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Implementing Rewiring the nation. How do we future proof our networks - Environmental and social impacts
This article is part 5 of 5 in our current series on “Implementing Rewiring the nation. How do we future proof our networks?"
Considers the significant investment in infrastructure required and the potential environmental and social impacts that the energy transition may have.
The articles together seek to provide an overview of current thinking regarding the many challenges associated with the energy transition to a zero-carbon power system. It has been developed by reviewing a number of CIGRE Electra strategic articles that have been produced over the last twelve months together with a limited review of other associated articles. From this, five challenging areas have been identified as needing global attention.
They are:
- Reliability, security and resilience
- Standardisation and optimisation of supply chains
- Evolving Technologies
- Markets and Regulation
- Environmental and social impacts
The Challenge:
Affordability
Electricity is an essential product and as such, significant increases in its cost can have major political implications. Significant investments in infrastructure are required to enable the energy transition and these are likely to have an impact on consumer costs. Many countries subsidise the cost to reduce the impact on customers, however, this can distort economic signals and lead to lower efficiency. There are still approximately a billion people that do not have access to electricity. New infrastructure in these areas must deliver electricity at a competitive price to encourage users to move away from more polluting sources of energy such as burning wood.
Electricity demand is expected to increase significantly as other sectors such as transport electrify. This is likely to reinforce cost pressures and impact affordability.
When assessing affordability, it will be important to consider complete lifecycle costs. This may be difficult to assess due to relative inexperience with newer, cleaner technologies. We can also expect innovation to lead to changes in technology that will make some current technologies obsolete. This can include investments in new transmission lines which may not be needed if more economic large scale storage solutions are developed.
Equitability / Fairness
Applying traditional economic assessments of energy transition solutions may mean that some socio-economic demographics may not have access to the benefits of these solutions. For example, roof top solar in Australia is subsidised to the extent that we are world leaders in per capita installation of this form of generation[1]. However, there is no incentive for landlords to install solar as the tenants are the ones that pay for the electricity. Home owners therefore get the benefits of subsidised solar energy wheras tenants receive no subsidy.
Sustainability
Sustainability requires the optimum balance of environmental, social and economic outcomes. This requires extensive use of recycling as well as prudent use of resources to ensure that appropriate solutions can continue to be developed as needed. A continued focus on efficiency and reduction of waste will be essential. Ensuring that the necessary resources are available to all countries and not just focussed on the wealthy countries will also be a challenge.
Environmental impact
There is a tension between the need to drive the energy transition as fast as possible and the impact that the new technology may have on stakeholders. For example, the addition of new transmission lines can traditionally take up to ten years for all the necessary environmental assessments and stakeholder engagement processes. Speeding up this process may be difficult and may lead to increased costs such as those associated with an increase in HV cable solutions. Achieving social acceptance of the need to build new infrastructure will be critical.
Examples of actions underway
- Solar for public housing [2]
- Government backed residential BESS schemes (means tested)
- Government grants for remote and isolated communities
- Changes to regulatory requirements to ensure gaining social licence for a project carries greater weight in the investment testing
- Several CIGRE Working Groups are completing work in this area C3.16, C3.09, C3.22, C3.23 and C3.20
- Household Energy Upgrades Fund announced in the 2023 Federal Budget is providing $300m for energy performance upgrades to social housing [3]
Other possible Actions
- Improved Transmission Line Engagement and Approval Processes: obtaining approvals for transmission line developments is a very time consuming and costly endeavour. Delays in approval can delay the decarbonisation of the power sector. Further work is required to develop better approaches to engage with effected stakeholders and to provide better opportunities to mitigate or compensate stakeholders impacted by transmission line developments.[4]
[1] ELECTRA_322-virtual-power-plants-are-leveraging-australian-consumer-investment-in-rooftop-solar
[3] https://budget.gov.au/content/01-col-relief.htm#m2
[4] Federal government launches review of transmission line planning to ease community opposition - ABC News