Anyone suggesting the path to the renewable energy future is being somehow blocked by industry or political “dinosaurs” needs to take a good look at the facts, both on cost and the rapid rise of renewable energy.
In the past 9 years, grid-scale wind power capacity has risen by more than 300%. Solar power has also escalated dramatically, by about 265Mw hours. We can’t measure a percentage change because there was virtually zero grid-scale solar power nine years ago; notwithstanding there was an awful lot of Government-subsidised rooftop solar capacity with taxpayer-subsidised grid return tariffs.
These are key elements of the latest national energy picture, released this week by the Australian Energy Market Operator.
Gas-fired power generation also increased 20% during the period, a creditable increase given that Federal and State-based pro-renewables subsidy schemes have made it much more difficult for older coal and gas-fired plants to turn a profit.
In fact, the AEMO report is clear on the important role of natural gas in national energy security:
“The convergence of the gas and electricity industries has never been more prominent.”
The report also praised a “co-ordinated effort between Government and industry” to address possible gas shortages forecast by AEMO.
Gas supply for industry, tens of thousands of businesses and millions of consumers had been secured for 2018, it said.
What the report did not say is that at no time in modern history has national energy security been more challenged or the relative price of electricity higher.
Renewables subsidies combined with the low incremental cost of wind and solar energy when the wind is blowing and the sun shining, have exerted a big influence on the electricity generation market – economic purists would call it a major market ‘distortion’.
Economic reality has shown time and again that when governments inject public money into competitive markets to promote specific industry components (in this case wind and solar generation), market distortions are inevitable.
South Australia is a classic example. Two coal generation plants and one gas-fired plant have closed down in the face of the massive renewables push — and the State now has among the highest electricity prices in the world.
Thousands of jobs have been lost and the State has suffered repeated blackouts, including an unprecedented whole-of-State blackout.
Businesses have been urged to buy diesel generators to protect themselves for times of outages.
Having been told by SA industry that this situation was unacceptable, the Government has committed about $500 million to build a new gas-fired plant to provide the urgently-needed back-up to the intermittent renewables generation fleet, so that SA is not left in the dark when the wind is not blowing or the sun is not shining.
It has done a deal with Tesla to build a gigantic battery.
At the national level, this week’s AEMO report shows that coal-fired generation has fallen by 20%.
In addition to the SA shutdowns, the Hazelwood coal-fired plant in Victoria has also closed.
The next coal-fired plant in question is AGL’s Liddell facility, in the Hunter Valley. AGL wants to close the plant and says it has a plan to replace the significant Liddell generating capacity (10-15% of the State’s needs). Businesses and consumers throughout the State are hoping it is a good plan.