 So, good afternoon, everyone. My name is Lachlan Blackhall, and on behalf of the Energy Change Institute, please allow me to welcome you to the webinar today. Firstly, please allow me to acknowledge the traditional custodians of the land on which we're meeting virtually today, the Ngunnawal people. We acknowledge and respect their continuing culture and contribution that they make to the life of this city and to this region, and we pay our respects to their elders past, present and emerging. For those of you who are joining an ECI event for the first time, please let me tell you a little bit about the Energy Change Institute based at the Australian National University. So ECI provides leadership in energy research, education and public policy, and covers the full gamut of energy topics. So it includes the science and engineering of energy generation, energy efficiency, all the way through energy economics, regulation, sociology and policy. So at the ANU, the ECI comprises about 300 staff and students across all seven colleges over the university, and we've got access to over $100 million in infrastructure and facilities and supported by a substantial amount of external grant funding. I think one of the defining points about the Energy Change Institute is that we're both technology and policy neutral, and so we undertake research and education to provide the basis for evidence-based decision-making across both technical, social and policy domains. So today we're very fortunate to have a fantastic speaker, Parish Yashanti, who's joining us from San Francisco. We're originally going to be hosting Parish on campus, but given the global disruptions caused by COVID-19, it's great that we're still able to host this event, but as a webinar. I'll introduce Parish formally in a minute, but just to let you all know, the format for the event today is that Parish is going to give a talk for about 40 minutes or so, and then we'll follow that up with Q&A. When it comes to questions, you can either write the question into the Q&A box accessible at the bottom of the screen, at the bottom of the Zoom screen, or you can use the raise hand feature, and I'll then bring together those questions that have been written and people have got their hand raised and direct them to Parish so that we can retain some order to how the questions are handled. I'd just like to note that while the event's only scheduled for one hour today, Parish is certainly happy for us to continue beyond the hour mark, so if there's people who need to head off after an hour, we'll certainly understand. So feel free to head off as you need, but please accept our thanks up front for your interest and attendance. So let's dive into this. Parish asked me to give a very short bio, and I'm sure that he will give us some further background about himself as we continue. But Parish's president of Menlo Energy Economics, a consulting firm based in San Francisco, California, he's got over 35 years of experience in the electric power sector. So he advises domestic and international clients on a variety of strategies to respond to the rapid transformation of the electric power business, including utilities. And we were fortunate in Australia to welcome him last year at the NEM 2025 summit held in Sydney to give a talk on his perspectives around the... Parish, I'll let you say anything further about yourself that you'd like to, but we welcome you to the webinar today and really look forward to your presentation over to you. Thank you very much. Can you hear me? Certainly can. I hope you can. Okay. Well, first and foremost, I hope you can see me on the screen. I have a flag of the two countries. Can everyone see that? And anyway, I'm going to forward the slides and questions. I guess we can have the questions at the end. I appreciate that. And I looked at the number of people registered and it's very impressive. So on that note, I want to thank Ken and Auckland and Lee and Paris to organize the webinar and also wish to thank everyone who expressed interest in attending the webinar. And the explanation, some of you might say, why this particular webinar with this title and so forth. And the reason, as Lachlan pointed out, is that I was supposed to give a in-person seminar on the 6th of April, but obviously that was canceled. But I was contacted by Ken and others suggesting that we turn it into a webinar so that I can speak with you remotely, which I'm very happy to do. So the question you might ask, the next question might be, well, why this particular topic? We're talking about variable generation and flexible demand and the focus on California and so forth. So let me give you a little bit of background and this will also explain a little bit of the motivation for me in personally doing this webinar. And that is the topic of the webinar today is actually the topic of the forthcoming book. It's number 13 in a series of books that I've done since 2006. And some of you may have seen some of these titles in the past. This is the first, I guess, eight or so volumes, which I'm not going to spend a lot of time on. But the more recent ones, which are these five, are perhaps more relevant to what we're talking about today. So the topics, as you can see, is distributed generation, the future of the industry, innovation at the grid's edge, the transformation of consumers into prosumers and prosumagers. And the latest volume that just came out in February of this year, hot off the press, is behind and beyond the meter, as you see on the bottom. So now I'm working on the next volume, which is variable generation, flexible demand. And the background and why this particular topic is of interest to me, and I think a lot of other people, is that if you go back to 2012, the California independent system operator, or CAISO as we call it, made a study and looked at the future of renewable generation on the California network. And they projected what they called the net load for the year 2020. And what they came up with is what you see on this graph. Perry, we might, I think we're having, people aren't seeing the slides advance. I'm not sure if you're seeing them advance on your screen. I do. So what, where are we? What is not advancing, because on my screen they do advance. We're still just on the why this webinar screen, from what we can see. On the which one? On the original, on the first slide, the why this webinar. Oh boy, okay, let me go back and see. Can you see the titles of the, the books and so forth? No. Okay, I see one, something flashing on the screen that says more. I don't know what that means. People are joining or what would you like me to do? I can, I can go back and try to forward again. Yeah. If you don't mind. Okay. Okay. So why this seminar? You see that? Yep. We see, you see what we see that ones. Could you see if you can just progress forward? Okay. Apologies all for the technical difficulties. Not at all. Do you see the next one says topic of forthcoming book? No, I don't think it's known from my end. Okay, then maybe either you or Harris can see if you can forward on your end. I'm not sure what else to do. That's all right. Let me, let me pull up the slides for you. I've got it here. If you need, I'll just need you to stop sharing your screen and I could share it from here. So again, do I need to un-share my screen? Yep. Yeah. How do I do that? It'll just be at the top of the screen. It should say stop sharing. Okay, stop sharing. Okay. He's on this. All right, I'll share now. Oh, okay. Is it okay to start with this one? The California duck. If that's what you're up to. Far away. And if you can just, if you can tell us when you want the next slide, we'll be out of hands for you. I'll tell you next. Okay, so let me just repeat what I was, when I was describing this. And for those of you who are not familiar, back in 2012, the California Independent System Operator, or KISO, did a study of what they called the net load on their network, projecting what that might look like to the year 2020. And the result is the so-called duck curve, because it looks like a duck, as you can see on this chart. And what it shows is that as the years progresses, you can see from 2012, which was the actual, and then the next ones are all projected. The belly of the duck keeps getting bigger and bigger, while the neck gets sharper and, I guess, moves further into the evening hours. And so they were very alarmed by this development, and particularly what they call the evening ramp, which is what you need to get to the neck of the duck curve from the belly of the curve. And so they said, if everything goes as currently planned in California, with addition of a lot of solar in particular, that this is what the net load is going to look like by 2020, and you can see on this graph, the most alarming, of course, is the fact that the evening ramp is about 13 gigawatts that you have to manage in a three-hour window. Next slide. So what happened is obviously this was stunning, but what has happened in the interim, you know, we're now in 2020, and what happened is that the ramp, which was projected for 2020, in fact, a bigger ramp, has already been experienced. We had a ramp of about 16 gigawatts in 2019. And the 2020 belly of the duck actually occurred in 2016. And so forth and so on. As you can see on this slide, we've had issues of increasing curtailment of renewables, more frequent hours of negative prices, the fact that we don't have enough storage and not enough capacity to export imports, so forth and so on. Next slide. This one I got from California ISO, this was a presentation that was made in, I think, later towards the end of 2019, and it shows the actual ramp for a January in 2019. Actually, I think it was first of January 2019, as you can see, which is not a heavy load kind of a day because it's winter and there's no air conditioning load in California. But nevertheless, you see that ISO essentially has to prepare for that evening ramp, starting at about 2.30 p.m., because January for us, of course, is winter, short days and early sunset. So starting at about 2.30, ISO has to begin to prepare for that evening ramp and the fact that all that solar generation disappears. And you can see what happens in that three hour window. The renewables goes from 11% to zero, and you have to compensate for that by generating more gas fire generation, also bringing more imports from out of state. Next slide. But according to the same study, if you fast forward to 2030, this is what you're going to see. In other words, the ramp is projected to be about 25 gigawatts, and you see the window. In other words, if that orange portion, which is all solar generation, that comes and that goes, and when it disappears, you have to make it up somehow. So ISO keeps projecting ahead, and California keeps putting more solar and wind and so forth on the network. And of course, this problem of the gut curve keeps getting progressively more challenging to manage for a variety of reasons. Next slide. And the reason for being concerned, among others, one is that California on many days depends on solar generation for a significant portion of its generation. You can see some typical days. This is for 2019, an actual week, again, in January. So on some days, solar production represents 71% of what is feeding the network. So when the sun goes away, or if you have two or three days where there's no sunshine, you have a lot of deficit that you need to pick up, and that's what's shown in this slide. Next one, please. Anyway, you probably familiar anyone who looks at these kinds of variations in demand is familiar with these kinds of charts. And again, you see on a typical solar day, you see the orange portion being prominent, and then on the right-hand side, you see days where there's mostly cloudy or very little sun, and you can see that the yellow portion is almost non-existent. So this is among the other issues. What do you do if you have a whole week of virtually no sunshine, and then you have other weeks where 70% of your generation during certain hours could come from solar generation? Next slide. OK, so a couple of examples, again, showing the same thing. This shows variations as a percentage of average curtailed renewable. These are gigawatt hours per day, and you can see that in 2019, there were days that we were wasting 5 gigawatt hours per day in the spring because there was just too much solar generation and not enough demand. So this obviously is an issue of concern, and particularly happens in spring and to a lesser extent in the fall, where sunshine could be quite brilliant, if you will, and load could be quite low because there's little air conditioning load. Next slide. Here's another chart showing examples of how much renewable was curtailed in California in several years. Data for this year is the chart in the black, and you can see we only have data for the first few months of the year. But it looks like this year is going to be worse than all the previous years for which we have data available. Next slide. And this is from another study, basically shows where in the US, we have been experiencing negative prices. And you can see the dots are mostly in California, but even more so in Texas. And the reason for Texas, of course, is they have a lot of wind in parts of the state where there's no load and there's shortage of transmission to move that to the load center. So you end up with negative prices, which I guess most people are familiar with. And the next slide also shows the incidence of the, this one shows the curtailment as a percent of load in a given year. And you can see the trend for California, which this chart only goes through 2018, where California was about a little over 1% for Texas. It's already about 6% or 7%. And in both cases, it's getting worse as time goes on. So curtailment becomes an issue. And it's an issue because, particularly in California, where we're trying to reach carbon neutrality by 2045, the last thing you want is to have lots of solar but not be able to utilize it. Because when you cannot absorb the solar, it generally means that you have to fire up peaking gas plants, which are not helpful with your climate targets. The next slide gives you an example, I should say, a sample of the penetration of solar in the top five states in the US. And you can see that it varies quite a bit. The average for the US is very small. But states like California, Nevada, Hawaii, and so forth are already in double digits. And these numbers keep getting bigger as the years go by. So these are some of the obvious problems that the duck curve produces and generates. If you go to the next slide, this is a slide that I copied from a presentation from that same conference that I was attending in Sydney in November. And this is from Jenny Ries at AEMO. And she showed us something that looks very, very similar to a duck curve for South Australia. So the point I'm trying to make is this problem of having or dealing with variable generation is now not just the California phenomenon but is appearing in markets all over the world where renewables are a significant portion of generation. As shown in the next slide, for Italy, and this slide I copied from Turna, which is the grid operator for Italy. And they project, again, a different version of the duck curve for year 2030 for Italy. Next slide. So having presented the problem, I want to kind of review what are the different aspects of the problem. And the most obvious, which I think I explained reasonably well, is the daily cycles, which are challenging. In other words, you have to ramp down, ramp down all thermal generation in the morning when the sun rises and then ramp up in the evening. The seasonal cycles I'll describe in a minute, that's far more challenging. I call it daunting. Then you have this issue of over generation. There are days where you have more generation than you have load, and you have to do something about it. And when you have over generation, of course, you get negative prices. You get into a situation where you have to curtail the renewables. And then there are problems with grid reliability, what happens in a week where you have no sunshine in a system where you get used to having quite a bit of sun in the network. Price responsive demand or demand response is very interesting, which is one of the things that is covered in the book. But this is not happening fast enough, and I'll talk about that. And frankly, one of the issues that perhaps is only happening in California is that because of the climate targets, which I mentioned, regulators and policymakers in California essentially would like to see all the gas peakers to be eventually phased out. So you can imagine meeting that ramp in the evening without gas peakers. That's going to be far more difficult than it is today. Next slide. So having described the problem, what are some of the solutions? Well, there's a number of options, and here's a list of what you can do. You can have more flexible generation. If regulation allows that, you can have more storage. You can build more transmission lines. But the focus, which I'm going to get into in a minute, is what about flexible demand? What if we have more flexible demand that can respond to price signals and to the variability in generation? And to give you an example of all the things that California ISO is doing, if you go to the next slide, one of the things they're trying very hard is to expand the geographic footprint of California ISO. The ISO consists of that kind of orangish color in California and all the other areas that are outside California, including portions in Arizona, Nevada, and so forth, and to the north. All the way to British Columbia, you can see there are utilities in those areas that have agreed to participate in something that is called energy imbalance market. So utilities, even though they're not members of California ISO, utilities in this broader region have agreed to help California deal with its imbalance issue by trading all kinds of energy in the day off and the head market, basically. So this is one of the ways that we can deal with some of that variability. But if you go to the next slide, I want to emphasize again the challenge. There's two different challenges. This chart, by the way, is from a study that was done for the European Union. And it's looking at the year 2050 hypothetical scenario. But again, it shows the daily variations in solar generation from day to day. And what it shows is you basically have to have like 345 gigawatt hours in mid-sunny hours of the day that somehow you have to store and shift to somewhere else for the day to make it through the day. So again, the chart for Europe, for this hypothetical future, it also shows why it's so difficult to manage these ramps, if you will. The next slide shows what you can do with those ramps. On a daily basis, basically, you can shave off the peak, move it by having storage and demand response. If you can shift some of the load or generation, say, two to five hours, you can address some of that ramping that I showed you in the previous chart. But if you go to the next slide, it shows, again, this is back in Europe for the study that I mentioned. This is for Europe as a continent, looking at year 2050, looking at the policies in place for the year 2050, assuming that Europe can meet those targets. And you can see that you have excess energy, the red bars. And then you have deficits, the blue bars. And the problem here is that you're talking about three or four months in some cases and or longer. You have to store the energy in one season and move it or shift it two, three, four, five months later and then use it up, which is not a technology we have today. Maybe a lot of researchers at A&U are looking at these types of challenges. So in this particular chart, it says 25,000 gigawatts of storage will be required according to this particular study. Next chart shows what you can do with that, the daily cycles versus the seasonal cycles. The daily cycle may be something like 350 gigawatt hours, which you can do with batteries, pump hydro, demand, response, and so forth. But the seasonal cycle is far more challenging. We're talking something of the order of 25 gigawatt hours, which is very difficult to move around. So you need entirely new technologies like green hydrogen and things of that nature, which we currently do not have. Next slide shows what we have today, which is limited storage capacity. It tends to be expensive. It's very well suited for short variations, but not for seasonal cycles. And of course, the next slide shows what a lot of customers in California have. They buy these Tesla power packs and put them in the garage like you see in this photo. And this is helpful during emergencies when you have forest fires and so forth. You can store the energy and survive through it two or three days of no service, if you will. But obviously, again, this is not something you can do for inter-seasonal variations. So if you move to the next slide, and I'm mindful of the time, is sort of get back to where I started. And that is the topic of, what about demand response? Why aren't we using more of the flexibility in customer demand? And when you ask people in the industry why we don't do more of this, historically, there were basically three excuses, if you will. First, you would hear people say, well, we don't have smart meters. We don't have smart prices. And for demand response to be done on a large scale, you need smart devices delivering smart crisis delivering messages to smart devices. And therefore, you generate smart, which is flexible demand. Many of those problems have been resolved in many parts of the world. In California, for example, smart meters almost can be found on every home. And we have time of use prices. And there's some advances in making smart connected devices talk back and forth. But when you talk to people in the business of delivering demand response, they would tell you that we need massive scale for this to be profitable. There are the issues like transaction costs. In some countries, they tell you that there's privacy issues and so forth and so on. So a lot of people I talked to in California and elsewhere, they say that these things are kind of interesting, but they may not pan out. In other words, one person I talked to in this field basically said that behind the meter, trying to manage behind-the-meter assets is for the birds or something to that effect. So the next slide basically is what I'm trying to cover in the book that I mentioned, the book number 13, which is under preparation as we speak. And if anyone in the audience is particularly keen to contribute, I'd be more than happy to listen from you or hear from you. The questions to address are posed here. What is flexible demand? I think we all know what that is. The reverse of that question is what demand is flexible. The answer is almost all customer demand has some inherent flexibility, not every device has to be on 24-7 all the time running full glass. So that's what I mean by the second bullet. But how much there is and where can it be found and how can we aggregate it and develop it on scale so that it's profitable, so that it's reliable, that we can deliver it to the grid operators such as California, ISO, or AEMO in South Australia, those are still questions that haven't been totally resolved. Next slide. So this one is super advanced technology. It's just the electric water here. I just found one of these pictures and for no particular reason. So electric water heaters have been used for many years. You don't have to heat up the water when prices are high and peak demand occurs. You can heat up the water and store it and basically avoid those difficult periods. And that is shown on the next slide. This is charts and I don't see if you can see very well. It shows historical patterns from 1967 and more or less to present. And you can see the shape of the daily load curve in France has been altered because millions of electric water heaters in France are now on a time of use tariff where they avoid heating up during peak demand hours. So obviously this is a simple and not technically challenging technology that has been around and I believe has been widely used in Australia as well. The next slide is an example of flexible demand from industrial customers. And this is for ERCOT market in Texas. And you can see as prices jump up and down, you can send signals to industrial customers requesting that they respond. And if they do, they get rewarded and everybody's happy. Next slide shows a study that was done by the Brattle Group, a consulting firm. Actually one of their offices is here in San Francisco. They did a study for the US, a hypothetical study, you might say. But the broad conclusion they reached is that for the big network like US, if it was all one grid, which it obviously is not. And if it had a coincident peak, which it does not have. But if you set those problems aside, the conclusion was that nearly 200 gigawatts, roughly 20% of US peak demand has some flexibility. Now that is the fine print. You have to read the report to figure out how they came up with the 200 gigawatt. How much of it we can do today versus how much of it we need more modern technology and better prices and better policy and better regulation, better communication and more trust with customers and all kinds of things to develop. So this is by no means a done deal, but you can see an example of what can be done if we really put our energy and mind into it. So the next slide, I just want to briefly mention I was in a symposium covering these topics in Florence in mid-February. And there was a panel where we invited those four companies that are highlighted here to explain how they actually practice the art of creating flexible demand from customers. And the first one was a presentation from NLX, which I believe is also active in Australia. And they gave several examples, one of which I thought was really interesting. They talked about Kimberley Clark, which is a paper and pulp manufacturing facility. I don't know where exactly this particular facility was, but when they talked initially with a customer who has 70 megawatts of load, initially the manager of the plant said that of that 7 megawatts, only half a megawatt was flexible and he could participate in demand response, but not more than that. So NLX started with that, but after they developed protocols and developed some trust and communication with the company, they found that ultimately something like 5.3 megawatts of this facility's load was, in fact, flexible. So the gentleman from NLX that made the presentation basically described to get from the 0.5 megawatts to 5.3 megawatts takes a lot of doing. It's not trivial. You can't just call up a customer and say, I have one flexible demand. And they say, come and get it. It's far more complicated than time consuming and so forth and so on. There were a couple of the examples. I'm not going to dwell on it because of time, but let's just move on to the next slide. This is from the presentation from NLX. And you can see that they are a global player and they claim to have a total of 6.3 gigawatts of flexible demand already developed across all these clients across the world. And you need 15,000 sites or participants in the program to add up to 6.3 gigawatts. So it's obviously not a trivial thing to do. Next slide is an example from a company you might have not heard about. It's called Voltalis. It's a Paris-based startup that uses smart communication to adjust thermostats on electric water heaters in France. And all I'm saying is that basically the three boxes is what it takes. You have some means of communication, which is the smart box. You need some platform. And then you need algorithms to crunch out the numbers to get results. But the next slide essentially shows what Voltalis can do. Basically, the grid operator in France sends a signal and Voltalis can adjust. I think they claim a million electric water heaters so they can drop the thermostats or shut them down for a given period of time. And they can deliver, I've forgotten the number, but I think it's like 300 or 400 megawatts of more or less instantaneous demand can be delivered. So these are examples of what can be done. And the next slide is a presentation that may be difficult to follow. But basically, when you approach an industrial customer, such as Kimberly Clark, and you say, I want to help you manage your load better, you immediately confront this task of, what is it you're going to minimize? Are you going to minimize the electricity cost? Are you going to minimize the staff cost? Are you going to minimize storage cost or all of the buff or some total of the buff or some combination of the buff? So obviously, customers are interested in reducing their electric bills, but they also have to be mindful that they have operations to do and have critical loads. So it's not so simple to go there and just shut down certain devices at certain times. And this is illustrated in the next two slides. Next one, again, shows the process that you have to go with a major industrial or large commercial outfit. You have to model the process. You have to optimize what they use, look at their schedules, what time do the workers show up and what are the shifts and where is the flexibility and go back and forth until you get it right. And the next slide essentially shows that this is what they started. This particular organization was just scheduled things kind of nice from 8 to 5 kind of thing, flat during all hours of the day. And the next slide shows that after you do the analysis, if we can move to the next slide, you basically avoid certain expensive periods and you reshuffle activities within the industrial process to be able to deliver essential services but at much lower cost. So these are examples of what at least I learned talking to some of the companies that are actually trying to deliver flexible demand. And if you go to the last slide of the day and I'm going to spend a quick minute on this to kind of wrap up and then happy to take any questions. But I think it goes, if I were to summarize everything I said, I would say first and foremost variable renewable generation is on the rise in many markets in America and Europe and Australia and so forth. And as I showed you in the early part of the presentation, balancing supply and demand is already a challenge and will become more so as time goes on. There are, however, multiple options. And I showed you what some of those options are, but none of them is a silver bullet. You cannot solve the variability of renewable generation with any single bullet. So what is the bottom line? I think the bottom line for us to perhaps wrap up this webinar is to remind ourselves how we started this business historically and what I think the future holds. Historically, and I used to work for one of these utilities in the US back in the late 1970s and early 1980s. In those days, if you were in the utility business, you would forecast the load for the next day or week or month or summer, and you would dispatch generation, all of which was thermal and dispatchable. In the future, we will increasingly be confronted with a situation where a big chunk of the generation comes from renewable resources and therefore is not dispatchable. You cannot dispatch wind or sun, for example. Therefore, that historical mindset needs to fundamentally change, and that's what the last bullet says. We have to, I think, begin to forecast how much generation we're going to have and essentially dispatch the load to match it. So with that, I'm going to stop, and I don't know how Lachlan is going to handle the Q&A, but hopefully I can hear the questions and happy to answer any questions you might have. Thanks, Perry. That was fantastic. I think, certainly, a very interesting talk in the context of what's going on here in Australia as well, and many of the topics you covered will be well-known by those on the call because they're also the questions that are being asked here in the Australian context. So I might just pick up on a couple of the questions that were asked in the chat to get us started. And then for others, if you've got questions, either type them into the chat or type them into the dedicated Q&A box or if you raise your hand, we'll go around that way. So I think, sort of kicking off with a question that Matt Stocks asked, he was, I think he would have been reflecting on the curtailment slide. He asked, you know, isn't it okay to simply throw away some energy? Is it okay to throw away some energy? Yeah, because, you know, the slide showed that you were talking about curtailment that was probably, you know, I think, between 1.2 to 1.8% of, you know, of total. You know, is it okay to use that curtailment as a form of flexibility? And if not, why not? No, definitely. But it's kind of a last resort. And let me add a couple of things. First of all, in 2018, that chart only showed the 2018. In 2019, if I recall, it was like 3%. And within a few years, it's projected to be in double digits. So they asked this question from someone at California ISO. And his answer was, if it's in single digits, you can probably get away with it. But if it gets into double digits, you know, a lot of people are going to say, why are we investing in all this, you know, solar or wind or whatever, and not utilizing it fully? Obviously, you know, the policymakers didn't think this through. And it's true. It's a difficult question to answer. Why are we wasting, quote unquote? I sympathize. I mean, your point is well taken. And solar energy in the middle of the day, on a spring day in California, is, you know, worthless. So if you curtail a little, so what? I mean, I fully understand that. But at the same time, you know, if you're investing billions of dollars in capital to develop the solar resource, then ideally you want to use it or store it or be able to import and export it and so forth. So I don't know if that answers the question, but it is a problem. Thanks for that. I look, one more question that I'll ask on behalf of Darryl Camel, he's asked the question of, you know, what do you think that AEMO, so the Australian Energy Market Operator, can learn from Kaizo with regards to wholesale demand response? Well, I think there's a lot we can learn from each other. I don't think it's a matter of, you know, Kaizo learning from AEMO and vice versa. I think it's very fortunate that AEMO is headed by Audrey, who has a lot of experience from working in New York at PJM and so forth. So I think it's good to have that kind of cross-ferralization. I think it's nice to visit, share problems and solutions and maybe brainstorm together because as you mentioned, Lachlan, I think it's fair to say that great operators, whether they're in Australia or Germany or Italy or California, they are facing rather similar issues and it's becoming urgent. And therefore, if AEMO has a good solution that people at California and California I so have not thought about, why not? Why not share that and vice versa? So again, I don't know if I answered that question, but I wouldn't necessarily say that AEMO can necessarily learn a lot from Kaizo, but why not try it? If those kinds of interactions haven't taken place, I think it would be wise to do so. Maybe set up some, maybe set up a webinar where experts on both sides can discuss the challenges. Absolutely. Daryl, I'll just open your mic if there's any further clarification you wanted to make about that question. Hi, hello. Can you hear my voice? Okay. Yes. Yes. So as I understand that Kaizo has already implemented the host of the MataSpawn a long time ago and AEMO just arranging the regulation and about DC, I guess, we're about to launch the program probably next year too. From what I understand that AEMO still implement the host of the MataSpawn for large customers and what do you think that is the best that we can learn from Kaizo about that? What is it that we can learn? Is that what you said? Yeah. Well, California, I'm not a super expert on this, but among the great operators in North America doesn't have one of the best track records in developing or implementing demand response and there are a number of reasons for that. PJM at one time was considered a much better model and now probably another of these organized markets may have a better idea. But there's a lot of institutional issues and policy and regulatory issues that prevents effective demand response from participating in wholesale markets. And California ISO is one of the worst as far as I understand in terms of the percentage of flexible demand that they can actually reliably manage. And maybe part of that is that they just do not trust people who say they have demand response. So maybe they'd rather be on the safe side and only do things that they think is 100% reliable. So this is a major issue. I think one of the key words that I put in some of my slides is reliability. You want pilot programs and so forth to test that what somebody says, whether it's a load aggregator or a company like NLX or Baltalis, you want to make sure that if they say they can deliver 400 megawatts of flexible demand with five minute advance warning, you want to be sure that when the time comes and you give them five minute notice, they can in fact deliver 400 megawatts of demand response. So a lot of grid operators are in a position where they're reluctant to accept or utilize some of this flexibility just because they're not 100% sure that it's gonna be there when they need it. I don't know if they answer your question but it's a very interesting and difficult question to deal with. Thanks, Perry. We've got a question now from Glenn Tari. Glenn, I'll hand over to you to ask the question. Okay, the question is around how we make the emergency response to instability, whether we can do remote control in your opinion of devices that might otherwise not be automatically included to increase the ability to control household devices. I'm not talking about industrial, I'm talking about household. Right. Well, this is the topic of several chapters in the book that I'm editing. On the one hand, you read a lot about digitalization. You read a lot about smart devices that can respond to price signals. And you read a lot about software and artificial intelligence and smart aggregators who can put portfolio of small loads together and manage them remotely and monitor them and so forth. There's tremendous excitement in all of these things, but again, we are at the very early stages of developing and delivering small scale demand flexibility, particularly in the residential and small commercial sector. And that's where a lot of the challenge is because the industrial sector, by and large, already participates in these things because the savings are significant. But a small residential consumer or a small commercial consumer is unlikely to be terribly excited about participating in a program where the dishwasher can be adjusted by a few minutes here and there or for a hot water electric heater can be adjusted because the savings are small. And so this is the $64,000 question. A lot of people think that maybe 10, 15 years from now, we look back and say, problem solved. But we're not quite there yet. Thanks, Barry. Peter, a question from Peter Dobney. Peter, you're on the air. Hi, Perry. Yeah, just you may recall that Aurora, the company I work for, was done two significant power purchase agreements, one in Victoria and one in South Australia. The one in Victoria, the wind farm is actually being, commissioning is being delayed by AEMO. And there's a number of others in Victoria that are also being delayed by AEMO. And I think this is going to work against further investment in renewables in Australia. The delays are long. And part of the problem is that AEMO doesn't actually let participants know where they sit in the queue until where new wind farms and solar farms are going to be built until they start commissioning the plant, you know? And this can lead to bad decisions in where to locate these facilities and also leads to financial pain for the investors. And in South Australia, where we are dealing with an existing wind farm, South Australia's actually renewables are being curtailed significantly like you were saying in Texas. And that's also a financial problem that these investors have to put up with. And I think it's going to discourage a lot more investment in renewables. Your thoughts? Well, first of all, Peter, good to hear from you. And that's one reason. I think you should delay your retirement. I think you should hang around and solve some of these problems. You know, we need people with your kind of experience to help us through these difficult times. But the general comment back, I don't know about the details of the projects you're mentioning, but when at the symposium in Florence where we had several of these major players, when the question was asked, what is the biggest obstacle preventing you from expanding and increasing your scale and, excuse me, increasing your sales, the single biggest challenge that everybody mentioned was regulatory delays uncertainty, lack of clarity. You know, as an example, until a few years ago, storage and demand response was essentially forbidden to bid into many of the organized markets in North America. And it took lawsuits and a lot of work and effort to convince the regulator at FERC, which is our super regulator, to change the regulation allowing demand response and storage to actively participate in the market. But if you talk to the players, they will still tell you that they're years from actually getting a fair treatment. And all the reasons you mentioned, there's delays, there's ambiguity, so forth and so on. So these things are not gonna get resolved over time, but once the initial message gets through to the regulators, that this is in fact the stumbling block, that this in fact is the obstacle that prevents more active participation of customers and demand response in the markets. And what are the savings that we're missing because of these delays and lack of clarity and so forth and so on? I think that would hopefully lead to regulators making the advancements and making the moves that are necessary. Thanks, Perry. I'll pick up a question now from the chat from Savannah McGurk. Question is, couldn't large-scale pumped hydro like the proposed snowy 2.0 scheme in Australia be used to store energy for many months? So really getting to the question of seasonal storage. Pumped hydro, as I mentioned, is one of the few proven, you might say, cost-effective depending on where you are, technology is available. So California, for example, we have developed to the extent that we can. You need elevation, you need reservoir at the top, reservoir on the bottom and so forth and so on. So it's not something you can do everywhere and anywhere in some countries like Germany. There's just not enough elevation difference from... Unless you do it. So there's some countries you cannot do it in mountainous countries with a lot of resources, maybe someplace like Tasmania is probably good for that and so forth. So it only goes so far. So California, unfortunately, has limited capacity. I don't think I've seen any proposals to expand that. Now, whether the Australian case makes sense, I've seen some pros and cons for the snowy, you know, being expanded and so forth. I don't know enough to actually tell you whether that does make good economic sense, but pumped hydro is a godsend if you have it and it's reasonable, it's the right place and there's no major opposition to developing it and so forth, more power to you. I can't think of anything else in the next 10 or 15 years that would probably match in terms of scale and cost, cost-effectiveness that is to pump hydro. So countries that are blessed with variations in elevation I think are blessed and they should take advantage of that. Yeah, and probably worth sort of making a shout out to Andrew Blakers and Matt Stokes, colleagues of ours at ANU who've done extensive analysis of pumped hydro in the Australian context. So certainly look them up through the ECI website. We've got another question here from Mark Grenning. Mark, I've just unmuted you. Hi, Mark. Mark, you may need to unmute yourself actually now. Okay, can you hear me now, Lachlan? We can. Okay, I think I've got my Energy Users Association hat on today, Perry, so I'd just like to give a couple of perspectives and then invite your comment on the way our members see demand response. Demand response has been a large part of a number of PPAs for many years in Australia. It's a simple thing where a smelter does a contract with a retailer and says, I'll agree to cut off my demand by X megawatts an hour for Y minutes Z times a year and they get a dollar a megawatt hour less in their price for all the year for doing that. The barrier to the expansion of that has been the perception by large users that the retailer is taking all the benefit and they're only getting a little bit of it. And so that's why the perception of a mismatch of who's benefiting from that because the retailer is selling that demand response for a market price cap of $14,500 or $15,000 and the large user is only getting a small percentage of that. Now that mismatch is being addressed through the AEMC work on the two-sided market which we strongly support. So we're looking forward to getting a two-sided market where demand response can be bid in just as generators can bid in and the providers of that demand response get an adequate recompense for that. Two comments on that one is that our members really wanna be in that. A lot of people say, oh, demand response is easy. It is not easy. It is very hard for manufacturing and minerals processing businesses to get used to cutting back on demand in a process that they're used to running stably 24 seven or something like that. And they need to be assured that the benefit's gonna be worth it. Final point before I invite your comment is we're getting into a difficult situation for those potential providers of demand response in Australia because AEMO and Coag Energy Ministers are expanding. They've just made a decision to Institute of Strategic Reserve. They're expanding RERT. I think you understand what RERT is in Australia. They're out of market provision of demand response for generation. That is a lot more expensive than in market provision and the problem and the concern we have is that those markets are depriving the in-market demand response market of potential volume. Those people think they can get paid more by the out-of-market reserves model. Thanks. Bye. Thank you, Mark. I think a lot of what you mentioned is peculiarities of the Australian market with which I'm not intimately familiar but I think I generally get the sense of it. I think the bottom line is this. I think as former, one of the former chair of FERC who's now retired and so forth, guy by the name of John Wellinghoff, used to say when he was head of there, he basically said whoever can do the job, the fastest and the cheapest should get the bit. In a fair market, you should set up the rules so that small and big, demand response, peak peakers, flywheels, snowy hydro, whoever, it doesn't matter, whoever can get the job done faster, cheaper, better should get the bit. And so I think what you're saying is we're at the stage we're trying to figure out exactly who has the cheapest resource and when it comes to demand, bidding against generation, we were sometimes in storage, which is sometimes caught in the middle. We still haven't figured it out. So your point is well taken. I think we need to think through these issues carefully and fairly and come up with solutions that everybody can agree to and it's fair and reasonable. And hopefully as new technologies develops, we introduce them to the market. But I think the bottom line is people should get paid for what they do and the cheapest resource should be the first to get dispatched, just as we do with the merit order of generators. Thanks, Perry. I think sort of a related question to that which has come up from a couple of people is could you maybe just comment on the role that electric vehicles might play in sort of meeting reliability and providing stability services to the grid, probably both in kind of the US context but also in the Australian context, obviously. Well, that's a fantastic question. I was hopeful someone would ask, you know, electric vehicles are next to the pump hydro I think is probably the biggest, probably will give you the biggest bank for the buck. And to give you an example, in California context, you know, we are planning to have at least 5 million by 2030. And I've seen some studies, now this is before the virus came and everything stopped and Tesla shut down this factory. But prior to that, some people were projecting that we would actually overshoot that target and maybe as many as 7 million. So let's say we have 5 million EVs, which is California roughly is half of all EVs in America. And one of the studies I saw, and I can't think of it exactly where it came about, but basically said by 2030, US the aggregate storage capacity of electric vehicles on American roads would be something like 26 gigawatts. And roughly half of that will probably be in California. So we're talking about 13 gigawatts. So the evening ramp, which I talked about, at least half of the 25 gigawatt ramp could potentially be just solved by the electric vehicles charging and potentially discharging. So the electric, the grid to vehicle and vehicle to grid, once that technology takes off, and which I think it will eventually. And the beauty of electric vehicles is that they are generation and their storage and they can move. So it's, frankly, they just offer incredible flexibility like no other technology in the size of these, you know, an average Tesla can, for the average person in a city environment, you know, 80%, 90% of the storage in the battery is not used and utilized all the time, which means that it's available as a storage device for balancing the grid. So again, I'm rambling on. It's just an amazing, it's an amazing technology offers huge potential. So people in California are very excited. It's one of the few things that we have to do aside from decarbonizing the electricity generation, we have to de-fossilize, you know, the transport sector, which is the biggest source of emissions. As you probably know, in California, transport produces twice as much greenhouse gases as the electric power sector. An electric power sector will within 10 or 15 years, the emissions from the power sector would be next to nothing. So electric transport is critical for a number of reasons, one of which is the fact that you can use the storage capacity of the vehicles to balance the load. So we'll be asked that question. Thank you, that's a good one. Thanks for that. There's a question here from Simon Coburn and Simon, I might take the liberty of kind of expanding it out a bit, but the question is, you know, is it realistic to expect California's competitive and regulated market? And I would expand that to competitive and regulated markets everywhere to produce a net zero carbon solution in the available time. Simon asks, so do we need a system architect? So the question is, can we truly get to net zero for the grid or for the state or both? Simon, I might open your mic if you'd like to clarify that. Yes, hi, this is Simon Coburn. What I mean is, can we rely on a market mechanism to achieve zero carbon fast enough for, or do you think based on all your experience that we actually need an architect, which is sort of counter market, a solution architect, a system architect to describe a system that can achieve zero carbon and then let the market run at it. That makes sense? Okay, I need to think about this. I'm not 100% sure what you mean by the architect, but I think at least the experience in California, as you recall, California opened its market both generation and retail back in 1998 and collapsed two or three years after. So the regulators and policymakers in California are very skeptical of trusting markets totally. So we live in a kind of a hybrid where markets do certain things but it's still very much a command and control environment. So the state, for example, has a carbon neutral to the entire state by 2045. But to achieve that, we have a huge number of specific goals and targets and mandates and regulation and so forth. So the markets actually do a very small, for example, we have a cap and trade system in California, but that probably would deliver maybe 25% of the carbon reduction. The other 75% will be handled through command and control, regulation, policy standards, efficiency standards, so forth and so on. So I don't know if that answers your question, but basically this is maybe a strange situation that we have in California, that we have all these ambitious targets. And for the most part, the regulators are trying to micromanage how we reach those targets through these series of regulations, everything from how many electric vehicles we're gonna need by such and such a date and so forth. So getting back to your question, can we let the market do it? Maybe theoretically, maybe the answer is yes, but it depends on how trusting you are of markets delivering what you want and in the timeframe that you want without lights going out or something else happening. I'm not sure. It's probably something we need to brainstorm further. Do you have any particular solution in mind or were you asking because you have an answer to your own question, maybe you can share that. No, I don't have an answer. I'm a systems engineer, my background is a systems engineer and I'm not sure that the market itself will come up with a system that is optimal. It might come up with a very suboptimal solution that's just let to run itself and that's why maybe we need a system architect and I'm not talking about one person, but a system architect to define the architecture of the 100% variable renewable energy network set the system architecture like a playground and then let the market play in it. It doesn't make sense that the market won't come up with an architecture all by itself. Yeah, yeah. When you started asking, like when you started asking, I thought you were maybe the question was slightly different one. The one that we spend a lot of time in California discussing and debating is whether California can in fact reach zero fossil fuel electric sector by 2045. In other words, can we phase out all the gas pickers and some people say, yes, we can but it'll be horrendously expensive. So that is the debate. That's the hot debate in California. Should we allow some gas pickers to remain because they are relatively inexpensive once you get to very high levels of renewables. So that is a hot debate in California and I can point you some literature on the discussion on that. But the question you asked, I'm not, I don't have a good answer for I'll give it some thought. Great. We might move to a question from Tom Worthington. Tom, I'm gonna, I'm gonna, Tom, apparently you're using an older version of Zoom. I'm gonna promote you to a panelist to give you the chance to talk. Maybe you could pick one of the questions that you've asked in the chat for Perry. Tom, you'll need to unmute yourself. Yeah, there we go. Okay, I'm just dealing with the honor of being promoted. It'll be taken away soon, don't worry. Okay, I was just wondering what effect our current COVID-19 emergency might have on the future viability of renewables. If people get used to working from home more, learning from home more, there's significantly more people at home during the day and not in offices. Is that likely to be large enough to have an effect? Will that make renewables better? Cause there's more home during the midday hump or does it cause problems at other ends of the day? Good question. I think a lot of people are not speculating that we may never go back 100% to where we were. As an example, if many companies did like people to work from home, but they're not forced to do it. So the argument that you cannot work from home is not gonna be as strong as it used to be. And some people who have long commutes, like people have in San Francisco, and I'm sure in Sydney as well, may just like to stay home and to work from home. So that is likely to have some lasting impact. The same thing applies. I think I have neighbors who are homeschooling their kids. And initially they were concerned that kids are not gonna learn a lot. Now I think some of them think that they're actually learning more and learning better because it's customized. The parent is teaching one or two kids and kids are actually making more progress. So some parents may decide they're never gonna send the kids back to school. I mean, who knows? Well, I've got a master's in education and I suspect the novelty of homeschooling will wear off for those parents. Very likely. I know there are two camps. There are parents who can't wait to send the kids back to school and there are parents who think this is not such a bad idea. But assuming there are more people at home, what effects they're gonna have for renewable energy? It's not gonna be all that big because unless you think shopping malls and things like that are not gonna be around and nobody's gonna air-condition them and so forth. The load in California, the peak, the neck of the duck curve is primarily, well, there's some lighting and cooking and stuff when people go home. But a lot of it is also air-conditioning and it's worse during the summer months. And so whether that gets significantly changed, I really don't know the answer but your question is a good one. I think we need to wait six months and maybe six years and look back and say how much of this impact was temporary and how much of it stuck. I mean, one of the areas that people think, well, maybe never go back to normal is that people get used to shopping online and having groceries and everything else delivered. Maybe a lot of people say, why bother go shopping? So that's probably a trend that is gonna be accelerating. And then travel, the fact that, I mean, this webinar didn't go 100% according to plan but we seem to manage, right? So maybe I, instead of having two or three trips to Australia, maybe I do one and do the others with webinars. So I think the impact on lifestyles and use of electricity and all of that, I think we need to, I mean, that's an interesting question you're asking. I don't have the answers. Good question. Thanks for that. Look, I think there was a couple of comments here from Andrew Blakers. Andy, I'll open your mic up now if you'd like to ask a particular question. Yes, but the main comment I would make really, I guess, is that California is such a very little state compared with the whole of the United States or Europe or Australia. And really, if you try and balance your wind and solar in one little place where the weather is all the same because the same weather system moves across all at once, then it's a lost cause. And you absolutely have to connect to the east and to the north, preferably all the way to the east with IPDC. And then basically your problems actually go away. To some extent, first of all, it's not, I mean, it is small relative to America which is a continent, but it's a big state, 40 million people, it's a long state. So we do have some variations in cloud coverage and wind and sun and so forth, but it is all one time zone. You're right, I mean, that's a problem. California ISO, if you talk to them, this is music to their ears. They say, well, how soon can we do it? But the problem is that the neighboring states for a number of reasons don't necessarily trust California or like its policies or want to participate in its market. So, I mean, there's a lot of politics involved. Some of the neighboring states, for example, don't have renewable, ambitious renewable targets. So they don't want any part of that and so forth and so on. So California ISO and Frustration developed this energy imbalance market. Basically said, okay, you don't have to belong. You don't have to buy into everything we do, but if you have excess power, you want to export or import, there's an easy way for you to do that and we'll schedule that. So that energy imbalance slide that I showed you, I don't know if it made a good sense, but you can see that almost the entire WEC, which is called the Western Electric Coordination Council, which is the 14 Western states and the two provinces of Canada are part of that system. By the way, the network in US, the East and West in Texas, there's three separate networks so they could be like different islands. There's virtually no electrons that go across so East Coast is out of the question. But certainly the WEC can be developed into a very large integrated market and maybe 10, 15 years from now, that's the effect of what will happen. For all the reasons that I mentioned, it's just the pressure, because California is the 500 pound gorilla, all these other states that they have minimal load compared to California. So the sheer size of the market in California may induce its neighbors to gradually participate in either the energy imbalance market or eventually agree to have a WEC-wide organized market, in which case it would not be a California-centric market. So those are all developments that I think are gonna happen, but exactly how we're not sure. Great, look, Perry, I might sort of aim to wrap up there. I think we've exhausted all the questions and there's no more hands up at the moment. So again, on behalf of the Energy Change Institute today, and you thank you very, very much for your time and for a wonderful presentation and for sticking around so long for the Q&A session. Thanks everyone who's still on the line. It's fantastic to see everyone turning up to the rescheduled event, even though we weren't able to do it in person. There'll be plenty of other events held this way, I'm sure over the coming months, and we look forward to a time when we can actually get back together face to face. So thank you all and we'll see you all soon.