Energy Consumers Australia logo

Featured publication Hero publication Presentations

The secret to great energy research? We don’t know…

Author

Lynne Gallagher

This keynote speech was delivered by Lynne Gallagher at the State of Energy Research Conference in December 2021.

Thank you for inviting me here today, to give the keynote for the second day of the State of the Energy Research Conference.

I feel very privileged to follow on from Drew Clarke AO who gave the keynote address yesterday, and to speak ahead of Dr Alan Finkel AO who will address you tomorrow. I am mindful that it is important that I use this platform to speak to the role of the consumer in the future energy system.



I wanted to first comment on the overarching conference theme which is Accelerating research for a speedy energy transition.

If I take the second part of that sentence first – the goal of a speedy energy transition – I think it is critical to acknowledge that as fossil-fuels are inevitably phased out economy-wide, our energy will largely be supplied by our electricity system.

At Energy Consumers Australia, we describe this transition as happening at two scales. The first transition is the replacement of large-scale, centralised fossil fuel generation with lower cost renewable options and the proliferation of battery storage. The second transition is largely driven by consumer adoption of rooftop solar, residential and neighbourhood battery storage and electrification of transport and heating in their homes.

So far so good.

However, as a natural contrarian I wanted you to know that I only reached the first word of the conference theme before realising I need to stop you all right there.

While I share the sense of urgency for research to support the decarbonisation of our energy system within the 2050 timeframe, it isn’t the pace of research that’s the challenge when it comes to the part people, society and institutions are being asked to play as part of the energy system transition.

Rather than accelerating research, to my mind the goal has to be to close the gap between our knowledge of potential changes in social practice, culture, business models and infrastructure with the engineering, technology and market design possibilities for our future electricity system. Today I want to talk about the challenges in achieving this goal, and the great things we might accomplish if we engage in just a little course correction.

To go fast, go alone, it is said. To go far, go together.

This quote, usually attributed as an African proverb, has become a bit of a mantra in some of the program and policy design circles where smart people are trying to tackle some of the world’s most complex problems.
In the context of the future of our energy system, I like this aphorism. It hints at some of the things I think we routinely overlook.

For those of us in the energy system, net zero will mean a transition to a 100% renewable grid and a huge push towards the electrification of everything.

And we have a prevailing view about how to get there. Our journey will be led by technology, we are told. By innovation. By engineering and by science.

But achieving these goals will not constitute – on its own – a successful transition.

You see, it’s not just whether we get to net zero that matters, it is also how we get to net zero that is important to households, small businesses and large commercial industrial users for whom electricity is essential.

Electricity remains expensive and the energy divide between households is widening. Consumers expect a better future, in which energy is not only clean but is also abundant and affordable, including for those experiencing vulnerability and hardship. It is also a future in which their values – including agency and fairness – are respected and where there is reciprocity, so that industry, government and consumers all play their part in the transition.

To go far we need to go together. And we need to arrive together too.

The pathway from the lab to life

This kind of thinking is now commonplace when it comes to wicked problems and complex systems. To tackling the kind of challenges that involve an interconnected web of actors, many of whom want and need different, often competing, things.

It’s not the way we often think about research, though. When it comes to research our minds turn more towards brilliant individuals or small teams, deeply immersed in their subject matter and leveraging their expertise to answer questions that mere mortals can barely comprehend.

The truth, of course, is we’ve mostly moved well beyond that. As researchers now, we know that the old myth of research for research’s sake is gone. Our institutions, our funders and our society expect and demand more from us.

Research must be applied to real-world problems. It must have demonstrable real-world impact. I know you all probably feel that pressure.
These things are important but, again, they are not enough. They are necessary but can never be sufficient. Because they should always lead to the next questions.

Real-world problems for who? Real-world impact… for who?

Let’s think for a moment about how things often work now. A researcher scans the energy space looking for a problem. They ask people in the industry what is needed. What would make the system more efficient? What would deliver more value?

Then we fall back upon disciplinary perspectives — the hammer that makes everything look like a nail. If you’re an economist, like me, it’s going to be about modelling. About incentives and disincentives. Price signals and so forth.

If you’re an engineer or a technology designer, hey, let’s build something. If you’re a chemist, maybe the answer lies with – you guessed it — chemistry!
We start with our articulation of the problem and then we hypothesise and test. Next stop, solutions. But we’re not mad scientists working alone in a lab. Collaboration matters, right?

So we come together. One team of researchers joins with another team from a different university or organisation. Maybe they involve some system actors – let’s consult with industry players on this particular project (it’s probably the same ones we talked to when framing the original problem).

Together, we collaborate. For impact. Creating an innovation, generating some insights. And then, you know, you can’t just launch that research into the world, right? You’ll need to do some consultation.

So, with your finished research output you come to an organisation like Energy Consumers Australia and say: “You represent consumers. We’ve created this thing. Will people like it? Will they use it? Will they mind?”
And we probably say…

We don’t know.

With the greatest of respect, I’m here today to tell you one thing I do know:

There are better ways of doing this.

Too many of the collaborations we see might better be described as a group of similar people with similar backgrounds and similar ways of seeing the world, using similar approaches to tackle a problem they, themselves, have identified and defined.

That is not what we need, to navigate a complex, socio-technical transition.

As the leader of an organisation that exists to provide evidence-based policy and advocacy in the energy market, as well as carrying out and commissioning research ourselves, Energy Consumers Australia has a great vantage point to see where some of the gaps are. And despite all of the research we carry out, fund and collaborate on, the most frequent answer to the questions we get asked is…

We don’t know.

How much control of their own smart appliances or rooftop solar would people be prepared to give up in exchange for a more reliable system?

We don’t know.

Are most people interested in energy independence (and looking to one day add a battery in their garage)? Or will more people lean towards local resilience (and are waiting to enthusiastically adopt shared storage like community batteries)?

We don’t know.

As Australia transitions to a nation of electric vehicles, when and where will our cars be charged? Will we be using more electricity at peak times, or will people have shifted consumption to the during the day? Guess what?

We don’t know.

We need to research people

The reason we don’t know relates more to the size and scope of the task than because we don’t research people. We regularly ask households and small businesses about their attitudes and choices in the energy system, now and into the future, in our Energy Consumer Sentiment and Consumer Behaviour Surveys.

But researching people is a whole of system task, not just a task for an organisation that has “consumers” in its title. So much of the research we currently see, carried out by brilliant people with excellent intentions, begins by either excluding consumers or by making assumptions about what they want and need in relation to their energy.

When it comes to research there’s a huge amount that’s needed across a range of social science and transition design disciplines to help us better understand what consumers want, what they need and what they do. To start filling in some of those ‘we don’t know’ spaces.

But if you’re a data scientist, an engineer, a technology or software designer that doesn’t mean you’re off the hook. Because that thing you are working on – sooner or later – is going to run head-first into the consumers who make up the energy system. And if that’s the first time you’ve given a thought to them, chances are it’s not going to work how you intended.
If I sound frustrated, I am not. I’m actually excited. Why? Medieval cartographers used to write ‘here be dragons’ on the parts of the map that were, to them, unknown. On the glorious messy map that is our complex energy system there might as well be inky sections marked ‘Here be consumers’.

Those old mapmakers assumed that what they didn’t understand was scary. An inconvenience or worse, a threat. But in reality that’s where the opportunity lay. That was the exciting part.

Because when it comes to carrying out the kind of research that will change the world and change people’s lives for the better, it almost always starts out with one simple idea.

We don’t know.

So we are at the right starting point, at least.

Today I want to start the conversation about what better looks like. And that doesn’t just mean better for consumers or a better future energy system. It means better for researchers too.

Take a walk in their shoes

Back to that starting point. Any and all research in the energy space should begin with the consumer. Consumers are not an unfortunate glitch in the system, compromising an otherwise-elegant design.

They are the system.

What do we mean when we talk about consumers in an energy context? Many have questioned whether it’s even the right word to use. After all, more than 3 million households are also producers as well as consumers of electricity in the system we already have. And that is only increasing.
Our idea of the consumer is an active one. Consumers are not passive, in the sense of waiting to be imprinted by the system. They have agency. They want stuff. At Energy Consumers Australia we talk about an energy system that meets consumer values, needs and expectations. That’s what we always need to keep in mind when we set out to create research that has a real-world impact.

Whether you are engaging with them or not, those values, needs and expectations still exist. Change in the real world will not come via passive consumers who silently conform to your mental model of what they could or should be doing.

All of which means there’s a big shift we need to make in how we think about consumers. It involves adding one little letter (it’s an S).

The biggest mistake I see repeated is thinking about research only in terms of value. We want to create value in a perfect, closed system — to create efficiencies, to weigh our contribution according to this impeccable logic.
But actual flesh and blood consumers? They don’t always make rational choices (at least not as we determine them). Their choices and behaviours stem not just from value but from values.
(There’s that ‘S’)

And this is the part we seldom take the time to observe and engage with.
Some consumers have the means and opportunity to invest in rooftop solar, batteries, electric vehicles to contribute to decarbonisation. Other consumers may have the same values but are in different circumstances – as renters, low-income households and small businesses they are relying on the grid, and shared local resources such as neighbourhood solar and batteries.

Some consumers want simplicity. Others want control. Some want independence and some might see things more in terms of shared responsibility, fairness or community. In reality, even these ideas are reductive. Most consumers will be weighing trade-offs involving these values and more.

How much complexity might I allow if it helps preserve my independence? How much independence might I cede if I know it will help my neighbour?
From these values, and what might be seen as social negotiations within communities, emerge needs and expectations. Understanding, predicting and building for this kind of complexity is hard and it is messy. But it absolutely has to be done.

And it needs to happen at the start of your research.

Ideally, the initial problem or hypothesis that forms the basis of any new research project should be framed against a vision of a plausible and desirable future from the point of view of the consumer — not the system or network.

Things look pretty different when you see them from that angle.

The transition that could be

That’s all great in theory. Now I’d like to talk through how current thinking about the energy system transition is playing out in ways that from a consumer point of view could be seen as somewhat dystopian.

And while you listen in, I want to see if you can spot the deliberate mistake.
As many of you know, our energy system has a problem with rooftop solar and it’s a problem that is born of our own success. Millions of Australians have rushed to install solar panels on their rooftops – a world-leading feat that has helped consumers gain a sense of independence while also financially benefitting by generating their own power and selling some of it back to the grid.

And all this extra renewable generation has helped bring down the price of electricity for everybody. Which is great.

But we are fast reaching the point, and in some cases are past the point, where we have more rooftop solar energy than we can possibly use — particularly at times during the day in Spring and Autumn when the sun is shining but Australians aren’t using large amounts of energy for air conditioning or heating.

Electricity generated from rooftop solar needs to be used or stored. Exporting it all back into the grid, at levels far exceeding demand, makes things unstable and can lead to system faults, blackouts or worse.

So we have a problem.

Remember what I said happens next?

All of those hammers come out of their toolboxes searching intently for nails. And that means we currently have three “solutions” being offered to this problem.

The first is not new and is a purely regulatory or legalistic solution. New connections are prevented from exporting or face strict limits around when and how much. Even with those limits, if too many people are trying to export too much solar power at certain times, system operators will simply curtail their ability to do so or use their own solar generation.

As hammers go, this is a particularly blunt one but it is what is happening now. It’s not surprising that the hunt is on for better ideas.

For the economists, the answer is obvious. This is a pricing problem. Want to send a message that exporting solar during times of low or negative demand is unhelpful? You need to create a mechanism to reduce benefits from doing so, or even to install some disincentives.

This is where we get the policy response known as solar export pricing.
There are pros and cons to such a measure. These were canvassed through a consumer led-collaborative process, which were part of. The final package came with guarantees of a “free” basic export, and both rewards and penalties depending on when electricity is exported. It will come into effect after 1 July 2025, once proposals have been approved by the regulator.
This response, the economist’s hammer, is not the only measure that’s being pursued to fix this system-level problem.

An idea you might have heard about is another response to this same challenge, which replaces fixed limits with varying limits on how much electricity a consumer can export onto the grid at any given point in time without unduly stressing the network and causing bad things to happen. They are variously known as flexible export limits, dynamic customer connections or dynamic operating envelopes.

Pretty much everybody in the energy system who saw this realised it was a really clever idea – it provides a way to allow consumers to connect more solar to the grid and only face constraints on exporting on the infrequent occasions when there is too much supply. That’s a big change from the current reality where we sometimes constrain the consumer from even connecting solar in the first place if there’s a perceived threat to the network from excess exports just a few times a year.

So a number of the network businesses, the Australian National University, the Australian Renewable Energy Agency, the market bodies and Energy Consumers Australia together have been further developing this idea as a way to create a more flexible way of managing exports, that doesn’t involve the market and pricing.

We’ve had the regulatory response and the economist’s response. This, then, is the engineers’ response.

All of these responses could provide the benefit of allowing more Australians to continue adding solar to their rooftops and avoid wasting some of this energy at times when it could be useful.

Do you remember I asked you to keep an ear out for the deliberate mistake? How did you go?

It turns out it was the very first sentence I said after making that request…

“Our energy system has a problem with rooftop solar.”

I imagine most of you probably nodded along as I said this. You know about this problem and this way of thinking about it. This is our current paradigm – the problem as seen from the perspective of the system.

But here’s the thing. Millions of Australians who are generating solar electricity on their roof – to meet their own energy needs and exporting what they don’t need – see this as a helpful thing. A noble thing, even.
They don’t think this for no reason. Before we had market-based feed in tariffs, we rewarded solar exports at high, subsidised rates. We supported the highest rate of solar production per capita anywhere in the world, directly funded by consumers. Of this we can be rightly proud.

And then, all of a sudden, we want them to stop.

And we have three different, and somewhat bewildering “controls” to making them stop. Bewildering because mostly they are complex, and it isn’t easy to comprehend when they will apply and why. That is why we earlier this year we raised the need for building social licence for these controls, and we have seen the Australian Energy Market Operator (AEMO) move to market notifications as a first step.

Nor do these “controls” in themselves inform consumers what action they can take to avoid being adversely impacted. As the architects of these controls, we are courageously relying on a “market” coming into being that will support willing buyers and sellers of solar exports and resolving these choices for consumers. In this market, there will be many providers, including technology companies, installers, and intermediaries including retailers and aggregators.

We can go on with developing or implementing better safeguards, as we have been doing, so the system can operate with what we expect to be 6 million Australians with solar by 2030. Or we can turn what is now a negative into a positive, by offering a more desirable future.

We know that homes and small businesses will use more electricity not less, given the inevitable electrification of transport and heating, so it makes no sense to have the electricity generated by solar going to waste.

You may have also heard me say earlier that the “electricity generated by rooftop solar needs to be used or stored, to avoid the energy system problem.”

So it’s time that we set about solving how more electricity can be used during the day, and what is not used is stored.

This is a system challenge we face, even if solar was generated “in front of the meter.”

If we can shift all hot water heating and a significant proportion of electric vehicle charging to during the day, we can soak up what is currently excess solar.

Heating and cooling will continue to be in high demand when we are at home, simply because our housing is not insulated. The way to bridge the gap is storage. We are already seeing neighbourhood and shared stored options that are affordable and accessible for people with solar generation to bank their excess and use it later in the day.

But we ignore at or peril the need to reduce the overall level of heating and cooling demand, by retrofitting more than 8 million homes, with a priority of fixing rental and low-income properties.

Sounds simple. Except changing social practices is not easy – they exist for a reason. They are so embedded that they are likely to confound any attempts to use automation to “override” people’s choices.

We need to fill in those “we don’t know” spaces I shared earlier, through research.

A way forward

Social science research and collaboration is already playing a powerful role in this space and must continue to do so.

Together with Monash University, Ausgrid and Ausnet Services, we are partners in the $2.3 million Digital Energy Futures project. The project is generating new knowledge by employing digital ethnography and sociological theories to investigate how changing social practices will impact on electricity sector planning.

Australia is playing a major role in the International Energy Agency’s Technical Collaboration Program, through funding provided by ARENA to Monash University and the University of New South Wales, to undertake a research program on the social licence to automate. Energy Consumers Australia is hoping to continue to support this work, with the support of the Australian Government.

We are also collaborating with the ANU’s Battery Storage and Grid Integration Program, to support translational research into consumers and their role in the energy transition.

And, as the CRC RACE for 2030 moves to the next stage, we are seeing opportunities for consumer research as being central to their work.

Fully involving consumers in our research is hard but that is not why so many researchers don’t do it.

As thinkers and researchers we are not afraid of hard — we often gravitate to the big problems and challenges. After all, that is where the opportunity for maximum impact lies. But it’s also true that things that are messy and murky are confronting. Fierce as they are, we prefer to take on the monsters we can see with the tools we already have, rather than the mysterious dragons that lurk beyond the limits of our experience.
It’s not particularly helpful for me to sit here and lecture you all about engaging with consumers in a meaningful and ongoing way throughout your research and building our shared knowledge without offering a way of doing that.

A method of engaging with consumers that I think shows huge promise is the idea of Living Labs. They are in-the-field, real-life, well-supported experiments in changed ways of living over a few weeks or months. They are ways of learning about the extent to which people are prepared to modify their lives in response to a new product or service, and what the nature of those modifications can be and why.

Living labs are important for two reasons.

Often consumers cannot make decisions about alternative choices in the abstract, or on a cost-benefit analysis or in isolation. They need the lived experience.

Living labs also provide an opportunity to go beyond asking consumers what they think they might act, creating a situation in which they can co-design what they would do. It is also a safe space to experiment, to make a mistake, and try again.

In the UK, a living lab run by Energy Systems Catapult offers researchers, policy makers and other innovators the chance to design, test and refine their ideas in real-world consumer settings across 500 volunteer households.

For researchers and policy makers the offer is clear: Such labs allow householders or small businesses to try out new energy consuming practices, seeing how “adjacent practices” will be impacted, and then receiving help in reconfiguring those practices so that it becomes more viable to sustain those energy practices over time. It’s an opportunity to see if the dragons are friendly before sailing over the horizon.

In closing, my remarks today are as much a personal journey as they are a reflection on the state of research and how it supports the “peoples’ energy transition. My journey has taken me from finding fixes to problems, often with the best of intentions and often necessary, to visioning a future. A richer future that might be possible if we just lift our eyes for a moment and rechart our course in the direction of those scary dragon.

I am hopeful, and I know we can do it together, as many of us having been doing in recent years. Collaboration is hard, but very worthwhile because it has a better chance of succeeding in the mission. That mission is an energy future that is better than today. Better because energy is clean, it is abundant, it is affordable and we arrive together.

Thank you.

Should you have questions on this or any of our work at Energy Consumers Australia please reach out here and a member of our team will be in touch.

Comments are closed.