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The madness behind a Chief Scientist report on energy

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Australia's Chief Scientist Alan Finkel. Photo: Mark Graham

Australia’s Chief Scientist Alan Finkel. Photo: Mark Graham

Imagine a situation where an entire nation’s media and political system got caught up in frenzy of concern about government policy initiative that existed in press release only.

That’s what’s been unfolding over the last 6 months.

Quite frankly you couldn’t dream up the crazy set of events that have driven fears that South Australia is a sign of the threats to come to power supply reliability and price from lots of renewable energy.

The Chief Scientist’s report provides a rational discussion about the future energy security of the National Electricity Market but is surrounded by an environment of ridiculous hysteria and fear.

Leading the charge in spreading fear has been Adelaide’s one main newspaper, the Adelaide Advertiser.

According to the Adelaide Advertiser the SA Labor Government is responsible for the blackout they suffered in September and is also responsible for driving the state’s electricity prices up to some of the highest in developed world. According to the Advertiser it’s all due to the South Australian government’s madly ambitious rush to achieve a 50% renewable energy target.

What is rather strange about this is that back when the Weatherill Government announced this 50% renewable energy target in September 2014, the Adelaide Advertiser was very eager to publish an article I wrote that was scathing of Weatherill and his target  – South Australia’s ‘do nothing’ renewables target.  The article began,

Yesterday the South Australian Government announced a target to achieve 50% renewable energy in its electricity mix by 2025.

Wow, sounds impressive and it is. But if it is achieved it has precious little to do with anything the South Australian Government has done.

You see the SA Labor Government have been pulling these clever little PR stunts for many years now, pioneered by the climate change PR gesture master Mike Rann.

The way it works is SA public servants assess the likely amount of renewable energy that will be installed in SA within the next few years as a result of the Federal Government’s Renewable Energy Target. Then the South Australian government take this projection and duly claim it as an ambitious target that they are setting for themselves.

And what exactly will the SA Government be doing itself to achieve this ambitious target?

Precisely nothing.

Wind power was attracted to SA not because of Mike Rann but because of the state’s high underlying wholesale electricity prices. This is due to SA’s historical heavy reliance on costly gas and the concentrated ownership of power generation.

SA’s residential electricity prices are inflated again by its unusually peaky air conditioner demand for power that has required paying for lots of network capacity that is only rarely utilised. Plus the state, unlike others, has avoided subsidising residential electricity.

This has meant SA’s homeowners have been more enthusiastic adopters of solar systems than other states.  You see SA’s high electricity prices were the cause of its high amount of renewable energy, not the other way around. A doubling in gas prices since the establishment of LNG facilities has then made SA’s situation even worse.

But the episode gets even more farcical. The media have unquestioningly published the Prime Minister and national Energy Minister criticism that the South Australian Labor Government can’t keep the lights on.

Yet as part of a Howard Government initiative, South Australia and other eastern states agreed to hand over their energy regulatory responsibilities to national institutions – the Australian Energy Market Commission (AEMC), Australian Energy Regulator and Australian Energy Market Operator (AEMO).

It is these bodies that hold the responsibility of ensuring the lights stay on and they report, not to SA alone but also the Federal Government, Victoria, NSW, Queensland and Tasmania.

If the Federal Government was so worried about SA’s level of renewable energy why didn’t they request a rule change from the AEMC to address it several years ago?

Yet this saga gets crazier still because those that are using the SA blackout as proof that renewable energy is a threat to power system reliability got the cause of the blackout completely wrong.

When South Australia was plunged into darkness last September power system experts like Barnaby Joyce, Nick Xenophon and the ABC’s political correspondent Chris Uhlmann were quick to pronounce that it was the fault of SA’s wind turbines having hit high-wind speed cut offs.

Uhlmann observed: “40% of South Australia’s power is wind generated, and that has the problem of being intermittent – and what we understand at the moment is that those turbines aren’t turning because the wind is blowing too fast. ”

It turned out they were wrong. Pictures soon emerged of major transmission powerlines buckled over as a result of several tornados. The Bureau of Meteorology observed that the state was subject to “one of the most significant severe thunderstorm outbreaks in recent decades”.

A subsequent investigation by the Australian Energy Market Operator ruled out turbine’s high-wind speed cut-outs as a factor. Indeed AEMO made the following observation in third report on the SA blackout:

AEMO assessed the risks to the power system in SA and the likelihood of damage to the network or wind turbines cutting out due to high winds….. High winds were expected to reduce the output of some wind farms but, based on prior experience, the reduction in output could be expected to occur gradually, and the expected loss of output could be accommodated using the spare capacity on the Heywood Interconnector already set aside to manage credible contingency events.

But there was an extraordinary turn of luck for the likes of Uhlmann, allowing them to claim vindication, ignoring they’d actually been completely wrong.

Conservative electrical protection software settings in two models of wind turbines nearby to where the transmission towers toppled led a significant number to disconnect rapidly after several of the transmission lines were taken out by the storm.

The fact that these software settings were quickly and easily changed, and that other models of wind turbines behave differently, so that such a problem will never be repeated – well that was a complexity the protagonists weren’t much interested in exploring.

Nor did they seem interested in the fact that such extraordinary damage to transmission lines almost always results in widespread power outages in areas where wind farms are non-existent.  And as for examining the probability of such an extraordinary storm occurring again? Forget about it.

Let’s get this straight – the reason we’re debating energy security issues right now is not because we are facing some imminent, high probability risk to electricity system reliability.

Yes, it’s true that if the Federal Government took its commitment to the Paris Climate Agreement seriously then we would need to make adjustments to our electricity system to accommodate much higher levels of renewable energy.

But so far the Federal Government has ruled out just about any policy that would deliver such a goal: no regulated closure of coal generators, no expansion of the renewable energy target, no emissions intensity constraints. And as for expanding the budget funding for the Emission Reduction Fund – did anyone notice the Federal Government is threatened with credit rating downgrades?

Last October, the National Electricity Market achieved 25% renewable energy and there was no blackout. There are technologies available now that are a lot cheaper than batteries that would allow us to go far further while maintaining high reliability. Finkel recognises this.

But the debate about energy security right now is being predominantly driven by people who aren’t really interested in technological solutions. They’re actually far more interested in politics.


Tristan Edis is Director – Analysis & Advisory with Green Energy Markets. Green Energy Markets assists clients make informed investment, trading and policy decisions in the areas of clean energy and carbon abatement. Follow on Twitter: @TristanEdis  

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  • AllanO

    I think we’ve just reached peak madness with Greg Hunt flying off to meet the global heads of Alcoa proposing to put CEFC funding into a new gas-fired power station located in south west Victoria as a way of “saving” the Portland smelter! But perhaps I shouldn’t be cynical, he is after all the world’s best minister.

    • Brian Tehan

      I always wondered why Alcoa hadn’t invested in turbines nearby, in one of the windiest places in Victoria. Probably because it was getting heavily subsidised electricity from the Latrobe Valley 500km away. Let’s face it, it was a crazy place to build it but they could still partially power the plant with wind and solar. It might have been enough to avoid the damage to the plant.

      • DogzOwn

        But imagine Alcoa, as major member of international aluminium cartel, would they really want to miss this opportunity to game the politics of energy, until we pay their ransom, forever and ever?

  • Chris Fraser

    The private sector has understood the renewable thing. As for the federal Government … all MIA.

    • John McKeon

      MIA = Missing In Action. Agree.

  • Robin_Harrison

    Politics and our political system are just the tools of the people who own it. The same people own the fossil fuel industry and most of our mainstream media. Expect them to get a lot dirtier as they become even more desperate.

  • Ken Dyer

    What else would one expect from a Murdoch rag, the Adelaide Advertiser?

    • Calamity_Jean

      Rupert Murdoch is a malign influence in every nation where he operates. If the climate of the world is destroyed, Rupert or his ghost can take a victory lap.

  • disqus_gF5uXVTUbL

    If batteries prove popular in 2017, we may see network peak demand decrease. Hopefully this will have a small effect on network security as a whole, as well as a large effect for the households installing it. If this becomes evident, it may remove some of the fuel on the fire for the attacks on renewables.

  • Bonadoochi

    Great analysis and perspective.

    Crazy commentary aside, Is it not a good thing that the issue of managing the energy transition is achieving the attention it deserves?

    • Jonathan Prendergast

      It certainly needs attention and discussion, and lots of planning.

      1 thing that is frustrating is public figures (Frydenburg, Tony Wood, some regulators and utilities) concentrating too much on problems, but not concentrating on or even contemplating solutions.

  • Tobias J

    Kurt Cobb has blogged about the criminal negligence that our federal government’s failure to act constitutes. Insisting we use power generation that pollutes is something our leaders will have to justify to a judge or panel of peers.

    Is there room for private climate-related lawsuits seeking damages?
    Maybe. If there is general obligation to protect the public from the
    effects of climate change brought about by greenhouse gases, then it
    seems logical that those emitting the greenhouse gases might be held
    liable for damages.

  • John McKeon

    Wow, allow me to confess my sense of my own naivety. Tristan’s analysis (as I understand part of this article) is that the SA Labor government has claimed credit for the level of sustainable energy build up in the state, but that credit should be claimed by the federal LNP government. And the federal LNP government is criticising what in effect is the achievement of its own targets in SA, in a political dog fight meant to damage sustainable energy development and to damage the SA Labor government.

    Well, that is a sobering angle which has taken me by surprise. I’ll concede that it is food for thought. 🙂 Yes, as Tristan says, the situation is crazy.