The intense heat engulfing the eastern states and triggering power shortages in South Australia has, predictably, reignited political debate over the shortfall in grid energy supplies. In South Australia as many as 90,000 people were impacted by power cuts mid week and there was outrage over the inactive gas plant that could have been cranked up to feed energy into the grid at a time the wind turbines were unable to supplement supplies. NSW is now tipped to experience rolling blackouts from Friday afternoon as the mercury soars to 42 degrees before hitting 43 on Saturday.
But the solution in terms of reliability of supply is right in front of us, and while last week seems a long time ago in the world of politics it is worth relaying the Prime Minister’s comments at his address to the National Press Club where matters of energy and storage featured prominently both during the address and question time which followed.
“We have an abundance of coal, gas, sun and wind resources, not to mention uranium. Yet our energy is among the most expensive in the OECD. … [and] energy bills are making up an increasing proportion of household budgets,” the Prime Minister declared. (Perhaps we could we add high power bills are acting as a strong incentive for households to install solar and storage.)
“Australia should be able to achieve the policy trifecta of energy that is affordable, reliable and secure… security, affordability and emissions reduction, that’s what we need to achieve.”
The PM went on to state “Energy storage, long neglected in Australia, will be a priority this year” and announced a new ARENA/CEFC funding round for large-scale energy storage demonstration projects, including pumped hydro, adding he had written to Chief Scientist Alan Finkel asking him to advise on the role of storage and pumped hydro in stabilising the grid.
“Large-scale storage will support variable renewables like wind and solar. It will get more value out of existing baseload generation and it will enhance grid stability. We’re going to get on with it.”
The Australian Solar Council and Energy Storage Council welcomed the PM’s strong statement about energy storage but queried the silence on the election promise of a solar thermal project in Port Augusta part funded by the Clean Energy Innovation Fund, whose funding has in any event been slashed.
The ASC also stated “We all know coal can no longer compete with solar and wind on price even without a price on emissions.”
During his speech to the NPC the PM stated “We will need more synchronous baseload power and as the world’s largest coal exporter, we have a vested interest in showing that we can provide both lower emissions and reliable base load power with state-of-the-art clean coal-fired technology”.
He bemoaned the lack of new coal-fired power stations using so-called lower emissions technologies, despite the multi-million dollars that have been pumped into ‘clean’ coal technology research and demonstration since 2009.
“Here we are, $590 million spent on clean coal, trials and demonstration. Biggest coal exporter in the world. You’d think if anyone had a vested interest in showing that you could do really smart, clean things with coal, it would be us, wouldn’t you? Who has a bigger interest than us? We are the biggest exporter. Yet we don’t have one power station that meets those requirements.”
It was this comment that invoked a strong backlash from community and business groups. The Greens were up in arms; Richard Di Natale said the Coalition had been spruiking renewable energy investment in “clean coal” power stations as a means to reach their modest Renewable Energy Target.
“These alternative facts set the scene for this year’s renewable energy battleground,” he said. “Pushing clean coal is like promoting light cigarettes or scientific whaling: the product is deadly, but comes with a healthy sounding label. After Barnaby Joyce’s “we should be building new coal-fired power stations” comment, this is the final proof that Malcolm Turnbull has been captured by the Trumps in his party.”
The Green’s Adam Bandt describes Turnbull as a coal protectionist, using public money designed to be spent exclusively on renewable energy infrastructure to instead prop up a dying industry saying “He wants to take money out of renewables and give it to the coal industry … it’s like trying to deal with the rise of the internet by subsidising the fax machine industry.
“The Prime Minister laments spending over half a billion dollars of public money on clean coal only to find the technology still doesn’t exist. That should tell him something. Maybe it’s a sign that this technology is bogus and he should stop throwing good money after bad.
“New coal fired power stations are uneconomic because they can’t compete with wind and solar. They will never be built in Australia unless the government stumps up the money.”
It’s worth recording that the Business Council of Australia and the Australian Industry Group also affirmed that ‘clean’ coal is an unwise investment, and the duo representing a large swag of Australian commerce reinforced their support for the RET.
Big energy retailers AGL EnergyAustralia and Origin likewise have no goals for new coal plants in Australia and in many instances are steering efforts towards renewables.
And on a technical matter, Section 62 of The Clean Energy Finance Corporation Act prohibits investment of its funds in carbon capture and storage. Despite this Treasurer Scott Morrison told media “Coal is a big part of the future under a Coalition Government and restated his intent to set aside in the Clean Energy Finance Corporation (CEFC) to fund a new generation of coal-fired power stations.
Repeating Bandt’s retort “it’s like trying to deal with the rise of the internet by subsidising the fax machine industry.”
Back to last week’s address to the Press Club where the PM also criticised some states for “setting huge renewable targets, far beyond that of the national RET, with no consideration given to the baseload power and storage needed for stability”.
We read – horrifyingly so – that Energy Minster Frydenberg now refers to Labor’s renewables target of 50 per cent by 2030 a “horror show” and note that the past PM continues to rage war on renewables, incorrectly saying the RET should be scrapped because it will push up power prices, despite all evidence to the contrary.
BNEF’s Kobad Bhavnagri helped demystify the cost of renewables during a recent ABC radio interview in which he backed up Shadow Environment Minister Mark Butler’s assertion that the RET puts downward pressure on prices. That too was the conclusion drawn by Warburton in his review of the RET two years ago.
Making the point that energy markets are highly complex and only made worse by politics which causes instability in the market (politicians “cherry pick” reports to support their view), Bhavnagri stressed that today it’s cheaper to build clean energy plants – solar and wind – than gas or coal fired power plants – and once they are built the energy source is free.
On this, BNEF calculates the cost of new wind and solar at $80 per MWh and the cost of a new coal generator at around $160 per MWh. BNEF notes too that the price of wind and solar continues to decline.
“Energy is part of the culture wars” Bhavnagri said. “It is hard to get sensible debate …. It should be left to the experts … and whatever the plan you have to factor in climate change.”
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