Giles Parkinson: "It has been fascinating to gain a broader view of Spain"

The Australian Leaders Programme 2016 included four Australian journalists specialising in different areas, who visited Spain in November to gain a greater understanding of Spain as a country. The Council Foundation, as part of its active communications policy, is publishing interviews with them monthly.

Giles Parkinson is a financial journalist specialising in renewable energies. He has worked at the Australian Financial Review, The Bulletin Magazine and The Australian, and was also the founder and editor of Climate Spectator. He currently owns RenewEconomy, a website on environmental policies and renewable energies targeted at a very specific audience.

- What have been the highlights of this visit to Spain? Had you ever been before?

Yes, I had. In fact, I visited the country a year ago, and even travelled to some of the places we’ve visited with the Leaders Programme. But I have found it fascinating to gain a broader view of Spain. As a tourist you only see one side of the country, but during the Programme we have been able to see various different facets of Spain at the same time which cannot be understood on their own.

I think that is the advantage of the Leaders Programme; it offers a broader view of the country that a regular visitor would not have. Spain is one of the main tourist destinations in the world, but people only see one side of it. That’s why there’s a lack of awareness regarding the Spanish economy, its politics and its industrial capacity. That may also be why we do not always recognise Spain’s rightful position at both a European and a global level.

- In your area of expertise, renewable energies, which similarities and differences do you see between Spain and Australia?

It is interesting, because the two countries have both been pioneers in the renewable energies industry in some aspect or another. They have been leaders in the development of technologies and have alternated between times of significant expansion and pauses.

In my opinion, what’s most interesting about Spain is that it has created a large export industry. Australia has significant renewable energy capacity and has done a great job in R&D at universities and research centres, but it has not developed its own industry and therefore, when renewable energy facilities are built, what we actually do is import. 

In Spain, however, there are a great deal of companies exporting this technology, such as ACCIONA and many other world leaders. It’s interesting to see that the industry Spain has created, despite not being hugely developed in Spain itself, continues to be a prominent exporting industry. This aspect is often overlooked: when talking about renewable energy, people are often only interested in how much capacity has been built and at what cost.

- Even though they weren’t actually responsible, many blamed renewable energies, and more specifically wind power, for the supply problems in South Australia a few months ago. Has this had an impact on the country’s wind power industry?

I think so. The response was rather surprising. Based on my own experience, and on discussions with other experts during this trip, it’s clear that renewables can be integrated into a modern power grid, but it must be done with some degree of planning. Renewable energies in Australia are the victims of political ups and downs: some governments develop them, others slow them down… In this case, it was surprising to see how people blamed renewables for the blackouts in South Australia, and how those power cuts were used as a political weapon to slow down the rollout of clean energies.

This is very frustrating. I don’t think people in Australia have fully understood as people have in other countries which have installed a significant amount of renewable energies, that the technology to incorporate them into the power grid is there. It’s a matter of changing the way we operate, which is hard but not impossible. It’s been very interesting to talk to people at ACCIONA, who told us that the technology exists, but a change in mentality is very much needed.

Getting back to the South Australia issue, I think that although the initial reaction was to blame renewables, people had time to think it through afterwards and realised that the supply system in Australia is vulnerable. I think it will be positive in the end; even if it is frustrating now, the end result will be a greater level of awareness.

- On your website, RenewEconomy, you claim we are seeing a new industrial revolution based on a shift towards clean energies. Which countries do you think are the leaders in that regard and what benefits could this bring them?

I believe the revolution in Europe is being spearheaded by Spain, Denmark and, above all, Germany, which is moving towards an economy based on clean energies. The US and China should also be taken into account for all the money they invest in research and their achievements in areas such as reducing manufacturing costs. Some American states like California and New York are making huge progress. Finally, I believe Australia is yet another renewable energy market leader thanks to our special characteristics: our electricity is among the most expensive in the world, because we have built a highly centralised system in one of the world’s largest countries with a very small population. Installation costs were exorbitant and Australian consumers pay remarkably high rates.

What’s interesting is that the cost of solar energy has dropped to a third of the price of energy from the grid, so if you install solar panels on your roof you can get energy at a third of the regular price. If you add storage systems, the cost is still lower than the price of power from the grid. This will change the idea people have of electricity: people will stop depending on large installations, oligopolies and large companies that control what you do with electricity.

At the moment, between 25 and 30% of households generate their own electricity in Australia. In the end, we will see energy being shared through mini-grids as an alternative to macro-grids. The way we think will radically change. Innovation is moving towards concepts such as free energy, as this will be an integral part of households. The ramifications of all this, what it means for the energy sector with the political and economic weight it now has… This “energy democracy” will have a major impact, it could even be greater than the implications of issues like Brexit or the US elections. People will be able to make their own decisions around energy. This will cause a shift, just like the one that the collaborative economy is causing at the moment.

- Although they are among the most developed countries in the world, Spain and Australia do not belong to the core of economic giants. How will that impact this new revolution? Do they have enough traction on their own in the international arena or should they seek protection from more powerful players, such as the EU in the case of Spain?

We tend to think that Spain and Australia are small countries, but they aren’t really. The world is dominated by two major economies: China and the US, which make up for 15 to 20% of the world’s economy (each). Then there’s the EU and the large countries in it. But Spain and Australia are among the top twelve or fifteen global economies. What they need is to be able to keep progressing, to keep applying technological changes rather than trying to slow them down, and to leverage the opportunities generated by those changes. Australia, for instance, has fostered R&D, and Spain is building a large exports industry. That may grant them an important role in the new economy.

- We have talked about Spanish companies carrying out renewable energy infrastructure projects in Australia (ACCIONA, FRV, Gas Natural). What do you think of their work and how are they seen by Australians?

They are very important, efficient companies. Spanish companies have played a significant role in Australia: they built many of the first wind and solar farms. Banco Santander also played an important role by financing projects.

- What do you think about the Australian Leaders Programme? Which aspects have you found most appealing?

It has been really interesting and fun, I’ve enjoyed it. I was concerned initially as it is not focused on my area of specialisation, renewable energies, but it has been fascinating to be able to understand the political and industrial background. It has also been fascinating to listen to presentations by Secretaries of State and executives from large companies. It is fine to focus on one aspect, but getting a broader view allows you to better understand what is happening.

If you asked me to highlight something about the Programme I would emphasise the meetings with the Secretaries of State and their overviews of Spanish politics. The meeting at Elcano Royal Institute and the chat with Spanish journalists were also great.

I also enjoyed the meetings at large companies and the people we met there, they were all really kind and prepared to provide a lot of information.

From my point of view, this has been a very valuable experience, even more so than I thought it would be at first. It has been an excellent trip. Oh, and the food was also excellent. So was the wine (laughs).

II Australian Leaders Programme activity summary