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Abbott’s Australia faces an energy revolution, ready or not

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Malcolm Turnbull gets it. Last Saturday, after having a test drive of a Tesla Model S electric vehicle in California – an experience he described as ‘exhilarating’ – he declared that an “energy revolution” was upon us.

He noted how battery storage could turn the energy market upside down, reducing peaking power requirements, optimising the use of renewables and in some cases enabling consumers to go off the grid altogether.

“The excitement of technology in the Bay Area is exhilarating…..but not quite as palpable as the jolt you feel when you hit the accelerator!” he wrote. We don’t have a video of Turnbull’s test drive, but if he was in the passenger seat, it might have looked something like this.

Steve Ciobo gets it. The senior Abbott MP, a parliamentary secretary to both Julie Bishop and Andrew Robb, told ABC last week that the combination of solar and battery storage technologies was happening so quickly that Australians were ready to leave the grid. “There is massive change happening,” he said.

The CSIRO gets it. Its landmark report a year ago suggested that nearly one half of Australia’s energy requirements will be met by on-site generation, and up to one third of customers could leave the grid. The only question was when, and the utilities respond.

The biggest utilities in Europe and the US get it. E.ON is splitting itself in two so it can concentrate on distributed energy, and not centralised fossil fuels. NRG has put all its growth options into solar, storage, EVs and micro-grids.

Most Australian network operators get it. They predict that it will be cheaper for regional users – already heavily cross-subsidised by city-dwellers – to use solar and storage to get off the grids. Whole communities could focus on micro grids, and that will eventually flow to major centres and capital cities.

The solar industry gets it. The Australian Photovoltaic Institute said in a submission on Tuesday – and many times previously – that technology change is happening fast, and it will provide lower cost, lower risk and more reliable solutions to the current reliance on elongated grids.

Many financial market analysts get it. UBS says solar and storage may make it cheaper for people in suburban Sydney to be off the grid by 2018. Citigroup says battery storage will be at grid parity within years, and will hasten the demise of fossil fuels. Deutsche Bank says solar costs will fall another 40 per cent within two years, and solar plus storage parity will be widespread, including in Australia.

The big energy retailers in Australia get it. EnergyAustralia last year acknowledged that solar parity has been reached, storage is coming and micro-grids are on their way – bypassing or at least challenging – traditional utility businesses.

Origin Energy and AGL Energy are busy putting the finishing touches of a new marketing campaign on solar, storage, and possibly EVS. The immediate aim is to lock in customers for the long term – churn is one of the biggest costs they face – but at least one of them has a Plan B,  à la E.ON and NRG, should the transformation be as quick and dramatic as some suggest.

The Australian Energy Regulator gets it. Last year, it warned that network models need to be changed to allow greater access for customers to participate in the market and to address the “prosumer revolution”. If barriers remain, then prosumers – those generating and storing their own energy – will “walk away” from the grid.

NSW Environment Minister Rob Stokes gets it. He says solar technology is providing households with greater autonomy in managing their energy needs and is helping reduce our State’s reliance on traditional energy sources.

“Solar panels are revolutionising the Australian electricity market,” Stokes wrote in 2013. “The pace of change is faster than official projections, and the effects on customers and energy companies are profound and irreversible.”

And the newly elected Queensland Labor government gets it. Last week, before its unexpected poll victory, it unveiled an ambitious renewables target that focused on getting a million Queensland houses connected to solar, more large-scale renewables, and embrace the new technologies that could cut costs, create jobs, and provide export income for the state.bury-heads-australia-v3

Everyone, it seems, gets it. Everyone that is, except for those who matter, such as Prime Minister Tony Abbott and energy minister Ian Macfarlane in particular. Both are wedded to the idea of centralized fossil fuel generation.

Both believe in coal, say we should exploit every large molecule of gas, damn the carbon price and demonise and rubbish renewable energy sources, at the same time as two million households sign up for solar, and 15,000 more do so every month. Installers says nearly half of new enquiries want to know about battery storage too.

It reminds us of another technology revolution about 20 years ago. As many people took up the internet, many were left struggling to comprehend what a distorted “a” – as in @ – could possibly mean. Even they catch up, eventually, as this ad in Super Bowl suggests. That’s right, an EV ad in the most watched TV event in the most heavily fossil fuel dependent nation on Earth.

The sad irony is that Australia is at the pointy end of the energy revolution that is sweeping the globe, even if the government does not know it, or will not recognise it. The first reason is because we have the highest electricity prices – not because of coal, whose health impacts are not priced into the market, or renewables, but because of the massive cost of delivery. And Australia has some of the best solar resources, and some clever technical people. And the people love solar.

The question is, what to do about it. Ciobo used the prospect of grid defections as an argument to support the former Newman’ government’s plan to lease the state’s energy assets. Best to get the assets off the government books before they lose value.

The APVI wants the rapid take-up of enabling technologies to be recognized by energy regulators, who are about to rule on network spending plans for the next 5 years. As we reported on Tuesday, the APVI thinks the networks are still married to the old ways of operating, despite their talk of micro-grids and all that, because it is easier for them to operate that way.

But allowing them to lock in expenditure, means that customers will pay for yet more grid extensions and upgrades of the poles and wires network that they do not need.

Already, $45 billion of spending in the last five years is locked in to customer bills, and at least a third of that probably wasn’t needed, says the University of Technology. Australia has been too busy building a bigger dumb grid, rather than a smaller, smarter and cheaper grid.

That will rebound on network operator, owners and customers soon. Loading more delivery costs (via the network) simply makes the prospect of going off-grid even more attractive. As attractive an idea as it is for some, to do so en masse would have massive social equity issues, and would result in massive over-capitalisation.

It’s good that a lot of people get it, but until the people making policy – from the PM down through the energy minister and into the federal and state pricing, competition and rule-making regulators, many of whom share the same views as Abbott, Macfarlane and their chosen advisors, then the whole industry is facing something of a disaster.  

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  • Bernie

    So, if everyone ‘gets it’, as you say why do you need to jump up on your soapbox and bash the only two remaining who don’t? Surely it is simply a matter of getting on with things and letting the market prove you are correct.

    Or do you have another motive other than achieving the implementation of efficient, non polluting energy?

    • Peter Campbell

      Because the ones who don’t get it are in the way.

      • Bernie

        Then perhaps it is not as good as everyone who ‘gets it’ thinks. My point being that its own benefits will sell itself if everyone does get it. It doesn’t need the remaining two people he complains about to change. Even if they are in influential positions. Just get on with the job of implementing the technology. Build it and they will come. No need for politics if it already has the support Giles is claiming.

        • Harry Verberne

          When you have power companies who cut your feed in tariff down to either nothing on a derisory 6.2c, who up your daily connection charge by 24% as is happening to me and when you have luddites or FF protecting politicians such as Abbott and Hunt, then YES it IS political.

          • Alan Baird

            And the market IS fatally flawed because of those increases to unavoidable connection fees. This and huge subsidies to fossil fuels (which dwarf anything to renewables) don’t help. Apparently that’s a level playing field for Bernie.

        • Paul Lemming

          Fossil fuel wouldn’t be able to sell itself if it were not for the huge subsidies that it has received for decades.
          The Abbot point development would not be even viable if it were not for the taxpayer having to pay for the Dredged material or the spill to be dumped on the reef , and the railroad to carry the coal , so they can sell it for a loss. Bernie, Bernie, Bernie. Open your eyes , I think you are very naive , if you think you can deal with the politics ,and the move away from Fossil fuels and towards renewables totally exclusive from one another.

    • johnnewton

      What on earth do you mean? What a pointless comment

      • Bernie

        Too hard to understand Johnny? He is making political statements.

        • johnnewton

          Wow, you really think so? I’m afraid you haven’t been listening Bernie. Criticising tone deaf Abbott is no longer political. He is a gone goose, a dead duck. From all sides.

          • Bernie

            So if he is ‘a gone goose’ or ‘dead duck’ why waste your time and energy criticising him? He will be gone soon if you are right so the only thing left to do is get on with the job

          • RobS

            Because for better or worse at present he is a highly influential dead duck who has the potential to do a lot of damage in the time he has left. We are getting on with the job, installing solar at ever expanding rates depsite ever decreasing subsidies and supports but in the meantime it is important to call the coalition on their rank hypocrisy of claiming to support free markets whilst ratcheting up the special deals and backdoor subsidies for fossil fuel projects all over the country.

          • Chris Fraser

            … and ideologically quite bonkers too

    • Paul Lemming

      “letting The market prove you are correct ” is unfortunately the problem. The Liberal Government has put barriers in place , tried to hoowink and dissuade the public with a flawed and stacked report , and everyone seems to ignore the huge subsidies in place for Fossil fuels , yet put small subsidies in place for Solar , and everyone in the fossil fuel industry or lobby groups or utilities , cry foul.

      Lets have a fair market , where even subsidies are paid , and industries are evaluated for their employment prospects, economic and environmental impacts looking forward.

      So getting on with things , needs government to embrace renewables , not call them “blights on the landscape” and put policy and subsidies in place to progress forward to the inevitable change that is coming, not try to block the new , and prop up a dying , and outdated model for energy.

    • Harry Verberne

      “Surely it is simply a matter of getting on with things and letting the market prove you are correct”.

      Fine, then all the rebates and subsidies that the fossil fuel industry benefits from should be abolished? After all you want the market to rule.

      • SunGod

        Every time someone says “let the market” do anything, I start picturing a bunch of magical fairies.

        • zynismus

          Milkum Termble : I’M NOT GAY !

  • lifeboatman

    The tide has changed in Queensland, it is only a matter of time before the same thing happens in Canberra. Let Tesla lead the new revolution!

  • David K Clarke

    Yes, it looks like people with solar PV will be leaving the grid. This is a pity because it would reduce Australia’s greenhouse emissions if they stayed on the grid and exported all their excess electricity for others to use.

    For example, I have a shack that I use about half the time. It has 6.7kW of solar PV. On average I export about 30 times as much electricity as I import (winter it gets down to 3 or 4 times, in summer it gets up to 40 to 50 times). I don’t get paid much for the power I export, but I’m happy to know that it is displacing fossil-fuel-generated power somewhere.

    • Andy

      a possible answer would be ‘mini-grids’ and ‘smart-grids’ just small local grids within your community. You share with you ‘neighbour’. Germany has some of these smart grids already, basically smart software controls where power is been generated and needed and distributes it in a optimal way.
      Alternatively solar and wind power can be stored in hydrogen locally and re-converted into electricity via fuel cells. This technology is there already too…

    • The effect will be even more pronounced in WA! Being a small grid (relative to the eastern counterpart), every household going off-grid will reduce solar contribution to peak load 🙁 (hence, more requirement for peak-load power plant).

      There is a nice web interface for SWIS grid (http://www.imowa.com.au/), but the eastern counterpart seems to be not ‘free-view’.

  • Blair Donaldson

    With a bit of luck the shortsighted antics displayed by Tony Abbott and Ian Macfarlane will soon be of no consequence. Abbott has lied to too many people too often and reality is about to catch up with him. We have to hope enough rational people exist in the coalition who can turn the delays of the past into sensible planning for a renewable future. There is a strange double standard with the current federal government, it frequently talks about the virtues of private enterprise and industry yet it is doing its level best to inhibit those same jobcreating industries while it props up fossil fuel industries that are discarding jobs and a great rate.

    • disqus_3PLIicDhUu

      Blue ties, tell lies.

  • Ken Dyer

    Of course Tony Abbott “gets it”. But what a senior member of the British conservative party said was this, “What you have to realise about the Conservative Party is that it is a coalition of privileged interests. Its main purpose is to defend that privilege….” That is exactly what Tony Abbott and his henchmen in the Liberal Party are doing, protecting their mates in the coal industry at the expense of Australia’s renewables future.

  • suthnsun

    The new Victorian Labour Goverment should get it, perhaps they should put a hefty royalty increase on brown coal , that would level the playing field ,dramatically reduce emissions, provide finance for properly designed and engineered bicycle infrastructure ( the only currently available, truly viable and sustainable future transport option)
    From a Victorian public parochial view they may as well wring every benefit they can from brown coal before it is necessarily consigned to history?

    • The Green Lantern

      They should, but they won’t. Led as they are by Daniel Andrews, who curried favour with Murdoch during the election campaign by saying he’d refuse to enter negotiation to form a govt if the Greens had held balance of power.

      They wouldn’t even be scrapping East West Link if they hadn’t been forced to by the Greens.

      Andrews and the Victorian ALP (led by the faction who operate under the spectacularly false label of “Socialist Left”) were called on to commit to closing down Hazelwood and have refused to do so. Called on to properly wind back the unjustifiable Coalition restrictions on wind power, and won’t do that either.

      And it can’t be forgotten that Federal Labor had the chance to bring in a real mining tax, that RSPT, and decided to allow the big mining companies to write their own tax legislation instead. That’s reliably indicative of the direction of Victorian Labor as well.

      • suthnsun

        Thanks Green Lantern, it seems I was just being hopeful, an attribute I have been successively excising reasonably successfully in the last few dark years..

      • Blair Donaldson

        TGL, is there any possibility that Andrews could be reasoned into promoting renewables if he could be shown there would be jobs and financial benefits for the state?

        • The Green Lantern

          Everything I’ve seen says political corruption is the issue Blair. The influence of the fossil fuel industry and its other wealthy backers, through those campaign bribes, so-called ‘donations’, plus Murdoch and Murdoch allies throughout the MSM.

          And Daniel Andrews and the Victorian ALP oppose a Victorian ICAC and campaign finance reform, as they’ve made clear.

          Still would hope the obvious facts about jobs and financial benefits from greater support for renewables would have an impact on him and his government, but I’m not confident.

          • Blair Donaldson

            There is no doubt corruption/influence from the fossil fuel industry has delayed sensible action on renewables. I just hope the time comes when those responsible are held to account. It doesn’t help that so much of the community is scientifically illiterate as well. The useful idiots who deny AGW are willing apologists for the fossil fuel crowd. Of course they are not driven by science, ideology is enough for them. It’s like trying to reason with creationists. The minute the evidence parts company with their cherished beliefs, you can no longer reason with them. I don’t know what the solution is. Trouble is that these people hold everybody back and make us all pay more in the future, environmentally, ecologically and financially.

      • Harry Verberne

        I think Labor is afraid of the political and financial clout of the FF generators and miners. That was apparent under the previous Federal Labor government when they tried to introduce a super profits tax (with poor justification to the voter I might add) and the miners mounted a very effective campaign to force a weakening of the tax to the point where very little was paid. Whilst I would like to see Hazelwood and Playford shut down I think the Greens are being naive if they think that they can do so without huge opposition. I don’t know if they proposed to pay compensation. Federal Labor proposed to “pay for closure” and that would have involved a staged shut-down to minimise the impact on the local community but negotiations broke down over the high compensation demanded. I suspect the owners could hold out because they could see an LNP government coming which had no closure policy.

        • Chris Turnbull

          I like to think that the Greens are not naïve, but rather push the envelope to make the major parties realise they can do better. As a volunteer and now member, I’m constantly inspired by the ethics and education of the candidates that run for this party for the people.
          Hopefully, enough people realise this and will give them their number 1 vote in both upper house voting and in lower house preferential voting. At least when they get the number 1 vote, the Greens will get additional funding with which to evolve the thinking of the majors – due to not taking donations from big business, the Greens have always run campaigns on the smell of a biodiesel-saturated rag.

  • John Silvester

    Right now would be a good time to express your concerns to your local coalition backbencher about the way the government has handled the RET.

    • Billy Bangle

      The RET is a poor option compared with a Carbon pricing mechanism. There’s no incentive to store energy or to find another way to deal with peakload and other variables. Mike Rann’s nuclear waste power station didn’t work, but in theory, it could have delivered backup electricity, partly displacing gas. Is an RET better than nothing? I’m not sure.

      • John Silvester

        I mentioned the RET because it is the carbon mitigation mechanism under attack by the coalition right now.

        Is the RET by itself THE ANSWER. No.

        We had a number of complementary mechanisms that included the RET that collectively would have moved carbon mitigation forward.

        Those mechanisms included:
        Renewable Energy Target (RET)
        Emissions Trading Scheme (ETS)
        Clean Energy Finance Corporation (CEFC)
        Australian Renewable Energy Agency (ARENA)
        Climate Change Authority (CCA)
        Climate Commission
        Carbon Farming Initiative (CFI)

        So what would a strategy to reduce Australia’s Fossil Carbon intensity look like.

        You would need to build low carbon generation capacity so the lights don’t go out when you start to close carbon intense generation. (RET)
        You would need begin closing down carbon intensive generators by appling financial pressure on carbon intensive generators. (ETS)
        As a mix of low carbon technologies would be required. So a way to bring commercially ready low carbon technologies that due to a lack of learning by doing and scale is not yet economically cost effective. (CEFC)
        We would need to do research into improving the low carbon technologies commercially available now and creating the low carbon technologies of the future. (ARENA)
        Governments need to implement policies based on science and a clear understanding of what other countries are doing. (CCA)
        The general public need to understand why there is a need for moving towards a low carbon economy by being given sound information based on the science. (Climate Commission)
        While electricity generation is a major emitter of carbon, the farming and land use sector accounts for about a third of carbon emissions so a mechanism aimed at the carbon intensity of land use and farming would be required. (CFI)

        Is there other things needed to be done. YES

        Of those not mentioned so far, energy efficiency is probably the largest and most important. Like electricity generation, it crosses all sectors of the economy.

        We need to start moving transport away from fossil fuels. Electric cars, high speed rail to displace air travel on Australia’s major transport corridor, bike paths, bio-fuels for those applications where liquid fuels are still necessary and improved public transport in general .

        Designing urban areas so that car ownership is not a minimum requirement, where it is possible for people to regain a sense of community.

        You mentioned Energy Storage. We need a mechanism to encourage Energy Storage, as places like California and Germany have started to do.

        So the RET by itself is not the answer.

  • Jason

    Several recent analyses of the inputs to our energy systems indicate that, against expectations, energy storage cannot solve the problem of intermittency of wind or solar power. Not for reasons of technical performance, cost, or storage capacity, but for something more intractable: there is not enough surplus energy left over after construction of the generators and the storage system to power our present civilization.

    The problem is analysed in an important paper by Weißbach et al.1 in terms of energy returned on energy invested, or EROEI – the ratio of the energy produced over the life of a power plant to the energy that was required to build it. It takes energy to make a power plant – to manufacture its components, mine the fuel, and so on. The power plant needs to make at least this much energy to break even. A break-even powerplant has an EROEI of 1. But such a plant would pointless, as there is no energy surplus to do the useful things we use energy for.

    There is a minimum EROEI, greater than 1, that is required for an energy source to be able to run society. An energy system must produce a surplus large enough to sustain things like food production, hospitals, and universities to train the engineers to build the plant, transport, construction, and all the elements of the civilization in which it is embedded.

    • Colin

      Be careful putting too much faith into the report by Weißbach et al. I was very interested in your comment above, so I went looking for the report. I was astounded to see that the report concludes that Nuclear energy is by-far the most cost-effective source of power. The paper looks very professional, so perhaps everyone else is wrong?

      So I went up and had a look at who the authors are. Weißbach and all the other authors listed work for the Institute for Solid State Nuclear Physics. When a group of nuclear scientists tell you that the most economic form of energy production is nuclear energy, you need to be a bit skeptical!

      Perhaps the authors need to have a look at reality, such as the exorbitant price that the UK Government is having to guarantee (for the next 35 years) to pay for power from the new Hinkley Point nuclear reactor. I don’t have enough knowledge to be able to refute the Weißbach report directly, however I know enough to be skeptical of reports that reach conclusions that are very heavily biased towards the technology that the authors’ careers depend upon.

  • Jason

    For countries like the US and Germany, Weißbach et al. estimate this minimum viable EROEI to be about 7. An energy source with lower EROEI cannot sustain a society at those levels of complexity, structured along similar lines. If we are to transform our energy system, in particular to one without climate impacts, we need to pay close attention to the EROEI of the end result.

    The EROEI values for various electrical power plants are summarized in the figure. The fossil fuel power sources we’re most accustomed to have a high EROEI of about 30, well above the minimum requirement. Wind power at 16, and concentrating solar power (CSP, or solar thermal power) at 19, are lower, but the energy surplus is still sufficient, in principle, to sustain a developed industrial society. Biomass, and solar photovoltaic (at least in Germany), however, cannot. With an EROEI of only 3.9 and 3.5 respectively, these power sources cannot support with their energy alone both their own fabrication and the societal services we use energy for in a first world country.

    • Peter Thomson

      Jason, do you have a link or a ref to the paper by Weißbach et al? Presumably this is where I can find the figure you refer to (a quote from the paper?). I would be very interested to read it.

      In discussing EROEI it’s useful also to study the historical trends – fossil fuel EROEI’s for fossil fuels have been falling for decades as remaining reserves become increasingly difficult to extract, whereas EROEI’s for renewable systems are increasing. Be interesting to see if Weißbach has discussed this.

      • Peter Thomson

        Don’t worry, I found it, I found it:
        “Energy intensities, EROIs (energy returned on
        invested), and energy payback times of electricity generating power
        plants”, Weißbach et al, Energy, vol. 52, pp. 210-221, April 2013,

        http://dx.doi.org/10.1016/j.energy.2013.01.029

        Not everyone agrees with their conclusions though:
        “Comments on “Energy intensities, EROIs (energy returned on invested), and energy payback times of electricity generating power plants”—Making clear of quite some confusion”, Raugei, Energy, vol. 59, pp. 781-782, Sep 2013,
        http://dx.doi.org/10.1016/j.energy.2013.07.032

        Weißbach et al respond:
        “Reply on “Comments on ‘Energy intensities, EROIs (energy returned on invested), and energy payback times of electricity generating power plants’ – Making clear of quite some confusion””, Weißbach et al, Energy, vol. 68, pp. 1004-1006, April 2014,
        http://dx.doi.org/10.1016/j.energy.2014.02.026

        And most recently:
        “Rebuttal: “Comments on ‘Energy intensities, EROIs (energy returned on invested), and energy payback times of electricity generating power plants’ – Making clear of quite some confusion””, Raugei et al., Energy, (in proof, 2015),
        http://dx.doi.org/10.1016/j.energy.2014.12.060

        Thus the scientific method progresses, scrutinising and criticising methodologies, and hence conclusions drawn from the results. And the quality of research required to refute counter arguments improves at each stage.

        • Jason

          Very reasonable. In fact all I am suggesting is we all approach the transition with some pragmatism. But I do believe business as usual is not sustainable for the damage being done to the environment is the result of a cultural alienation. Essentially the energy profit from fossil fuels has acted as an enabling agent to magnify our cultural stories that has Nature as the enemy of progress so it must be subdued… this will lead to the hardest challenge that our culture will face acknowledging there are limits to the current model running the world.

  • Jason

    This doesn’t mean the technology can’t support prosperous societies but should give us pause on believing we can run business as usual ….

    • Chris Fraser

      We’ll do that. And we’ll factor in the social cost of carbon as well.

  • Rob G

    The demise of Abbott may happen quicker than we think. When that happens he will take Macfarlane, Hockey, Hunt and other deniers will him. Malcolm or Bishop will restructure and if they want to preserve themselves they’ll get with the program. We’ll look back at 2015 and think how quickly renewable resistance collapsed. Newman is gone, VIC ditched the LNP late 2014 – that’s 2/3s of the problem fixed. Just Abbott to go and Australia can move again.

    • SunGod

      Would say 2/3 of 1/2 of the problem, but I back the general principle here.

      Plenty of renewable resistance remaining in the other major party.

      • zynismus

        hmm … let’s see what the “other major alternative” does with T p P …

        • SunGod

          Oh yeah, I saw your other posts about how Labor are keeping quiet on whether they’ll support it or not now, and blocking that Green motion to inform the public about it.

  • Rob

    Maybe Steve Ciobo gets it but I’m not sure his boss Julie Bishop does. Only a couple of months ago she was all excited about nuclear being able to provide baseload etc. and off to take a look at one of these ‘new generation’ (ie. experimental) reactors called TerraPower – backed by Bill Gates!!. And, of course, it all made perfect sense because unlike renewables it could do baseload AND we just happen to have lots of uranium we can mine AND it would be just the thing for poor third world countries AND we could sell them our uranium for ever to keep the bloody things going.

    And did you say Steve Ciobo also works for (climate science is conspiracy) Andrew Robb? We can’t sell our wind and sunshine to third world countries, Silly.

  • Blind Freddy of Cairns

    Fantastic, looking forward to leaving the grid and leaving the rest of the poor suckers that cannot afford the cost of PV’s and storage or that rent (possibly 2/3rds of households) behind to share the spiralling cost of the grid, which don’t forget is State owned and regulated by the AER. Those state governments will have a power grid that is not worth didly squat in just a few years! Oh hang on, we the people own them!