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How the far Right have hijacked Australia’s energy policy

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If you ever wondered just how comprehensively the Far Right has hijacked the Coalition’s energy policy, it’s worth reading the speech by NSW energy minister Don Harwin we reported on last week.

It’s a speech that might once have been made by prime minister Malcolm Turnbull – and in fact large parts of it, particularly the focus on energy efficiency and demand management, are exactly the sort of things Turnbull did talk about.DonHarwin copy

That was, however, before he was prime minister and became master of all he surveyed, apart from his own climate and energy policies.

The thrust of Harwin’s speech was this: the era of baseload coal is coming to an end, fossil fuel plants are not a guarantee of reliability, wind and solar offer the cheapest forms of new generation, we need to look at storage, and we must not lose sight of the long-term climate targets.

Turnbull is not allowed to say any of these things, for fear of upsetting the Far Right. The sight of the craven apology offered by front bencher and government whip Christopher Pyne last weekend for daring to suggest that the moderates had some influence over policy matters was testimony to that.

And so too have been the efforts of federal energy minister Josh Frydenberg to placate the Far Right by suggesting that each individual new wind and solar farm should carry an equal amount of storage for its rated capacity – megawatt-hour per megawatt – effectively trying to turn the new technology into the same monoliths that exist now in the current energy market model which is clearly past its use by date.

Frydenberg said this to the party room and then repeated it when addressing an energy conference in Melbourne a week later. He made clear it was not about energy security, but “levelling the playing field” between lower cost renewable and expensive and polluting coal.

It’s a classic case of overkill – of politics over policy, and of ideology over technology.

It is true that the Far Right in Australia have not had the same powers as their colleagues now have in the US, where climate science, environmental protections, renewable policies, and emission controls are being systematically trashed and dismantled by the Trump administration.

But they have given it a good shot. While in power, the Abbott government abolished the carbon price, slashed the renewable energy target and other institutions. Since losing power, they have still succeeded in freezing their policy, or politics, in time.abbott_turnbull_130906_aap_0

The whole debate around the potentially ground-breaking Finkel Review boiled down to whether it was good for coal generators or not.

The climate science was discarded, and then the fossil fuel industry and the conservatives began to question the very idea that wind and solar were cheaper than new coal. Fake news made front page headlines in the Murdoch media as the incumbents fought back.

Harwin’s speech puts a nonsense to this, and highlights the fact that to be a member of a conservative government does not necessarily equate to the need to deny basic facts.

It is worth repeating Harwin’s major themes, because like the $565 million investment in Nectar Farms, the creation of 1,300 jobs and the shift of one of Australia’s biggest vegetable growing operations to 100 per cent renewables, it did not get a single mention in the mainstream media.

It seems there are some things MsM doesn’t want you to know. (Although we should belatedly note that the Guardian did finally write a story on the Harwin speech on Tuesday, nearly a week after it was delivered).

The major themes of the speech were in direct opposition to the positions and beliefs held by the Far Right.

The era of baseload power is coming to an end: This is not a new concept – the head of the UK National Grid, the head of China State grid, even Australia’s AGL and the BNEF and goodness knows how many others have acknowledged it. “Our old paradigm was based upon a notion of a baseload of energy demand being supplied by large thermal generators, and then a peak. Over the coming decades, this will change.”

Wind and solar are cheaper than coal. Full stop. Harwin says wind and solar are even cheaper than modelled by the Finkel Review, and noted the history of underestimating cost reductions, particularly from the IEA. Not only are wind and solar cheaper than new coal, Harwin suggests they will soon be cheaper than existing coal plants. “We could see a situation in the 2030’s where existing coal plants struggle to compete during the day because new solar is cheaper.” This is in direct contrast to the Coalition view that somehow new coal is cheaper, an argument vigorously promoted by the Minerals Council of Australia and the Murdoch media.

Coal and gas plants do not equate to reliability: Harwin was appointed just a week before the heatwave in NSW, and describes the “white knuckle ride” as authorities tried to keep the lights on as coal and gas-fired power plants tripped across the state. In NSW, the grid lost more than 2GW of capacity as coal plants succumbed to the heat and gas generators failed. Renewables, and in particular solar, performed as expected and kept the lights on. “Clean energy performed as forecast. Thermal generation did not,” Harwin said.

Energy storage will fill in the gaps between renewables: Harwin came out in support of one of the few positives to have emerged from the federal Coalition government, when glimpses of the “old Malcolm” were briefly visible: Snowy Hydro 2.0, and the need for flexible rather than baseload generation, this time through pumped hydro. It is not yet clear if this is a go-er financially, but the implications are important if it is. Harwin says it will be a “game-changer” and support 5GW of new wind and solar in the state – which makes a nonsense of the Frydenberg push for each new wind and solar plant to match each megawatt of rated capacity with a megawatt-hour of storage.

New rules are needed: Harwin supported new rules and mechanisms to level the playing field for new technologies. It is not enough that wind, solar and storage offer cheaper alternatives to coal and gas if the rules are fixed in favour of the incumbents. The most important of these is the 30-minute settlement, which most people agree allows the big generators to manipulate prices, and does not encourage battery storage. “It (the 30-minute settlement) is a classic example of a rule made to suit existing technologies. I have supported change so we can benefit from new technologies such as batteries.” Without reform, Harwin noted, “the National Electricity Market could start to resemble Voltaire’s view on the Holy Roman Empire – which he quipped was neither Holy, nor Roman, nor an Empire.”

We have to take climate change seriously. “We must end the self-indulgent climate culture war,” Harwin says. The Paris climate deal has to be taken into its main target, not the initial down-payment made by Abbott. NSW has a goal of net zero emissions by 2050, and first off the rank will be electricity. The Finkel Review, prepared to mollify the Far Right, had a net zero emissions electricity sector target of 2070. “Investors know that emissions are expected to go down in the future” Harwin said. “And it’s not ideological. Whatever your view on the science, carbon is risk, that’s how investors see it, and this is an exercise of risk management.”

We have to be ambitious with renewables: Harwin spoke of a vision of having two renewable energy spines running across the state: the first running from west to east – South Australia to Snowy – unlocking Riverina solar and Western Division solar and wind, along with a huge balancing battery in Snowy. The second would run from the Hunter to Queensland, tapping wind in the tablelands and solar from the Central West, and use the Hunter’s existing infrastructure for a balancing battery and bioenergy hub.

Such vision is anathema to the Far Right, who are still pushing for new coal generators in Queensland and Victoria, with the loud support and editorials from conservative commentators, and the Murdoch media.

Harwin is not the only one to lament the influence of the far Right. Labor’s energy spokesman Mark Butler makes mention of it in his book Climate Wars, describing in detail how the Far Right has skewered climate policies and politics over the last decade.

Butler described the campaign against the “carbon tax” by media commentator Alan Jones, who was “joined by other right-wing commentators and News Limited papers in a campaign of vitriol, the likes of which none of us had ever seen in Australia.” But which continues to this day.

Ross Garnaut, the economist whose work was central to much of the policy designs, including the carbon price that was in place for two years, and the associated institutions that remain (such as the CEFC), said in a speech this week that it was only a small minority.

“(Some people) have ideological objections to modern atmospheric physics, or ideological or vested interests in old ways of supplying energy,” Garnaut said in a speech to the Melbourne Energy Institute this week.

“There is no way of building a bridge across to the ideological and vested interests. But people of such mind represent a small proportion of the Australian community, and it must be possible to establish effective policy stability without them.”

And Ian Hunter, the climate change minister in the South Australian Labor government, had this to say in a speech late last month in response to Finkel and the reaction to it from the federal Coalition:

Following the release of the Finkel review, the federal Liberals spent the whole week debating climate change science rather than seriously looking at the challenges facing our country in terms of energy policy.

“We are still struggling with federal Liberals like Tony Abbott, the former Liberal leader, who said that climate change was crap, who led his troops into battle once again in the party room, discrediting and debating the merits of climate science all over again.

“The science is very clear. To achieve the ambitious targets set out in the Paris Agreement of limiting global warming to 2o or less means decarbonising the economy and it means more clean renewable energy. It is clear from across the country that there is a set of ageing energy infrastructure which has to be replaced.”

To be sure, the ideological interests are not just the province of the federal Coalition. At state level, we saw an unbelievable push-back against renewable energy by the Northern Territory government; the former WA LNP government vigorously opposed any new wind and solar development; the state opposition in Queensland promised to put the wagons in motion for a new coal generator within 100 days of winning election; and the Victoria and South Australia Coalition parties remained implacably opposed to their state government’s ambitious renewable energy and climate targets.

Several senior Coalition operators who might have guided the party to more science-based and economically realistic policies have lamented their impossible position. “You have no idea what we have to deal with (in the party room),” is a common refrain.

Oh, but we can imagine. At least now we know what might be said, assuming they had the courage of their convictions, as Harwin seems to do. And, the ideologues should note this point that Harwin made: “The coal sector should accept the Finkel framework as potentially the best deal that coal will get.”

  

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  • riley222

    Many people, myself included had high hopes for Malcolm Turnbull. As the deal he did to become PM started to be revealed those hopes quickly evaporated. If only the Libs had left The Wrecker to go to the election we would be rid of him and the renewables landscape would be a different story.
    The Wrecker is now doing a job on his own party because they’re daring to talk about doing things the public actually wants. It’s obvious that Abbott is the new K Rudd, hopefully he will suffer the same fate.

    • Pete

      We’d probably have a Labor government now if Shorten wasn’t the leader. For too many people he carries too much baggage from the Rudd/Gillard years.

      • Alastair Leith

        Not just the baggage but the mould. He’s playing the long game, the only kind his ilk can play.

    • Alastair Leith

      I never understood the broad enthusiasm of Turnbull given his past and even recent history as a minister. Sure, he wasn’t Abbott but had not ever really defeated Abbott either. The NBN was a once in a lifetime opportunity to get a great social leveling and prosperity making technology into the hands of all Australians no matter what their wealth, race, gender, faith or any other attribute was. And get Telstra out of the way. What did Turnbull do, hobble it, tie it up it string, make it more expensive, buy back the deteriorating legacy copper network and make that the weakest link for most users, slow it down by factors of ten and hand it all back to telstra to Lord over. Priceless work Mr Internet, Uncle Rupert was very pleased I’m sure.

  • Rob G

    There is a feeling that the Mineral’s council should accept the Finkel recommendations. If they meddle around (where they should) it will cost them. Labor will not be so kind when the return to power in 2018 (yes there will be an early election).

  • Chris Fraser

    When Abbott made a stump speech at a branch meeting for Michael Sukkar he said “… we’re at a bit of a low ebb”
    http://www.smh.com.au/federal-politics/political-news/were-at-a-low-ebb-tony-abbott-bashes-liberal-leadership-in-leaked-audio-20170704-gx4pee.html
    Ironically, he has not one single introverted idea as to why.

    • DJR96

      That “low ebb” is largely his (Abbott’s) fault. He’s not the PM or even a minister – stop undermining the leadership. Or he’ll find himself out of parliament or in opposition, taking the government done with him.

      • Alastair Leith

        Keep going Tony, keep going, love your work for the first time ever.

  • The nightmare of corruption and incompetence continues – the nonsense and lies from the conservatives and twisted fools (on both sides of the houses) continues to be spouted and goes to the media. Everyone is worried about their share portfolios, and they are willing to give their grandchildren hell so they don’t have to pull their heads out of their own dirty short-term vested interests holes. These people have no vision, courage or worthwhile values. As a result they are incapable of making any constructive contributions in terms of planning to Australia and the world. They have nothing to offer but their permanent absence.

    • Robin_Harrison

      But politicians are the only people we get to vote for. Just as well we have a choice of unprincipled, lying thieves.

      • Have a look at an alternative approach – We have to ditch the Oz constitution, a 19th century anachronism designed for colonial rule of a bunch of states, and start again, and I suppose their is no courage left in this country for that. Check out my little web – look at the small downloads. I’ve been stirring this pot to no avail since the last millennium. http://www.lifesupportinternational.org – and I’ve been living off grid for over 30 years. Easy, convenient and very affordable. https://uploads.disquscdn.com/images/6abbe882d0acddb76580dd29c538576999eb2d35b67efb04f9ed4a6361a8a5ec.jpg

        • Robin_Harrison

          I couldn’t agree more that we need an alternative approach. Our supposedly democratic system is specifically designed to benefit wealth and influence and I think we need a system of universal self-determination, empowerment and prosperity. I also suspect that’s achievable through the current market system because sustainable practice makes far better economic sense.
          I explain that more at https://www.youtube.com/watch?v=svfEa3_y4fQ
          Good spot you have there.

  • Cooma Doug

    Fossil fuel can not survive in a free market situation. The cost realities are in place.
    Interference of the market is their only option.
    Fortunately some of the big players are lining up with the free market option.

    The more I look at the situation, the more I like Snowy 2 as part of the process of change. Also, the market rules are on the bench and the changes are being designed.

    Solar and wind with some battery storage and electronic stability control, will be much cheaper and effective than large base load retention.

    Snowy 2 has more positives for this situation than storage alone.
    It will bring down infrastructure costs across the eastern grid. It will empower NSW VIC and SA to provide system security and reliability much more efficiently.
    The location of the Snowy 2 project is very significant in voltage and stability management. It will also provide a lot of synchronous plant
    during the transition with relative
    low cost compared to present options. Large coal just doesnt fit when the whole picture is looked at.

    • riley222

      Agree 1000%, Cooma Doug.
      Twould be nice if Mal could get Snowy 2 going before the next election, but you really have to wonder if Abbott would rather take the whole shebang down than see it started.
      Labor has said they’ll look at but I don’t know whether it’s something high enough on their agenda to commit political capital to.
      Politics, as usual.

      • Cooma Doug

        If the free market is truely free, snowy 2 will happen.
        The more I look at it, the better it seems from the point of view of control of the grid. Also as a lift in the value of all renewables on the grid.

        • Alastair Leith

          If there’s an even playing field other sites would possibly beat Snowy 2.0 on price, without having to do more damage in a NP wilderness area. And batteries can provide microsecond response so serve other Ancillary Services tasks that are probably of more value ATM than reserve capacity.

      • Mike Shackleton

        Riley, I was approached to work on the Geotechnical investigation for Snowy 2 a few weeks back – that is expected to take 3 – 6 months and they are starting right in the middle of winter! Just getting the reference design complete is going to be a big undertaking. Turnbull will be lucky to have it complete within 12 months, putting it out to tender could take another 12 months. It’s a very risky play and relies on a lot of pieces falling into place.

    • lin

      Victoria should also see if pumped hydro can be retrofitted at Dartmouth. It is smaller than Snowy 2, but could be cheap and fast to build, and the generators and powerlines are already in place.

    • Alastair Leith

      Snowy 2.0 will help coal by lifting daily minimum demand. Until RE gets to around 50% and perhaps higher storage isn’t such a necessity. CSIRO has said that, most wind states in USA are saying that.

    • neroden

      Snowy 2.0 is going to take SO LONG to build, that by the time it is nearing completion, you will be talking about seasonal storage of solar from summer to meet winter demand.

      At which point it will be useful.

  • George Michaelson

    How about if wind and solar met their required battery backup by funding capex and opex of the PHES? If they co-fund the investment to build 5GW of demand, surely they meet their obligations? And its low risk, known cost..

    • Mike Shackleton

      You’re better off distributing that storage across the network at a local level. Country towns that seem to bear the brunt of load shedding worse than say, inner Melbourne (where I can’t remember ever experiencing a blackout) could insulate themselves against these incidents and reduce their demand on the transmission network when demand is high, hot weather is prevalent and network assets are more prone to failure.
      Perhaps there could be a per MW levy on new renewables that goes into a fund to invest into storage. That fund could finance storage on a reverse auction basis with knowledge gained shared back to the industry, much like we are doing with Solar farms funded by CEFC and ARENA now.

      • George Michaelson

        The observation still holds: The state government can demand providers consider storage in their model, stipulating where it is, and what kind could include requirements to distribute, requirements to centralize for a common goal, and a mix of technologies. So far the conversation has been ‘wind+batterybank’ or ‘PV+batterybank’ when it could be {wind,PV} + some kind of coordinated storage model which is a mix, depending on local needs and state/federal needs.

      • Alastair Leith

        Perhaps there could be a per MW levy on coal and gas seeing as they are more vulnerable to not meeting their forecast supply in hot weather?

        SA is the only state in need of storage ATM, building snowy 2.0 at this time is about grandstanding (distributed smaller PHES projects would seem more sensible and cost effective at first glance) and keeping coal in the game. With RE at 15% on the NEM Snowy 2.0 storage will help coal and CCGT not renewables.

        Agree, further you get from CBD more likely blackouts to occur. Never had one over ten years of living in Melbourne CBD and just adjacent to it. A few out at Preston but that was more likely to be line outages and substation explosions that load shedding.

  • Mark Roest

    So just what are the capital cost per kWh of storage, and the levelized cost of storing a kWh in it, of Snowy River, and of Dartmouth? How long would it take to build each?

    I expect that as new projects each would cost more than US$100 per kWh capacity, that it would take a few years to build them, that pumping efficiency losses would be greater than the losses in advanced batteries, and that Coalition-exacerbated climate disruption will lead to prolonged droughts which will hinder, to possibly cripple, the utility of pumped hydro in the face of other environmental and human demands for water. Also, large dams lead to methane formation in the muck that accumulates on the bottom, as drowned plants and trees, and silt, are colonized by anaerobic bacteria.

    Within a few years (by 2020 or 2021), I expect the leading batteries to sell for $100 per kWh capacity in volume, to last for 10 to 40 years, to have a depth of discharge associated with that long life of 80% or greater, to be fireproof and nontoxic, and to have a levelized cost of storing and releasing electricity, per cycle, of under 1 cent, headed for under half a cent. My guess is that this is better than new pumped hydro. My expectations are grounded in (closely held) facts.

    There will almost certainly be business opportunities as a result of this likelihood.

    • Alastair Leith

      Someone suggested on a previous post that plant procurment for pumps and turbines is the longest timeline item for turkey nest scale PHES. The scale of storage for PHES isn’t to be dismissed lightly given the resource extraction etc involved in today’s chemical batteries. (Admittedly there are many contenders for safer cleaner battery chemistries in the labs that one day may emerge as commercially viable including organic sugar batteries and graphene supercapacitors)

  • bedlambay

    Oily FRYberg has zero crediblity.

    • Ian

      I’d suggest that you actually have a deeper look into the quagmire he’s dealing with before making such statements. I wouldn’t want his job.

      • Alastair Leith

        True but then lying has become his favorite out, so he’s lost my respect. His comments after the SA blackout were pure opportunism and lies. If Turnbull told him to lie against the advice that we know the AEMO provided to them on the night then he had a choice. He choose to lie.

  • Grpfast

    THIS MEANS THE COALITION GOVERNMENT HAS BEEN LYING TO THE AUSTRALIAN PEOPLE.
    BLATANTLY TO PROTECT A GOLDEN EGG POWER GENERATOR INDUSTRY.
    IT COULD ALSO MEAN CRIMINAL ACTIVITY BY MEMBERS OF OUR ELECTED POLITICIANS.
    SOMEONE NEEDS TO STANDUP AND ASK THE QUESTIONS.

  • Tinman_au

    I can’t wait till I pay my panels off and I can get batteries and go off grid….

  • neroden

    Anyone honest in the Liberal Party should admit that their party is screwed and join Labor. Including the Prime Minister. Don’t think they have the guts to do so though.

  • This is an interesting article that I found

    https://spectator.com.au/2017/07/when-electricity-becomes-a-luxury/
    What happens if this then becomes the norm?

  • Radbug

    A price will have to be paid for all this misallocation of capital, but the ones who created this misallocation will be long gone by the time the bill is presented.

    • Alastair Leith

      And on a nice Superannuation while probably sitting on the board of a mining company or acting as a consultant to a Gas corporation like our former Minister for Cliamte Change Combet.

  • Alastair Leith

    So Harwin is actually more ambitious on the decarbonisation date and trajectory than the modelling commissioned by Chief Scientist Finkel. Tells us something of the compromises the Chief Scientist was prepared to put his name too. Something I regard as a particular low in the history of that office on Climate which is saying something.

  • Travis

    Tony Abbott single handedly killed off the industries of the future in Australia. When Malcolm Turnbull became PM I thought here is somebody I could vote for – WRONG. Malcolm T has been a huge disappointment. Trouble is the public are way to apathetic and need to get out in the streets and protest as in France. Joe and Mary Middleclass are paying for everybody, the poor, themselves and the rich when it comes to services. We need a recession, the one we need to have. Bring back Paul Keating.

  • Max Bnb