EnergySafe Magazine Summer 2018/19, issue 52 - Page 8

Latest news 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 08