The network - a view from the inside
The network - a view from the inside
You could say that Andrew Deme is part of the furniture at Ergon Energy. Having worked across a number of areas in a range of positions over the last 14 years, Andrew's seen the company and the industry go through several changes.
As Group Manager Network Development, Andrew - pictured below - is responsible for steering the good ship SS Ergon away from peak demand land and one-way power flows, into a world where the traditional electricity network exists in harmony with distributed generation, storage and more and more of our transport system being electrified.
Talking Energy recently invited Andrew to discuss what he sees as the future for this utility.
Tell us a little bit about yourself and the role you play at Ergon?
I started in banking in the mid 80s and went through the rapid development of information technology, cashier terminals, passbook printers, automated teller machines, interactive voice response systems and one of the world's first intranets and eCommerce systems.
Fourteen years ago I joined Ergon Energy's IT department and then worked my way into a business development role with Nexium Telecommunications. From there I moved to Asset Management, with a goal of developing a ubiquitous telecommunications network, P25 two-way radio and cellular data networks. Then about six months ago I progressed into my current role – Group Manager Network Development.
Throughout my entire time at Ergon I have been surrounded by the best and the brightest and am humbled to be associated with their successes.
You've obviously seen a lot changes in Ergon during your time with the business?
At Ergon, it's been gradual. The thing I've witnessed in the electricity industry is that change has been much, much slower until now, compared to other industries. The change in banking, the change in IT and the change in telecommunications has been consistently rapid. If you think of how we purchase things, we now have Amazon and Ebay as well as companies like Coles and Woolworths as well as Apple, who are now entering the finance market - the change in those industries has been quite amazing.
However, what we've seen in the last four years is the beginning of a revolution with the massive uptake of solar and I think what we'll see in the next four to five years is the same for battery technology and electric vehicles. Even if the uptake is slower it will still be an amazing difference to the last, say, 100 years of what we used to think of as power networks.
For example, 10 years ago you needed to be a billionaire to play a serious role in the power industry, building a coal fired generator, buying a power network or a retailer was a massive investment.
Now the investment for new entrants is relatively low with wind and solar farms, battery storage or even gas peaking plants being seen by entrepreneurs as worth investing in.
This will increase the activity within Ergon Energy in evaluating and planning for a greater number and range of options and our future depends on our ability to create a platform that interconnects, integrates and shares the costs and benefits amongst all those that are connected today and want to be connected in the future.
What does the future of the industry entail?
Customers want to have more control and influence over how they use power. They also want more control over the certainty in the price they pay. Many want to pay their electricity bills at a fixed rate, much like a banking where customers have a choice between fixed and variable interest on their home loans.
Another example are mobile phone plans where we pay a fixed monthly amount and get a certain amount of call minutes, texts and downloads.
As well as certainty around price, the investments in infrastructure will be more distributed throughout the network as well as moving closer to the end customer.
So, why has the electricity industry been slow to change and adapt?
In reality the power industry created the underlying infrastructure that has for the last 100 years supported massive economic growth. As we became an electricity powered society, the peak use of power continued to increase but only recently, efficiency gains in manufacturing as well as heating, cooling and appliances have seen overall energy use decreasing slightly.
What might surprise many people is that it was nearly 60 years ago when IBM made the first hard disk drive which stored 3.75 MB. Since then, the rate of development has been nothing short of stunning.
What will the electricity industry look like in 60 years?
For me, the turning point for the electricity industry happened about eight years ago, when it became obvious that distributed generation (solar PV) was set to grow dramatically.
Unlike the IT industry where CPU speed, hard disk storage and telecommunications networks developed at a similar rate, the development of solar technology didn't occur at the same time as the development of battery storage technology and the power network still has to meet peak demand, whilst experiencing reverse power flows from solar during the day.
So just like how the refrigerator disrupted the food supply chain by allowing shops and homes to store food, battery storage and other technology in the customer premises and in the grid will create a similar disruption.
With battery storage, the industry is at the cusp of having access to its first 'hard drive', so in reality it isn't so much that it is slow to change but more so that the technology options haven't been available, that is……until now.
If you could tell someone how Network Optimisation is playing in that new frontier, what would you say?
We have around $11 billion worth of assets which already connects a massive customer base. It's a great position for Ergon to be in as we have the ability to leverage developing technology and increase the value of the distribution network by interconnecting users and suppliers of electricity, and the more local they are the better for our network business.
My foremost goal is to ensure the changes we make to the topology and technologies in the power distribution network encourages the use of the entire network, all the while stabilising power flows and voltages and this all hinges on our ability to partner with our customers.
Ultimately of course, the goal of Network Optimisation is to maintain services, whilst stabilising the price for customers by minimising investment in augmentation of the network and interconnecting renewables with users.
Facilitating the exchange of electricity between producers and consumers, no matter where they are located on our network and in many cases the same premises, is at the heart of our Platform Business Model and I expect we will all play a lead role in the development of this highly innovative ecosystem. Exciting times ahead!
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