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Summer 2018/19
energysafe issue 52
One hundred years
of electricity supply
By Paul Fearon, Director of Energy Safety
100 years ago, in December 1918, the Victorian Parliament passed
a Bill that established the State Electricity Commission of Victoria (SECV)
under 'Electricity Commissioners'.
After returning from the Great War,
Sir John Monash was appointed its
first full time Chairman. The vertically
integrated utility generated, distributed
and sold electricity to Victorians for
75 years. The model of electricity
supply reflected conventional wisdom
of the time including the economics
of the industry, known technologies
and government objectives of the day.
The SECV was by any measure the
powerhouse of economic development
for Victoria.
Most people took electricity supply
for granted because it worked. They
vaguely knew about voltage and current
because it meant light, heat and power.
They also knew that in the wrong
proportions it could kill you. But terms
like frequency control, harmonics, power
factor, capacitance and inertia were
hardly mentioned. Few realised that,
whilst generally very reliable, the physics
of electricity made these systems
complex and electrically fragile.
Large grids were particularly hard to
keep stable and secure. Around the
world we saw how they could collapse
and plunge states, large cities even
local areas into darkness – even when
there was adequate generation. During
the second half of the 20th Century,
Australia developed a particular
expertise in maintaining stable grids and
SECV electrical engineers helped many
utilities in the US when they experienced
these events, such as the 25 hour
blackout in New York in 1977.
Engineers and system planners know
that the physics of electricity requires
careful management in real time as
well as having an eye for medium and
long term forecasts of demand and
supply. There are few other systems
that come close to the intricacies and
interdependencies of our electricity
system. Achieving electrical stability
is no mean feat, made all the harder
because the system is influenced not
just by the source of the electricity but
the network delivering it, the direction
of flows and how the customers are
using their electrical equipment.
Much has changed in the supply of
electricity, but the physics of electricity
hasn’t, and neither has our high
expectations for affordable, secure,
reliable, safe and — increasingly —
environmentally sustainable power
supply. History also tells us that in
many cases industry structures left
unexamined will, over time, fail to deliver
positive consumer or social outcomes.
Even those nostalgic for the SECV
are unlikely to recall the double digit
increases in electricity prices that were
experienced through the early to mid-
1980s in Victoria, or the relatively poor
reliability and state of rural distribution
networks at that time. It is now 25
years since competitive markets were
introduced and the SECV disaggregated
and privatised. These reforms were
motivated by the need to address the
institutional factors that were perceived
to have led to poor reliability, low
productivity and over-investment.
This in no way diminishes the huge
contribution made by the thousands
of engineers, technical trades and
commercial staff who worked for
the SECV.
But today we rely on electricity markets
and regulated networks to deliver
electrons in sufficient proportions of
quantity and quality to ensure electrical
supply is safe, reliable, secure and
stable in real time. That’s difficult under
“normal” conditions and even harder in
an increasingly distributed energy world.
If the proportions are wrong, then the
grid or parts of it will become unstable
or constrained. Reliability suffers,
intervention follows and costs inevitably
increase.
Distributed generation and renewables
are the future, but they are challenging
the traditional one way flows of
electricity. They are also challenging
the traditional roles played by the
existing businesses. Like tectonic
plates, the established players in energy
generation, distribution and retailing are
now colliding with the new entrants at
the edge of the grid and outside it.
For all players, new energy forms and
digital technologies offer the solutions
to manage the physics of electricity
through embedded smart networks,
smart meters and battery storage.
But designing market rules and
regulations that attempt to manage
the transition as well as harmonise
competing commercial interests, the
physics of electricity and desirable social
and environmental outcomes is not easy.
Director of Energy Safety, Paul Fearon
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