02/01/2019

In 2018 The Australian Government Chased Its Energy Tail. Here's A More Hopeful Story

The Guardian - *

While the federal government dithered, business, the states and the public took matters into their own hands to dramatically change the energy picture
‘Almost everyone in the energy sector now accepts that renewables are cheaper than building new coal capacity’ Photograph: jjnogueron/Getty Images/iStockphoto 
While the government continued to trash Australia’s international reputation by reaffirming allegiance to coal on the global stage, lying about progress on our climate commitments and dismissing the findings of the landmark IPCC report, the transformation in our electricity sector tells a different and hopeful story.
Attacks by the former prime minister Tony Abbott and his environment minister Greg Hunt on the renewable energy target, and the investment strike that followed, are a fading memory. Momentum is now unstoppable.
In the three years from 2018 Australia will install a little over 12 gigawatts of renewables, as much as was installed in the 30 years after the country’s first windfarm opened at Salmon Beach in Western Australia in 1987.
Since 2017, 19 new windfarms and 30 new solar farms have been registered and in early December the two millionth Australian household went solar. Once derided as insignificant, solar supplied more than 7% of Australia’s power over the past three months.
A little over a decade ago, when just 5.2% of our power was from renewables, the Rudd government was swept into office with an aspirational pledge of “20% by 2020”. That target has been met two years early, and analysts Green Energy Markets predict one-third of our power will be from clean energy by 2021.
A decade of transition in the electricity sector
Change in terawatt-hours generated in the National Electricity Market between 2008 and 2018.
Chart: @simonahac Source: OpenNEM, derived Get the data Created with Datawrapper
The transformation of the national electricity market over the decade has been stunning. Highly polluting brown coal use is down 36.6% and black coal (still dirty!) has fallen 9.4%, mostly replaced by wind and solar. Surprising to many, we burn less gas in the NEM now than we did a decade ago.
Increasingly businesses are taking energy matters into their own hands. Sun Metals, a zinc refinery in George Christensen’s Queensland electorate, installed one million solar panels to lower their power costs.
The Commonwealth Bank became the first Australian company to join the RE100, a group of 156 global companies committed to 100% renewable power in the coming years. Much of the bank’s power will be supplied by the Sapphire windarm, which incidentally will be partly financed by a community investment project. The project, one of 105 of its kind around the country, has been overwhelmed with $7.5m pledges from locals keen to get in on the action.
The South Australian chamber of mines and energy secured a renewable energy deal that will save its members 20-50% on their power bills.
Macquarie Bank has joined a consortium developing a wind and solar farm bigger than every existing wind and solar farm in the country combined. The Asia Renewable Energy Hub, to be located in the Pilbara region of WA, is backed by Vestas, the world’s largest wind turbine manufacturer. The project will connect by sub-sea cable to Indonesia, supply processors in WA’s north west and generate “green” hydrogen.
Consumers are starting to see a welcome, albeit modest, retreat in power prices
Modest price falls for consumers
Almost everyone in the energy sector now accepts that renewables are cheaper than building new coal capacity, including the CSIRO and the country’s largest power companies, Origin and AGL. The latter pushed back against extraordinary pressure from the government and announced that its Liddell power station will close in 2022, to be replaced with a portfolio of projects delivering cheaper, more reliable and cleaner power.
As if to prove the point, Snowy Hydro, now owned 100% by the federal government, announced that it can offer long-term, reliable supply contracts based on a portfolio of wind, solar and hydro for less than $70MWh – a price coal-fired power stations can match only if someone else pays for the coal or the power station.
And consumers are starting to see a welcome, albeit modest, retreat in power prices. Retailer Powershop led with a 5% price reduction attributed to new renewables investment. The Australian Energy Market Commission announced that most consumers would soon receive price reductions largely thanks to increased wind and solar generation – South Australians can expect to see falls of 6.5%.
More than a dozen large wind and solar farms contracted at prices well below $60MWh – below the market prices for coal and gas – in arrangements that involve little or no subsidies.

Coal – our fleet is showing its age
The average Australian coal power station is 31 years old – five years older in New South Wales – and with an average age at retirement of 41, our fleet is showing its age. The Australia Institute tracked 108 coal unit “trips” during the year. In each case hundreds of megawatts of generation instantly and unexpectedly disappeared, stressing the network.
The Australian Energy Market Operator produced the most rigorous study of the possible future of our grid and determined that on the least-cost path – with no new policy – the grid would reach 47% renewables in 2030 and 72% in 2040, while keeping the lights on. As each coal-power station falls over it will be replaced by renewables and storage.
States go their own way
In an election year, the Victorian government upped its renewable energy target to 50% by 2030, wrote contracts for six large wind and solar projects at record low prices and rolled out a plan for an additional 700,000 solar rooftop installations, committing to focus on renters and low-income households. Climate-aware voters had an easy choice at the November state election, with the opposition’s policy limited to an ill-conceived TV giveaway and a plan to build new fossil fuel power stations.
Feeling the heat from the Victorian experience, the NSW Coalition government sought to distance itself from the trashed Liberal brand, with energy minister Don Harwin calling out his federal counterparts as out of touch on energy and climate. With little progress to show for the last eight years in office and the state lagging on almost every energy indicator, Harwin has much work to do before the March election.
A change of government in South Australia had many worried that the Weatherill government’s energy initiatives would be derailed, but the new Liberal government has embraced the state’s leadership position. Former coal town Port Augusta has bounced back with 13 clean energy projects under development, and the state is rolling out a virtual power plant project that will allow 50,000 households (starting with those on lower incomes) to be fitted with solar and batteries, saving on power bills and working in unison in much the same way as the mega-battery.
In Tasmania, the Liberal party pledged 100% renewables and their Labor counterparts responded with a 120% target. The ACT moved closer to its net 100% renewables target, Queensland oversaw the start of a construction boom of impressive scale, while Western Australia continued to muddle along without any real policy.

Federal fire-fighting
Meanwhile, the federal government spent 2018 chasing its tail. Former energy minister Josh Frydenberg attempted to put out the Coalition’s smouldering energy policy with a national energy guarantee that would not have reduced emissions by a single tonne. The backbench “Monash Forum”, whom it was written to appease, instead chose to fan the flames and sacrifice yet another prime minister on the ensuing fire.
For good measure, Scott Morrison threw petrol on the fire by appointing Tony Abbott’s energy man Angus Taylor to the energy ministry. Taylor has been flailing about ever since. His plan to set a cap on energy prices was soundly rejected by his states colleagues in a particularly angry Coag meeting. His legislation to give him a “big stick” to beat investors until confidence improves has been pushed off to a Senate committee and is unlikely to see the light of day.

Batteries supplied
Storage moved ahead in leaps and bounds. While SA’s Tesla mega-battery seemingly receives equal parts derision and adulation from politicians and commentators, energy experts have been quick to heap on praise – the $90m battery was actively providing stabilisation services 95% of the time in its first year, earning $19.6m in net market revenue.
Four other megabatteries have been commissioned – at Alice Springs, Ballarat, Dalrymple and Gannawarra. The Snowy 2.0 pumped hydro storage project moved a step closer with board approval, at least 10 other pumped hydro projects have been announced and the NSW government launched a roadmap identifying 24 potential pumped hydro projects leveraging existing state-owned reservoirs.
Energy market analysts SunWiz estimate that 25,000 households installed small-scale battery systems in 2018, collectively matching the combined capacity of the country’s grid-scale megabatteries. On the back of solid growth, three battery storage companies set up in South Australia.

A referendum on climate
As in 2007, the looming federal election is shaping up to be a referendum on climate – a choice between action and denial. The public, businesses and states, having learned from the climate and energy wars of the past 10 years, are now savvier and better prepared. The increasingly desperate coal lobby looks weak compared with 15,000 striking schoolchildren, many of whom will soon be voters.
We’re making great progress on the electricity sector, but much more needs to be done across the economy – locally and globally – if we’re to have a fighting chance of passing a safe climate to the next generation.
MPs valuing survival might want to heed the advice of energy thinker Michael Liebreich: “Face the direction of travel!”

*Simon Holmes à Court is senior adviser to the Climate and Energy College at Melbourne University

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