with greater urgency by lowering market risk and ensuring the nation has a credible plan for retiring coal without risking reliability.

The ex-Australian Energy Market Operator chief executive spent last week touring the country meeting clients in a new advisory role with consultancy Alvarez and Marsal and said she was struck by the gap between a comprehensive blueprint for the system and its lag in execution.

“The trick of all of this is the energy transition. And for it to be successful, it really needs a true partnership between government, which can’t afford to do it itself, and private capital,” Ms Zibelman told The Australian.

“And the goal needs to be, ultimately, how do we get private capital and investment into these very complex long term infrastructure at the lowest possible expense.”

Ross Garnaut, a long-time ­adviser to the Labor government and a backer of renewable energy, ­recently criticised Labor’s expanded capacity investment scheme for sidelining private investment that did not have the backing of some form of government subsidy.

Ms Zibelman, who holds other roles including a board position with Andrew Forrest’s Squadron Energy, said the Albanese government had a role to play but stressed the importance of bringing investors along for the journey.

“We need to move from a plan that is the idea of what we do to a much more deeper execution level, which requires a great deal more transparency of how we do it, and that’s all the complexities around supply chain risks, resource risks and the need to get communities involved,” she said.

“When I speak to investors what they’re looking for more than anything is price signals that are durable and certainty in the role that governments are going to play in making sure that the investments that come in can realise a fair return.”

To deliver its green agenda, Labor has promised to underwrite more than 40 gigawatts of renewable energy projects under a scheme guaranteeing developers a minimum rate of return.

Ms Zibelman arrived in Australia for the top AEMO job in 2017 amid a turbulent period for the national electricity market, caused by blackouts in South Australia and political tensions as industry and regulators attempted to secure a passage for the national energy guarantee.

She was rumoured to have been on a shortlist for US Energy ­Secretary had Hillary Clinton won the White House.

Her achievements included the two-decade vision of AEMO’s integrated system plan, which maps out the shape of the electricity grid and plots the switch to renewables. Still, others were critical of AEMO under her leadership and accused the energy market operator of becoming too ideological.

Ms Zibelman said Australia was best in class in terms of its navigation of the energy transition but needed adequate back up as the coal mainstay of the grid exits over the next decade.

“We can’t be in a position where we’re risking reliability, right? One of the challenges of this particular industry is you can’t use just-in-time planning because we need the plants to be there and be operable and it’s an integrated system,” she said.

“It’s very complex in terms of both adding and subtracting. And when I talk about having an executable plan, it is around getting a great deal of clarity of not only what we want to get done, but how quickly in reality, we can actually get it on board and then integrate it.

“So we make sure that we’re not putting ourselves in a position that scares people, where we say we’re exiting a unit, and then a year later or two years later we say, ‘oops, we can’t exit it yet’, because that just creates risk.”

AEMO said last week Australia’s renewable energy pipeline is large enough to safeguard reliability across the National Electricity Market during the next decade but only if projects are delivered on schedule and government support schemes translate into real investment.

The operator’s implicit warning that projects must be completed on time illustrates the precarious nature of decarbonising. Several of the nation’s most prominent infrastructure developments, such as Snowy Hydro 2.0 and transmission projects such as VNI West, are running several years behind schedule.