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Australia’s energy future by 2050? The scary vision of the Right

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Australia’s clean energy industry says it has been reassured this week, after using the forum of the Clean Energy Week to obtain assurances from all sides of politics that they support the Renewable Energy Target. That is a significant achievement. But what should worry them most is what happens beyond 2020, or what happens when the Coalition sweeps to power, as is widely predicted, in 2013.

The industry got an insight into Coalition thinking at a specially convened debate about what Australia’s energy mix might look like in 2050. A range of views were sought, from global energy systems manufacturer Alstom, Australian energy giant AGL, a right-wing thinktank, a UNSW renewables specialist, a leading representative from the clean energy industry, and a former Liberal politician.

It was this latter, the former Senator Nick Minchin, that gave the scariest insights into Conservative thinking on clean energy. He said that even the Labor government’s relatively conservative predictions of 40 per cent renewables in 2050 were “ridiculous, laughable and a joke.”

He didn’t think wind or solar would supply much more than their current 3 per cent because they couldn’t provide baseload power. He told the audience of wind and solar developers that the “ground is moving out” from underneath them.

“My problem with the renewable debate at the moment is that you’re just talking about windmills and solar panels,” he said. “Windmills and solar panels are not going to do it for a modern sophisticated economy. They ain’t going to cut it.”

It might be tempting to dismiss Minchin’s remarks as irrelevant, because he no longer holds office. But the man most responsible for the Coalition turning its back on the CPRS and for installing Tony Abbott is still influential.

Indeed, his views on wind and solar, were virtually a carbon copy of the views expressed a day earlier by the Coalition’s energy spokesman Ian Macfarlane – who dismissed them as expensive and unreliable. Like Minchin, Macfarlane wants money spent on R&D but not on deployment.

As we suggested yesterday, and previously, this is the common narrative of conservative energy policy: delay the deployment of renewables, and keep them in a test tube. But around the world, it is clear that renewables are charging down the cost curve and will intersect with fossil fuels all along the value chain by the end of the decade – as McKinsey recently noted. Politicians such as Minchin and Macfarlane, and their Republican counterparts in the US, are basically the principal line of defence for the fossil fuel industry.

The only notable difference between Minchin and Macfarlane is that Minchin said the RET should be dumped altogether. Macfarlane on Thursday pledged his support (pending the outcome of a review from the Climate Change Authority, an institution the Coalition has pledged to close down).

It should be remembered that it was Macfarlane, as energy minister in the Howard government, who rejected the Tambling inquiry’s recommendation that the modest 2 per cent renewable energy target at the time be doubled. That was a decision that brought the deployment of renewables in Australia to a virtual halt.

Even more scary, however, are the views of Alan Moran, the director of deregulation of the Institute of Public Affairs. The IPA actively campaigns against the idea of anthropogenic climate change and wind farms. In Minchin’s words, Moran “makes me look like a pinko.”

Moran’s vision of the future was to look 50 years into the past. “We had communism then, we got the Greens now,” he grumbled. He said the energy profile in the 1960s was not much different from today, and “I expect that continue into the future.”

He didn’t expect the cost difference between fossil fuels and renewables would change. Clearly he hasn’t read any reports by the International Energy Agency, or noted that wind is cheaper than coal in the US, gas in Brazil and Europe, and will likely be cheaper than the lot in the US, China and India by the end of the decade.

It’s not easy to dismiss his views as just those of an ultra-conservative think-tank. The IPA holds enormous sway of much of the public debate in Australia; they are prominent in newspapers, on the internet, on talkback radio and the ABC. Coalition politicians often defer requests for on-the-record comments about the energy market to the IPA. NSW’s energy minister was repeating the same nonsense at a function hosted by AECOM on Thursday night.

Fortunately there was some commonsense in the panel. Mark Diesendorf from UNSW pointed out that every energy source has received massive government subsidies at their time of their deployment, and fossil fuels still do (by a ratio of nearly 10 to one according to the IEA). And he noted subsidies for sources such as nuclear were rising, while those for renewables were able to fall as the costs of technology and deployment came down. Diesendorf and his colleagues have already outlined a model that shows that Australia could have powered itself on renewables in 2010, with currently available technology.

The CEC deputy CEO Kane Thornton said that by 2050, distributed generation would have a much greater role, giving consumers greater opportunities. Fossil fuels will have faced significant price pressures, while energy from solar, wind, geothermal and wave will have fallen rapidly, and will have zero operating costs. “By 2050 we will be exploiting those to the maximum.”

Alstom’s Gwen Andrews said she expected around 40 per cent renewables by 2050, while AGL’s Paul Simshauser said it was impossible to forecast, and noted economists such as he had gotten it completely wrong on the cost curve of solar PV (too conservative) and gas (too optimistic). But he noted that by 2050, virtually all existing coal plant would have been replaced, and he couldn’t see how asset managers or bankers would fund new coal.

Ken McAlpine, the director of policy relations in Australia for Danish wind turbine manufacturer Vestas probably best summed up the discussion with a tweet; “Minchin and Moran were highly entertaining. The rest of them stuck to the facts.”

Sadly, very few in the political arena are able to stick to the facts.

But there was one very revealing moment. Moran had predicted that renewables would account for just 1 per cent of global energy by 2050. But in what must have been a Freudian slip, he acknowledged that there was a “slim chance” that a global accord to fight climate change could be implemented – in which case, he said, “there would be 60-70 per cent renewables.”

And that just about sums it up. The fossil lobby knows that as soon as they lose the debate over climate change, the game is up for fossil fuels. Which is why the IPA fights so hard to keep up the charade over global warming. It’s the Maginot Line of the coal industry, and the conservatives this week have shown their true colours.

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  • Alastair Leith

    Freudian slip noted. Okay it’s totally doable he’s saying just a matter of policy debate which is where IPA does it most evil and global safe climate destroying ‘best’ work.

  • Beat Odermatt

    I disagree. We have some old fashioned “conservatives”, but the majority of people on all sides of politics do strongly support environmental improvements and cleaner energy. Opposition to a low carbon economy is overall weak. We have union, fearing for jobs in the coal and transport industry, sharing their opposition to renewable energy. We have strong opposition to a low carbon economy coming from people on the extreme side of politics. On one hand we have the Green party doing its best to destroy environmentalism with an unworkable carbon tax and on the other side we have lobbyists and out-of date politicians making silly comments trying to stop the future. If we look at history and we have seen how the motorcar overtook the train as the preferred mode of transport. Did the motorcar kill the trains? No, it changed the transport mix. Renewable energy will not kill off all types of non renewable energy, but they will change the mix. Minchin and Macfarlane and Bob Brown may all oppose a greener future out of different reasons, but they will fail.

  • John Bowman

    Jobs being lost around the country could quickly be replaced by the renewable energy industry if governments took their feet off the breaks.

  • http://www.energyinachangingclimate.info Martin Nicholson

    Giles, I don’t think it is the debate over climate change that is protecting fossil fuels. It is the lack of cost effective clean replacements. Get renewables to a position where they can deliver the load demanded (and not the heavily reduced load advocated by some groups) and you will see the end of fossil fuels. Nobody really likes burning coal and gas. In Australia we have no alternative today.

    The next issue then will be can we get renewable energy to deliver that load alone and how long will it take to be cost effective. Will that happen sufficiently quickly to protect the planet? If so great. If not we need to seriously consider other zero carbon alternatives. Just like we need to invest in many forms of renewable energy it could be folly to completely ignore the nuclear option. Otherwise we are betting all our dough on single ‘renewable’ horse. We need an each way bet.

    • John Bowman

      I have solar panels on my home roof I haven’t paid for electricity for a year and the credits come off my gas bill. If you think that isn’t a cost effective clean alternative- think again.

      • Jim James

        +1

    • Tim

      Maybe that’s the problem with the 100% renewable example – it distorts the thought process. It’s high risk or relatively expensive to make the last few steps.

      So we should have solar PV and wind producing as much low-emission power as possible while maintaining a reliable grid. While that is being built, we can investigate how to cost-effectively replace the remaining high-emission generation with “test-tube” renewables, nuclear or whatever.

      Win-win for everyone.

  • http://www.stratosolar.com Ed Kelly

    Green energy advocates damage their case by being unrealistic about the real costs of renewable energy. This makes them easy targets in any serious political debate.

    NREL just published a Renewable Electricity Futures Study that looks at various scenarios of how to get the US to 80% renewable energy electricity generation by 2050. This is a comprehensive simulation based study that covers the impact on the electricity generation, transmission and distribution system. The study was a large multi-year collaborative effort with contributions from over 100 individuals from national labs, academia and industry. While some assumptions may be optimistic or slightly outdated, it shows all the pieces of plausible solutions and their costs. This is a significant first that puts all the cards on the table in a quantitative manner.

    This study at least shows it is possible to engineer a solution, but it’s complicated. It takes renewable dispatch-able supply (bio, hydro, storage) to balance with the intermittent supply from wind and solar. This means that generation capacity has to be about 1.6 times a pure dispatch-able solution. It also takes a massively re-engineered grid to transport power. A high level of energy (over 10%) has to be curtailed. Adding it all up, the overall cost of electricity is 1.5 to 2X higher than today. The complexity of the solution requires planning and politics on a grand scale, and the high cost is a hard sell.

    This only covers electricity, about 40% of primary energy. Tackling the other 60% of primary energy is a harder problem.

    Better solutions are needed. Some like Bill Gates agree, but think an answer lies in more advanced nuclear power.

    I’m promoting StratoSolar,a solution that can solve the complete energy problem. Like any solution that is not familiar it takes time to get used to.

  • John Bowman

    Everybody thinks they can save the world, run the country, coach the team. The cost? Start at home, go solar, show your neighbours, the whole suburb may follow and then be like Turkey where there are solar panels on most roofs.