Abbott won’t let facts derail his anti-renewables campaign

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Last week it was quietly announced that the Australian Cleantech Competition would hitherto be known as the Australian Technologies Competititon. It was another subtle reminder of how the new Australian conservative government is going about the re-phrasing of Australia’s energy future. Anything that involves the words climate, clean energy, or cleantech are considered projects or institutions -non-grata.

In the public arena, it’s not just a rephrasing that’s taking place, but a concerted attack on renewables. For the second time in as many weeks, Prime Minister Tony Abbott has criticized renewable energy, its intermittency and its supposed costs – repeating the force-fed lines from his main business advisor, Maurice Newman, extremist blogs and some mainstream media, and encouraged by the fossil fuel incumbents, whose greatest fear is that their coal and gas-fired generation is being sidelined and rendered unprofitable by the growing capacity of wind and solar.

Abbott’s complaints fail on numerous counts. For a start, the renewable energy target is having little impact on retail prices. The Queensland Competition Authority notes in its latest finding that the large scale renewable target (the apparent subject of the new government’s attacks) will cost Queensland households $26 a year, or about 1.3 per cent of their bills – about half the rise in retail bills caused by soaring gas prices.

Wind and solar do not need new back-up power. South Australia has got to 31 per cent wind and solar without the need for any new equipment. That’s because most of the peaking plants that respond to changes in demand – and supply – already exist to cope when a whole bunch of people switch on air conditioners at the same time, or when coal or gas fired generation has unexpected shut-downs, such as when the Millmerran coal fired generator shut down last March, or the two major gas generators lost large amounts of capacity in South Australia. The difference with wind and solar is that at least their output is predictable.

Abbott’s outburst are cheered, and sometimes inspired from the sidelines, by elements of the mainstream media. The Australian took another bash at Germany last weekend, which it likes to cite as what happens to a country when it moves away from baseload – coal and nuclear – and towards renewables. The newspaper’s principal complaints were there were more coal plants, more emissions, and more costs.

Germany is the nightmare scenario for the fossil fuel industry because if the biggest manufacturing economy in Europe can wean itself off nuclear, coal and gas, then so can everyone else. Which is why its policies are attacked with such gusto.

What The Australian omits to tell its readers is that coal-fired generators coming on line now were planned and construction was begun well before Fukushima, and before the extent of the rapid growth in renewables was acknowledged. The net impact is a lot more coal projects are being abandoned. The country’s big three utilities – RWE, E.ON and Vattenfall, have made it clear they intend to build no new fossil fuel plants, because some of them are having to close new plants almost as quickly as they are opened.

Investment bank UBS, for instance, predicts that one third of Germany’s fossil fuel capacity will need to be closed by 2017 because it is no longer economic, and they are no longer needed. Germany industry has not been affected by the renewable energy rollout because it is only charged the wholesale price of electricity, plus a margin. Its costs have fallen substantially in recent years, not risen.

To try and illustrate its lament, The Australian sought to create drama by pointing to a period in early December when renewables contributed just 5 per cent of its generation needs on some days.  I presume these charts reflect the issue.

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Actually, it’s not the dips that are worrying the incumbent utilities, or the grid operators, it’s the big lumps of clean energy that are forcing their generators off line when they produce. Currently, Germany gets just less than 25 per cent of its electricity from renewables over a year, and this will rise to around 60 per cent by 2035 (the new government’s new target). As that happens, those gaps will disappear, the lumps will get bigger, and new storage solutions will mean there is even less need for fossil fuel or “baseload” generation. A similar scenario would take place in Australia, which is why the incumbents are so keen to neuter the renewable energy target so they can extend their revenues as far as possible.

The problem with the current debate in Australia is that much of this information will simply be ignored. The new government – like its noisy boosters and spokespeople – has shown itself to be un-interested in clean technology, even when it makes environmental, economic and financial sense.

Take the Clean Energy Finance Corporation as an example. It has now established that it will be able to do its job of investing up to $10 billion in low carbon technologies, while achieving up to half the government’s emissions reduction target, and return a surplus to the budget.

Too good to be true? Must be. Because even though Treasurer Joe Hockey accepted the CEFC’s numbers in his budget update just before Christmas, the government has given no indication it will abandon its attempts to scrap the CEFC.

As some industry insiders suggest, it’s about time the PM accepts that Australia has a “super-abundance” of wind and solar, just as it has of coal and gas. The only difference being is that wind and solar generation will be cheaper – as the government’s own economic advisor suggests – and cause a lot less pollution.

The renewable energy industry is currently fearing the worst. If, as The Australian suggests, the only two cabinet ministers supporting the renewable energy target are Industry minister Ian Macfarlane and environment minister Greg Hunt is true, then there is big trouble ahead.

Macfarlane, it should be remembered, was responsible for neutering John Howard’s MRET nearly a decade ago, but the new government is so extreme he is now considered a moderate. Hunt is said to have little within cabinet. The reality is, however, that there is more support than The Australian lets on. It may be less an observation of the Cabinet dynamics than a threat.

Of course, if the PM is serious about limiting electricity price rises, he’d focus on reigning in network charges which, according to every analysis, has been by far the leading cause of electricity price increases.  Of course, this might not be so easy in NSW and Queensland, as this would mean less revenue for those State Governments as they own the networks. And more renewables mean less revenues for the generators – be they government owned or private.





  • Darryn McKay

    If only logic, economics and scientific evidence was actually used in public policy….is that too much to ask?

    • Pedro

      Apparently it is for a bloody minded, blood oath government.

  • Rob

    King Abbott will be remembered for his failure to turn back the tide.

  • chrispydog

    The graph says it all: solar and wind is nowhere near demand, and that coal is still doing the ‘heavy lifting’. Imagine scaling those low output days up to the demand line, and what it would mean, even IF (ie BIG if) a suitable large scale storage system can be developed. We are talking in trillions of Euro, and no large industrial nation looks like going anywhere near it for the obvious reasons.

    RE and nuclear would work, as it’s done already in France (for decades) or Ontario which both have incredibly low CO2 emissions compared with Germany’s.

    But ONLY renewables? It’s ludicrously expensive (Germany’s retail price is the 2nd highest in Europe after Denmarks) and simply will never meet the demand.

    • Alen

      Have a look at solar thermal if you want a renewable energy source with mass storage, many are already built and proven to be reliable, with the price of such a plant only coming down as smart countries and states like Spain, California and Nevada are investing in ongoing research and development. Smart grids are another alternative approach and lets not forget the abundant availability of hydrogen as a storage medium, although with a mindset as Abbotts the research for this will again have to be from smarter governments that actually believe in what 95% of the worlds climate scientists say

      • chrispydog

        Sorry Alen, CSP is the MOST expensive of them all…hideously expensive. All reputable studies on the LCOE confirm this.

        • Concerned

          And why no mention,that even in Spain it does not work in Winter,storage and all.

          • Alen

            Correct if I am wrong but the 110 MW solar tower to be built in chile is reported to have LCOE ($100/MWh) at the end of the decade, which is a cost below that of peaking plants

  • Richard Johnston

    I am surprised that Abbott has been so politically un-savy on management of green issues. In ignoring them he is creating a real possibility of a single term Government, or a great opportunity for a Turnbull led revolution within Liberal ranks. Maybe this is God’s plan?

  • howardpatr

    it seems almost certain that Australia’s god fearing Prime Minister is a CREATIONIST.

    There seems little, if any, chance that a person who holds such faith in fairy tales to change his mind over anthropogenic climate change and renewable energy technologies?

  • Kurt Liffman

    The King Island Renewable Energy Integration Project demonstrates one pathway to a renewable energy future:

    ” The Project, which is currently underway and due for completion by the end of 2013, will see a significant improvement to the existing King Island power station, providing residents with reliable renewable energy whilst reducing generating costs for the State of Tasmania.

    We are aiming to develop a world leading power system on King Island. KIREIP will result in the use of renewable energy for over 65% of the islands energy needs, and will reduce CO2 emissions by more than 95%.”


    Even with an incomplete system, they are starting to obtain some interesting results, e.g. from the December 2013 update:

    ” The KIREIP team is excited to report that since July we have been able to run your power station on renewable energy alone (no diesel) for 125 hours (equal to five days) using the existing wind turbines and our advanced enabling technology. This achievement saves lots of diesel and reduces carbon dioxide emissions, and it is the first time this has been achieved on this scale anywhere in the world, bringing King Island international recognition for its renewable technology.”