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Five ways to improve Finkel’s energy blueprint

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First thing first, this scheme won’t amount to a hill of beans unless the Paris climate targets are adopted, and that does not mean the modest down-payment from the Coalition on which this blueprint is modelled, but a serious attempt to deliver on the pledge to limit average global warming to well below 2°C.

Quite why the chief scientist didn’t choose to make much of the chief science questions is a bit of a mystery, but he did underline the importance of bipartisan and federal and state agreement on this. The reaction, to date, shows this is as difficult now as it was when the climate-denying, fossil fuel-backing Coalition hard right thrust Tony Abbott to the head of the party in 2009.

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Can we see some modelling please? The actual energy blueprint is vague on details. Some results of the modelling are shown, such as the modest fall in consumer bills (above), and the lingering presence of coal-fired generation in 2050 (25 per cent).

But the inputs are not revealed, neither are comparisons with other options, or how they are stress-tested with a 2°C target. Most consumer watchdogs would warn against buying something with so little information, and no warranties, but that is – in effect – what we are being asked to do. Or, at least, may be what the Coalition back bench is being asked to do.

Don’t leave the clean energy target mechanism in the hands of the gentailers. We saw what happened with the renewable energy target, as the big gentailers fought to have the target cut, then went on a capital strike, and then cashed in as the prices for renewable energy certificates were pushed to their penalty level.

The gentailers have too many vested interests to protect, so a better and more efficient mechanism would be for a new authority to auction capacity at various points along the target. This has been used very effectively across the world, and at state level too. It gets a good price and avoids the market being held to ransom.

Be smarter about energy storage. There is no doubt that many solar plants, and wind farms, will be happy to add battery storage to their installations, and Finkel’s report acknowledges that these combinations will beat either gas or coal on both costs and emissions. But Finkel’s proposed obligation for ALL new wind and solar plants to have storage seems like regulatory overkill, adding unnecessarily to prices.

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Only in South Australia has the penetration of wind and solar reached a level where storage is now required, according to the CSIRO, which suggests that anything under 40 per cent wind and solar is “trivial” to the management of the grid (presuming the grid managers are on top of their brief). So making a no-argue requirement now seems overkill, and the approach of the Victoria and Queensland state governments – calling for bids for cheapest storage – as they roll out more wind and solar seems more sensible.

Make this transition quicker, smarter, cleaner. As we noted last week, this is not Grid 2.0, it’s actually not a whole lot different from business as usual. This review was an opportunity to redefine those boundaries, but comes up short, mainly because it does not focus enough on the implications and the benefits of all the solar and storage added behind the meter by households and businesses. The CSIRO estimates $200 billion will be spent by consumers over the next three decades.

They will want to know that this investment is worth it, and they are not locked in to a utility business model that has failed to evolve, and continues to impose costs on consumers. Indeed, half of their bills comes from the transport of electricity, which means that even if the wholesale component was free, it could not match the cost of solar and storage. Which does not mean, for a moment, that everything would go off the grid, or should; but unless there is some regulatory recognition that technology changes and costs are moving fast, then they will simply not be prepared to deal with it.

And let’s not forget, all consumers will be wanting more than $90 savings a year over the next decade after seeing their bills going up $300 a year. That’s one step forward and three steps back. There is simply no reason why more savings cannot be delivered, given the falling cost of wind, solar and storage.

  

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  • Chris Drongers

    This will not be business as usual IF it passes the no-alition on the back bench.
    The Liberal back benchers seem ignorant of how fast China and India are switching their generation from coal to solar/wind even when their per capita emmissions are ao much lower than ours.

    And to add insult to their unfairness the chemistry/physics/mathematics refuseniks want to deny third world a modest increase inemissions while industrializing. While granting ourselves virtually unlimited rights to emit from well below best-in-class cars and trucks, houses and factories, because we Australians are somehow ‘special’ or because 50 years ago we became so invested in coal that this should remain the way forever. Coal supporters would do well to look at the world maps of 100 & 200 years ago and ponder what it might look like in 50 years from now. Politically and topographically.

  • MoreBikesPlease

    My reading of the report says it’s not ALL wind & solar that will have to provide energy storage. Only those in areas where the level of dispatchable generation has dropped below a threshold, as determined by AEMO.

  • wideEyedPupil

    “When I was a Monash engineering graduate, I was part of the second group. My
    pathway to the future was not visible to me.

    In fact, throughout my entire career, I have never known my next step in advance.
    Instead, I have seen life as a series of doors and have strived to keep as many open
    as possible. And when opportunities came knocking, I jumped at them.

    This approach has enabled me to pivot from one opportunity to the next—from
    electrical engineer to neuroscientist, businessman to magazine publisher, university
    chancellor to Australia’s Chief Scientist.

    But l admit it. There has been no grand strategy. I have simply seen the light and
    walked through those doors of opportunity.”

    http://www.chiefscientist.gov.au/wp-content/uploads/Chief-Scientist-Monash-Graduation-Address-24-May-1.pdf

    Walking through the doors of opportunity, just like Malcolm Turnbull has.

    • MrMauricio

      ..until the last 2 years….Malcolm Turnbull has turned and walked backwards away from ANY doors of opportunity for the nation costing the nation DEARLY!!!

      • wideEyedPupil

        Perhaps forgetting the superannuation and gentlemens club respect an ex-PM from the right side of politics obtains.

    • Ian

      Poor guy, corrupted by an evil cabal.

  • Robert Comerford

    All one has to do to interpret this report is to have watched Q&A last Monday.
    Tony Jones’ repeated attempt to get Finkel to label it as a carbon tax were met with a poker face. As soon as that is acknowledged the chance of getting ANY action out of the current govt is over.
    Don’t anybody think they are going to disappear easily when the next election comes around. CARBONTAX! will again be shouted from the rafters.
    Failure by those who should know to pull up the audience questions based on lies was cringeworthy as was the plant from the power station. Finkel should have pulled him into line immediately by pointing out that power workers transitions to new jobs was not part of his brief. They should be reminded that they have had high paying jobs, are well educated and have had plenty of time to retrain knowing this was inevitable. Why should they be treated any better than those who have the lowest paid jobs and are constantly having to find new work as technology and business viabilities change ?
    If they are going to get 3 or more years notice so should the cannery worker of farm labourer.

    • Rod

      Agreed, polluting should not be part of a job creation scheme.

      Re the Carbon Tax. If Labor has the cahoonies they just need a graphic. Electricity costs with the CT and electricity costs now.
      Hopefully enough voters have enough intelligence to realise they have been conned.

      • Joe

        …and show the path of emissions production with the “Fixed Price on Carbon” and now since the Abbott dumped it.

        • Rod

          Unfortunately most people are more concerned about their sheckles than emissions.
          Maybe publicise what a waste of taxpayer’s money Direct inaction is.

          • Joe

            …yes, $2Billions worth of “Direct Action” and our emissions are still going up and up and up. DA is taxpayers money paying polluters, now that is what I call a “Carbon Tax”. Bring back the former ETS !!

  • solarguy

    On storage: It all depends how much storage is slated as to how much it will cost for any given plant. Finkel on Q&A said, that not all solar or wind installations should have storage. Umm, he should have mentioned that in his paper!
    Anyway, I agree with Finkel that as coal plant is retired, that capacity must be replaced with renewables with storage that is dispatchable 24/7, because that will be needed. It’s basic common sense in regards to solar generation especially. Finkel also mentioned Biogas to be used as a back up on the show.

  • Ian

    $200 billion will be sent on solar and storage, that would keep an Aussie gigafactory or two or three supported with customers for many years.