In this episode of the “Wired for Energy” podcast, Jack Kotlyar, Head of Green Transport at Energy Australia, discusses the evolving landscape of EVs in Australia. He highlights the rapid growth of EV adoption, driven by falling prices, increasing model availability, and lower operating costs compared to traditional vehicles. Kotlyar notes that Australia is on a similar trajectory to Europe and America but with a slight delay, projecting significant acceleration in EV uptake in the coming years. Kotlyar emphasises the challenges and opportunities for the energy sector, particularly distribution networks, in supporting this transition. He explains the need to upgrade infrastructure to handle the increased electricity demand from EV charging and other electrification efforts.
The conversation explores customised energy plans for EV owners, the potential of Vehicle-to-Grid (V2G) technology, and the critical role of government support and regulatory frameworks in facilitating a smooth transition to a decarbonised transport sector. Ultimately, Kotlyar believes the tipping point for widespread EV adoption is near, driven by economic factors and increasing consumer awareness. He envisions a future where EVs are commonplace, and the focus shifts to managing the energy demands of a highly electrified society. This shift will require significant investments in renewable energy generation and storage, as well as innovative solutions for grid management and customer-centric energy plans.
Transcript:
Neil: We’d like to begin this podcast by acknowledging the traditional owners of the land on which we meet and broadcast today. We pay our respects to elders past, present, and emerging. And in particular, I’d like to pay my respects to the people of the Yame Nation where I spent the formative years of my life and who are instrumental in shaping the person I am today.
Jack: We have 1.6 million accounts, residential and small business, and in my head, that’s actually four to 5 million drivers that will be buying electric vehicles in the coming decades.
Greg: I’m Dr. Greg Trainor.
Jack: And I’m Neil Belford.
Greg: And this is the Network Edge Wired For Energy podcasts.
On today’s show, we have Jack Kotler, head of Green Transport and Energy Australia. Here to discuss decarbonizing the transport sector, the anticipated rise in electric vehicle adoption, and the associated challenges and strategies for grid infrastructure and regulatory frameworks in Australia. Welcome, Jack.
Jack: Thanks Craig.
Greg: How did you get the role of the, uh, head of Greens transfer to ea? What’s your journey?
Jack: Yes. So from a journey perspective, I got really lucky from an, uh, energy industry perspective. I finished uni 25, 26 odd years ago, was looking for that first corporate job and got into powerco from a tax perspective.
I finished business accounting at Monash, always loved numbers and so from tax went to management, accounting. Um. Explaining what the numbers meant, backwards, looking at monthly results. And they got into financial planning at, uh, power Core City Power, which was a bit more forward looking. And then Alinta came along from the west to the East Coast and got recruited into a strategy role for Alinta.
As they were buying up assets on the East coast, and that was my first foray into strategy, so they gave me a lot of experience in the distribution network business as well as transmission both gas and electricity, and then hopped over to Siemens, another part of the value chain on the other side of the negotiating tables.
Selling into the t and d, the transmission distribution businesses and the generators. Did that for six years and then was looking for experience in the generation and retailing part of the industry. And so Energy Australia, I was lucky enough to get the head of strategy role and then the head of reputation role, which took up corporate comms and regulation and uh, public policy, did that for three or four years.
And then my former CEO said, time to start to eat a bit of your cooking. And got into NextGen saying, right, get into it. Start developing these businesses. And we looked at, um, solar and battery and behind the meter and develop that part of the business. And then for the last couple of years, what role will ea play in the e mobility space?
And so this is what brings me here 25 years later in the energy business, still learning and still trying to do new stuff in our industry.
Greg: So you’ve been in a while. When did, um, EVs first come up on your radar?
Jack: Probably and probably belatedly, probably two to three years ago. Um, probably should have started a little bit earlier, but yeah, it was really in the last three years, we start, three years ago, we started to have a think about where’s the market gonna come from and we identified buses particularly ’cause the public transit buses owned by the governments have been accelerating.
Take up. And if you need electric buses, you need the charging infrastructure and the grid infrastructure, which is the role we play. And then from an Energy Australia perspective, we have 1.6 million accounts, um, residential and small business. And in my head, that’s actually four to 5 million drivers that will be buying electric vehicles in the coming decades.
And the question of, okay, what role is EA gonna play when somebody needs to charge away from their home or their business? If we’ve got your account home and business, we’re giving you those electrons from your vehicle. But what if you’re a holiday maker? What if you are in the transport business and need to fill up your electric battery halfway through the day?
What if you live in an apartment? And you can’t fill up at home or a terrorist home and you can’t fill up at home. What conversation do we want to have with those customers? And our board said, yes, that’s something that we want to be part of. The reason EA is around is to help our customers electrify and decarbonize.
And so we have been figuring out what role will play for the last three years and starting to actually do it.
Greg: I’m guessing you’ve got one at home, right? You’d have to
Jack: Yes. Yes. For three years. I, I definitely want to, as my CEO said, eat what you cook and experience. What does it mean to be out on the roads?
What is range anxiety? What’s it really all about? How quickly does it take to charge up your car at home, just with the normal plug? Is that an issue? So I wanted to experience what our customers will be experiencing.
Greg: Cool. We’ll probably pressure on that a bit later too, Jack. Yeah. What role do you see EVs and the consumer take up of EV EVs playing in the energy transition?
Jack: Yeah, so from an EV perspective, and I look at it from starting off with a macro perspective, so currently IM, the national electricity market consumes about 200 terawatt hours. A year of energy. So a big number for everything that we do. And if you look at the forecast, and it’s only a forecast, but if you believe that we’re gonna decarbonize by 2050, that’s probably about 50 to a hundred terawatt hours of extra energy that we’ll need to electrify transports.
And so that’s why I think EV’s biggest small buses, trucks, uh, cars. Scooters. They have a role in decarbonising Australia because that’s why we’re doing it. We’re not doing it for the tech. We’re not doing it with their electric batteries. We are doing it to decarbonise Australia and we can make green electrons, zero carbon electrons now.
We can’t make green petrol. We can’t make zero emissions petrol. And so that’s why I think transport’s got a really big role to play. Once we close down a couple more coal fired power stations in the next three to five years, in Australia, transport becomes the biggest emitter. And so it’s already got focus from the government.
It will be the number one emitter. It will have probably the number one focus. And so that’s why from an EA perspective and personal perspective, we’re in this industry.
Greg: Mm-hmm. What are um, three to five jack main reasons why people are taking up EVs at the moment?
Jack: So, I think we’ve now got the early adopters.
We’re up to about probably 300,000 odd EVs in Australia, selling probably around a hundred thousand odd. Per year, and that will grow and that will accelerate. I think price is really important. It’s probably the main reason we will now accelerate from early adopters who are all about the technology to call it early mass markets.
Five to seven years ago, we probably had, I don’t know, 10 odd models, 20 odd models. Everyone knew the Tesla. Mm-hmm. Today I think we’ve got 60 to 80 odd different models, right. From all the different manufacturers and multiple models. Um, I. You know one example from a Beamer perspective, there’s the IX two, the IX three, the ix.
So they’ve got three if not more models. You’ve got the Chinese brands coming in really hard, and I think what the Chinese brands are gonna do no different to what the Japanese car brands did 50 years ago. The Koreans 30 odd years ago are. I think I still remember the high Hyundai Excel. Mm-hmm. That we’re all buying for $10,000 or nine.
9, 9, 9. I still remember that is electric cars. Now, for a person who’s looking to buy a new vehicle, are priced at the same number as an internal combustion engine vehicle. A nice vehicle. So they’ve got a two in it, probably high twenties to early $30,000 for a vehicle that will do three to 400 kilometers in the battery.
Mm-hmm. Around 50 Ks, you’ll get 500 kilometers, which is pretty comparable to an ice vehicle. And then that’s what’s been happening in 22, 23, 20 24. I think you look at the next three years, EVs are still scaling across the world and with scale benefits, costs come down. So we’re gonna be in this situation where EVs are probably gonna continue to get cheaper and even more competitive.
And so that’s on the purchase price. On the operating costs, electrons are probably 20 to 30% of the price of petrol. So we’re talking 60 to 70% cheaper. If you are lucky enough to have solar and battery at home, or at least solar at home, it’s even cheaper If you can use your own solar electrons for free into your car.
And then from a maintenance perspective, there’s no engine. So the, the cost to maintain that vehicle is so much cheaper from an EV perspective versus an ice. So I think price is what’s gonna really accelerate. Um, the uptake of EVs as we need to. There’s 20 million vehicles in Australia with 300,000 in.
There’s a lot of stock that’s gonna get replaced in the coming decades.
Greg: And vehicle size is not an issue anymore, is it? It used to be the Prius, which is like a small
Jack: Yeah.
Greg: Hybrid or whatever. Now you can get almost any size. Yeah. Military almost. Bloody trucks on the road. Yeah,
Jack: true. I mean the, the IX from A BMW perspective, um, but all those large SUVs that are five seaters, seven seaters, what was the brand?
I think I saw a nine seater just recently. Where it was from there is a key, which looks like a truck or, yeah, so that is no longer, um, the absolute, that’s no longer a issue and I don’t think the range anxiety to have a vehicle that can do 5, 6, 700 kilometers on a battery and. You know, at the moment if you’ve got a petrol vehicle, you have only one choice of where you can fill it up at the servo, at the petrol station, you now, from a home perspective, that is your fuel station.
Mm-hmm. So you can do just, just with the plug, just with the regular plug that’s given you two kilowatts per hour, that’s probably about 10 kilometers per hour. So if you plug in for seven or eight hours or 10 hours, you’re getting 70 to a hundred kilometers just from your overnight charge. Just from your regular plug.
Mm-hmm. Now, if you’re doing more than a hundred Ks a day, which the majority people, which is not many people, right? People don’t do, yeah. It’s not an issue. Just have a plug. If you wanna put in a seven kilowatt charger, which will cost you a couple of thousand dollars installed, well then there’s obviously no problems.
10 hours, seven kilowatts per hour, 70 kilowatt hours. You’re done, you filled up your, your, um, battery
Greg: and, and in your role, you’ve probably spoken to a lot of consumers about their use of EVs.
Jack: Yeah.
Greg: Range anxiety is not really an issue anymore once you’ve had one.
Jack: Yeah. Yes. I think that’s the key thing.
Yeah. That, that there’s a lot of press about the range anxiety of stopping people from doing it, but once you’ve done it or perhaps you’ve leased it and you’ve learned about it, then I think it does fall away quite quickly. I think the use cases are really important. If you are in the transport business and you’re doing a thousand kilometers a day, yep.
I think you’ll have it more on your mind, but then you’ll simply work out where do I have an ultra fast charging station, whether it’s at a petrol station or a car park where I can hop in there and within 20 minutes get a full charge. So if you can find a 200 or 250 kilowatts, um, station out there.
Which there are out there.
Greg: yeah.
Jack: Not as much as I’m sure we all want, but they’re out there. You need to plan a little bit more to be able to get that charge, say through halfway through the day.
Greg: Yeah.
Jack: No different going Melbourne to Sydney. Whether you stop in Albury or any of those suburbs on the way, four to 500 kilometers in, you’ll plan your journey.
And in the coming years, you won’t have to plan your journey. ’cause there’ll be everywhere.
Greg: Yeah.
Jack: But at the start of this industry, this forever industry, you need to plan a little bit more. Yeah. And so that’s, that’s what we do.
Greg: So what’s working today in terms of convincing consumers that now’s the right time to buy into EVs?
Jack: So I think from a tech perspective, what I’ve heard anecdotally, and this is just from mates who have surprised me that they’ve bought an electric vehicle and I’ve gone, why? Why did you buy an electric vehicle? You’re not in the industry. You’re not part of this transition. You’re not living, you know, living this dream.
And they’ve gone, but hold on for the same cost, and I know my fuel is cheaper. Why would I only get new tech? And so I think there’s definitely that side that are thinking and they’re the residential drivers and then every single time and like most that are probably listening to this and for us, we do a lot of travel, different states, et cetera.
And every single time I hop into an Uber and hop into a taxi, we talk about EVs. ’cause they ask me, what do you do? Mm-hmm. And of the EVs that I do start to hop into, they’re going, but my cost is so much cheaper. It’s literally 70 to 80% cheaper to fill up my vehicle with electrons than with petrol or diesel.
It’s a no brainer. The, within a couple of years you’ve paid off potentially the extra cost you’ve paid for your electric vehicle versus an ice vehicle, but this will last 8, 10, 12 years. Mm-hmm. And you’ve paid it off within a couple of years ’cause of the petrol and maintenance cost. So I think like anything.
Nothing will go to scale if the economics don’t work. Yeah. So it’s not a niche industry and I think the economics are working now, and regular people are just saying, why wouldn’t I buy new tech? If it’s the same cost. And when you, when you say
Greg: tech, the design element’s pretty good as well, isn’t it? I mean, they’re usually a pretty good looking car and some are even quite futuristic.
Jack: Yes. I, I mean, I think I, people love the interior where you’ve just got a screen. Yeah. And it just feels new. It’s got, um, all the new safety standards. The ice vehicle is not beating the electric vehicle in many, in many reasons.
Greg: Yeah.
Jack: Hey, if you love the sound and the feel of a V8. Electric’s not for you.
Like you’re not gonna get that, that, although you can’t program.
Greg: Okay.
Jack: But Well, but I will tell you that they’re quicker. The electric vehicles. Yeah. So if you’re after performance, the EV will probably beat, and there’s more than enough YouTubes out there with regular Tesla beating Ferrari and Lamborghini.
So if you’re into performance, electric vehicles are phenomenal. If you love the, the feel, the roar and, and the rumble of a V eight. Sure. Not, not this yet. Although, yeah, they, they are starting to program electric vehicles with sound and vibration to,
Greg: can sound like a Harley if you wanted to give
Jack: No, yeah.
Give you that nostalgia. If, if that’s what you love. But that’s not the majority of the market. The majority of market use a vehicle for util utilitarian reasons you get from A to B. EVs are, um, you know, just a stat. 80 million new vehicles sold. Um, every year. 17 million were electric vehicles. Now you wouldn’t have thought almost a quarter of the world is now buying electric vehicles.
Yeah. In Australia, I think we are three to five years behind Europe, America, et cetera. This is not a discussion for them, but I think we’ll quickly catch up. Like we have in most, most, um, techs,
Greg: and we’ll probably pick up a little bit later too, but Europe’s probably leading that charge, right?
Jack: Yeah, yeah.
Greg: Right across
Jack: excusing the pun leading that charge. Beautiful. I know, I hope you meant that,
Neil: Jack, on, I’m just wondering, um, you know, you, you touched on it, uh, a little bit earlier, but, uh, just how this is, um, gonna affect electricity networks itself. We’ve got this big shift in fuel use. From this, this supply chain we’ve got today. Service stations, um, people know what they’re doing. They go in, they charge, they fill up their vehicle and they.
You know, they know, they know they’re good for X number of Ks, but what we have to build to, to support this fleet that you talked about the, this transition. Um, how do you think the distribution networks themselves are going? How do you think they’re Yeah. Uh, moving to meet the demand, which I think will be, will, will go exponential sometime soon.
Jack: So phenomenal. So XDB, so got a very soft spot for power Core City Power and UE. It’s, it’s where I started and then, and then off to inter, so amazing industry to be part of, you know, the, the distribution business. It’s a significant growth industry as we electrify everything, not just transport. So phenomenal industry to be part of.
I think the DBs are partners with the whole energy value chain to decarbonise Australia and be. Part of the equation. We are finishing off a bus depot. Uh, 12 buses have been ordered in, uh, north Queensland, and we are now working on an 80 bus depot here in Victoria. And this concept will apply to petrol stations and bus depots and truck depots and all, all these EV fleets.
We are going from what I call a garden hose of electrons. To a fire hydrant, and that will be one of the massive challenges and opportunities for all of us and the DBs I’m sure will deliver for us. These industries are used to diesel and petrol, probably on site. Big Bowser fill up their buses, fill up their cars, and they’ve dealt that with that for a hundred years.
And they’re a small electricity user, you know, maybe 50 to $70,000 per year. And then over the coming decade, like the Victorian, um, job that we are now working on, they’ll be consuming millions of dollars of electrons when they fully electrify that depot. And so the grid infrastructure, so it’s not just about the Chargers for the bus depots, no DB connection, no grid connection, no project.
And that’s how important it is. So we need to get, so for instance, this, this site that we’ve got here in, um, inner East. Melbourne. My example is the zone sub there has currently got a 10 MVA capacity, and that suburb currently consumes five MVa. So, and whether it’s MV, a, just call it units. So 50% that zone sub is good for.
My one medium sized project and 80 buses is medium. It’s not a large bus depot. The large bus depot is 160 to 200 buses needs four to five odd MVa of energy. So we suck up from this one project, just that amount of energy and we’ve secured it and tick. But I do ask myself, what about the other couple of bus depots in that suburb?
What about the truck depots? What about the petrol stations and what about the tens of thousands of people who will be electrifying their cars in that suburb? And how will other, you know, zone subs help? So, in my head, a huge challenge for the distribution businesses, how to potentially stay ahead of the curve as this tsunami of electrification comes on.
And hopefully we don’t get to the, to situation where we’re saying, yes, we’ll get you that energy, but in three to five years time. And so how do we stay Pace. With the electrification of transport of any particular vehicle, that that will be an amazing challenge that we’ve got.
Neil: Yeah, I agree. And, um, we’ll come back to, um, what, what we might be able to do in terms of the time of use, but um, I’m just wondering for the larger project.
There’s a lot of growth of electrification of things other than electric vehicles. Yeah. So the larger projects, I think are like a commercial industrial thing that, uh, distribution networks are used to. And so presumably the bus company pays to have an extra fee to put in or something. Is that, is that how it works?
Jack: Yeah, it, it’s the usual grid connection process. I mean, for, for us. We’ve got a very democratized grid connection process. Whether you are connecting for a home or for a bus depot or for a hospital or for a mine, it goes in a very similar method that you need a certain amount of energy and the distribution works out.
What’s the incremental CapEx to build that grid connection to give you that energy versus what is the incremental income that I’ll get over the 10 or 20 year period and if there’s a difference. That’s the, that’s the contribution they ask from the customer, but the process is the same. One of the challenges I think we’ll have, particularly where this electrification in the majority will occur, is in very built up areas.
And so as our system goes from generation to transmission, to transmission, to distribution, to distribution, to the actual sites. The ability to get that amount of electrons at certain parts in the day. To your point about time of use, that will be the challenge. And so a question in the future is once that zone sub is tapped out.
How does one expand it? Particularly in the very, in the growth area? Sorry, not in the growth areas, in the built up areas. ’cause land is at a premium.
Greg: Mm-hmm.
Jack: And so how are you gonna build, do, do you build another zone sub next to it? Can you get access to that land? I don’t know. Can you go vertical? How do you get those bigger transformers to get more and more juice?
Into that area. And you’re right, it’s not just about the electrification of transport, it’s the electrification of heating as gas goes. It’s the electrification of water, which gas often is used to warm up water for our homes. It’s the electrification of everything and how do we get, how do we go from the garden hose to the fire hydrant?
Is in the coming decades. And you’re right, it’s not just about transport, it’s everything transport’s only probably a third. It’s the other two thirds that we need to deal with at the same, and we’re doing it all at the same time. So I think there’ll be an amazing government policy discussion of will we, will policy need to come into it to prioritize what gets electrified over something else.
A public bus route is an essential service. Does it get right of way relative to someone else? So there’ll be wonderful policy issues that Australia and the governments will have to deal with. There.
Neil: There will be, I mean, one of the things that I think is, well, depending on where, where you’re sitting, whether you’re in a, in a, a state or federal government energy department of one name or another, and you’re wondering how the hell you’re gonna, um, have this go smoothly.
Greg: Yeah.
Neil: Is. The very, um, the, the, our slow take up of electric vehicles, which I think will, will change very quickly. Mm-hmm. When the price point continues to fall the way it’s falling. Yeah. And new models come on the market, but I’m just wondering what are the, what are the main reasons do you think. Now why there hasn’t been a widespread uptake in Australia comparable to to say Europe or, or North America?
Jack: I remember some, some work, I think it was coming out of McKinsey that we are literally two to three years away from where America was, for instance, in 2022. So we’re actually tracking similar to Europe, similar to America, of the uptake of electric vehicles beside the fact that we started two to three years later to ’em.
So we are tracking in the same way where, you know, we were. It was at eight or nine odd percent of new electric vehicles last year. Let’s see if we maintain that or accelerate that. So in Australia, I think we sell about 1.1 million vehicles per year. Last year I think we had about a hundred thousand electric vehicles.
So that’s at eight or 9%. It’s no different to where America or Europe, perhaps were in 2022. You sort of going through Covid. So if we do track what America and Europe does and and electric vehicles were more expensive back then as well. Yeah. So now they’re getting cheaper. So we are on. Good times from an Australian perspective that if we track what America and Europe does in 25, 26, 27, 28, I think we’ll see the hundred thousand become hundreds of thousands of electric vehicles.
And then there’ll be these challenges of how do we make sure we can charge them up all the time.
Neil: You think the reason we haven’t kept pace with them is because of our, our lower population density. Like a more, a more basically, not necessarily rural but regional spread of. Uh, people.
Jack: Yeah, I, I think Australia’s always been seen and Australia’s always been a, generally a technology taker.
Um, and I think we’re characterized being a small market, which is probably a detractor, but a market that can probably afford it. And so that will always be the toss up. Uh, I think the fact that you’re seeing now, you know, up to probably a hundred electric models being available in Australia with, with the cheaper ones starting at 30,000 odd dollars.
The Europeans have come, the Chinese have come, and so, and they’re competing hard and they’re competing on price. I think one needs to always be careful on when you read an article or hear somebody say something, where is it coming from? What is there an implied interest when people say, oh, you know, not as many vehicles have been solved in Australia, and they’re starting to really compete on price.
That’s great from the consumer. The prices will fix the prices as, um, a, a former colleague at EA will say. So, um, I think it’s great that prices are falling. I think it’s great for the consumers. I think it’s great that the cost of fuel for electric vehicles is cheaper than petrol, particularly in a cost of living crisis.
So if you wanna reduce your EV cost, your petrol cost, EVs will do that. And if EVs are now priced at the same or less than a comparative ice vehicle, great. We should take advantage of it. We shouldn’t see it as, oh, this is horrible. EVs won’t come on ’cause they’re getting too cheap. Like, I find that argument curious.
Greg: Is it a cultural thing as well, Jack? I mean, you see a lot of trady type vehicles on the road that aren’t driven by tradies all the time. And a lot of SUVs that’ll never, ever go on off four wheel drive. Yeah.
Jack: Yes.
Greg: Um, so we like those big cars, right?
Jack: Yes. And, and I think electric cars have come off started smaller as we’ve seen them.
Yeah. With the, with the Tesla and because. Yeah, they’ve come out smaller. The battery’s there. The battery’s obviously. Uh uh. I think an EV is still. Heavier than a nice vehicle by a hundred or 200 kilograms, you know, comparatively. But batteries are getting cheaper and smaller, so we are gonna see then the same size, but now with the Europeans and the Koreans and the Chinese taking up, that was it.
Uh, yeah. Taking up the size challenge of the bigger vehicles we are there. Yeah. And it’s only the first year that we’ve seen in, you know, late 2024, the Utes come on. Yeah. Yeah. But, and the first Utes won’t be as good as the second Utes or the third Utes, so I’ll be really fascinated. The Vans and the Utes of 20, 26, 27, 28.
So much better than the 24, 25 models. Um, just like with any technology, anything that you bought five years ago, it’s gonna be better now than five years ago. I think it’s, it’s gonna be. To the masses. It’s not gonna be, do you wanna place
Greg: a bet on cyber trucks taking off here or
Jack: cyber? Uh, well, you know, a lot of the time I hear that the cyber truck’s not coming here because they’re so busy.
Um, and, you know, so many orders, um, overseas,
Greg: seriously,
Jack: we were working on, so we are working on a truck. On the big B doubles. So I now say from a road transport perspective, there’s nothing that can’t be electrified. The last one with the, the really big trucks, you know, from Melbourne to Sydney Depot to depot, the big B doubles, and we had a chat to a couple of Europe, European, and American companies to bring them out here.
And they said, we’re too busy. We, we, we can’t allocate you any trucks. Yeah. Because it’s so busy over there. Which is a really good sign. ’cause the more they build, the cheaper it gets. Yeah. It finally comes down to Australia. Great. Whether we’re a couple years behind, for me it’s a shoulder stroke. It’s, it’s gonna happen.
It’s happening. We have time to actually get our distribution businesses, transmission businesses, generation businesses. So this will consume a hell of a lot more energy. Like I said, transport will add. You know, 25 to 50% more energy that we need, which means we need to build the solar, we need to build the wind, we need to build the storage, whether it’s water or big batteries.
Mm-hmm. Because we need more electrons for Australia to hit our decarbonization targets, which is why we’re doing this.
Neil: So coming back to the energy industry and um, and, and your organization and Energy Australia, the relationship between, uh. Energy Australia as a retailer and the consumer moving into an electric vehicle, there must be a lot going on in your business, thinking about how to give plans to customers Yeah.
And how to integrate, um, the, the vehicle, the charging, and the, the other electricity use. Um, I’m just wondering to the extent to which, uh, your internally, you, you must have a lot of different, uh, balls in the air.
Jack: So from a history perspective, we started Next Gen, um, probably about 10, 12 odd years ago in Energy Australia.
And that was all about the energy consumer is changing. We’re going from an, a lot of people from an energy perspective will have heard this before. We’re going from a one-way to a two-way system. And so solar came on, I don’t know, probably 15 years ago whenever it, it came on from an Australian context.
Uh, and that was, you know, one of the first behind the meter. Assets, you are democratising energy, you’re creating a little loan generator on your roof relative to having it at your lawn or uh, having it in in the Hunter Valley in New South Wales. And then batteries came on probably 5, 7, 10 odd years ago.
And I think charges now are just another behind the meter assets where. In our residential and small business, uh, part of our business, they’re trying to work out with those 1.6 million customers. How do they customize those EV plans for the future? How do you use the cheapest electrons to get into your vehicle?
I. To have the lowest fuel costs. So is it off your solar? Is it off your battery? Is it nighttime charging? Uh, and then from a big business, from a B2B perspective, where I focus on is for our North Queensland job, we were able to customise that tariff. So the other critical thing that’s happening, particularly for, let’s call it Fleet Depot customers, not public charging, but Fleet Depot, they generally have a curve before they electrify where they use most of their energy during the day.
The office, the air conditioning, perhaps the pump, perhaps perhaps the bus car wash. And now all of a sudden, as they electrify, they’re using a majority of their energy during the night. And why not during the day when energy’s cheap Or they can use their solar, well, their buses are doing stuff there. The Ubers are doing stuff during the day.
They’re earning money. So. The critical thing from a retailer perspective and from what I’m trying to take advantage of from an EA perspective, from the customer, is customizing that retail tariff and saying, well, I don’t, you know, dear bus company, I don’t need to buy energy for you during the day. ’cause you’re not consuming energy during though you need, you’re buying it all at night.
And so let’s customize that tariff. Let’s only buy energy when you need that energy, and that’s delivering a lower cost for the customer. The really big challenge then ipso factor going forward is as the coal fired power stations close, how do we ensure we have enough energy during the nights? Solar won’t be there.
Perhaps the wind will be there and the storage will be there. So we need to work out how do we customize our retail tariffs for when the. Transport industry or whoever is charging their vehicle needs that energy. And then how do we make it net zero green, whatever term we want to use, particularly if they’re using it at night because we are removing the coal fired power stations, which are 24/7 energy when they’re working.
To an energy system with solar, so it’s good during a certain part of the day out. Wind, similarly, a capacity factor of about 35%. It sort of works a third of the time, and then storage will be important, whether it’s gas or whether it’s lithium ion or whether it’s water.
Neil: Yeah. So there’s so many layers in in that’s what you were just telling us.
It’s another episode. Right. And, and, and, uh, I’m particularly. In regard to the changes, uh, the, the, the rule changes in the markets with, uh, secondary settlement points and the ability to, um, to, uh, have a manage variable load and particularly as a, uh, you know, commercial industrial customer to manage that very, very dynamically against wholesale market.
Yes, we could have a completely separate talk about it, but I just wonder, are you also considering putting. Uh, bulk storage and energy storage into large, uh, vehicle depots. Yes. To take advantage of the wholesale market.
Jack: Yeah, absolutely. So from an EA perspective, whether we control, I think we have now four big batteries.
Last, last week, uh, we broke ground on our 400 megawatt, 1400 megawatt hour W Battery. Its biggest investment Australia, um, energy Australia is making from a battery perspective. We already existing have existing four big batteries and we’ll have plenty more. But no different to having, uh, batteries behind the meter.
So at the actual sites, whether it’s a home, um, like my home ea controls my, my battery at home and we’ve got hundreds of other customers we do that for or at a, um, business, small, large business context. The things from that we are learning from is those 40 foot one or two megawatt hour. Batteries that you sometimes see at the commercial industrial sites, they’re about the same size as a bus bay, and so the bus operator needs to think, right, do I have an extra bus there or do I have a battery there?
Because a battery I can make money from from trading, it’s really good for resiliency if I have a outage, which is really important, which is another whole topic of at the moment, the more you electrify a depot, once you get to a hundred percent, your risk of an outage is much, much higher. What happens if you have an outage for 24 hours?
How are you getting your public buses out there? How are you running your private buses out there? If it’s not public bus routes? So two different feeders, how do you build resiliency into the grid for that particular customer? Sorry, I digress. So space sometimes is a consideration when space isn’t a consideration.
I think a battery can play a really good role. Then if space is a consideration, then it will be a compromise of where do you take it. Um, it’s also working with the distribution businesses because you can only. Export a certain amount of energy depending on what that transformer tells you. So, you know, don’t size a battery that you can’t export.
Similarly, don’t size, you know, certain and solar if you can’t export it or if you’re not self consuming it. So from a regulation perspective, like with anything, as the industry changes, the regulations will need to keep up to get the best outcome from the customer. Because if the customer needs to pay more or abundantly more, they will eventually reject that technology, which is what should happen.
If it’s not economic, it won’t ever scale.
Greg: So clear this one up for us, Jack. Is there such a thing for consumers as skipping an energy battery purchase? So in a measured way, they use their EV battery. Yeah.
Jack: Yeah.
Greg: As another energy source, and they don’t necessarily have to buy a battery if they’ve got solar.
Does that make sense?
Jack: Yes. Well, so I think. So V2G is a hot item. It, it has popped up more and more and you’re hearing it different. So I think we’ve got a couple of years, maybe shorter. Hopefully somebody can tell me it’s shorter of getting an inverter that will take V2G in Australia. Undoubtedly, it’ll happen.
It’ll probably happen in the next 12 to 18 months. I do wonder, and there’ll be a lot of testing on this, will you let an energy company or even yourself. Will you use your vehicle battery for energy trading? So, at the moment I’ve, I’ve got solar at home. I’ve got a battery at home. It’s sitting out, out, um, you know, on the outside of the wall.
And that’s used potentially for trading, for arbitrage. Will you want to use your own vehicle battery? I. Bearing in mind that each cycle does degrade it a little bit. And is it actually worth using that vehicle battery for energy trading? I think it’s great for resiliency. There’s an outage that battery gives you days of energy for your home.
That’s particularly important for areas where the grid is, um, much weaker. So, you know, in, um, north Queensland at our bus depot, we are putting in a couple of, and they’re not big batteries. Um. 100 kilowatt, 233 kilowatt hour batteries. They have lots of outages. So when hurricane Jasper went through, they were out for three weeks.
There’s now talk of another, um, you know, cyclone hurricane going through Southeast Queensland. Uh, resilience is a really big issue and the way we’re setting up that bus depot is the batteries, the smart, which says if there’s an outage. Use my solar, use whatever I have in my battery switch on the generator.
So it’s, it’s a lot of people, I don’t know, against using generator to charge up, um, their vehicles. But when you have to, you have to. Mm-hmm. There’s, you know, media that laughs at that. I, I think it’s just misguided and like I always say, be careful on who. Gives the profits a, an opinion. And then when the grid outage comes back on our automatic switch, switches back on the grid, switches off the generator.
Um, you got the solar there and the battery there. So that’s at a business sense. I do wonder there’ll certainly be a certain proportion that says, yes, use my battery to get me, um, money to trade. Uh, I do wonder, I think it will only work if there’s two really simple things. It’s really easy for the consumer to say yes.
You don’t have to do new wiring, you don’t have to upgrade the distribution boards, you don’t have to do all this other stuff. And if it makes financial sense, so solar, what are we like three and a half million solar installations in Australia. Um, out of probably seven or 8 million homes that can actually take, you know.
Amazing penetration. It’ll probably go go even higher by 2030. 2035. Why? Because we can install solar on our home with minimum disturbance to that home, and it pays back in five or six years, and it’s a 20 year asset. That’s why it’s boomed. Yeah. Key question is when there are hundreds of thousands, millions of vehicles out there, will that V two G offering be really simple and.
Make that consumer a lot of money, what their business. But
Greg: you touched on it before with, um, energy Australia and managing your battery.
Jack: Yes,
Greg: yes. Can you see that being a common theme Right. Throughout the industry as people get more comfortable with My energy company does everything for me. Yes. Or whoever it might be.
It could be Telco, whatever, but you know, they manage everything in the house. Yes. And they’re comfortable with it for a price. Yes.
Jack: And, and I think what we’re seeing is. Consumers, not all of you, you can’t say it’s all, but consumers are more comfortable for energy companies to potentially control things outside of the home.
Mm-hmm, mm-hmm. I think where it becomes really hard is when you wanna start to control things in the home. So you hear about, you know, controlling your air, conditioning your heating. It’s like some will say, stay outta my home. Yeah. You can do the stuff on the outside, on my roof, in my garage, on the outside of the wall, perhaps the car.
But will they? The, the car will be, I think, fascinating. I think we’re just entering the idea, you know, you’ve got UK doing stuff about V2G. The key question is, will be the take up, will it be at scale or will it continue to be a niche? But the offerings there, the offering will definitely be there. And I think if energy companies can deliver it at a lower cost, then customers will say, yeah, that’s for me.
Neil: Yeah. Well, that, that comes right back to the time of use, um, uh, question and, um, and just the types of plans. Do you think, um, with those time of use plans and with, um, with, with, uh, people sort of giving up the. The control for a benefit in terms of when they charge you their ev, um, do you think it’s, it’s, it’s gonna stick to kilowatt hour plans or do you think there’ll be some sort of rolled up bundle that, uh, is a per monthly charge or something?
Jack: Like a subscription service perhaps. When I think about time of use, and I just saw a fantastic, uh, presentation from the states at a Monash, um, uni function, which talked about time of use planning and getting ev consumers to let the energy company switch on. When are they gonna charge the vehicle and let’s say peak times is from three to 10 o’clock here in Australia, you know, different for different distribution businesses, no different to what they’re seeing in Canada or in America.
And they’ve got exactly the site. The peak is between three in the afternoon, 10:10 PM and all of a sudden, all these EV customers who are part of this trial said, yeah, let’s be on this plan where you only start charging after nine o’clock or 10 o’clock, and all of a sudden, a shadow peak was created where all of a sudden there’s this huge amount of energy between 10 and 12 because everybody’s switching on their vehicles at that time because they weren’t doing it during the peak time.
So we need to be careful with that time of use of. When are we gonna create those peaks? I think for some customers who aren’t reliant on having a full battery at seven or eight o’clock in the morning. I think they’ll be up for, let us switch it on at 12 o’clock. At two o’clock in the morning, or let us charge it at, at, you know, during the day when there’s plenty of solar.
On the other hand, for business, I think there’ll be a lot more constraints. So I’ve gotta get out those electric buses at seven o’clock in the morning. I need them to be on a full charge. We’re not, this isn’t a discussion. If you’re doing a road trip, sorry, if you’re an Uber driver, a taxi driver, or last mile delivery driver, or you’re going on holiday the next day and you wanna make sure you’re at 80%, 90%, a hundred percent.
Not a discussion. So I think where you have discretionary charging available, I think customers may say yes to it and they’ll always have the override option. And when they don’t, that they won’t. So I think again, if energy companies can work out how to lower the cost for consumers, businesses, or residential, I suspect customers will take that up.
If we can’t, then they won’t.
Neil: And moving on to the, how this sits in a regulatory framework. How do you rate the state and federal governments at the moment? How they’re, how they’re going with, um, supporting ev uh, take up both directly with Australian citizens and with the energy industry itself?
Jack: Yeah, so the government I think has a role to go with what the will of the people have got.
I think we’ve got bipartisan support that we need to decarbonize. I think there’s, there has been plenty of support at both the EV vehicle and the charging infrastructure that governments have been out there providing.
Neil: Yep.
Jack: It hasn’t been at a sort of federated level, at a NIM level. Each state’s doing their own thing.
Each council’s doing their own thing, but I think the support has been there. I think we’re now getting to a stage where they’ve got us through that first three to five years when private industry. Won’t invest ’cause it’s just too risky and too unknown. And that’s what government’s there to help with, to, to help start an industry and get there.
No different to solar, no different to battery. And now we’ve got that EVs. I think in certain areas you probably still need help for EVs, perhaps in the regional areas where private business can’t do it. But that’s no different to the telco industry or to to the energy industry. I think some will say we want more, we need more.
I think we, now that we’re getting to a stage from an EV perspective, that the price is similar to ice. Perhaps that’s a good place that we’re in. Um, from a charging perspective, I. There is support and I think that support’s continuing to get us to put big chargers in for ultra fast chargers in for that transport industry and the holiday making industry.
So it hasn’t, you know, arenas driving the Nation fund has been really good in helping customers who wanna invest to co-fund with them. So, as I said, some will say, you know, we need more, but the support is still there for those people who want to invest into this new technology.
Greg: Thanks, Jay. If you could predict the tipping point of ev takeup in Australia, how far away do you think it is and, and what’s the thing that, things that most that contribute to that happening?
Jack: Yeah, so I think we’re, we’re within a couple of years of that significant acceleration as word of mouth gets out there. I’ve had a couple of EVs for a year or two years. I haven’t found any issues. You know, I, I notice less articles about Easter or Christmas where people have been lining up for charging a really long time, like it’s less.
Compared to a couple of years ago. And I think price talks if, if prices continued. So batteries are still scaling. They’re the, they’re a big component of that vehicle. If they’re continuing to get smaller, cheaper, and more dense, I. So I remember, you know, Teslas of five odd years ago would get 350 kilometers out of 50 or 60 kilowatt hour battery.
Now they’re getting 500 kilometers. So you’ve got these really good trends of price. The batteries are getting smaller, which means they’re lighter, which means you’re getting more kilometers out of the same size battery than you would previously. I think we’re a couple of years from going to scale.
Hundreds and hundreds of thousands of vehicles. So again, 1.1 million vehicles in Australia, we’re now at a hundred thousand. So about 10%, almost 10%. You know, what will it take? Perhaps a couple more years till we get to 15, 20%, and then we are really becoming, it’s becoming normal. I.
Greg: And the vehicle manufacturers are helping this, aren’t they?
’cause they’re shutting down some of the petrol lines and just going fully electric. Yes.
Jack: I, I mean, you hear different stories. You, you hear some saying that, Hey, you know, we’re, we’re, uh, delaying when we’re going fully electric. And perhaps those vehicle manufacturers in that particular model is just not successful.
I. Whereas you hear other ones going fully electric and talking about significantly scaling up, you can’t have 17 million new electric vehicles in the world and saying, we’re still a small industry. Yeah, it’s just not as big in Australia, but go to Korea, go to China, go to Europe, and it’s like, you know, it’s normal.
This was 10 years ago. This is normal. You know, we’re now at 20, 25% penetration, you know, when does Australia get to 25%? 2025, perhaps by 2030 as it just continues just to be a normal thing. Yeah. Um, I’ll look at it myself. I’ve got four, four vehicles. Um, I’ll have four vehicles in two years time when my younger one is 18 and driving, um, perhaps by 2030.
I go from a couple of years ago of having four ice vehicles to having four electric vehicles at my home by 2030. And then the wonderful question is. The distribution grid, how does it cope with that? Mm mm-hmm. How does my street, that’s got 20 homes on it. That’s right. That started off with zero ice or zero electric vehicles five years ago.
My, my street now probably has five electric vehicles. I know all of my older ones friends have got electric vehicles. They’re parked outside. So what happens when that street has got 20 electric vehicles? 40, 80 electric vehicles? You know, that’s,
Greg: and and do you need the same numbers too? I had example seen examples where in apartment complexes they’re putting in almost like a, an uber fleet of cars in the bottom of the apartment for 10 or 20 electric vehicles.
And you book them like it’s part of the, um. Part of the apartment complex and
Jack: perhaps you need less electric vehicles, but I suspect those vehicles will be used more. Yeah. And so from an energy perspective, we’re still worried about how do we get you enough energy if you’re charging more at the same time.
Yeah. And you’re continually recharging them ’cause you are using them a lot more. Yeah. And that’s what the, the whole energy value chain from generation, uh, down to retailing needs to focus on.
Greg: Yeah.
Jack: And it’s great industry to be part of. It’s growing.
Greg: That’s great, Jack. Thanks very much. Fantastic discussion today.
I am sure we will ask you back at some stage ’cause it’s such a ongoing, um, fascinating story and, and, and we’re keen to find out how you go with those bus stations as well. So
Jack: yeah, love it. Thank you. Thanks very much Jack. Thanks for the opportunity.
Greg: Thanks for listening. You can find more information about this and other episodes in the show. Notes Wired For Energy is a production of Network Edge with episodes produced and edited by Poster Boy Media. Make sure to follow or subscribe to stay updated on future episodes.