04/10/2016

South Australia: Failing To Learn The Correct Lessons Will Mean A Failure To Deliver Secure, Affordable Energy In Our Future

Climate Institute


If governments are serious about energy security, they have to face up to the twin challenges of increasingly extreme weather resulting from climate change, and the need to decarbonise the electricity supply.
This requires a thorough, effective national energy strategy, The Climate Institute said today.
“The rapid convention of another COAG Energy Council meeting suggests that governments have at least started to grasp the urgency of the situation,” Climate Institute Head of Policy, Olivia Kember said.
“But the less they face up to the fundamental pressures of climate change and emissions reduction, the less secure our energy system will be, and the higher the costs accruing to energy users.”
Kember said the electricity system has been in a continual process of coping with shocks in recent years.
Australia has now experienced an unexpected decline in demand, uncoordinated expansion of the gas market, the unravelling of bipartisan renewable policies, unjustified retail price hikes, unsustainable wholesale price lows, unprepared-for closures of coal stations, and now an almost unprecedented state-wide blackout.
Firstly, Kember said, we must get beyond the arguments about whether or not a single event is “caused by climate change”. It is a fact that we are adding more energy to an already very dynamic climate system, causing extreme events to become more frequent, and the extremes to become more intense. This means climate change is already affecting the electricity system’s operating conditions and will do so with increasing force over coming decades.
“Back in 2012, we noted the sector was underprepared for stronger winds, more intense rainfall, and more extreme heat,” she said. “But nowhere in the government’s recent national adaptation strategy is there a plan to improve the resilience of the national electricity grid.”
Secondly, she said the reality is, worldwide, electricity systems are undergoing an unstoppable and inevitable transition to cleaner energy. State renewable targets are at best only part of the solution and risk creating more complications within the market if implemented poorly. But the state targets are consistent with both global technology trends and Australia’s international climate commitments. Meanwhile federal policies have allowed emissions to rise, depressed investor confidence and created ongoing uncertainty that affects fundamental operations and maintenance decisions.
“Falsely scapegoating renewables is a dangerous distraction,” Kember said. “To maintain a secure and affordable energy supply we need to integrate planning for climate impacts and net zero emissions electricity into our energy market framework.”
“The solution isn’t to bin state renewable policies, but to make them part of a stronger, better national plan,” she said “This needs to include:
  1. policies to drive an orderly withdrawal of our ageing, high-carbon coal stations and support affected communities through this process;
  2. appropriate incentives for the full range of energy services we require: such as frequency control, dispatchability, and demand management; and
  3. policies that optimise energy productivity, to keep the overall costs of transition as low as possible, maximise the efficiency of energy use and keep users’ bills down.”
She said that dealing with all of these approaches simultaneously, while keeping the lights on and the power bills under control, is not an easy job.
However, Australia will fail in both these regards if it doesn’t take the opportunity to develop a very carefully crafted energy strategy that takes into account all the moving parts of the power sector.

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