 Conference, it's great to be here. If I sag halfway through the presentation, it's because it's about a quarter to three in the morning where my brain is. So hopefully I'll sustain my concentration through the end of the presentation. I thought today, I'd start by focusing on what I wouldn't talk about. So I won't talk about the frustrations in Australia of changing climate policy. I think we're the only country in the world who introduced the emissions training scheme and then take it away again. And so for a decade we've had that kind of stop-start which has led to investment gridlock. We've had two years. We have a renewable energy scheme, but we've had two years now where virtually no large-scale projects have been built because we have chronic oversupply as incumbent generators wait to see what climate policy looks like and hopefully that their competitors get taken out so they can recover and make money. I won't talk about our gas market challenges we've developed. We look like being the largest LNG gas exporter in the world by 2020, which was really great until the bottom fell out of the gas market and we now have these oil index contracts to Asia which make delivering that gas along the eastern seaboard very challenging. I won't talk about the highest switching rates in the electricity market in the world. We have very well-trained consumers who are switching like crazy and it's both a great reflection of competitive markets but also a cost and an increasing challenge for the industry. So why I'm going to focus on something that's more interesting and relevant is there's a little story that's come out of Australia which is really intriguing about the disruption of solar PV. I put up there a map of Australia so we're quite clear what we're talking about here. Two words describe this country. It's hot and it's big and it's important. I put this up because I think people assume that when you electrify a developed country the whole thing gets electrified. So the green lines are the grid and as you can see about 85% of Australia has no electricity because no one lives there. So I got asked when I first put this up did something went wrong with the program? No, that's it. The grid just basically isn't there. What it means is and the grid that does run the Eastern Seaboard basically is the same distance as running from Paris to Moscow. So 20 million people on a grid that's the longest single interconnected grid in the world makes it actually a very challenging and relatively expensive thing to run. There's a smaller market over in Western Australia it's about six megawatts and again they have the challenges of being a relatively islanded economy. So this is one of the really big challenges in Australia is it's remote and we don't have the option of connecting into larger grids like at least you have here in Ireland. The other thing just to note of course is the coal gas story. The Eastern Seaboard is built on enormous banks of coal. Sydney's ringed. It's basically sits on a bowl of coal. So Sydney's ringed by coal mines. You don't see that on home and away neighbors but it is. The dots on the map are just interesting. So basically the roaring forties rip around the southern oceans and the 40th parallel runs pretty much through the middle of the gap between Tasmania and the mainland. So unsurprisingly the wind farms tend to be located towards the south of Australia picking up those very strong wind assets. The red dots are the planned large scale solar facilities. I say planned because we've virtually built none of them for reasons I'll discuss later. But what's interesting is what they work the utilities have worked out is that it's great to locate solar thermal facilities as far west as possible of the load centres because if you're smart you can get solar generating into the evening peaks. It's up to an hour gap there so it can be sunset in Sydney and you've still got solar farms potentially generating into those markets. Now again what's probably not well known is despite the frustrations we've had is that on a per capita basis Australia is actually doing quite well in overall renewables development. So it's a very, very energy intense economy with lots of metals processing but on a per capita basis we ranked about eighth in the world. And despite having almost no large scale solar generation we're a very strong country in solar generation and the reason for that is because of rooftop solar. So this is the graph showing the deploy of rooftop solar in Australia and what it shows you is we've gone from having about 692 households with solar panels on their roofs in 2005 to north of 1.4 million households having solar panels on their roof right now. And this has been a phenomenon which has shocked everybody including and especially the solar PV industry who in their wildest dreams never quite expected this to happen and have been surfing this extraordinary wave. Now what this has done, I'll talk about where it's come from but this has had a real impact on the way consumers and the market thinks about electricity which may help inform some of the discussion we have today about where it goes and what it looks like. Now just at the tail end of that graph this picks up the last few years and what it shows we're about 4.5 megawatts of capacity of solar PV. The red line shows you the average size of systems. So now approaching 5 kilowatts. Now even by neighbour's standards that's a very big roof and so we're clearly moving into the CNI market for solar PV. So the market is finding new growth as it expands beyond the residential sector. To give you some idea of what this looks like this is sort of a heat map if you like of Brisbane and what the colours show you is the pinker it gets is the more solar penetration. So the very pink part which is not in the posh inner city bits of Brisbane but in the sort of the mundane outer suburbs that's north of 40% of households now have solar PV. Now that comes, that's still the number. So when you actually get an aerial photograph and circle the houses that have solar panels it's every other house. So the network provider there has parts of Brisbane that are at 70% of dwellings with solar panels. So this phenomenon is not isolated it's now ubiquitous and it's across major cities and it's mainly in those parts of Australia that it's sort of non affluent suburbs but they are homeowners obviously. So why? So I would observe that when booms like this occur and they surprise everyone and with some sense in other research there's never one driver there's a coincidence of events that occur. And so I'm gonna walk you through what happened at the start of that boom. The first one and this is poorly understood was we had what we called a millennium drought in Australia running from basically the start of the millennium through to about 2009. Now that drought was extremely intense to the point where Australian cities were running out of water. So Melbourne approached 25% of storage levels at the bottom at the peak of the drought. What that meant was that basically households were put on incredibly strict water restrictions and their gardens began to die. So around this time they've been in drought for six weeks six years it's hot and it's dry and they're using buckets to keep their garden alive. This personalizes the issue of climate change and governments reacted that. So what do they do? In the absence of the government setting climate policy then state governments began to offer very generous feeding tariffs for solar panels. They thought they'd get a few hundred or thousand uptake so they offered quite generous feeding tariffs 25, 35, 40, 66 cents gross in some cases. So they thought well wins and votes and everyone think we're terrific. And then they misread the fact that the cost as Michael pointed out the cost of PV started falling dramatically. The two coincided and suddenly we had households virtually getting solar from near for the two year paybacks. It was a no brainer to stick solar on your roof and the market took off. The next issue was after that was we saw sharp increases in retail prices. So prices from 2009 to 2014 because of a regulatory period increased by between 70 and 100% in Australia. So consumers thought well power prices are going up indefinitely so the business case for this looks like it's just going to get better so it's a no brainer. The fourth point which is really interesting is that the engine room of this investment was retirees. So we have a mandatory pension scheme in Australia and no one saw this coming. A mandatory pension scheme in Australia introduced about mid 90s. And what it meant was that households that were approaching retirement in that around 2009 had balances of about $300,000 in their pension fund. And to qualify for the age pension you need to have cash balances of no more than about $270,000. So they were going to financial advisors and they said you need to spend smart to get down that $30,000. We recommend this and buy a large solar system because it goes on to your house and then it reduces a bill and it allows you to having the asset attached to your house excludes it from being considered as a cash asset. So this sort of timing point on our pension scheme was a really big driver of the scheme. And finally what we saw was that renewables policy because of the way we priced it priced the lowest cost renewables generation which in Australia is still wind farms. And so we saw no large scale solar but purely wind farms and rooftop solar. That's the damn storage levels I was talking about. You can see approaching 25%. It's really hard to capture. That was around the time of Al Gore's movie coming out. And a lot of people in Australia thought Al Gore changed the market. And I don't think Al Gore had anything to do with it. I think Australians were captured by the real terror of living in that sort of, that condition. And that's the snapshot of the electricity prices. That has a lot of fathers too but it's driven from blackouts that occurred in 2004 in the northern states which drove up reliability standards. It's driven by the funding, the increased cost of funding after the global financial crisis and by a lot of the government networks who deferred large investment in the grids until the point where they just had to be, they had to play catch up and it all happened at the wrong time. Now when you look at the international comparison on this Australia wins the gold, the silver and the bronze medal for rooftop solar. So South Australia is at 25% of all dwellings. So that includes flats and units, Queensland is second at 23% and Western Australia is around 18%. So even a state like Tasmania, which is down the south and is quite cloudy and much more like Ireland in its sort of weather patterns, everyone thought well that won't go solar for two reasons because there's not much solar, sunshine there and they use hydroelectricity so there's no incentive for consumers to get green energy. It made no difference. Consumers bought, got into the market late but they bought PV at the same rates as the major states. So what it sort of showed us is that consumers don't actually go into net present value when they consider technologies like solar panels, they just say I like it and if I can afford it, I'll buy it. So they, you know, and what someone observed that once the cost of the solar, the entry point of a solar system was below a credit card purchase, which is about $3,000 in Australia, they just started moving out the door in large numbers. Now what the effect of this has been is to being to hollow out demand but it hasn't solved peak demand. So if you look at that green curve which is the historic peak on a very, the very hot day on the 18th of January in 2010 that shows you a pre sort of solar hot day and as you'd expect, that's our summer, our peaks are mainly summer peaks in Australia. It's nicely curved in the evening that the peak wears off. The purple line underneath it is a reasonably hot day in March this year and what that shows you is the hollowing out of demand during the middle of the day and then in the evening, the evening peak is higher than the old peak as installation of air conditioners has increased. So the solar hasn't knocked out the evening peak, it's moved it to slightly later in the evening but it hasn't gone away. So the PV is hollowing out demand during the day but it's not solving the issue of peak demand. And this is the peak average demand ratio in Australia. You can see it's still going up during that period of solar installation. So this is the problem we have with solar. It is delivering emissions for electrons, it's saving households bills but it's not solving the challenge we have of finding off electrons on those warm and colds winter and summer evenings. And also the other problem with it is there's an implicit subsidy because we use volumetric charging in Australia and of course if you use less units of electricity which a solar household like my household does then you pay less for your electricity, you pay less for the network which transfers the cost of the network in those ancillary schemes onto households that don't have solar. So clearly this is driving the case for tariff reform in Australia. We missed it when we had the large air conditioner boom in the 90s where we saw a cross subsidy to air conditioner installs. We've seen it with PV. The risk is if we have other technologies like storage or others, there'll be other implicit subsidies and what we need to get to is clearly a cost-reflective tariff base which creates the right incentives for all these new technologies to deploy it the most efficient way they can. So what I'd observe running out of time very quickly is what we think this is, the way we would describe this is that there's now two markets for energy in Australia. There is this consumer market which sits sort of above the water line which is what households see. And they see that as PV. They see it as their billing system. If they bought an S thermostat if they buy a storage device, then that's really, and that's what they engage with and they think that's all that they need to worry about. You ask households with solar panels in Australia and they say, I've gone off the grid. I'm off the grid now. I don't use the grid anymore. I've got solar. We say, what do you do at night? I'm off the grid. So they tell themselves a narrative about what they want to believe which is what we all do as consumers with everything we choose and that's what they're doing with energy. Meanwhile, of course, that market is being supported underneath the water line by this enormous grid and network which consumers don't really want to know about or care about anymore than anyone in this room wants to think about the reinsurance industry and how that's going at the moment. There are many complex systems out there that are supporting our consumer markets that we just know exist and we don't want to worry about. Now, that's fine. We're seeing the major retailers now providing and selling these technologies to households that they're very interested in storage devices and sales for them. They're selling solar panels. But it does raise this issue of how that resolves itself. The other technology, which is, of course, the Powerwall, we describe as the most aerodynamic battery in the world, is, you know, I think the whole industry has been praying for 100 years for cost-effective, large-scale storage. It's the Da Vinci code of electricity. When and if we get it, it changes everything and certainly we think at the moment on our maths, a Powerwall going to the best conditions with a solar household in Australia with a very large system pays itself off in 18 years. So it doesn't make sense in our market, which is probably as good as you get on purely cost-reflective grounds. That doesn't mean we won't have tens or hundreds or thousands of Australian households buying Powerwalls because they like them because they're now operating in this consumer market and they buy stuff that they like. Finally, just this is household-password relationships. I think we need to put the energy market in context. So when I was a kid in the 80s and when most of us were around, you know, our parents, we had a very small number of relationships. We had a bank account, we had a utility bill, we had a council rates, notice maybe you don't have water rates here, it's a very sensitive subject apparently, but we had some health insurance and but we had a very small discrete number of relationships. Now, if you think over the last 20, 30 years how we've gradually accumulated more relationships, the first one was a video club membership which we've actually gotten rid of, but frequent fire accounts, iTunes accounts, retail loyalty schemes, pay TV accounts, online music, retail accounts, there are now 20, 30, I just picked up three last week, the council was in Australia, now required to have an app to pay for parking meters. So they didn't talk to each other so every council has a different app and so it's like rail gauges, you need multiple apps to park your car in Australia. So they are accumulating. Consumers see energy as a very much a negative and dated relationship and if they could get rid of that relationship and focus on the ones that are more interesting and more fun, then they would. So the risk is or the opportunity is that aggregation of these services and of these bills is the way of the future and so if you're not thinking about how you're going to either bundle electricity and energy with other services, then someone else may think about it for you. Thank you.