2019 CEO Survey: Rob Wheals, APA

We need policy that does not turn on a cycle of elections, says APA’s Rob Wheals.

APA CEO Rob Wheals. Picture: John Feder.

Every year The Australian’s John Durie asks some of the biggest names in Australian business five key questions about what’s coming in the year ahead.

READ MORE: John Durie’s 2019 CEO Survey.

How is your company affected by low-interest rates and what is needed to boost the economy?

APA invests in energy infrastructure over the long term and this is underpinned by customer needs and long-term contracts. We look for a commercial return commensurate with risk, regardless of interest rates. Generally speaking, we all want to see an economy that’s growing off the back of increased productivity and more jobs. Investment in energy infrastructure is critical as we transition to a cleaner energy future.

What is the impact of government regulations on your company including those applying to the energy sector?

Dealing with regulation is what APA does every day. We support regulatory measures that are conducive to a well-functioning market, encourage investment and deliver better outcomes for consumers. New regulation needs time to work. Constant tinkering with settings introduces uncertainty and adds cost for consumers without any meaningful benefit.

The community expects more to be done to improve energy affordability. In the case of gas, increasing supply will be the biggest contributor to that. Government restrictions on new gas supply in a number of states are of great concern and these issues need to be resolved collaboratively.

What percentage of company revenues are spent on research and development and how is your company using technology to improve performance?

APA has made a significant investment in technology and its operations centre to manage the East Coast Gas Grid, which enables our customers to transport gas to and from any point across eastern Australia. We are also exploring opportunities in hydrogen and renewable methane as the energy market continues decarbonisation. APA’s vision is to be world-class in energy solutions and that requires the best technologies and standards of operational excellence.

What are the three major policy issues facing the country and what should be done about them?

● We need policy that does not turn on a cycle of elections. From APA’s perspective, that means clear, long-term settings that support energy reliability, while delivering on community expectations about affordability and emissions reduction without leaving anybody behind. Good policy supports investment – including building new ‘firming’ generation and investment in the electricity grid to support the increasing penetration of renewables. Public trust in institutions has slipped. I’d like to see more collaboration by lawmakers, policy formulators, business and the community. It is occurring in the energy sector with initiatives like The Energy Charter, which has brought together 18 companies in the industry to collaborate on better outcomes for consumers.

Australia needs to drive productivity growth. We must embrace emerging technologies and foster a culture of innovation and investment.

● The problems we face today are simply too complex to be solved in silos. We need to work collaboratively to solve issues – rather than an us-and-them approach. This will go a long way to restoring public trust and really setting ourselves up for the best chance of solving complex problems in the most effective way.

What are the major impediments to long term growth facing your company and what can or is being done about them?

Short-term thinking and a lack of trust are the biggest impediments to long-term growth. There is a critical need for more investment in energy infrastructure to ensure system reliability, particularly as coal-fired power generation retires over the medium term. Investing in energy infrastructure is our business and we need certainty in policy settings to ensure that happens. It is also critical to see the energy market from a whole-of-system perspective.

To support decarbonisation, we need investment in ‘firming’ capacity to generate energy when the sun doesn’t shine, and the wind doesn’t blow. Gas generation is an obvious choice and has half the emissions of coal. Increasing gas supply will put downward pressure on cost and support decarbonisation. That requires the right policy and regulatory settings, as well as community understanding of the critical role gas has to play. Collaboration and building trust are the key to the right outcomes.