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Like Trump, Turnbull’s energy policy is based on “alternative facts”

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The first few weeks of the Trump administration have been extraordinary, and quite frightening – not just because of the incompetence of a president who appears to be little more than a self-obsessed idiot, but by the actions of the dangerous ideologues at the helm of the world’s biggest economy and military power.

There have been shocks across the policy spectrum, but probably none more so than in climate and clean energy, where Trump has promised to throw the baby out with the bathwater, quit the Paris deal, disband or dismember environmental regulations, “re-invent” coal, stop renewables and build more gas pipelines.

It might sound stone-cold crazy to many people in Australia, but it should be familiar: There is little that Trump and his regime is doing on climate and clean energy that has not already achieved, or attempted, by the current Coalition government in Canberra.

Remember that former prime minister Tony Abbott destroyed the carbon price, slashed the renewable energy target, disbanded the Climate Commission, absorbed the climate change department, and removed the words climate change and clean energy from the government lexicon.

If he had had the executive power, or the numbers in the Senate, Abbott would also have demolished the Climate Change Authority, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, and abolished the RET altogether.

Far from reversing those acts, current prime minister Malcolm Turnbull has extended them – slashing ARENA funding and now calling on the CEFC to subsidise new coal-fired power stations. With energy minister Josh Frydenberg, Turnbull has sought to demonise renewable energy at every possible turn.

And just like the Trump regime, if the Australian government does not rely on lies, they certainly depend on “alternative facts” – particularly about the costs of power, the impact of renewables, and the efforts to reduce emissions.

Let’s look at each of them in turn:

Cheap coal-fired power

The basic premise of the Coalition line is that new coal power is cheaper than renewable energy, a point repeated by George Christensen on ABC Radio on Tuesday morning. This is a blatant nonsense.

The Coalition has made much of the supposed $48 billion capital cost of a 50 per cent renewable energy target, but neither it nor its boosters in the media have reported the $62 billion cost of building new “ultra supercritical coal” instead, which doesn’t include the huge ongoing fuel cost, nor the environmental or climate impacts.

The Melbourne Energy Institute puts the carbon emission savings from $62 billion invested in renewables at twice that if invested in “clean coal”.

Put more simply, says Bloomberg New Energy Finance, if you are building new coal-fired power plants now, you will be paying nearly twice as much than if you were building new wind or solar. This graph from Bloomberg new Energy Finance illustrates the point.

bnef renewable costs one

The industry itself does not dispute these figures. It is instructive that neither the major coal generation lobby, nor the major coal generation companies think new coal is either valid or a good idea. The Australian Industry Group has dismissed it, much to the horror of Murdoch commentators such as Judith Sloan.

Energy experts point out that not only is new coal expensive and polluting, it is also relatively useless in a grid that will rely increasingly on flexible generation, particularly as more consumers turn to rooftop solar and storage to reduce their bills.

Indeed, the only people pushing new coal, apart from the ideologues within the Coalition and the Murdoch and other media, are the coal miners, desperate for a market for their product.

(It was interesting to see the front page “exclusive” in The Australian on Monday, quoting an “analysis” from the Minerals Council of Australia of the costs of the RET. Typically, it sought to add the costs without counting the benefits. Yet when they talk about coal, they prefer to add the benefits without counting the costs).

Wholesale power prices

Turnbull and Frydenberg continue to bang on about rising prices of electricity, fingering wind and solar as the culprit. A brief scan of the wholesale prices in individual states over summer proves the nonsense of that claim.

The highest prices this year have come in the states with the least amount of large scale renewable energy, Queensland and NSW. We’ll have more on that in the next few days, with a particular focus on how the actions of certain retailers that own fossil fuel plants is pushing wholesale prices to stratospheric levels.

But, as David Leitch pointed out in his column on Monday, the average pool price in Queensland last week was $319/MWh. Even more appallingly, the average pool price at 4.30pm in 2017 has been $886/MWh, and at 5pm it has been $1,332. As Leitch notes, “the Queensland State owned Generators are having a lend of consumers.”

This is about competition, or the lack of it. Large scale renewables increase competition and reduce the pricing power of the big coal and gas generators. It was this lack competition, exploited by the gas operators in South Australia when the interconnector was being repaired last year, that caused prices to jump.

Turnbull and Frydenberg have been banging on all summer about the high prices in Victoria and South Australia, attacking their decision to focus on renewables and the resulting coal closures. Which states have had the cheapest wholesale prices in 2017? Victoria and South Australia.

average wholesale prices

Data from Jan1 to present sourced by David Leitch from NEM Review.

The most expensive has been Queensland, with virtually no large scale renewables. Over the first five weeks, it has averaged $229/MWh – for so called “cheap” coal and gas.

It is insane. And what have we heard from the Coalition about Queensland’s price jumps? Absolutely nothing.

No wonder so many companies, including major zinc refiner Sun Metals, are focusing on large scale solar – it is less than half the price.

Role of renewables

Turnbull, Frydenberg and most others in the Coalition tell us that targets such as Labor’s 50 per cent renewable energy target are a recipe for disaster, not just on costs but on reliability of supply. Again, this is a nonsense.

The Australian Energy Market Operator is making it clear that the South Australia blackout last year was a storm issue, not a technology one. Yes, there was problems with ride through mechanisms on wind farms that were unknown, but have now been addressed. Moreover, these right through mechanisms are not unique to wind farms, similar issues were found on thermal plants in Australia more than a decade ago.

It is interesting to note that AEMO’s new CEO, Audrey Zibelman, is to be the head of New York’s Reforming the Energy Vision, a groundbreaking program that aims to take New York state to 50 per cent renewables by 2030. But we don’t have to rely on imports to tell us what is possible.

Chief scientist Alan Finkel says the technologies to incorporate large amounts of wind and solar are at hand, and the CSIRO and the network owners have made it clear that high levels of wind and solar are not just doable, but desirable because it will cut emissions and be cheaper to consumers. There is really no evidence, apart from a few crack-pot commentators, to support the Coalition position.

Paris climate deal:

Then it comes down to how seriously the government takes climate science. In the case of Trump, it is clear that he does not. He has a Big Oil CEO in charge of diplomacy, and climate science deniers in charge of environment, energy and many other key portfolios.

Turnbull claims he accepts the science and will honour the Paris climate deal. But that requires more than just paying lip-service to Australia’s down-payment of a 26-28 per cent cut in emissions by 2030.

The Paris deal requires the world to keep average global warming “well below” 2C, and Australia’s fair share of that effort is at least a 45 per cent cut by 2030, and a long term plan to reach zero emissions by mid century, or in the 2040s according to the Climate Change Authority.

Building new coal-fired power plants doesn’t allow that to happen, and it’s instructive to know that the loudest supporters of new coal fired power plants are among those who think we should shred our participation to the Paris goal.

The Bernardi defection:

It would be tempting to think that the defection of Cory Bernardi, and potentially other far right-ers to form an Australian equivalent of the Tea Party would give Turnbull room to breathe, moderate his clearly unpopular stance on key issues and shift to the centre.

Fat chance. Turnbull’s over-riding ambition is to last at least one day longer as prime minister than Abbott. That means that he will remain beholden to the right, who are ready to push the self-destruct button at any moment in the fervent belief that they can win power, if not immediately then after a single term of Labor.  

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  • trackdaze

    Bernadi the rat. Better out than in.

    Get lost abbott.

  • Chris Drongers

    A good indicator of Turnbull’s capitulation to the climate change denying technically illiterate of his government is the lack of media comments on the causes of ACC and the urgency of doing lots about it.

  • Chris A

    Given the QLD market has extra capacity and is oversupplied, rather than putting on more renewable in QLD, it would be a lot cheaper to break up the government owned generators and make power stations actually compete with each other…… That’s a lot cheaper than building anything! Prices tend to skyrocket when they can move over a 1GW of capacity to the market cap with impunity. QLD government is going to destroy GDP while raking in ROI greater than 100% to pay off debt. Its just criminal.

    • JeffJL

      Or the government directing the generators to only make a set profit rather than the obscene ones made currently. Yes it provides input into the QLD govt coffers but at the expense of the residents and industry.

      • Chris A

        QLD Cal17 is now above SA $109.71 vs $106.97. Ludicrous.

        • JeffJL

          Here in WA it appears that the Govt have directed that the spot price cannot exceed $330. Synergy (govt owned) owns the majority of the production capacity and just fires up more capacity when the supply gets constrained.

    • Mike Shackleton

      They did that here in Victoria but the issue is the owners of the plant send all the profits offshore, hold back the bare minimum in cash to maintain the equipment and run it into the ground. Now we’re in a situation where no consideration has been given by the owners of the equipment as to what happens next. At least the QLD government has the opportunity to take that profit and invest it into renewables.

  • Cooma Doug

    Giles,
    Great article thanks.
    I cant recall a worse feeling than hearing Turnbull talking up coal this morning.
    They should put the suicide watch phone number up on the screen while he talks energy.

    • stalga

      Turnbull is no longer pretending he’s not a fraud. What an utter dog.

  • DevMac

    Turnbull and Frydenberg using the term “technology agnostic” in regards to their energy security plans is extremely worrying. That’s the exact same term Turnbull started using whilst under Tony’s instruction to turn the visionary fibre-based NBN into whatever chaotic mess it’s currently shambling towards.

    In a shining example of post-truth and alternative facts, “technology agnostic” has come to mean both “the most profitable to our masters” and “worst possible consumer outcome”.

    I shuddered when I heard Turnbull use the term in his Press Club address, and then shuddered again when Frydenberg used it a couple of times on Q&A.

    • stalga

      It’s a dog-whistle. “Climate-change believers are religious extremists!”. You’ve got to stay “on message ”

  • howardpatr

    Yes, once again Turnbull and that fool of a man Frydenberg were at it again during question time.

    It is not difficult to envisage hundreds of PV plant with storage projects spread throughout Australia – they could form part of network of projects owned by for the benefit of members of superannuation funds BUT you won’t hear anything from Turnbull and his RWRNJ controller. (Even if this emerges they will want them controlled by bank own funds.)

    The LNP will be sitting back wondering how renewable energy technologies can eventually benefit the likes of Cayman Turnbull.

  • solarguy

    Giles, On Q&A last night Frydenburg told the audience, that Finkel agrees that clean coal would be cheaper than RE. Of course a blatant lie, but the VIC Premier, who was also on the show said nothing in return to it. Check it out on Iveiw.

  • Miles Harding

    It beggars belief that the COALition could think that such an ill-fitting fig leaf could possibly hide the ugly and inconvenient truth.

    What is even more surprising that they are doing this in the full knowledge that none of the potential players are at all interested such a dodgy game, one that is purely a construction of the coal lobby that is so evidently pulling the LNP’s levers and twiddling its knobs.

    They will all look look (even more) like idiots and fools as this unfolds.

  • Radbug

    If Anthropogenic Climate Change is a worthless idea, then the DOE-sponsored technology devised to address it is also worthless, which means the IP pertaining to that technology is worthless, which means the licence fees in respect of that IP are worthless. Under Obama’s stewardship, the DOE has sponsored a huge amount of incredible renewables technology, the licences to which Donald Trump is now logically obliged to sell for a song. Unless, of course, he’s two faced on the issue.

  • stalga

    Any QLD residents here? If so, do you recall the “green option” surcharge on the electricity bills? The deal was you paid a small amount each quarter and they sourced green energy. It was around about 2002-2003. I want my money back, what a con.

    Giles, love your description of Trump.

  • Brunel

    Good on you Giles for using actual data and graphs to prove the coal lovers wrong.

  • Farmer Dave

    Great to have you back, Giles. Your comment on Turnbull’s main objective was priceless – and had the ring of truth.

  • Andy Saunders

    To be fair, the LCOE numbers should probably add in a cost of storage for renewables. Doesn’t change the answer, I suspect.

    • To be fair, you would also add in the pricing for redundant back-up capacity built to support fossil fuels, for maintenance and unexpected outages. Until wind and solar get close to 40-50% they simply use the redundancy built in for coal and gas, and by the time they get much beyond that storage will be killing gas on price and value (added services to grid, network investment, etc).

  • Ken Fabian

    The LNP has sought, with the aid of compliant media organisations, to disconnect energy policy from that of climate and emissions policy – and wants the latter rather than the former to be perceived as something “ideological” rather than informed, rational and responsible. What they accuse the “other side” of is more a reflection (or attempted deflection) of their own failings than sound criticisms of those seeking more rather than less action on climate.

    Given that the climate issues is central and essential to long term prosperity they are showing themselves to be incredibly shortsighted – but having spent so much effort framing the climate thing as green and fringe in order to associate it with irrational protest politics they are left with a legacy of entrenched denial that would be internally divisive to confront. I suspect there are a lot of LNP MP’s that accept the problem’s reality and seriousness but I can’t name one; they are so busy keeping heads down and avoiding notice that they can contribute nothing positive to facing the gravest long term economic issue of our time.

    Not that I’m greatly impressed by Labor – if the LNP implodes and they perceive the support of those leaning “green left” as unnecessary to their electoral chances they too would be likely to put The Transition into the too hard and contentious basket too. Labor has not shown much backbone or even much inclination to go hard after the climate science deniers on the government benches and expose them for the ideological ignorami that their actions and words reveal them to be.