NSW Energy Forum 19 July 2026

[00:00:00]Good afternoon everyone and thank you for inviting me to speak today um about the practical realities of the energy transition and what lessons we can draw from the experiences in Australia, Britain, and elsewhere.

[00:00:12]Electricity systems don't respond to political ambition or financial models.

[00:00:16]They respond to the laws of physics and these are not laws that politicians can repeal.

[00:00:22]Let me be clear at the outset. I don't believe that the energy transition as currently conceived is sensible. I'm not against clean energy or technological progress or reducing genuine environmental harm.

[00:00:34]Nor do I believe that the electricity system should remain frozen in the form it took 50 years ago.

[00:00:39]But replacing reliable energy dense generation with large volumes of intermittent wind and solar is a poor use of both capital and natural resources.

[00:00:48]It requires us to build far more generating capacity than we need, duplicate it with dispatchable capacity for periods when the weather doesn't cooperate, expand the network to connect increasingly remote and dispersed assets, and then procure additional equipment and services to replace the essential electrical characteristics lost when synchronous power stations close.

[00:01:10]This isn't an elegant transition from an old system to a better one. It's the construction of several overlapping systems at enormous cost in an attempt to reproduce the reliability we already had.

[00:01:23]Britain is presented as a as a success because coal, which supplied around 40% of our electricity a little more than a decade ago, has disappeared from the power system entirely while offshore wind has grown rapidly.

[00:01:35]In fact, the choice to move away from coal had nothing to do with environmental concerns. Coal started to run out just as North Sea gas was discovered and a switch between them was economically rational.

[00:01:47]Had we discovered coal when gas was running out, we'd have made the opposite choice and now we'd be crying about the emissions.

[00:01:54]But this fuel switching decision and the subsequent choice to replace gas with wind and solar does not tell us whether the policy was rational or the resulting system secure.

[00:02:03]Installed capacity is not dependable capacity. Annual production is not production when electricity is needed, and a megawatt hour is not the only thing a power station provides.

[00:02:14]Policy makers have counted visible inputs while overlooking total system performance and cost.

[00:02:20]The central problems are intermittency, energy density, and trying to force direct current technologies onto alternating current grids.

[00:02:28]Wind farms generate when the wind blows, and solar panels generate when the sun shines, regardless of the level of demand.

[00:02:35]In Britain, we tend to talk about cold, dark, and still winter weather. Demand is high, wind output can remain low for days, and the solar contribution is meager and disappears altogether before the evening peak. That's a serious problem, but it isn't the only weather pattern that matters.

[00:02:51]Australia's more obvious challenge is heat, particularly heat combined with still air. When temperatures soar, air conditioning demand surges.

[00:02:59]At exactly the same time, a stationary high-pressure weather system can suppress wind generation across a very large area.

[00:03:07]Solar may produce strongly in the middle of the day, but it ramps down far faster than people expect, and extreme heat itself reduces the efficiency of solar panels.

[00:03:16]Demand doesn't disappear when the sun begins to set.

[00:03:20]Europe has faced the same combination this summer. Intense heat, wind weak wind output, and high cooling demand.

[00:03:27]On the 23rd of June, Britain came uncomfortably close to power shortages as demand exceeded the system operator's forecast, and available reserves became dangerously low.

[00:03:38]The control room curtailed exports, and there are now whistleblower allegations that the grid was insecure, and that the system operator's management has covering has been covering it up.

[00:03:47]Investigations are underway after questions were asked in Parliament.

[00:03:51]Elsewhere in Europe, high river temperatures forced cuts to nuclear outputs over reduced access to cooling water, and low river levels have restricted coal deliveries to thermal power stations.

[00:04:02]Heat also increases line losses and losses from transformers. Thermal power stations are also less efficient.

[00:04:09]Basically, the entire grid has to run faster just to stand still.

[00:04:13]Transformers are also harder to cool, increasing the risk of equipment failure.

[00:04:17]So, whether the critical event is a cold, dark, and windless winter evening or a hot, still summer evening, the underlying requirement is the same. The system has to meet demand continuously, not merely on average, and not merely when the weather is helpful.

[00:04:32]This is why claims that wind and solar are the cheapest forms of electricity is so misleading.

[00:04:37]They may have a low marginal cost when they happen to generate, but consumers don't buy isolated megawatt hours at the gate of the wind farm.

[00:04:45]They buy a reliable electricity service delivered at the right voltage and frequency every second of the year.

[00:04:52]The relevant cost isn't simply the cost of the wind turbine or the solar panel.

[00:04:56]It's the cost of the whole system, generation, backup, storage, transmission, distribution, balancing, constraint management, reserve and stability services.

[00:05:06]If wind and solar replace dispatchable generation, what supplies the system during a prolonged period of low renewables output?

[00:05:15]If dispatchable generation has to remain available, then it hasn't really been replaced. We've simply built another generating fit fleet alongside it and forced the original fleet to recover its costs over fewer running hours.

[00:05:27]That makes the dispatchable capacity less economic even as it becomes more important to security of supply.

[00:05:34]The inefficient use of capital is matched by an inefficient use of physical resources.

[00:05:39]Wind and solar have low energy density and relatively low capacity factors. So, procuring a given quantity of electricity requires a large number of machines spread across very large areas.

[00:05:51]Each machine needs steel, concrete, copper, and other minerals.

[00:05:54]Offshore wind also requires extensive foundations and undersea cables, while solar consumes land, glass, aluminum, and network equipment.

[00:06:03]Batteries add further demand for processed minerals, yet most grid batteries store only a few hours of output.

[00:06:10]That can be extremely useful for rapid response or for moving some solar generation into early evening, but a battery that can discharge for two or four hours isn't a solution to several days of low wind.

[00:06:22]All these materials have to be mined, refined, manufactured, transported, and eventually disposed of or recycled.

[00:06:29]Much of the mining and processing takes place in countries with weaker environmental safeguards and poor labor protections.

[00:06:35]We call the final electricity clean because we choose not to count the damage elsewhere in the supply chain.

[00:06:42]There's an extraordinary asymmetry in this debate. The environmental impacts of fossil fuels and nuclear power are examined in minute detail, as they should be. But the land stake, mineral intensity, habitat disruption, and waste associated with wind, solar, and batteries, and thousands of kilometers of new transmission, are all too often treated as incidental.

[00:07:02]We've confused low carbon at the points of generation with low environmental impact overall.

[00:07:08]There's also a deeper electrical engineering problem. Generating electricity and operating an electricity system aren't the same thing.

[00:07:16]A large synchronous generator does far more than simply produce energy. It contributes inertia, fault currents, voltage support, and system strength because of its fundamental physical characteristics.

[00:07:28]Historically, those services arrived bundled with the electricity, so markets didn't need to value them separately, and policy makers barely noticed them.

[00:07:37]Wind turbines, solar panels, and batteries connect through inverters and don't behave in the same way.

[00:07:43]Once synchronous generators retire, the system operator has to procure services that were previously broadly free.

[00:07:50]We replace the energy and then we pay again to replace the engineering characteristics of the plant we displaced.

[00:07:57]So, a system can have far more installed generating capacity than it could ever realistically need and still be insecure because capacity isn't the same as capability. If the output is in the wrong place, arrives at the wrong time, or can't support the network during a disturbance, its nameplate rating is irrelevant.

[00:08:15]Britain shows how these costs accumulate. Our transmission network was designed largely around dispatchable power stations built near established industrial centers. It's now being reconfigured to connect weather-dependent resources dispersed around the country and far offshore, often hundreds of kilometers from the nearest from the largest centers of demand. That requires enormous investment in new lines, substations, and subsea cables.

[00:08:41]Yet, building more network doesn't abolish constraints when generation is just developed faster than the infrastructure required to transport its output.

[00:08:50]On windy days, Britain can have too much electricity in northern Scotland and not enough grid capacity to move it south.

[00:08:56]The system operator then pays wind farms to reduce output while paying gas plants elsewhere to increase output.

[00:09:03]Consumers therefore pay twice for the electricity they actually use from the gas power station and the electricity they don't use from the wind farm.

[00:09:12]Britain's constraints and balancing costs have risen sharply while the range of ancillary services required to keep the grid secure has expanded.

[00:09:20]Synchronous condensers are being installed to provide inertia, voltage support, and fault currents without producing electricity.

[00:09:27]Gas power stations are sometimes instructed to run for stability even when their energy isn't needed, and batteries are paid to provide rapid frequency response.

[00:09:37]Each intervention may be technically sound, but together they expose the friction that wind and solar introduce to the grid.

[00:09:44]Nor does storage solve the fundamental problem. Batteries are excellent at responding quickly and can be valuable for frequency management, short duration balancing, and moving some solar output from the middle of the day into the evening.

[00:09:57]But the challenge in a renewable-heavy system isn't merely a 5-minute mismatch.

[00:10:02]It can be a multi-day or multi-week period of low wind, sometimes accompanied by unusually high demand.

[00:10:08]Providing enough battery capacity to bridge such periods would require a huge overbuild of generation to charge it, an immense quantity of minerals and capital, and storage assets that might only be called on it occasionally.

[00:10:22]Their economics are difficult precisely because the strategic reserve we most need must sit idle much of the time.

[00:10:29]Pumped hydro can provide longer-duration storage where geography allows, but suitable sites are limited. Hydrogen remains inefficient, expensive, and largely unproven as a route for storing electricity at power system scale.

[00:10:44]The Iberian blackout in April 2025 revealed the physical risks behind these economic distortions.

[00:10:50]The initial public reaction divided along familiar tribal lines. Renewable advocates insisted that wind and solar had nothing to do with the collapse, while critics described this as definitive proof that renewables could never be operated securely.

[00:11:04]The detailed reality is both more complicated and more important.

[00:11:08]The disturbance involved voltage instability, inadequate dynamic dynamic voltage control, protection behavior, and the failure of inverter-based gen generation to remain connected as required.

[00:11:20]More than 8 GW of inverter-based resources disconnected within seconds, including installations that should have ridden through the conditions.

[00:11:28]With relatively little synchronous generation online, the system couldn't arrest the cascade and the Iberian Peninsula went dark.

[00:11:36]The lesson isn't simply that the system lacked inertia.

[00:11:39]Inertia has become a convenient catchall whenever a grid disturbance occurs, but synchronous machines also provide short-circuit currents and voltage stiffness.

[00:11:49]These characteristics interact, particularly during faults, and they can't safely be reduced to a single metric.

[00:11:56]Iberia demonstrated the difference between compliance on paper and performance in the real world. An inverter may be certified against a grid code model and still respond differently when exposed to a complex disturbance involving both voltage and frequency changes across a weak network.

[00:12:13]Protection settings designed for a system dominated by large rotating machines may also behave unpredictably as fault currents become smaller and less familiar.

[00:12:22]Simulations and certificates are valuable, but neither is a substitute for demonstrated behavior under credible system conditions.

[00:12:30]The blackout also illustrates the danger of normalization of deviance.

[00:12:34]Asynchronous generation falls and inverter-based penetration rises, system operators may repeatedly operate closer to the boundaries that would once have been considered uncomfortable.

[00:12:44]Most days nothing catastrophic happens, and each successful day is then treated as evidence that the reduced margin was safe.

[00:12:52]But the absence of failure isn't proof of resilience. It may simply mean the system hasn't encountered the disturbance capable of exposing its weakness.

[00:13:00]It's a bit like thinking running out in traffic is safe cuz you did it a few times and lived to tell the tale.

[00:13:06]Electricity networks operate in milliseconds, not annual averages. They must survive the wrong fault in the wrong place on the wrong day.

[00:13:14]Iberia had abundant generation before the blackout, but it lacked the ability to keep that generation connected and the system stable when conditions deteriorated.

[00:13:24]Australia is especially important because it's further along this path than almost any other country. The national electricity market spans thousands of kilometers and incorporates some of the world's largest penetrations of rooftop solar.

[00:13:38]South Australia has already experienced periods when inverter-based resources supplied almost all local demand while conventional generators have progressively retired or reduced their running hours.

[00:13:49]AEMO and the network businesses deserve credit for being more candid than many policy makers about the resulting engineering challenge.

[00:13:57]Their work on system strength, minimum synchronous generation, fault levels, and protection acknowledges that adding megawatts of renewable capacity doesn't automatically add the capabilities required to operate a secure network.

[00:14:10]The installation of synchronous condensers in South Australia is perhaps the clearest physical expression of this reality. These are large rotating machines that consume capital and resources but produce no electricity.

[00:14:22]They're installed solely to restore some of the properties that were lost synchronous power stations were removed.

[00:14:29]Technically, that may be the correct response to the system that policy has created. Economically, however, we should ask why consumers are being required to pay for wind and solar generation, dispatchable backup, major network expansion, and synchronous machines whose purpose is to recreate services previously provided by the generators being displaced.

[00:14:49]If a supposedly cheaper technology requires an entire supporting architecture before it can be used securely, then it ceases to be cheap.

[00:14:58]Grid-forming inverters are frequently presented as the eventual answer. Unlike conventional grid-following devices, they can establish a voltage and frequency reference rather than merely following one. And in control settings, they can reproduce some behaviors associated with synchronous generation.

[00:15:15]The technology is promising and deserves serious investigation, but promise isn't proof of equivalence. Some designs revert towards grid-following behavior during faults, precisely when grid-forming capability is required, and maintaining stable control becomes harder as current limits are reached.

[00:15:34]Um we could build vast networks, enormous quantities of storage, synchronous condensers, grid-forming batteries, and fleets of underused gas power stations held in reserve.

[00:15:44]The relevant question is whether doing so produces a better outcome than investing directly in reliable energy dense generation such as nuclear, hydro where geography supports it, and modern gas power stations.

[00:15:57]These technologies can supply electricity when it's required, while contributing many of the essential characteristics the network needs.

[00:16:05]Policy has focused on the cost of carbon, while neglecting the cost of complexity, duplication, and fragility.

[00:16:12]Governments count installed renewable capacity because it's visible and politically convenient, but consumers don't care how many gigawatts have been connected. They care whether the lights come on, whether their bills are affordable, and whether industry can invest with confidence in a reliable supply.

[00:16:28]A system that occasionally produces an excess of very cheap electricity, but requires billions in subsidies, networks, balancing, and backup isn't genuinely cheap.

[00:16:38]A system that meets an emissions target by closing domestic industry and importing manufactured goods hasn't eliminated environmental harm. It's exported both the emissions and the jobs.

[00:16:50]Energy policy should be judged by its effects on human welfare and economic resilience, not by the elegance of its targets.

[00:16:57]A more rational system would have um would recognize that power electronics can't produce unlimited fault current, and software-controlled responses introduce interactions that aren't yet fully understood at system scale.

[00:17:11]It would be reckless to retire proven synchronous capability today on the assumption that future inverter controls will reliably reproduce all of it tomorrow.

[00:17:21]This is where engineering judgment has to confront political ideology.

[00:17:25]Engineers can devise ways to make a renewable heavy grid more stable, just as they can solve many difficult problems if they're given enough time, equipment, and money.

[00:17:34]But, the fact that a problem can be mitigated doesn't mean it was rational to create it. Technical feasibility isn't the same as economic wisdom.

[00:17:42]We're deliberately building generation that breaks the engineering logic of our electricity grids. And this is forcing us to spend billions of dollars on correcting the problems introduced by that generation.

[00:17:53]When we also pay billions of dollars in subsidies to build it in the first place, that adds insult to the economic injury.

[00:18:02]Um we could begin with we should begin with the outcome the electricity system should deliver. Secure and affordable power at all times, with environmental impacts assessed across the whole supply chain.

[00:18:13]Technology should then compete on their contribution to that outcome, including availability, location, useful life, material requirements, network impacts, and system services.

[00:18:25]Firm power shouldn't be treated as an embarrassing bridge to a weather-dependent future. It's the foundation of an industrial economy.

[00:18:32]Nuclear power, gas, and hydro each involve trade-offs, but they're energy dense, dispatchable, and or both.

[00:18:39]They require far less duplication than the system designed around intermittent output, and they preserve options while technologies evolve.

[00:18:47]If I leave you with one thought today, it's this.

[00:18:50]Don't think of the energy transition as the straightforward replacement of dirty generators with clean ones. It's the replacement of a compact, dispatchable, and electrically stable system with a larger, more resource-intensive, and more complex system that still depends on much of the infrastructure it was meant to supersede.

[00:19:09]And so, the objective shouldn't be to complete an energy transition regardless of cost. It should be to build an energy system worthy of the people and industries that depend on it. The markets will decide who gets paid.

[00:19:21]Governments may decide which technologies they want, but physics and engineering decide whether the system works, and economics ultimately decide how long society can afford to pretend otherwise. Thank you.