A leading energy expert has said that the energy market chaos that the eastern seaboard has experienced for the past two weeks will force a radical change in the way the electricity network operates.
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Ty Christopher, director Energy Futures Network at the University of Wollongong said the unprecedented step of suspending the national electricity market (NEM) would require a rethink at the highest levels.
"There's a fork in the road, as I see it, as the wholesale market has been suspended because it basically stopped working."
Going forward, Mr Christopher said there were two options. One, to keep the energy market suspended for a year or more while bureaucrats came up with a new pricing model, Two, to implement a mechanism where capacity is priced into the market.
Until now, the NEM was structured around the electricity infrastructure network of the 1990s, comprising large generators supplying a regular amount of power. The entrance of renewables, particularly wind and solar, which could provide large amounts of electricity but at a varying capacity, was not factored into the original design of the market.
Therefore, the market did not put a value on the capacity of generators, that is, their ability to switch on or off, depending on how much electricity was needed.
An attempt to introduce a capacity mechanism was made in 2021, dubbed CoalKeeper as it would pay coal fired power stations to continue burning coal, even when it was not needed, and disincentivised the uptake renewables.
At last week's energy ministers meeting, new Minister for Climate Change and Energy Chris Bowen and state counterparts agreed to work on an alternative, however some state ministers have argued for the mechanism to only include renewables, leaving out dispatchable power from coal and gas. Mr Christopher said a middle path is needed to get out of the current crisis.
"The most immediate pathway out of this for us as a nation is to establish a capacity market that is technology agnostic," he said.
While this would provide a short term sugar boost to existing generators, the inexorable push towards renewables would continue, as old coal-fired power stations are replaced with a combination of wind, solar and storage, whether batteries, hydrogen or pumped hydro, is incentivised.
The beginnings of this next generation renewable electricity network are already in place, with a third of all houses topped with rooftop solar. Where the Illawarra has a role to play, said Mr Christopher, is in the manufacture and transport of the new infrastructure.
"If we're going to make many litres of lemonade out of the many lemons that this [crisis] has given us as a society, then the lemonade that needs to be made, is to be made in clean energy production, and in particular, clean energy storage technology," he said.
"What region is better placed to be the manufacturer and transporter of this new clean technology, whether it's the towers for wind turbines, the community batteries, or all points in between?"
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