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THE FUTURES PROJECT ENERGY FUTURES ENQUIRY 2013

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ENERGY FUTURES ENQUIRY

Using social media to capture the wisdom of crowds and identify consumer preferences in regard to energy delivery technology over the coming twenty years

Prepared by Fergus Neilson Managing Director

THE FUTURES PROJECT www.thefuturesproject.com

16th October 2013


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Fergus Neilson

Managing Director

THE FUTURES PROJECT

www.thefuturesproject.com

Level 3, 53 Balfour Street

Chippendale NSW 2008

02 8303 2419

0418 609 371

[email protected]


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Table of Contents

1: EXECUTIVE SUMMARY ..................................................................................................................... 4

ENQUIRY PROCESS .................................................................................................................................................... 5

ENQUIRY RESPONDENTS ............................................................................................................................................ 7

ENQUIRY OUTCOMES ................................................................................................................................................. 8

SCENARIO SUMMARIES .............................................................................................................................................. 9

2: ENQUIRY RECOMMENDATIONS ..................................................................................................... 12

RECOMMENDATIONS ............................................................................................................................................... 12

3: ENHANCE KNOWN TECHNOLOGIES ................................................................................................ 14

SCENARIO CHARACTERISTICS .................................................................................................................................... 14

COMMENTARY FOR AND AGAINST .............................................................................................................................. 15

ACTION INITIATIVES ................................................................................................................................................. 17

4: UNLOCK THE HIDDEN RESOURCE ................................................................................................... 19




5: GOING GREENER ............................................................................................................................ 24




6: CONSIDER THE NUCLEAR OPTION .................................................................................................. 29



7: SOCIAL NETWORKS AND ACCESS TO THE WISDOM OF CROWDS ................................................... 33

AN ENQUIRY PLATFORM FOR CROWD SOURCED WISDOM .............................................................................................. 33

LESSONS LEARNED FROM THE ENERGY FUTURES ENQUIRY............................................................................................. 35

APPENDIX A: ENQUIRY PLATFORM SCREENSHOTS ............................................................................. 38

APPENDIX B: FOCUS ON THE FUTURE................................................................................................. 41

APPENDIX C: REGIONAL GROUPINGS ................................................................................................. 42

APPENDIX D: ENQUIRY MANAGEMENT.............................................................................................. 44


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1: Executive Summary

THE FUTURES PROJECT believes that it is better to shape the near future than to wait

until the future hits the fan, and that accessing the wisdom of crowds is not only a

sounder basis for looking into the near future than the predictions of individual pundits,

but is also the best way to re-engage a broader populace with the vital processes of

political and business decision making - to the benefit of all.


The first formal enquiry carried out by THE FUTURES PROJECT was funded by AGL

Energy Limited (AGL).

This enquiry – Meeting Electricity Demand Growth and Supply Pressures over the Coming

20 Years - was directed through Q1, Q2 and Q3 calendar 2013 to all of AGL’s on-line

customers. Each customer was invited to participate in the enquiry by identifying (and

scoring) his or her preference between four alternative approaches (scenarios) to

meeting energy demand over the coming twenty years. Each customer was also

requested to provide comment for or against each of the four scenarios.

Importantly, and specifically because opinion is cheap but initiative can deliver, each

participant was requested to make recommendations as to specific actions that should

be taken TODAY to increase the probability of achieving a nominated preferred

outcome in the NEAR FUTURE (four to twenty years out from the present day).

The four scenarios1, each one of which could provide a way of meeting or avoiding the

need to significantly increase energy generation capacity over the coming twenty years,

were scored accordingly (where 5 = preferred, 3 = neutral and 1 = opposed)2:

Going Greener 3.9

Unlock the Hidden Resource 3.5

Consider the Nuclear Option 2.8

Enhance Known Technologies 2.2

1 Where ‘Going Greener’ means greater usage of renewable energy resources; Unlock the Hidden Resource means making better use of what is already available (i.e. better usage efficiency, smart metering, time of use charging etc); Consider the Nuclear Option is self explanatory; and Enhance Known Technology essentially means sticking with existing coal and gas energy generation technology. 2 Scoring at the end of the first round billing cycle (end-April 2013): Going Greener 3.7; Unlock the Hidden Resource 3.3; Consider the Nuclear Option 2.8; and Enhance Known Technologies 2.3.


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Over two-thirds (71%) of 601 enquiry participants were aged 45 or older; just over one-

third (65%) were employed or self-employed; while 59% lived in Sydney and Melbourne,

12% lived in or around Brisbane and 8% lived in Adelaide and its hinterland.

Thus, just over 87% of respondents were resident in metropolitan or suburban regions;

including Newcastle, Wollongong and Toowoomba (c.f. Australian urbanisation at 89%).

Apart from the fact that there were no respondents from the ACT, from West Australia,

the Northern Territory or Tasmania, the participant group of 601 AGL on-line bill payers

is not entirely unrepresentative of the Australian population as a whole.

Enquiry process

AGL has over 420,000 customers who receive (and pay) their quarterly energy bill on-line.

These bills are ‘mailed’ out across a three-month billing cycle – 32,000 a week and 4,600

each day. Over two-and-a-half billing cycles through Q1, Q2 and Q3 calendar 2013 each

on-line customer received a ‘header letter’ with his or her bill. This letter contained two

messages from Mark Enzinger, AGL’s General Manager Retail Operations, one on account

management and the other on energy efficiency.

The letter also contained an invitation:

Help Shape the Future – AGL is proud to support THE FUTURES

PROJECT by inviting you to take part in an online survey. Make

your voice heard and contribute to the discussion about

increasing demands on electricity supply and how to create a

better energy future for everyone. Simply click here to take part

today.

Each customer who ‘clicked’ was taken directly to THE FUTURES PROJECT enquiry site3

as illustrated overleaf

3 See appendix A for additional enquiry platform screenshots.


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The characteristics of each scenario, commentary for and against and respondent

recommendations on actions to be taken today (to increase the probability of achieving a

preferred outcome) are included in sections 3 through 6 of this report. A synopsis of this

material is provided over the following pages.


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Enquiry respondents

It is acknowledged up-front that the number of responses generated over the enquiry

process 2013 was far lower than hoped for. The low end of expectation was for around

1,000 responses (or 0.25% of AGL’s on-line customer base). In fact, the enquiry eventually

delivered 601 completed responses.

Certainly, in any other enquiry to be undertaken by THE FUTURES PROJECT far more

attention will be paid to enhancing the visibility of the enquiry, simplifying the description

of alternate scenarios, and to putting in place greater incentives to participation.

That said 601 completed responses were submitted (as against 258 through the first

enquiry phase to end-April), over 70% of them by AGL customers 45 years of age or older.

Two-thirds of total respondents were employed or self-employed and a solid majority

(87%) were residents of metropolitan and suburban Australia.

Enquiry respondents by age

Age

category

Percentage

descending order

45 to 54 24.8

55 to 64 22.4

65 to 74 17.6

35 to 44 14.6

25 to 34 10.1

75 and over 6.0

15 to 24 4.5

Enquiry respondents by activity status

Activity

status

Percentage

descending order

Employed 51.5

Retired from paid work 29.3

Self employed 13.0

Not currently working 3.7

Student 2.5


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Enquiry respondents by region of residence

Regional

grouping

Percentage

descending order

Sydney metropolitan and suburban 35.2

Melbourne metropolitan and suburban 23.6

Brisbane metro, suburban & Toowoomba 12.3

Coastal NSW including Newcastle 10.0

Adelaide metropolitan and hinterland 8.3

Murray-Darling catchment 6.0

Coastal Queensland 4.0

Other 0.6

Note: See appendix C for further detail on delineation of regional groupings.

Enquiry outcomes

The modest level of response aside, the energy futures enquiry delivered to expectation,

which was to extract ‘crowd wisdom’ on preferences in regard to future energy supply

technologies by making three requests of each billing recipient:

• assign each (of four) scenarios one ‘value’ – Preferred (scoring 5), Supported (4),

Neutral (3), Concerned (2) or Opposed (1);

• add commentary – respondent opinion for or against the individual scenarios; and

• recommend specific actions – to be taken today that will increase the probability of

achieving the preferred outcome in the near future.

It is hardly surprising that ‘Going Greener’ scored highest at 3.9 (out of 5.0) or that

‘Enhance Known Technologies’ (coal and gas) scored low at 2.2. What did cause some

surprise was that ‘Consider the Nuclear Option’ was not rejected out of hand. Although

opinions were quite polarised on the issue, a score of 2.8 suggests that there is more

support for taking the first steps down a nuclear path than post-Fukushima rhetoric

might suggest.

The fourth scenario, ‘Unlock the Hidden Resource’, focused on the prospects for

reducing average energy consumption by households and companies through the use of

smart technology and pricing strategies. Early respondents scored this scenario at

around 3.7/3.8. However, as the enquiry progressed, some of the more strident concerns


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in regard to ‘energy poverty’ died away, so did the support for this scenario. It finally

settled at 3.5, essentially mid-way between renewables and nuclear.

Conclusions to be drawn from responses to each scenario – with a bias to highlighting

initiatives to be taken now to heighten the probability of a preferred future outcome - are

summarised below. These summaries are derived from the individual commentary and

recommendations for specific actions provided by the enquiry respondents. The material

tabled in sections 3 through 6 represent the views and the suggestions for action of

individual Australian energy consumers – in their own words.

Scenario summaries Enhance Known Technologies

Although this scenario found least favour (scoring 2.2 out of 5) with the enquiry

respondents it was not without its supporters. They highlighted the capacity of

traditional technologies (coal and gas powered energy generation) to deliver reliable

base load power at what are considered, for the time being anyway, to be acceptable

cost levels. Scenario supporters also point out that the technology, far from being

outdated, still holds considerable potential for efficiency enhancements and emissions

reduction. There was considerably more support for gas than for coal.

On the other hand, opponents emphasised that costs (after application of carbon

charges), negative environmental impacts, the finite nature of the resource and the

technological implausibility of carbon sequestration fully justified their belief that the

sooner these technologies were replaced, the better.

Recommendations for action initiatives to be taken in the here-and-now to enhance the

probability of a preferred near future outcome can be summarised as follows (see

section 3 for more detail):

• introduce more effective pollution control technologies;

• accelerate the transition to gas; and

• manage the phasing out of old technology over next five to twenty years.

Unlock the Hidden Resource

This scenario was characterised by vocal support for the principle of doing more with

less; but support was complicated by the implication that it should always be someone

else who should change their behaviour, while everyone would still be eligible to receive


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equal financial benefit regardless of whether they changed or not. There was some

cynicism as to likely benefits and concern about the probability of front-end cost imposts.

Perhaps of greater importance was the cry for more information, more education and a

greater range of options in regard to individual control of usage, pricing and technology

adoption.




• introduce smarter technology to allow a greater degree of individual control over

cost and timing of energy usage – including on-site battery storage;

• allow the consumer a wider range of options - price packaging, billing detail and

frequency, on-site energy sell-back pricing, etc;

• increase the educational effort by providers and regulators on ways and means to

more efficiently manage (and save) energy use in the home;

• make greater use of financial incentives (rewards) to drive change; and

• introduce stricter building standards.

Going Greener

This scenario was the most favourably scored of the four, rating 3.8 out of 5. However,

participant responses do highlight, more than in any of the other three scenarios, that

there is a serious information disconnect. Supporters remain convinced that ‘green’

technology works and is already price competitive with the traditional technologies (coal

and gas). Opponents however see it as the highest cost option and entertain serious

doubts as to its ability to meet anything other than the most marginal proportion of total

national energy needs.

Perhaps this reflects a failure of the industry itself to clarify and promote an evidence-

based position on technology, pricing and emissions.

Supporters of the ‘green’ scenario emphasised the importance of solar, wind and other

renewables as being eminently suited to Australian geographic and climatological

conditions and therefore the best long term solution to future energy demand.





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• facilitate the shift to a greater decentralisation of power generation – using on-site

solar, on-site battery storage, smart metering and smarter grids;

• incentivise the continued development of green technology – both to build an

industry in Australia (battery technology?) and to assist in delivering a cleaner

future; and

• look to government and business to cooperate on a medium to long-term program

to transition away from traditional energy generation technologies.

Consider the Nuclear Option

Commentary from respondents on the nuclear scenario is, unsurprisingly, quite polarised.

Clearly, opinion tends to be firmly black or white. Nuclear power is seen as either the way

to perdition or the only solution in an increasingly polluted world at risk of terminal climate

change. Rarely is there any middle ground.

As a consequence of this polarity (and the need for further research and testing before

application) respondent commentary is simply presented in section 6 as ‘for and against’.

In summary, however, this polarity can be seen as an entrenched positioning between

those who believe that Chernobyl and Fukushima represent the reality of nuclear power

and those who believe that technological advances and lessons learned over the past 30

years now make nuclear power the logical route for base load delivery in the near future.

There is solid acknowledgement of the risks; but this is tempered by the belief that

Australia must start now to prepare for a nuclear future down the track – having the

source minerals in abundance, a stable geology (for waste storage) and sufficient

territory to isolate generation from population.


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2: Enquiry Recommendations

Recommendations are derived from three sources – the enquiry itself (running through

Q1, Q2 and part-Q3 calendar 2013), the GAP Taskforce on Energy Pricing (run as a

precursor and mentor to the on-line enquiry4), and from the media debate on energy

matters over 15 months from January 2012 through to end-March 2013. It is important to

bear in mind that the participants in this enquiry are consumers of energy, the

recipients of quarterly billing and the constituents of nearly every state and federal

electorate from Adelaide up the Darling River into Queensland and around the east

coast through Sydney, Melbourne and Brisbane all the way to Townsville.

The audience for these recommendations are the ‘delivery stakeholders’ – industry and

government - in energy generation, distribution and regulation.

A single recent edition of the Sydney Morning Herald encapsulated the issues faced by

the ‘delivery stakeholders’. One article gave vent to the concerns of consumers about

the indigestibility of recent cost increases, another covered the resistance of certain

lobby groups to any form of onshore gas extraction and a third (in the same edition)

presented wind energy as dangerous, unsightly and unacceptable.

This same disconnect between consumption and production, and opposition to the very

technology that might both deliver an environmental benefit and still leave the air-

conditioner in operation, is also apparent in the commentary and action initiatives

delivered by the respondents to this enquiry into energy futures.

Recommendations

The conclusion to be drawn from this very evident bottleneck is that the energy

generation and distribution industry has done a poor job of presenting its case to the

consuming public.

4 Outcomes of the GAP Taskforce on Energy Pricing available on request. The primary recommendation of the Taskforce was creation of the ‘National Energy Consumers Council’ (NECC) under federal mandate, with sufficent funding to: a) allow a better understanding of the needs and concerns of ‘retail’ (household and small business) energy consumers; b) establish a mechanism by which ‘retail’ energy consumers could better voice their concerns; c) enhance consumer research; and d) shift focus from vulnerable customer groups with narrow and specific concerns, towards the balance representation of all household and small business energy consumers.


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Hence the first recommendation: Take back the initiative lost in the battle for the hearts

and minds of energy consumers. The energy generation and distribution industry should

follow the example of the International Council of Mining and Minerals and place a far

higher emphasis on consumer outreach and media interface – at chief executive level.

Second: The experience of the GAP Taskforce on Energy Pricing suggests that an

opportunity exists right now to establish a ‘National Energy Research Council’ that

brings together the industry, the regulators and the consumers into a single entity with

sufficient funding to initiate the research required to deliver robust support for a

collectively endorsed position – on technology, pricing, usage control, etc.

Third: That the industry pay heed to the desire of many energy consumers to take

greater control over their energy usage – including higher visibility to peak pricing times,

a more considered introduction of smart meters (learn from Victoria), and monthly billing

as an option. Government entities need also to acknowledge a role here, particularly in

regard to building codes, energy budget monitoring and consumer education.

Fourth: Respond to the evident level of energy consumer interest in on-site energy

generation and battery storage, as well as locking in what are seen to be more equitable

‘buy-back’ prices.

Fifth: Accept that a portfolio approach and scaled transition are the only ways to a

manageable future. There is no single technology that can satisfy all forms of energy

demand or meet all the environmental expectations of an extremely heterogeneous

consumer base.

Sixth: Acknowledge that the energy consumer is both better informed and more

determined to effect change than is perhaps acknowledged by both the industry and

their associates in government. It would therefore seem inadvisable to ignore the

growing demand for speedier application of emissions reduction technology.

Seventh: Of the traditional technologies, gas was more favourably supported than coal.

However transition to gas will require that the energy industry makes a more concerted

effort at assuaging consumer concerns and building a more effective platform for

customer engagement.

Eighth: Recognise that the opposition to nuclear power is lower than might have been

expected and that emerging nuclear technology (fuel options, reactor cooling and

station size) all suggest that Australia needs now to consider taking its first steps down

a path to the introduction of nuclear as a source of base load power.


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3: Enhance Known Technologies

Reliance on existing coal and gas powered electricity generation as the primary source

of electricity, with a strong focus on continuous improvement to efficiencies and

emission levels.

Scenario characteristics

Highest environmental impact. Compatible with current industrial structure. Least

expensive form of power generation known today. More expensive with introduction

of carbon storage (CCS).

Cost of electricity (projected cost in 2030 AU$ per megawatt hour)5

• Black Coal (supercritical PC) @ $50 to 60

• Black Coal (supercritical PC with carbon storage) @ $100 to 170

• Closed circuit gas turbine @ $70 to 105

• Closed circuit gas turbine (with carbon storage) @ $90 to 150

Emissions intensity (projected kg of CO2 per megawatt hour – net)

• Black Coal (supercritical PC) @ 300kg

• Black Coal (supercritical PC with carbon storage) @ 40kg

• Closed circuit gas turbine @ 170kg

• Closed circuit gas turbine (with carbon storage) > 20kg

Click links for further information

James Lovelock & coal seam gas extraction Guardian 15th June 2012

Carbon capture & storage CSIRO 14th October 2011

Gas supply forecast SMH 19th April 2012

Electricity costs Wikipedia

5 Cost projections and level of CO2 emissions sourced from (Australian Federal) Department of Energy Resources and Tourism (2011), Draft Energy White Paper, Chapter 7, page 206. See also appendix B.


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Scenario scoring

Enhance Known Technologies was the least favoured scenario with a score of 2.2 out of 5.

This scenario was scored on average most highly by respondents over 45, females and

residents of Sydney Inner West. It was scored least favourably by respondents aged 44

and under, and those resident in Sydney Metropolitan and Sydney East Beaches and

Botany.

• age category 75+ scenario score 2.4

• age category 65-74 scenario score 2.2






Commentary for and against Enhance Known Technologies

Supportive Opposed

BEST TECHNOLOGY FOR DELIVERY OF BASELOAD > If we don’t continue with coal and gas then there won’t be enough energy from the other resources being used in Australia such as wind and solar. > (although) Given the unlikelihood that energy demand will double, there may not be any need for additional base load power. > It ain’t broke and there is no need to fix it. LOWEST COST SOLUTION > This is probably remains the most feasible option given the existing infrastructure investment. > Certainly the cheapest option in the short term. > At the moment these remain the most effective ways of producing and

CONTINUED COST TO CONSUMERS > We need to move away from coal and gas as they will run out and it will be too expensive. > Current industry structure wrongly rewards extracting and burning more coal and gas. > My last gas bill had me pay $90 for $9 worth of gas. To me, the cost of supply has now reached a point of not being worth it. Once my contract ends, I will change to an alternative. > These technologies don’t but should be forced to reflect the costs of global warning and of the health issues relating to the continued use of coal. NEGATIVE ENVIRONMENTAL IMPACT > Won’t keep up with future needs and will never be able to deal with the pollution


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distributing electricity. > Best because it is the cheapest option. Forget the carbon storage complete waste of money. > This is probably the cheapest option with lowest likelihood of something going badly wrong (like with nuclear). But it only a hold steady option. We still need progress and improvement. GOOD SCOPE FOR EFFICIENCY ENHANCEMENT > Remains an option if emissions stripping and sequestration technologies can be made to work > Remains a feasible technology if the pollution issue can be resolved. > This least cost option would need to be enhanced with significant upgrade of coal power stations that have been largely neglected in terms of large-scale investment. > Energy efficiency potential is enormous in the traditional technologies and in many cases would be profitable rather than costly. Complemented by renewable energy and energy storage, this offers an attractive package. VALUE IN THE TRANSITION TO GAS > Gas is looking like an increasingly attractive alternative to coal. > Gas turbine can reduce capital investment with peak usage by quick start up times, while coal powered steam turbines have very slow start up and need base load for efficiency. COST TO AUSTRALIA > Australia produces less than 2% of global pollution while China and the US generate 20% each. Amelioration in Australia will have no effect on global pollution but will impose unacceptable costs on the

issue. If we continue with this we have no future. > CCS unlikely ever to be technically or commercially viable. > Unacceptable due to climate impact and local environmental damage. Carbon tax at current price does not adequately charge producers for the damage done. > I don't want my grandchildren to inherit the damage to their world that I created. > Coal and gas pollute the atmosphere. Coal mining also endangers the lives of those who work on the sites. > Overwhelming evidence that coal is a major polluter and responsible for carbon emissions. > Coal is a far too much of a pollutant and the cost is getting too great for the average Australian. It should be phased out as soon as possible. > This is the worst outcome because it locks us into highly damaging climate change. > The environmental impact is unacceptably high. > This is only cheap if you ignore the cost of CO2 emissions and global warming. Carbon storage is not proven at industrial scale, and can't readily capture the fugitive emissions from mining coal. > Our coal industry is what is responsible for Australia being the largest polluter in the world per capita. Not sure how this is letting anyone in the energy industry sleep at night. > Future generations are going to be amazed at how we continued to destroy the planet. > Carbon capture and storage is simply a myth created by politicians to avoid worrying (or actually engaging with) those with interests in coal mining. > These technologies are a disaster for the environment, especially for coming generations. We need to reduce usage as


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economy. much as possible. > Continuing down this road is sacrificing our children’s future to our own convenience. FINITE NATURE OF THE RESOURCE > This resource is finite and must be replaced. > Coal and gas will run out. It will take millions of years for the earth to create more. > We cannot continue to increase the use of electricity produced in non-sustainable ways. TECHNOLOGY PAST ITS USE-BY DATE > It's about time Australia and Queensland took advantage of their weather and started reducing their reliance on old-fashioned technology. > The cost of these technologies, as with the cost of any product or service created using them, has always been undervalued. This is because it doesn't account for the environmental damage that these processes create. It is time to move on. > Standing still is not an option.

Action initiatives Enhance Known Technologies

SEEK MORE EFFECTIVE POLLUTION CONTROL TECHNOLOGIES > Continue experimentation with cleaner coal options AND accelerate transition of older stations to gas power. > If fossil fuels do have a role into the future, then the focus should be toward more efficient and less polluting de-centralised energy systems with heat recovery. > Retain carbon pricing. > Increase the price charged to reflect the damage done. > Government funding should be directed to the upgrading of existing coal fired power plans to improve their efficiency. Coal plants should be subject to minimum efficiency standards, with carbon capture technology to be phased in as a mandatory requirement. > If we are to continue with the existing electricity generation technologies then a very


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strong focus needs to be directed at improving efficiencies and emissions. > Retain the price on carbon, increase the RET to reflect 25% of real demand and let the market eliminate unprofitable/unviable old coal generators. > Carbon prices must be retained to ensure progress away from our energy and economic addiction to such damaging fossil fuels. ACCELERATE THE TRANSITION TO GAS > Ensure gas resources can be effectively developed. > Commence the debate in regard to export vs. domestic use of gas and impact on pricing. > In the immediate future we should convert to gas fuelled turbines as the main gas fields lie just off shore, is cheaper than coal and cleaner than coal. > The use of all fossil fuels should be phased out and gone by 2060. Using gas is a reasonable interim solution. There should be increased emphasis on efficiency by using combined-cycle and tri-generation. > Natural gas is a wonderful energy source. Except that we are giving it away in huge volumes to countries bent on saving their own energy resources. MANAGE THE PHASING OUT OF OLD TECHNOLOGY > Introduce a meaningful CO2 price that makes coal and gas unattractive against non-CO2 technologies. > Halt any further approvals for construction of coal-fired power. > Continue to use existing coal fired generators, but don't spend a lot on them and plan to phase them out when possible. > Gradually reduce coal to a very small proportion of our power generation until green power technologies pick up and our power needs can be met by renewable power. > In general terms, there has to be encouragement for companies involved in coal and gas to get more involved in changing their business to get involved with the movement towards renewables. This is not about sending industries broke and putting people out of work, it is about evolving and adapting with society as demands and priorities change. > Tax this option so highly that companies invest in alternative ways to earn a profit and retire this type of technology quickly, say within 5 years. > Phase out coal fossil fuels ASAP. Transition away from gas to renewables ASAP. > Try and move towards other forms of energy generation, at the very least look at alternatives for the old clunkers of coal stations. Government should stop giving companies long term contracts for old stations to make a quick buck and then subsidise them to make energy. Instead the government should invest in building more efficient stations or alternatives. > Phase out coal and gas fired power stations as quickly as possible. Attach large solar thermal steam generating plants to existing power stations to quickly reduce their CO2 emissions during sunlight hours. > The most important action should be to shift all government support away from mining and fossil fuel technologies to make them cheaper, more widespread and more distributed. Thus allowing Australia to close down coal-fired power plants as soon as possible.


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4: Unlock the Hidden Resource

Reduce average energy consumption of households and companies by using smart

technology and pricing strategies.


Feasibly the lowest capital cost scenario. Technology allows consumers to make their

own decisions about household usage levels, timing of use, pricing and storage. Options

might include on-site batteries, smart metering, and smart grids, building regulations,

and peak power pricing. Consumer behavior is hard to change. Increasing public

awareness of energy pricing and efficiency measures resulted in cutting energy usage to

5.7% below forecast levels in 2011/12.

Cost of electricity

Significantly more affordable due to reduced infrastructure costs. Contracts to reduce

reliability of household supply in return for $/KWh at 10% of current price (plus the cost of

in-house battery storage)


Lower as less energy is being consumed.


Solar photovoltaics Clean Energy Council

Saving on household power usage Savepower NSW Government

AEMO energy demand forecasts AEMO 2012

Introducing the smart grid abc.net 1st May 2102

Scenario scoring

Unlock the Hidden Resource was scored 3.5 out of 5.

This scenario was scored most favourably by respondents aged 45-54, females and

residents of Sydney Metropolitan. It was scored least favourably by respondents over 75


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years of age, and those resident in Adelaide metropolitan, the Gold and Wine region (rural

Victoria) and Sydney Outer West.








Commentary for and against Unlock the Hidden Resource

Supportive Opposed

POTENIAL FOR CAPTURE OF THE LOW HANGING FRUIT > If households reduced usage by only 1% it would equal 18% of all solar PV output. > Demand already dropping and price signaling will see it drop further. > I am doing all I can to reduce my consumption and keep my expenses down. Spiraling costs are hurting many people and whilst creating and maintaining the system involves capital expenditure, some form of effort must be made by all providers to minimise the impact. > This is the easiest scenario to implement. There are companies whose business models now entirely consist of dragging the public kicking and screaming to a low energy intensity future, through installing stand-by power controllers. > This scenario alone is not enough to solve our problems, however is an important step towards the right direction. > Excellent scenario, we must continue down this path. > By all means use these systems to buy time while we change to 100% renewable

CONCERN AT COST IMPACT > Application of price mechanisms may be unfair on those at the low end of the socio economic spectrum. > Using so-called "smart technology" to reduce electricity consumption is a cop out. It appeals to governments and suppliers where they want more control and extract more profits from consumers. > So far, all this smart technology has had zero positive impact on my bills. In fact it costs more to have all this stuff. > Don’t do this. This approach is fine for some people, but the elderly, infirm, those with babies and those without access to other forms of heating (e.g. wood or gas) would suffer unnecessarily in a real-time retail price environment. LOW CONFIDENCE IN POTENTIAL BENEFITS > All very well looking for a new energy source, but we still need traditional technology until the new technologies are proven. > Attractive alternative as it requires low capital cost, but where are the incentives


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energy generation. SUPPORT FOR A SHIFT OF THE LOCUS OF CONTROL > Makes sense for households to become more self-sufficient. > Not necessarily that hard to change consumer behaviour and changing use patterns will make a huge difference. > Batteries and smart grids will reinvent the grid.

to change? > I am considering a relocation interstate and from what feedback I have received, "smart meters" are fraught with problems. I want to avoid them. > It's not bad, but it's just not good enough, and isn't really a "solution", just a temporary fix. > Definitely no smart meters. CONCERN AT CONSUMER INTRANSIGENCE > Consumer behaviour is in fact very hard to change. I just can’t see it ever happening.

Action initiatives Unlock the Hidden Resource

INTRODUCE SMARTER TECHNOLOGY > Introduce smart metering and in-home electricity consumption displays. > Bring forward and extend Smart Grids project. > Develop an ‘app’ that can allow real-time measurement and control of power usage. > Focus on encouraging and supporting development of technologies that assist in consumption management (and therefore affordability). > Smart metering is the first step, in-home displays and decent analytic tools are the second, and remote control of the home/business through ‘HAN’ is the third. > Direct government research funding to development of smart grids and heat pumps. > Make smart meter technology accessible. Introducing better building codes to ensure better insulated, less power hungry, homes would be a good step. > Get homes to have their own batteries to support nighttime usage and require that air conditioning can only operate off solar power. > I purchased a Watson Meter when I owned my own home. I got very excited when it showed me where and when I was putting power back into the grid. You learn very quickly when you can actually see the total household energy consumption and be made aware of its cost at different times of day. Continue the search for the right battery technology and adapt it into cars and buildings. First commercial, then industrial and finally residential. Let consumers choose when to charge their battery for their car/home and watch the daily demand curve flatten at lower average prices. ALLOW THE CONSUMER A WIDER RANGE OF OPTIONALITY > Accelerate the introduction of in-home storage in conjunction with energy generation


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on-premises. > Energy enthusiasts should be incentivised to get more engaged with the instantaneous power pricing market and allow their personal innovations to supply to, and draw from, the grid at their own choosing. > Energy monitoring by residents should be actively encouraged by energy retailers and the government through installation of KWh meters at the switchboard and integration with an energy portal. > Make smart meter information MUCH easier to get to! I have a smart meter. I want my data in 15 or 30-minute segments. Why? Because I want to work out if I should replace my electric hot water system with gas. Also I want to work out whether solar is worth it for me. Give – Me – My - Data. I've requested it but all I got was a monthly breakdown. That’s useless. > I think letting people choose their own usage levels and times is good. I would choose a time of day when I do most of my cooking and cleaning and would choose a lower rate for those times. I think I would most likely use less peak power if I knew how much it was costing at that particular time and knew it was cheaper at some other time. INCREASE THE EDUCATIONAL EFFORT > AGL could develop 'stories' of how different types of households could achieve very low energy consumption, costs and KWhs, and promote them as models. > Let me know when peak pricing is charged and I‘ll shift my usage. > Lobby our governments, federal and state, to help develop a long-term strategy which helps achieve consumer participation in reducing their energy use. > Educate people on how to save power even though this may mean higher prices if that has the necessary educational result. > In Germany they have energy company people door knocking customers whose bills are high and going through the house to make changes. This is not presented as an option - it is presented as necessary. It may not sound democratic - but climate changes with extreme weather events won't give us the luxury of choosing to maintain our current levels of energy usage. > More education on saving energy e.g., switching off appliances. > Publicity should be applied to educate people about proper insulation, exterior blinds, better sealing of doors and windows. > Perhaps, especially in winter in colder parts of Australia like Victoria, a simple flyover / infrared survey would identify those houses that are pumping out heat. > Campaign to make power users more aware of peak/off peak times and prices. This information is too hard to find and make out and the pricing differential (between peak and off peak) needs to be bigger. INCREASE THE INCENTIVES TO CHANGE > Provide cheaper power to households that agree not to use nominated devices in peak periods. > Develop a National Energy Efficiency Scheme to increase cooperation between government, environmental groups and energy industry.


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> Increase government incentives to consumers to use green energy. > Continue with solar photovoltaic where it can be cost justified, and continue to offer households incentives to reduce power consumption. > Introduce ‘game-ification' of electricity use. Tie smart grid technology and energy use metrics into a system that can rank and compare neighbours and friends. This could also include a system to reward someone who is the lowest user or most efficient, or greatest reduction, etc. > Provide tax reductions, but not upfront payments, to encourage retrofitting of homes to use less energy. Simply providing an upfront payment is known to encourage an increase in prices that leaves the consumer paying the same. > The assertion that consumer behaviour is hard to change is not universal. Consumers, if given incentives, are very quick to change as demonstrated by growth of solar panels with direct feed-in. > A true price on energy will only occur when carbon is fairly priced and both the industry and the user are incentivised by paying the real cost of their actions in the short and long term i.e. understanding the real long term cost of their self interested short term decisions. > Levy extra charges on those that won’t install solar panels. > This should be part of any energy plan, but it obviously can’t be the only course of action. > Air conditioners are far too cheap. There should be an environmental levy on their use. > Smarter usage is a good strategy. However, this needs to be monitored to ensure that all savings are passed directly back to the consumers and do not end up as company profit. INTRODUCE STRICTER BUILDING STANDARDS > Building Assessment must be nationally standardised and realigned to favour good design over the use of reverse-cycle air conditioning. > Building standards must be tightened. Our '5 star' designs are well below international standard. The incentives are for builders / owners to build on the cheap, often negating the intent to insulate. Building certification should include inspection of insulation quality. > Much higher energy efficiency standards should be demanded of all new housing in Australia, and all renovations of existing stock should have to include upgrading energy efficiency in terms of insulation, etc. > All new buildings should be made to have solar hot water and at least two solar panels. OTHER > Encourage power companies to offer monthly billing. > Consider avoidance or deferral of network / grid upgrades. > All manufacturers and importers should provide accurate energy consumption per hour information for every product sold in this country. > Move domestic reliance on large network energy systems to more localised models, where individual homes are self sufficient or at least small groups of homes. > Nominate a panel of bipartisan experts to reach an agreement on what to do to achieve best long-term outcome, including understanding the costs of being an early adopter.


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5: Going Greener

Support a shift to generating a higher percentage of energy supply from renewable

sources, such as wind and solar (which now generate only 2.6% of Australia's total

energy needs).


Lowest carbon emission option. Concerns with capacity of wind and solar to deliver base

load. Still the most expensive supply mechanism with a heavy dependence on subsidies.

Prices are dropping fast. SA and QLD – the states with the highest levels of solar

photovoltaic usage - have seen energy demand forecasts cut by more than 10% for 2011/12

(against the national average of 5.7%).


• Wind (medium scale 200 MW) @ $70 to 150

• Hot sedimentary geothermal @ $105 to 135

• Solar thermal (central receiver with storage) @ $120 to 240

• Photovoltaic (with two axis tracking) @ $150 to 290

• Photovoltaic (fixed flat plate) @ $180 to 370


• All forms @ zero kg


Wind power Wind Energy Development EIS

Geothermal energy Wikipedia

Alternative Technology Australia www.ata.org

AEMO energy demand forecasts AEMO 2012



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Scenario scoring

Going Greener was the most highly favoured scenario with a score of 3.9 out of 5.

This scenario was scored most favourably by respondents aged under 44, females and

residents of Sydney Metropolitan. The scenario found least favour with respondents over

65 years of age, and those resident on the Bass Strait Coast (rural Victoria and South

Australia), in Adelaide Metropolitan and in the Sydney Outer West.




• age category 45-54 scenario score 4.o




Commentary for and against Going Greener

Supportive Opposed

THE TECHNOLOGY ALREADY WORKS AND IS PRICE COMPETITIVE > Improving technologies are already providing ability to deliver base load. > Solar PV may already be price competitive with “price of power from the wall socket”. > Six years ago wind power costs were already equivalent to new coal and gas generating costs in the US. > Hard to believe that the next 20 years won’t see further movement down the cost curve. IT MAKES SENSE FOR AUSTRALIA > Most other countries, i.e. France & Germany seem to be years ahead. We have the space to allocate land to these types of technologies – time to catch up. > Solar power and wind turbines should be the way of the future. Start projects where

CONSIDERED TO BE THE HIGHEST COST OPTION > Not cost competitive yet, or ever likely to be with current technology. > Don't inflict green options on the entire population. For those that want it, let them pay the additional cost and not pass it on to non-green customers. > Would like to have solar power, but cannot afford current cost and our house is not situated to receive productive solar heat. > The cost issue remains a big problem with all forms of green energy. > Although going greener truly appeals to most people, I worry that the initial cost of supplying the necessary mechanisms would be too expensive for most users. > Far too costly for solar and too dangerous with wind.


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this is feasible. Federal and state governments to contribute. This is investment for the future generations and needs to start now. > Solar and wind energy is by far the best alternative. We have lots in Australia, and it is free once the infrastructure is set up. > Critical. Australia has solar energy in vast surplus. We should be actively promoting, developing and exporting this technology. > Utilize the sun in our deserts on a large scale, wind and wave energy from the southern ocean – and leave the coal in the ground. IT IS THE BEST LONG TERM SOLUTION > In the long run, coal and gas will have run out, for this reason alone other sources of energy should be encouraged. > In the long run, solar is the only reliable source of power. > Voices against green energy are only those with vested interests. Politicians must realise that this is not the issue for a lunatic fringe, but becomes more and more a mainstream topic. > Fully support this option, even if it costs more initially. Local generation of energy (although not yet fully developed) should allow reduction in cost of maintaining infrastructure for long-range transmission of energy.

NO CONFIDENCE IN ABILITY TO MEET BASE LOAD DEMAND > Green energy can never meet total need. Solar panels and wind turbines will only ever be effective when storage technology is introduced. > Bad stupid idea. This green rubbish is driving prices up for no good reason. OTHER > Wind power is noisy and ugly; it is not reliable and can cause health problems for those living nearby.

Action initiatives Going Greener

FACILITATE THE SHIFT TO DECENTRALISED POWER GENERATION > Unlock the passion Australians have for solar PV - it can be fostered without uneconomic feed-in tariffs. > On-site renewable electricity should receive a feed-in price equal to the retail price at that time, so if we had a real competitive market, that's what I could earn by selling power to my neighbour.


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> Modern technology allows the establishment of small-scale production and far better quality results even if at a higher price. The same principle must surely be possible with power generation. > I think we have to look at local installations as a big part of it, i.e. local wind, solar and wave generators, and put some effort into local battery storage. > Start paying a reasonable price for energy fed into system above current rate of 8c/KWh, as that is no incentive to increase solar investment. > The federal government should encourage all households to install solar panels by giving a much larger rebate on the units, and the Queensland state government should be made to pay a fair price to put solar PV power back into the grid. > Allow us to get a reasonable price for solar energy buy-back to make it worthwhile. > I would love to have 5kw of solar panels and a solar HWS on my roof, but it's too expensive and it should not be. The reverse should be happening - solar energy and wind turbines should be heavily subsidised. People choosing to install an electric hot water system should pay what a solar HWS service now costs, and a solar HWS and 1.5kw solar panels should each be the cost of an electric HWS. > Renewable power production with coal as a small base load support as well as local power micro-stations would alleviate the need for power transmission network upgrades and the savings could go towards clean energy investment. > All new buildings, commercial, government and residential must have enough solar power cells to generate their own electricity. Coal and gas should be available only as a standby for peak periods. > Encourage solar power for households and ensure that the consumer buy-back price is the same as energy companies sell it for. > Solar panels and batteries locally are becoming more viable (albeit not for base load) but I like the idea of local generation strategies that reduce the need for costly long haul distribution. > Look at programs to utilise large roofs in populated areas for solar energy generation as it delivers energy closer to the source with less network loses. > All homes, factories, shopping centres, office buildings, farm sheds etc., should have solar/ wind turbines with battery storage on site. > Use smart grid technology to allow more decentralisation of power generation. > South Australia has ample space for industrial scale solar power. It should also be mandatory for all new homes to have solar panels installed before occupation is permitted. > I have had solar power to my home since 2010; but am disturbed by the price being paid for power. There needs to be a closer link between prices paid and charged. INCENTIVISE THE CONTINUED DEVELOPMENT OF GREEN TECHNOLOGY > Do not ignore the option of tidal power as we are surrounded by ocean. > Create financial incentives for more innovation in this area. > Aggressive pursuit of investment in R&D to efficiently convert green resources. > Ensure completion of current 'industrial' sized solar power farming. > The amount of residential solar PV installed in the last 5 years has outstripped expectations. This has helped to address daytime energy demand. The challenge now is to


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address evening energy demand, using on-site battery subsidies and incentives to develop better storage technology. > Continue development of solar cells that can be used on houses/buildings not receiving desirable levels of sun. > Governments should give financial incentives to help all, business and private alike. My solar system is a 5Kw system, for one person I do not get a bill and get a summer credit of $430. This is a fantastic incentive for all. We save on the greenhouse effect and this is benefit for all on the planet. > The renewable sector is cost-effective when the Carbon Tax is included. Thus, subsidies should be removed from mainstream renewables but retained for those aspects that need building-up such as the addition of on-site battery storage. > Invest in solar now even though it will be difficult for a time to find the money. The longer you wait the more it will cost. > Use our carbon tax $ to fund new technology for renewable sustainable energy sources. > Fund more research into solar and other renewable energy sources. All new buildings should have solar panels, including government buildings and especially superstores. > Increase buy-back price for consumers selling their energy back to the grid. > Research into geothermal and storage batteries/storage of energy units should have a major government funded prize. > Make this scenario a national priority. Invest in R&D, particularly that research that will increase the capacity of solar panels to deliver base load. > We need to concentrate our resources on more efficient ways to store our green energy. COMMENCE A MEDIUM TO LONG TERM PROGRAM TO TRANSITION AWAY FROM TRADITIONAL TECHNOLOGIES > Prohibit the marketing of coal as ‘green power’, it is not and can never be ‘green’. > Acknowledgement of growing uptake of solar and falling price of solar and wind energy must play a more important role in planning on need (or otherwise) of network upgrades and additional coal and gas generation capacity. > Use green power primarily for households and go to nuclear for base load and commercial / industrial need. > Fossil fuel subsidies of any sort must be removed immediately. > Stop subsidising fossil fuels and plan the transition that we need for our future: develop a Green Transmission Grid; seek renewable deployment with energy storage where achievable; introduce incentivised Green Power markets; build government commitment to change; and stop displacement policies (such as solar credits multipliers and CEFC and Arena projects displacing other renewables already required by law). > There is no doubt we’re eventually going to have to go down this route. The longer we wait, the more it will cost. We should be acting as soon as possible. > The government should be much more supportive of this option. > All households should be encouraged to use solar power. If 70% of houses and 70% of industrial buildings in Australia had solar systems installed then no new power stations would be needed and most of the existing ones could be closed down.


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6: Consider the Nuclear Option

Consider introduction of nuclear power, perhaps starting with small modular reactors

in remote mining communities.


Potentially the cleanest, greenest electricity available (if meltdown risk can be removed

from the equation). Modern technologies such as thorium fuel reduce fuel costs, minimise

waste and eliminate risk of meltdown. Spent fuel cannot be used for weapons making.

Small modular reactors delivering 10 to 300 megawatts are already an ‘off-the-shelf’

option. Potentially the least expensive form of power. France delivers 80% of its electricity

using nuclear, while Germany is phasing it out.


• Nuclear @$100 to 110


• Nuclear @ zero kg


Nuclear power in Australia Wikipedia

Tim Flannery on going nuclear timflannery.com.au

Thorium as an alternative to uranium Guardian 9th March 2012

Scenario scoring

Consider the Nuclear Option found more favour than expected with a score of 2.8 out of 5.

Given the contentious nature of the proposed technology and the polarity of responses,

there was no clear pattern of scoring across the seven age categories or across regions.

However, this scenario was scored most favourably by respondents aged over 65 (as well



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as by those aged between 15 and 24), and by those resident in Adelaide Metropolitan. It

delivered consistently lower scores in Sydney and its various sub-regions.








As a consequence of respondent polarity (and the need for further research and testing

before application) commentary is simply presented as ‘for and against’.

Commentary for and against Consider the Nuclear Option

Supportive Opposed

CONFIDENCE IN EFFICIENCY AND COST POTENTIAL > Nuclear is big and scary and what happened in Japan is not justifiable on many levels. Having said that, the technology has moved on and may now represent the most effective way of generating large quantities of power. > This is perhaps the best way forward to provide cheap and plentiful electrical resources to our communities. > Nuclear should be used alongside the use of coal and gas as an efficient means of producing energy going forward. > Use green power primarily for households and go to nuclear for base load and commercial / industrial need. > Adopt nuclear power generation in Australia, as in France, Japan, US, UK, India etc. In the short term enhance the green energy to supplement the nuclear option. > Unfortunately political influence rules the outcome of this. But I hope people wake up

FEAR OF THE POTENTIAL RISKS > Nuclear power generation is too dangerous – forget the idea. > The apparent risks of nuclear would appear to outweigh any practical benefit. > Just not a fan of the idea: Chernobyl & Fukushima! Australia has better priorities. > A waste of time talking about it. > I’m still nervous of this option. > Don’t go there. I want my kids have a place to grow up in. > Too dangerous – no thank you. > I would like to see more investment in energy that does not pose a threat to peoples health and livelihoods - no more coal, no more coal seam gas and definitely no nuclear. > Never – incredibly naïve and potentially life threatening to the whole community. > This option is offensive. Nuclear should only be used in medicine. > Danger from human error in waste disposal makes this least attractive option.


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sooner rather than later in this country to this much cleaner and cheaper option. Why do we dig out the dirty coal, but not mine our own uranium? > A good option – cleaner than coal and a lot cheaper than solar. Follow the big industrial nations. It is good enough for them, should be good enough for Australia. > Go nuclear now! With better design and knowhow this will be cheap, safe and clean. SUITABILITY TO THE AUSTRALIAN CONTEXT > There would need to be strict safety controls on this, but surely Australia with so much 'open' space is an ideal place to take advantage of nuclear power whilst keeping the reactors away from populated areas? > Nuclear is most likely the most efficient source of energy in the world and is at reasonable price. > This solution is 20 - 25 years away but offers the best solution for the future. Australia has the fuel and the geography to suit this option. > Introduction of nuclear plant in one State, to be rolled out after a test period (perhaps small modular reactors in Mt Isa or at Olympic Dam). > Opposition to nuclear is a symbolic holdover from the cold war. We have the technology to create safe nuclear power plants. We have a lot of uranium to mine. We have remote locations we could build reactors. It’s better than burning fossil fuels. > This is a proven, cost effective, environmentally power generation technology and should this be at the very least trialed within Australia. PROMISE OF TECHNOLOGY ENHANCEMENTS > Thorium sounds like it might solve many

> I've got two words to say - Chernobyl and Fukushima. > Avoid at all cost not even an option. > The meltdown risks and the environmental cost of waste disposal are just too great. No nuclear. > Take this option off the table - permanently. > Don’t even think about it. Too dangerous and there is nowhere to safely store the waste. > It is not true that nuclear is the cleanest. Please sit in basement of the Fukushima No1 or No 4 reactors and repeat this. > I do not feel any action should be taken in Australia to introduce the nuclear option, regardless of the so-called advantages. > Forget about it, way too dangerous even in the long term. > You cannot possibly guarantee the safety and security of toxic chemicals that take hundreds, thousands or millions of years to break down. > Never ever! Can only result in one long-term disaster. Just look at Japan. > Fukushima? No thanks. Avoid at all costs. TECHNOLOGICAL UNFEASIBILITY > It will take too long to overcome deeply engrained opposition, both social and governmental (too wedded to coal interests and insufficiently innovative). > The assertion that nuclear is potentially the least expensive form of power consistently uses a cost-base that is fundamentally flawed by its exclusion of waste mitigation, shutdown and site remediation. > Unacceptable on so many levels – not the least of which is that ‘costings’ never take into account the cost of cleaning up afterwards. > This option makes no sense at all if you take heed any of the nuclear accidents that


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of the problems. > I don't believe that the Australian public is ready for this yet. But I'm glad to see it as an option. Agree that of any nuclear options, thorium based technology and remote sites are probably the way to go. > Build small-scale reactors in remote areas, invest in waste processing and share the technology with the world. IMPORTANCE OF MANAGING TECHNOLOGY RISKS AND WASTE DISPOSAL > An option worth considering but all nuclear safeguards must be known and only then trial one reactor. > Start now to build nuclear power plants, and seek ways to dispose of the spent fuel rods safely. > It is a very effective power generation method if careful planning can be implemented. I think if we manage to safely dispose of the waste along with proper engineering solutions, we can use it safely. > Nuclear power seems a sensible form of clean energy. However there needs to be a real careful action plan on dealing with the waste generated. TIME IS RIGHT TO START DOWN THE NUCLEAR PATH > Time to shut up with all the rhetoric and noise and have a real/serious debate in this nation. Focus on the facts, not on scare mongering. > Only way to go in the long term. > Proceed with care, but proceed. Be consistent. We mine it, we sell it, so why not generate with it. > Nuclear plants should be established - but not in highly populated areas. > The obvious solution. Just get on with it.

have occurred. No one is perfect and no system is foolproof. The world already has a problem with landfill waste; it doesn't also need the problem of what to do with radioactive waste! > At this time we do not have the safeguards for this nuclear option. > The opportunity window for nuclear energy in Australia has passed, if it indeed ever existed. It is important not to be distracted and focus on the real opportunities that renewable energy generation has for our country. > Use only when the nuclear waste problem is solved. > Keep nuclear material for medical purposes and scientific research only. > For heaven’s sake, Sydney can’t even get its act together to agree on building a second airport! Do you really think we’ll manage to get a nuclear power station?


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7: Social networks and access to the wisdom of crowds

THE FUTURES PROJECT is not about prediction. It is about considering ways in which our

society may evolve, or what risks might emerge in the future – using the assessment of

alternative near future scenarios, where the near future is that period between four and

twenty years out from the present. It is about using social networks to access the

‘wisdom of crowds’ – as opposed to the predictions of pundits. It is about aggregating

crowd wisdom on preferred outcomes and on ways to act now that will enhance the

probability of shaping the near future in a positive way – looking for action not

conversation.

An enquiry platform for crowd sourced wisdom

THE FUTURES PROJECT operates in the belief that it is better to shape the future than to

wait until the future hits the fan, and that accessing the wisdom of crowds is not only a

sounder basis for looking into the near future than the predictions of individual pundits,

but is also the best way to re-engage a broader populace with the vital processes of

political and business decision making – to the benefit of all.


There is a strong argument that the ‘wisdom of crowds’ can outsmart the ‘predictions of

pundits’. THE FUTURES PROJECT backs this particular hypothesis. However, we are

acutely aware that momentum cannot be achieved unless the targeted crowd has real

mass.

It is our ambition to build a sufficiently substantial crowd – our Friends of the Futures – to

give persuasive heft to our research outcomes, to drown out the extremists and to meet

the four fundamental characteristics of a wise crowd:

1. Diversity of opinion – where each person should have some private information,

even if it is just an eccentric interpretation of the known facts.

2. Independence of thought – to ensure individual opinions are not coloured by the

opinions of those around them.

3. Decentralisation of sources – which encourages individual specialisation and

application of local knowledge.


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4. Aggregation of input – or the application of effective ways of turning individual

opinions and ideas into collective (and influential) action for the here-and-now.

THE FUTURES PROJECT is designed around these four characteristics. It is not about

having crowds coming to a consensus. It is not about prediction. Rather, it is about

creating a social network of individuals delivering a pipeline of unique ideas unsullied by

groupthink.

It is about driving effective near future focused policy initiatives, in the here-and-now, off

the commitment of a global social network concerned with shaping our future. It is about

creating an effective adjunct to the traditional methodologies of opinion gathering (focus

groups, polling and the tracking of consumer behaviour).

Significant inspiration for THE FUTURES PROJECT was drawn from James Surowiecki’s

book The Wisdom of Crowds: Why the Many Are Smarter Than the Few. In Surowiecki’s

words, the wisdom of crowds assumes that: “a large group of diverse individuals will come

up with better and more robust forecasts and make more intelligent decisions than even

the most specialist and skilled decision maker”. Examples include:

1. US Navy – wreck of the USS Scorpion found by posting scenarios to a diverse group

(physicists, oceanographers, military, etc) that delivered a collective best estimate

location at only 220 yards from the submarine’s final resting place.

2. Sony – Howard Stringer (Sony CEO) no longer attends Davos because he “can learn

more by listening to Sony’s 167,000 employees”.

3. GE – Mark Vachon (GE’s VP of Ecomagination Strategy) now crowd sourcing with

GE’s Ecomagination Challenge to attract product ideas and new technologies.

4. HM Queen Elizabeth – “Very few of the sweeping advances we have seen over the

past half-century have come about from governments, committee resolutions, or

central directives” … but … “because millions of people around the world have

wanted them”.

5. DeLib – UK government’s crowd sourcing activity generated 200,000 ideas on ways

to cut the deficit and on ways to enhance individual freedoms. Used 40 analysts to

select and implement six actionable ideas.

6. Dell’s Ideastorm – Customer outreach that has generated more than 12,000 business

improvement ideas, 386 of which Dell has implemented.

THE FUTURES PROJECT argues that the most productive approach to shaping our future is

to consider alternative possible outcomes (scenarios), evaluate preference or risk rankings

between those scenarios, and then backcast to the present in order to take the actions

required today to set society or business or technology on a path to the preferred future


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outcome.

THE FUTURES PROJECT contends that the ‘crowd’, rather than just the expert, must be

permitted a role in considering the range of near future scenarios and suggesting

amendment where appropriate; in identifying preferred outcomes and suggesting actions

to be taken in the immediate present; and then in delivering the weight of visible support

to drive political and business action now.

THE FUTURES PROJECT believes that a wise crowd is a big crowd – diverse, distributed and

independent – and that such a crowd is best accessed using social networks.

THE FUTURES PROJECT recognises that the genie is already out of the bottle. Better to

engage with social networks than try to bottle them up. All attempts to contain public

participation will only result in frustration, opposition and perhaps social unrest. Better

outcomes will be derived from inviting social network users to the party, rather than by

excluding them from it. Better outcomes for society, for government and for business.

THE FUTURES PROJECT aims to give the largest possible crowd a purpose and role in

ensuring that the future can be shaped to our vision and ambitions, rather than just

waiting for the future to hit the fan.

Lessons learned from the energy futures enquiry Participation is the key. Without participation there is no point to implementation. The

priority should therefore be on ensuring maximum reach and on delivering a genuine

reason for stakeholder participation.

Lesson One: Potential enquiry participants respond to (the chance of) material reward

The low level of response to this first enquiry was a disappointment, especially given the

size of the AGL customer base. In future, in order to ensure sufficient participation, it is

expected that THE FUTURES PROJECT and its enquiry partners will be well advised to

consider ‘material’ enticements to participation. After all, participants in marketing focus

groups are paid between $80 and $120 for their presence. The chance of material reward

is expected to significantly increase the rate of enquiry response.

Perhaps one randomly selected respondent each week through an enquiry period should

be rewarded with (say) a tablet computer, a smart phone or even one quarter free of

energy billing.


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Lesson Two: Success starts at the top

Continued customer engagement requires a real corporate commitment and can only be

assured if at the most senior level in the organisation (or political party) there is:

• an agreed strategic purpose to the application of customer engagement

technology;

• real commitment to attracting and retaining sufficient numbers of participants to

blank out the stridency of single issue advocates; and

• across-the-board recognition that customers and constituents do have a legitimate

role in directing near future policy directions.

Lesson Three: Effective social media is more than just an electronic billboard

Merely putting out a one-way-message is the primary cause of, if not failure, then the

irrelevance of most ‘social media strategies’ and customer engagement programs. They

are just background noise on an already overcrowded bandwidth. Even allowing for

feedback mechanisms, there is no guarantee of success unless the ‘engager’ both listens

to the feedback from the stakeholders and is then seen to act on stakeholder feedback.

Two-way traffic is not sufficient. Only three-way traffic will deliver solid customer

engagement: starting with an invitation > generating participation and > then clearly

demonstrating that participation creates real customer benefit.

Lesson Four: Numbers are crucial

Participation in volume is critical, and for that participation to be meaningful, the process

and technology of customer engagement should be characterised by:

• the delivery of dynamic user-centred content - of real utility to the customer;

• a commitment to crowd sourcing - from a substantial customer group; and

• a genuine and visible commitment to acting on customer input.

Lesson Five: Community consultation is a pressure release valve – not a fuse

Any entity seeking to engage its existing or prospective customer needs, therefore, to

adopt technology that engages the customer, respects the customer and clearly

demonstrates to the customer that his or her input does actually influence the decision-

making process – both tactically (day-to-day operations) and strategically (long term

policies).


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• the technology is already in place – use it or lose it;

• if governments and businesses do not take the initiative - citizens and customers

will;

• it must more than just window dressing – the crowd is smarter than it looks; but

• be patient – the starting point will always be one of distrust.


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Appendix A: Enquiry platform screenshots


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40


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Appendix B: Focus on the future

The future is unpredictable. Technology develops in fits and starts. Public opinion can

make wholly unexpected changes in direction. In addition, the future will always arrive

sooner than expected. Any policy making must therefore keep a close watch on trends,

extrapolations and alternate scenarios, and only then apply decision making on the basis of

the probable rather than present.

This priority is well highlighted by a comparison between present and expected energy

prices as shown in the table below.

Energy price and emissions comparisons8

Energy source 2012 $ cost

per MWh

2030 $ cost

per MWh

2030 kg of

CO2 / MWh

Black coal (supercritical PC) 135 - 145 50 - 60 300

Black coal (supercritical PC) + CCS 162- 205 100 -170 40

Closed circuit gas turbine 96 - 108 70 -105 170

Closed circuit gas turbine + CCS 142 - 166 90 - 150 20

Wind (medium scale 200 MW) 111 - 122 70 - 150 0

Hot sedimentary geothermal 150 -163 105 - 135 0

Solar thermal (central receiver with storage) na 120 - 240 0

Photovoltaic (with 2 axis tracking) 277 - 344 150 - 290 0

Photovoltaic (fixed flat plate) 212- 264 180 - 370 0

Nuclear 94 -99 100 - 110 0

CCS = carbon capture and storage. Source: 2012 costs from Australian Energy Technology Assessment from the Bureau of Resources and Energy Economics (2012). 2030 cost projections and level of CO2 emissions from (Australian Federal) Department of Energy Resources and Tourism (2011). Draft Energy White Paper, Chapter 7, page 206.

8 Note that these price comparisons from 2011 may already be out of date. The Sydney Morning Herald of 8th February 2013 states: “Even without a carbon price, wind energy is now 14% cheaper than a new baseload coal-fired station and 18% cheaper than a new gas fired one (Bloomberg New Energy Finance report). With the carbon price included, wind farms can now generate electricity at $80 per MWh, compared with $143 per MWh for a new coal-powered station and $116 for a new baseload gas-powered station. BNEP projects wind power costs of $70 per MWh by 2020 and $66 per MWh by 2030 ($97 and $87, respectively, for large-scale solar PVs).


42

Appendix C: Regional groupings

One of the most important features of any research mechanism is the facility with which

it is able to divide gross results into meaningful sub-groups. With each of those sub-

groups being - in McKinsey-speak - Mutually Exclusive and Collectively Exhaustive

(MECE). That is, capable of delivering complete coverage with no overlaps and,

preferably, demonstrating relative homogeneity within in each sub-group. THE FUTURES

PROJECT has defined 30 regions that do the task for Australia.

One of the early priorities for THE FUTURES PROJECT was to find a way to usefully sub-

divide a country of roughly 22.9 million citizens (as estimated at end-March 2013) for

analysis and comparative purposes. The seven states and territories – with populations of

between 7 million (NSW) and 0.4 million (ACT) – are too lumpy and too heterogeneous to

be useful. The 15,000 or more named communities and suburbs would be meaningless for

understanding broad preferences and opinions. Even cutting back to 564 local

government districts or even 150 federal electoral divisions would still deliver a patchwork

too fine-grained for purposes of national enquiry.

As an alternative, THE FUTURES PROJECT has grouped and assigned each postcode in

Australia into 150 constituent federal electoral divisions, and then grouped or re-

configured these divisions into 30 regions. Thus, as each respondent to one of our ‘issue &

scenarios enquiry’ is requested to provide their postcode of domicile, each will be assigned

to one of 30 defined regions.

Each one of these regions has a population of between 0.6 and 1.1 million. And,

importantly, each one is broadly homogeneous as to social structure, economic base and

environmental circumstance.

In creating these regions, there has been no absolute adherence to existing state or

electoral borders. Some of regions will be recognised and accepted without arousing

inter-state rivalry or concern. Others may be viewed with horror by traditionalists.

However, it is emphasised that this categorisation is not an attempt to undermine long-

standing political (or sporting) loyalties. It is designed merely to allow better recognition

of region-by-region variation (if any) between preferences, opinion and suggestions for

action.


43

TFP regional mapping

examples of re-configured regions

Region Constituent federal electorates Pop’n

Tropical North From Capricornia, Dawson and Herbert on the QLD coast through Darwin and NT to Durack in WA

1.08m

Murray Catchment

Includes Mallee, Murray and Indi in VIC as well as southern part of Farrer, Riverina, Hume and Calare in NSW

0.86m

Bass Strait Coast

Groups Barker in SA with Wannon, Corangamite, Flinders and McMillan in VIC

0.80m

South East Coast

Stretching from Bundeena on Sydney’s southern fringes (Gilmore) through Eden-Monaro in NSW to include Gippsland in VIC

0.73m

Darling Catchment

Includes northern part of Farrer, Parkes, New England in NSW as well as Maranoa in QLD

0.69m

Arid South Includes the electorates of Pearce, Forrest and O’Connor in WA and Grey in SA

0.60m

Gold Coast & Richmond

Richmond in NSW grouped with the Gold Coast (Fadden, Macpherson and Moncrieff) in QLD

0.58m

Canberra & Queanbeyan

Queanbeyan extracted from Eden-Monaro and assigned to ACT while Jervis Bay is allocated to Gilmore in NSW

0.45m

Clockwise, and commencing with Sydney, the 30 regions are as follows:

• Sydney Metro and Suburban (5) – Metro / Eastern Beaches & Botany Bay / Inner West

/ Outer West / Northern Beaches;

• Coastal New South Wales (4) – North Coast & Lord Howe Island / Newcastle & Hunter

/ Blue Mountains & Central Coast / South East Coast (incl’ Gippsland);

• Murray-Darling Catchment (3) – Canberra & Queanbeyan / Murray Catchment (NSW

and VIC) / Darling Catchment (NSW and QLD);

• Melbourne Metro and Suburban (4) – Metro / East & Southern Suburbs / West &

Northern Suburbs / Melbourne Fringes;

• Rural Victoria (2) – Gold & Wine District / Bass Strait Coast (incl’ part SA);

• Tasmania (1);

• Adelaide (2) – Metro / Hinterland;

• Southern Arid Zone (1) – including part SA and WA;

• Perth (2) – Metro / Suburban;

• Tropical North (1) – including part WA, all NT and part QLD;

• Coastal Queensland (2) – Sunshine Coast & Mid-North / Gold Coast & Richmond River;

(incl’ part NSW); and

• Brisbane Metro and Suburban (3) – Metro / Suburban / Toowoomba & West.


44

Appendix D: Enquiry management

Fergus Neilson. Managing Director and Co-founder of THE FUTURES PROJECT. Previously

(2001/10) Fergus was Founder and Managing Director of DIF Capital Partners, a start-up

private equity and mezzanine debt investment manager. Between 1996 and 2001 he was

CEO and director of Chifley Financial Services, a joint venture between Equitilink and the

Labor Council of NSW. For a brief period, 1994/96, he was in Corporate Development and

Institutional Marketing with Norwich Investment Management Limited. This sixteen-year

career in the investment management community was preceded by employment with

Chris Corrigan at Jamison Equity (Australia’s first ‘vulture fund’), with McKinsey & Co, the

NSW Department of Environment & Planning, the United Nations in Japan, the Greater

Vancouver Regional District, and Lazard Brothers in London. Fergus holds degrees from

Nottingham University (BA Hons), University of British Columbia (MA) and Macquarie

University (MBA).

Peter Fritz AM. Co-founder of THE FUTURES PROJECT. Managing Director of Global

Access Partners (GAP) and Group Managing Director of the TCG group of companies

which, over the last 39 years, has produced many breakthrough discoveries in computer

and communications technologies. Today, the TCG companies and associated entities

employ well over 6000 people and generate turnover in excess of A$1.3 billion annually. In

2000 Peter established GAP, a not-for-profit organisation designed to initiate high-level

discussion on the most pressing social, economic and structural issues and challenges

across a broad range of Australian business and policy sectors. GAP seeks to foster links

between community, government and academia to streamline the process of ‘fast

tracking’ solutions to key issues, increased stakeholder participation in policy formulation

and decision-making. Crucially, GAP and its associated First 5000 and Open Forum groups

use social networks to maximize reach and generate wide community input into client

issues. Recent programs have sought to provide guidance to government on strata policy,

progress in society and social media.

Scott Middleton. Founder and CEO of Terem Technologies. Scott and his team at Terem

worked with THE FUTURES PROJECT to design, develop and manage the enquiry platform.

THE FUTURES PROJECT

Level 3, 53 Balfour Street

Chippendale NSW 2008

02 8303 2419

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