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Are renewables doomed to failure in Australia?

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Across the United States right now, a pitched battle is being fought over the future of renewable energy targets in the 29 states that have them. Already, 16 of these states are considering legislation – templated by a fossil fuel-sponsored lobby group, the American Legislative Exchange Council – to repeal or dilute the ambition of renewable standards.

So far, the campaign – boosted by Tea Party radicals in the Republican movement – has not been successful. In the past week, North Carolina rejected the idea after leading utilities such as Duke Energy, and big data centre operators such as Apple and Google expressed their support for wind and solar projects.

In Colorado, the ALEC bill met a similar fate, with the state deciding instead to lift its clean energy standard for rural electric cooperatives to 25 per cent by 2020 — a 15 percentage point jump from the current 10 per cent.

Still, the fate of other state-based RPS schemes remains in the balance. ALEC task force director Todd Wynn recently told Bloomberg that 2013 will be the most active year yet in efforts to repeal renewable energy standards. “Natural gas is a clean fuel, and regulators and policy makers are seeing how it’s much more affordable than renewable energy.”

In Australia, a similar battle is about to be waged. The difference here is that renewable energy targets are a federal policy mechanism, but the four mainland conservative state governments (Queensland, NSW, Victoria and Western Australia) are lined up firmly against them, and the new energy minister in WA, Mike Nahan, has upped the ante – possibly in anticipation of the Coalition winning the federal poll in September.

The Coalition has already indicated that it will seek yet another review of the RET, and will be sympathetic to claims by utilities that lower than expected electricity demand should cause less wind and solar farms to be built. Some utilities want the numbers cut in half – and they have the support of broader industry groups such as the Business Council of Australia and other industry groups, and of the conservative state governments.

Nahan is an interesting choice as energy minister. For supporters of renewable energy, he’s actually quite a frightening one.

The American-born Nahan is a former executive director of the conservative, pro-market, anti-renewable think tank, the Institute of Public Affairs, which is so intertwined with conservative policy making that many Coalition politicians refer journalists to the IPA for comment on issues such as energy and climate.

A collection of Nahan’s thoughts on climate and energy can be found on the IPA website as, like his contemporaries and successors, he was a prolific contributor to (mostly Murdoch-owned) newspapers. They give an interesting insight into his views on all things climate, energy and environment.

In 2005, he questioned the science of climate change. “Not only is the fact of global warming unclear, but a fully honoured Kyoto Agreement would have had only a trivial effect on temperatures,” he wrote in the Herald Sun.

In 2006, in the same paper, he hallelujahed the creation of the pro-nuclear and pro-business Australian Environmental Foundation, which has strong links to anti-wind farm groups. He also praised the expansion of the massive Hazelwood brown coal-fired power station, describing one of the country’s most polluting  power plants as “efficient, profitable and clean.”

And, of course, he doesn’t like the Greens, accusing them of being “Watermelons” – former socialists who were red on the inside and green on the outer. He even decried the focus of  Environment Day, saying such events should be a celebration of achievements – such as the fact that there were, he wrote in 2004 – enough whales to support large whaling fleets.

Elsewhere, Nahan mocks the idea that the planet is depleting its resources, praises Conservative pin-up boy Bjorn Lomborg, and suggests that the global environment is actually improving rather than degrading. He also scoffed at suggestions that the Murray Darling Basin had water or salinity issues – both here and here.

Elsewhere, he dismissed the concept of “negawatts” – the idea promoted by the likes of the International Energy Agency that energy efficiency can play a critical role in decarbonising the world’s energy system, and to save money – as “activist jargon for subsidised energy conservation.” His preferred term was ‘megawatts’ – code for building more coal, gas and nuclear plants and burn as much fuel as possible.

Just in case you thought he might have evolved since being elected to state parliament in 2008, his views of wind and solar remain staunchly conservative, old school and just plain wrong. In a recent parliamentary debate, Nahan insisted wind energy required “one-for-one” backup by fossil fuel generators and did not reduce greenhouse gases, said solar cells were “hugely more costly” than polluting alternatives, and the only “low-cost, baseload, greenhouse-low energy” that existed was nuclear power.

He said Western Australia should consider nuclear power, but conceded they “do not fit the grid, because they are too big; they are too lumpy … our system is too peaky and nuclear would not fit. And then he goes on to suggest that the government should “consider nuclear power for the Pilbara,” which is an even smaller grid.

Last week, the West Australian reported that Nahan had promised a “root and branch” review of the RET scheme, labelling renewables as “unsustainable”, and even promised a review of the much-lauded demand management system, which rewards large customers for reducing demand at times of peak load. This from a state which subsidises the construction of diesel-fired peaking plants that are never switched on.

The Australian renewables industry will recognise the dangers of such talk. WA, ironically, is probably the best placed state for added renewable energy investments because of its high electricity prices, and excellent solar and wind resources. The Collgar wind farm in the wheat belt operates at near 50 per cent capacity, and numerous solar plants – without subsidies beyond the RET – are being considered by developers.

The problem, in WA and elsewhere around the country, is that new projects are at a virtual standstill. Financiers have basically shut up shop pending the result of an election, and the likelihood of yet another RET review. This is despite the conclusion by the Australian Energy Market Operator that even going 100% renewables may not entail much greater cost than the air-con inspired super-sizing of the grid this past five or six years.

The appointment of Nahan – along with Queensland’s Mark McArdle, NSW’s Chris Hartcher, and Victoria’s Michael O’Brien – and the impending return of the federal Coalition’s Ian Macfarlane, has doomed the industry to another period of uncertainty and inaction. All, it would seem, in the name of ideology.

Look-alike energy ministers in Canberra

On the subject of federal energy ministers, it was fascinating to hear the newly appointed Federal Minister for Resources and Energy Gary Gray speak about the issue at a conference in South Australia this week.

As RenewEconomy pointed out after the resignation of former minister Martin Ferguson last month, he and his ultimate successor, the Liberal energy spokesman and former minister Ian Macfarlane, were like two peas in a pod – sharing like-minded, highly conservative views on Australia’s energy policies and how its energy system should evolve.

Gray – who says he is no longer a climate skeptic – is probably only keeping the seat warm for a return of Macfarlane come the September election, but he wants it known that he is of the same ilk as Ferguson, whom he labelled as a sometimes grumpy but “hardworking visionary,” and his Coalition counterpart.

“In many ways it really doesn’t matter from a Federal perspective if you look back at any (Federal Energy Minister), Ian Macfarlane or you look at Martin Ferguson, hopefully myself, you effectively see the same person,” Gray told a resources conference in Whyalla. “You see a Canberra political system that places the resource industry and the resource sector above politics, that cares deeply for the success of this sector and enjoys its success in the most obvious way.”

In the case of all three, it’s a matter of stepping on the gas. Gray is convinced the shale gas boom will deliver lower gas prices to Australia, notwithstanding that everyone else, including the gas operators themselves and market analysts, point out that gas prices will match export prices – and that means they are going up.

Note: This story was corrected to remove reference of the Australian Industry Group opposing the LRET, which is no longer the case.

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  • http://twitter.com/Zvyozdochka Zvyozdochka

    We’re over-run with conservative half-wits.

  • Ken Fabian

    The pro-nuclear rhetoric of disbelievers of climate change is a joke – until conservative politics treats emissions reductions as an absolute essential, without any get out of any commitment free cards to their mates, they will never support replacement of fossil fuels with renewables or nuclear. In the meantime the criticism of environmentalists for failing to accept and promote nuclear is a bit part in a wider policy of opposition to environmental regulation – at the top of that agenda is obstructing action on emissions. No climate problem in a nation well endowed with fossil fuels equals continuing use on fossil fuels, and obstructs both nuclear or renewables.

    Until emissions reductions is a strong bipartisan ambition and the LNP ceases to offer commerce and industry their strength of advocacy for avoiding commitment to emissions reductions the pro-nuclear noises of groups like BCA and IAG will be just as empty of real commitment.

    A firm expectation of a $100 a tonne carbon pricing within a decade, no matter who gets government, would do more to promote nuclear than all the anti-environmentalist rhetoric they can muster; of course it promotes renewables too and those would have a big PR and resourcing head start but that’s because of 2 decades of betrayal of nuclear by conservative politics – 2 decades of choosing denial, doubt and delay as their primary response to the climate problem and 2 decades of failing to push or even bothering to defend a nuclear based (or any serious) plan to reduce emissions.

  • bill

    I have serious misgivings about Nahan, but there is another aspect that he will have to consider. Synergy is overwhelmed with applications for grid connect solar. The SWIS now has about 280MW installed and rising. Unless Synergy under direction from Nahan shuts the door, the march of household solar will continue. Dare he do that?

    The other consideration is the cost of transporting diesel for mining companies. They too are becoming interested in the use of solar. At a recent meeting in Kalgoorlie, the mining industry and the City councillors were there in force to hear about the potential of solar. It is clear to me that if the CSP people can build power stations at less than 50MW ( remote mines are usually at around the 10MW level) then there is a market, notwithstanding what Nahan thinks. In fact what he does think is irrelevant.

  • Terry Mc

    Lets be CLEAR there is no need for nuclear power. It produces waste at every part of the processing chain and we are left with massive cleanup bills for 100,000 years. That is not cheaper. Australia has more renewable energy than you can poke a stick at. WE DONT NEED NUCLEAR. You want to fix one problem (CC) by creating another.
    Anyway in these electorates and everywhere for that matter we must try and educate the public not to vote for people that are former executives of large companies. It is absolutely clear that Mike Nahan(An American, can you believe it who would vote for a American), Gary Gray and Ian Macfarlane do not work for the people of Australia they clearly work for the fossil fool industry.
    I have been saying this for a while, that in my opinion the Liberals have a secrete agenda to build nuclear power in Australia. I dont think they will care about a mandate I think they will just build it anyway because they know the people have been dumbed down sufficiently that they wont protest against it.
    It’s pretty scary stuff. These people no longer see as representatives of the people. They see the people as mere stepping stones to gain power in order to represent business interests. However we only have ourselves to blame as we vote these people in.
    I think it is pretty clear what the future will look like if Abbott gets in and when the boom is over what will we have to fall back on. Dont get me wrong Labor is only 1mm behind the Lib’s. How you vote this election is vital. Good Luck.

  • Pedro

    Both sides of politics seem to be full of pro fossil fuel MP’s. Does anybody have a list of pro RE MP’s that can be lobbied so that debate with in both Labor and coalition parties can happen at a party level?

  • http://twitter.com/LeeNhan2 LeeNhan

    The battle between oil and gas and renewable energy – WANT TO BE LOW RATING -use my method 100% Green ,no noise , no storage needed without losing landscape and environment trongdong.weebly.com

  • http://www.facebook.com/people/Christina-Macpherson/100001582350337 Christina Macpherson

    Gary Gray says that he is no longer a climate sceptic. That statement should be seen in the context of Gray’s very fist public speech,as Minister for Resources and Energy. Gray addressed the Paydirt Uranium Industry Conference in Adelaide, and gave a rousing promotion for uranium mining and nuclear power.

    As the nuclear lobby continues to tout (against all the evidence) that nuclear power is the solution to climate change – well, Gray as a good Nuclear Believer, is pretty much forced to agree that climate change is real.

    You can’t push a solution to a problem of which you deny the existence, now, can you?

  • bill

    Further to my earlier comment about Nahan. Rumour has it that he is contemplating a charge to connect a PV system to the grid. He has to to put the brakes on the demand because it is cutting into the State revenue stream from Synergy.

  • Giles

    Bill, would that be a first in australia?

  • moosey

    “Natural gas is a clean fuel, and regulators and policy makers are seeing how it’s much more affordable than renewable energy.”

    Gas may be cleaner than coal, but it still pollutes and kills people over time, the real costs of fossil fuels aren’t shown, if they did show the real cost, then it would reveal that fossil fuels are much dearer, it would also show that solar is at grid parity right now, I also know exactly what will be the cost of the sun shining on my solar panels in ten years time, right now! can ALEC tell me exactly how much they will be charging for gas in ten years time?

  • Chris Fraser

    So it seems the Tea Party has got a shoe in the door in state politics. They walk among us …

  • Phil of Brisbane

    I fear that we are descending into a new Dark Ages…and it is happening through supposedly democratic processes in an electorate totally misinformed by fossil fuel lobby control of information flows! RenewEconomy is a breath of fresh air in the polluted gloom!

    • http://www.facebook.com/profile.php?id=661060224 Michael Petterson

      ” fossil fuel lobby control of information flows” really? Care to provide some actual proof to back that up? Also the statement that the ” the real costs of fossil fuels aren’t shown” is complete and absolute garbage,unless you care to clarify that statement with more detail,number-wise.

      • Phil of Brisbane

        ” fossil fuel lobby control of information flows” really? Care to provide some actual proof to back that up?

        Read the Australian tomorrow!! Listen to Alan Jones. Watch the Gina Rinehart-sponsored Andrew Bolt! As a retired climatologist I have been disgusted by their war against climate science and renewable energy. If the fossil fuel lobby didn’t have so much influence, fossil fuel industries would not be receiving the huge subsidies they receive.

        We are going to have an election on September 14 where the overwhelming scientific consensus on climate disruption and its causes are not going to be represented because of the immense power of the fossil-fuel lobby – Australia’s NRA. As you can tell I am so FURIOUS about this injustice towards future generations!!