Western Power faces Kodak moment: Rose

Western Australia’s monopoly electricity network provider has been warned it may be facing a Kodak moment as consumers demand changes to how electricity is made and moved around the state.

Sustainable Energy Association of Australia chief executive Kirsten Rose said at a Committee for Economic Development of Australia event today in Perth that Western Power needed to embrace disruptive innovations or go the way of outdated failed technology.

“(Grid operators) can resist and try to buy time while they think it through or they can work out really quickly how to profit from the change,” Ms Rose said.

“The utilities don’t have a great track record with this kind of change.”

“The combination of falling (renewable) costs, rising (network) prices and the unstoppable forces of technology mean the network has a formidable new competitor, which is the consumer.”

CSIRO Smart Grid Partnerships manager Mark Paterson said there had been an incredible rise of ‘prosumers’, characterised as people and businesses which produce as well as consume electricity.

“Customers themselves and market forces are forcing customers to the very centre of the equation,” he said.

Mr Paterson said electricity markets globally, including in Western Australia, were transitioning from a traditional one-way flow from central generators to one where consumers dictated a more distributed network.

He said leaders in the space had identified four possible future scenarios for electricity in Australia, all of which included vast increases in power being generated in many smaller local inputs, including solar PV on business and residential roofs.

“The 2015 to 2025 decade will be characterised, if there’s one word, by transition. By profound transition,” he said.

In the future electricity scenarios CSIRO has identified Mr Paterson said maintaining and improving the existing grid network was a key feature as it was likely most people would want to remain connected to the grid.

“Under any scenario the grid continues to play a critical role.”

Western Power chief executive officer Paul Italiano said Western Power was focused on managing the transition.

“We need to shift our mindset away from being merely the operator of a network to being one of an organisation that is adapting to supply service to consumers,” Mr Italiano said.

“If we keep in mind the value that we add to the energy consumers in Western Australia, then that is what will drive our decision-making going forward as we structure the network to respond to consumer demands.

“That is a profound transition in the way we approach our work as a network operator.

“We’re not resting on our laurels, we have a lot of work that we need to do.”

Mr Italiano said the network would continue to offer a core value proposition, but would have to alter to meet changing consumer demands and the transition to a lower carbon economy.

“The need to maintain reliability of supply and a power quality at the consumer and will always be a value proposition,” he said.

“I think we will be seeing a different sort of network and probably a smaller network and more fit-for-purpose energy solutions on the fringes of the grid.”

Mr Italiano said to achieve change Western Power needed to invest capital in customer solutions, lower its costs, allow market participants to innovate and adapt, price the service it provides to match its value and that changes be made to regulations.