The Climate Council’s latest manifesto is a recipe for higher power prices and more blackouts. It ignores real-life issues in favour of a dim ideological determination to shut down the use of fossil fuels.
At a time when South Australia’s power grid has the least reliability in the nation, the Climate Council wants the Federal Government to adopt and surpass what the State has done and mandate a coal and gas shutdown across the entire nation.
Such a big and rapid change would be very expensive and very economically damaging – particularly in the manufacturing and population heavy States, Victoria and New South Wales. The result would likely mean factory shutdowns, massive job losses and enormous economic harm for millions of people.
For 250,000 people in the Northern Territory, the Climate Council plan really would be lights out, and air conditioners off, because the entire Territory runs on gas-fired power.
With its large-scale deployment of wind and solar power, SA has learned the hard way that intermittent energy needs reliable back-up – what is known in the industry as despatchable power.
Natural gas provides the best such back-up – which is why it is the natural partner to renewable energy.
On current technology, batteries are not enough – they are not capable of supporting industrial use. Coal-fired power has to be ‘always on’ and has high carbon emissions.
For these reasons, the SA Government is going to the State election with a plan to build a new gas-fired generator to provide the necessary back-up to the State’s renewable energy.
The SA Opposition has a plan to build a new electricity interconnector to NSW, but this would be very expensive and would simply be shifting the reliability problem to NSW. If NSW has its own problems, and supply is short, where will that leave SA if the wind is not blowing and the sun not shining?
SA is a global leader in wind and solar power and it has the world’s largest battery. Yet it is utterly dependent on power ‘imported’ from Victoria to keep the lights on. Without the lifeline to Victoria’s electricity generators, SA citizens and businesses are in peril of total blackout – as happened across the entire State in late 2016.
So, price and reliability of power is a big issue in the current SA election.
Each of the major parties has a plan to address the challenge brought on by the closure of SA’s coal-fired power capacity and its replacement with intermittent – and therefore unreliable – wind and solar power.
There are arguments for and against each plan, but according to the Climate Council, neither are any good. In its practically and economically-challenged view, all coal and gas-fired generators should be shut down, as they are somehow a “threat” to reliable power supply.
Launched to coincide with today’s closure of submissions to the Federal Government’s proposed National Energy Guarantee, the Climate Council proposal lauds Australia’s “booming” renewable energy sector.
So, if coal and gas-fired power is a “threat” to reliable supply, and renewables are “booming”, why not let the market do its work and allow renewable energy to simply take over. Why is a Federal Government mandate needed?
The truth is that without taxpayer subsidies and Government regulations (State and Federal) which favour renewables, the sector would have found it impossible to reach its current “boom” situation.
The reason is simple: industry and business need reliable, affordable power. Without it they go broke – or suffer big losses, as happened in the unprecedented whole-of-State blackout in SA in 2016.
Following the findings of the Finkel review of Australia’s energy needs, the Commonwealth is trying to adopt an approach which can encourage renewable energy deployment, but at a more ‘digestible’ rate for the national economy – about 25-30% by 2030.
A focus of the NEG is to shore up reliability and to put downward pressure on prices. SA is a good example of the challenge – and of some of the pitfalls of an ‘all-or-nothing’ approach.
About five years ago, SA had reliable, affordable power. Now, with its world-leading deployment of wind and solar power and the world’s biggest battery, it has unreliable supply and prices near the top of the world’s most expensive.
The only thing which has succeeded in getting prices down has been turning to gas-fired power.
That is a lesson worth noting.