Power Narrative draft

Better Power Narrative

A skilled workforce is the key to future-proofing our power networks

Better Power


Building a workforce of skilled technical professionals will be the key to future-proofing our power networks. Years of strong investment have built world-class power networks across Australia. However, the way Australian’s use power is changing dramatically and poses a significant challenge for network operators.

Regulation and restructuring is pulling vital revenue out of the industry, forcing budget cuts and layoffs. If the industry is to be prepared to tackle the challenges of the future, we need to invest in a skilled workforce, capable of developing more efficient, sustainable networks and integrating with new technology.

Professionals AustraliaSTREET ADDRESS 163 Eastern Rd, South Melbourne Victoria 3205, Australia

POSTAL ADDRESS GPO Box 1272, Melbourne Victoria 3001, Australia

TELEPHONE 1300 273 762

EMAIL [email protected]

WEB www.professionalsaustralia.org.au


Dear Power Industry Professional

Australia’s power networks have improved significantly over the past decade. Network reliability in many areas is as strong as it has ever been, benefiting many consumers and businesses across Australia. But these improvements have not occurred by accident; rather they have been supported by prudent investment in networks and the development of a high-quality workforce of technical professionals and engineers in the sector.

However, while the reliability of networks has been enhanced, failures remain a significant possibility, and with potentially disastrous consequences. Minor failures on electricity networks have the very real potential to cause major damage to communities and even the loss of lives. The magnitude of these consequences calls for significant ongoing investment in both network infrastructure and the technical professionals to manage this infrastructure.

While the long-term interests of the community, and the safety and reliability of networks should come first, the Australian Energy Regulator (AER) has recently placed a greater emphasis on providing low-cost networks, prioritise the short –term cost to consumers over their long-term benefit. A push to restructure networks and privatise assets is also placing additional pressure on investment. Efforts to cut costs threaten jobs and investment that are integral to the provision of safe and reliable networks. Efficient networks will not be achieved without well-planned investment and the vital contribution of technical professionals across the sector.

While our networks remain strong, the way we generate, store and use power is changing faster than ever. The rising uptake of household solar, the development of battery storage, and the increased availability and falling cost of renewable energy sources are all going to dramatically change the way our networks operate over the coming decades. Now is not the time to be complacent. As the world changes, Australia’s energy generators, distributors, transmitters and retailers must be prepared to respond. We need our power industry to be well prepared to engage with disruptive technology, in a manner that is informed, sustainable, and affordable.

A key part of preparing for the next generation of power in Australia will be adapting our networks and generation capacity to respond to future demand. Alternate electricity systems are on the rise – solar panels and home storage are becoming much more affordable and will compete with the grid for users over the coming years. Only engineers and technical professionals in the power industry can lead the way in adopting and adapting disruptive technologies, to ensure future viability of the grid and to ensure that small scale, distributed generation is integrated with the technology and planning of the existing networks.The time to act is now if we are to effectively future proof our networks. To do this, we need to make sure we have the right people in place, with the necessary technical expertise to deliver our future energy infrastructure.

With that, I extend an invitation to all power industry professionals to be a part of this initiative, and help shape our plan from the ground up – to make the voice of your sector stronger.

Please visit: Professionalsaustralia.org.au/_________ and register your interest. Otherwise, contact [email protected].

Thank you,

Chris Walton, CEO Professionals Australia

An open letter

“While our networks remain strong, the way we generate, store and use power is changing faster than ever. Now is not the time to be complacent. As the world changes, Australia’s energy generations, distributors, transmitters and retailers must be prepared to respond”.

1


—

Governments are currently driving a move towards lower-cost networks, with regulators imposing massive revenue cuts across network businesses. While efforts to provide better

value for energy users are important, they should not come at the cost of reliability, capability, future need, and above all, safety.

—

Networks under pressure

The consequences

Australia’s power industry is under significant pressure as it seeks to balance the reliability, safety, efficiency and cost of our networks. Regulation, restructuring and disruptive new technology are providing new challenges for network operators. In order to face these challenges, we need to ensure that the technical skills of our network operators are maximised, as skilled staff are the key to delivering the future of our networks.

Recent cuts to network revenue will remove billions of dollars of investment from networks, encouraging large-scale redundancies across network businesses and threatening the future strength of network infrastructure.

Indiscriminate cuts across networks are likely to cause an exodus of skilled employees from the industry, reducing the ability of network businesses to maintain safe and reliable networks, and compromising the ability of networks to successfully integrate new technology and prepare for future challenges.

Regulation:• Funding cuts place aging infrastructure at risk of failure and power outages;• higher-cost replacements required due to inadequate maintenance; • funding cuts are forcing widespread layoffs and reducing capability of network operators;• inadequate investment increasing bushfire risk to community; and• inadequate investment in maintenance and safety.

Restructuring:• inadequate investment in strengthen and future-proof our networks;• funds not being redirected back into our networks;• private enterprises are more concerned with profit than with safety and reliability;• workforce cuts likely as private owners cut staff to increase profit;• higher maintenance costs per project due to a depletion of in-house skills at networks;• the exodus of skilled staff will threaten the ability of network businesses to respond to future challenges.

Technology: • network operators are unprepared to tackle the challenges posed by disruptive technology;• new technology requires highly skilled technical staff in our networks, to future-proof networks;• regulators not listening to industry experts, discouraging expert opinion;• without the skill to respond to new technology, our networks are unsustainable; and• networks are not prepared to respond as consumers move off network.

2


If Australian power networks are going to be ready to tackle the challenges of the future, we need to ensure adequate investment in energy infrastructure and the workforce required to run them. By providing the necessary funding, we can strengthen our networks and build a capable workforce. However, to do this governments and regulators must resist the short-term temptation to chase politically motivated cost savings. Cheap networks are not necessarily good networks, and small cost savings do not necessarily represent the best interests of communities.

RegulationThe most immediate challenge faced by the power industry is the ever-changing regulatory environment. With revenue and investment directly set by the Australian Energy Regulator (AER), regulation has an enormous impact on the way the industry functions.

Recently, the AER has increasingly sought to cut the cost of electricity, forcing network operators into massive cost cuts, with little warning. As a result, billions of dollars of investment are being pulled from networks and large-scale redundancies across network businesses are threatening the skill level of our asset operators. While better value electricity is important, it should not come at the cost of reliability, capability, future need, and above all, safety.

RestructuringAustralia requires massive new investment in infrastructure if it is to reduce the backlog of projects. One way many governments are seeking to fund this investment is through the privatisation of assets, including our electricity networks.

While asset recycling can provide a useful way to fund new investment, the funding alone should not be the goal. The privatisation of networks should only occur where it provides the best outcomes for the network itself. Any funds from the sale of assets should also be reinvested into new infrastructure, especially power networks.

Additionally, regulators must ensure that private owners deliver positive incomes for the community, through reliable networks, strong investment, and workforce development. Private owners are answerable to their shareholders, and will always be tempted to reduce investment and reduce costs in order to deliver higher profit levels.

Technology Over the longer-term, the largest challenge to face the industry will be the rise of disruptive new technologies. The way we use and generate energy across Australia is changing. Renewables are becoming more affordable and more efficient, and are becoming an important part of our energy production, alongside fossil fuels. Governments and regulators have a responsibility to ensure that network businesses are adequately funded and adequately skilled to invest in the future of Australian energy.

Additionally, new technologies in solar generation and energy storage will increasingly allow more Australians to move away from our energy grids. As these technologies become cheaper and more widely available, this trend is expected to gather pace. Australia’s power sector needs to be prepared for this change, the preparations must start now.

The development of a highly-skilled workforce will be vital if networks are to manage the challenges posed by new technology. Networks will need to be more efficient, greener and economical if they are to retain customers and survive as more consumers move off grid.

3


Solution

1. Establish an industry-wide policyIn order to strengthen Australia’s power networks, we need a coherent and well-developed policy to future proof the sector. Government policy must prioritise the safety and reliability of power networks, while ensuring that our networks are prepared for future developments and technological change. An industry-wide policy will ensure a more consistent approach to regulation.

2. Invest in infrastructureThe way Australians use electricity is changing dramatically, requiring that networks adapt. Additional investment in power networks will be vital over the coming years in order to future-proof our networks. This investment should recognise need to integrate effectively with new technology and the challenges that will come as users more off networks. Where restructuring and privatisation occurs, funds should be used to ensure our networks are prepared for the challenges ahead.

3. Plan for disruptive technologyDisruptive technologies pose the greatest challenge for our networks. As more users move off the network, the need for efficiency will increase, as the user base stagnates. In order to prepare, we need to invest now. Investment to integrate our networks with new technology will be vital if users are to be retained and if operating costs are to remain sustainable. By building a skilled workforce now, network operators will have the required expertise to effectively plan for future challenges.

4. Improve technical-skills in decision makersWith the face of the sector changing dramatically, there is a real need for strong technical expertise in the decision-making process. By involving a greater level of technical skills in the decision-making process, regulators will be in the best position to minimise waste, achieve better outcomes for the community and promote confidence in networks. High-quality power professionals are the key to delivering efficient infrastructure management in the power sector. This process should involve: Up-skilling of in-house technical capacity, both within the network operators and within the regulators.

5. Register engineersThe power sector relies on a wide range of technical professionals, from many different disciplines. Engineers represent a large portion of these professionals, and are integral in the management of new investment and maintenance. To avoid economic loss, deliver best-value investment, and protect the health and safety of the community, the registration of engineers should be a priority across the sector. Registered and accredited professional engineers who maintain and enhance their professional skills provide the best opportunity for strong power networks for the future.

6. Develop a sustainable workforceA national workforce development framework for professionals in the power sector should be developed to provide a high-quality, experienced knowledge base within our network operators. The funding framework should provide incentives for improving in-house knowledge, encouraging network operators to up-skill and minimise their reliance on outsourcing. Cuts to operational expenditure must be stopped, and investment in a skilled workforce should be encourages. Funding should also provide support for cadetship programs, professional development allowances and payment of registration for engineers. Improved in-house technical teams would allow network operators to better manage projects, improve maintenance systems, and deliver better-value for electricity users. While proper workforce development requires an initial investment, the returns far outweigh the costs. A key part of this process should involve the introduction of wages and conditions that facilitate the attraction and retention of skilled power professionals.

4


Advancing change to achieve solutions_

Strengthening our power networks requires a plan and expert guidance. This is our framework for moving forward, but it will only work with your direction and input.

_

1. Identify, confirm and understand the issueTo begin, there needs to be an issue, or an opportunity. In most cases, issues and challenges lead to opportunities. We know there are issues with regulation because our members have told us. We also know that restructuring and the growth of disruptive technologies pose new challenges. Once the issues are known, we consult, research, and confirm.

2. Engage with stakeholdersThe best arguments are backed by evidence and are supported by experts. Once the issue is known, we seek out experienced industry experts and get their evidence. If our argument can be improved, we want to know.

3. Identify and test solutionsNow that we know the issue and have developed our vision for a better power sector, we can build the campaign. The purpose of a campaign is to identify the key stakeholders and to raise awareness of the issues. We do this by demonstrating support for the campaign and highlighting the consequences if the problems are not resolved.

4. Build the campaignFor every issue to be overcome, we need a viable solution – the light at the end of the tunnel. Using the best minds at our disposal, we will develop a list of solutions, guided by industry experts. We might not win over everybody, but through gaining feedback from qualified power professionals, we can form new solutions.

5. Create community awarenessIt is critical that decision-makers understand there is support for the solutions being presented in the campaign. Building support means engaging in activities designed to target different audiences and generate wide-spread backing.

6. Lobby the decision-makersWe know the issue, we know the solution, we’ve collected as much support as possible, and it’s overwhelming. The next step is to package it up, and begin lobbying the decision-makers. If the argument is sound, support is strong and the solutions are deliverable and achievable, there should be no reason for the decision-makers not to listen and act. While they might not fear us, they probably fear you.

7. BargainingA key part of delivering better power networks is the development, attraction and retention of a skilled workforce. Organising and bargaining is critical in achieving better career paths, job security, payment of registration for engineers, access to professional development, and wages and conditions that facilitate the attraction and retention of skilled power professionals.

8. Maintain the relationshipsWe have done a lot of hard work bridging the gap between those on the ground, and those calling the shots. Regardless of the outcome, we’ll have formed valuable relationships that should be maintained. Please contact __________, at [email protected] to have your say in our plan.

5


Professionals AustraliaSTREET ADDRESS 163 Eastern Rd, South Melbourne Victoria 3205, Australia

POSTAL ADDRESS GPO Box 1272, Melbourne Victoria 3001, Australia

TELEPHONE 1300 273 762

EMAIL [email protected]

WEB www.professionalsaustralia.org.au

Power Narrative draft

Documents

Transcript of Power Narrative draft