1. Smart regulation for a 21st century energy system Rob Heferen Deputy Secretary, Department of the Environment and Energy 27 July 2016 Department of the Environment and Energy

2. The electricity sector is Australia’s largest source of emissions Source: Department of the Environment, 2015

3. Solar PV uptake Residential w/ storage Residential Commercial Saturation Installed capacity of solar PV (GW) Electric Vehicles Source: AEMO, NTNDP 2015 Energy sector outlook: a number of scenarios are possible Energy sector outlook: The sector is already in transition A number of scenarios are possible

4. Energy markets are changing It is difficult to predict what the energy market will look like in 2030 Total grid demand (TWh) Demand forecasts have been consistently revised downwards

5. Energy markets are changing The generation mix is changing Solar PV is forecast to become the largest source of capacity Falling technology costs are expected to drive uptake in solar PV, batteries and electric vehicles, which will impact on total grid consumption and peak demand

6. Increasing renewables Increasing distributed technologies Changing demand patterns Drivers of structural change  Energy markets are changing Regulatory frameworks will need to be able to adapt to a range of possible future scenarios

7. Department of the Environment and Energy Industry House 10 Binara Street Canberra City, ACT 2601, Australia Telephone +61 2 6213 6000 Department of the Environment and Energy