What is it that the general public appears knows about renewables and electricity prices that much in the conservative side of politics, and the federal energy minister Josh Frydenberg, do not?
2017 has kicked off with another round of attacks on renewable energy targets, both state and federal. They display fundamental misunderstandings of renewable energy, its deployment capabilities, costs and impacts on electricity prices. The good news: the public isn’t buying it.
As working life, business and the public debate gets back into full swing after the holiday period, attacks on renewable energy and targets have, unfortunately, also resumed. The Australian, unsurprisingly, is leading the charge, and elected officials have added their voices to the unrelenting campaign of misinformation.
Most worryingly Energy and Environment Minister Josh Frydenberg is playing a prominent role. On Wednesday he penned an OpEd in the Australian Financial Review in which he got stuck into the Victorian and Queensland state governments’ RETs.
On Friday, The Australian gave him a platform to attack renewable energy by way of a rebuttal to the Labor opposition climate change spokesman Mark Butler’s arguments for a 50 per cent by 2030 RET.
While Frydenberg’s argumentation in today’s Australian specifically addresses the Labor 50% RET, it is riddled with direct attacks on renewable energy itself.
Frydenberg argues that RETs lead to higher power prices. To support this he says that power prices rose rapidly under Labor, that a 50% RET will drive out coal generation – implicitly increasing prices – and that it will require $48 billion in new investment in generation capacity.
The Energy Minister then cites AEMC findings that the RET will have “the highest cost of abatement,” that it does not encourage emissions reductions beyond renewable generation.
(RenewEconomy editor Giles Parkinson has already pointed out that the AEMC modelling actually shows the opposite, that the RET is actually a cheaper option, even given the AEMC modelling’s ridiculously expensive costing of wind and solar).
Despite this and other lines of argument, it appears that the Australian public is just not buying it. There continues to be evidence that renewable energy remains widely popular with Australians, to which their continued adoption of rooftop solar and increasingly battery storage attests. And polling continues to confirm this.
GetUp released the findings of a ReachTEL poll it conducted on January 12 today, in which it asked 2,126 householders what they believe are behind rising power prices.
The leading response, with 58%, was that “privatization and the lack of competition between the big energy companies” were behind the price hikes. The next response was “undecided,” with 24.2% and renewable energy in third place, with 17.7%.
“A handful of generators with too much market power are gaming the system and artificially driving up prices on the supply side,” says Miriam Lyons, Environmental Justice Director with GetUp.
“The owners of the poles and wires have been gold-plating the grid, spending billions of their customers’ money building far more grid infrastructure than we needed.”
Taking the RET in isolation, as a policy to drive the shift towards less emission intensive electricity generation as Frydenburg does, is also mischevious.
In combination with overdue electricity market reforms and the pricing of externalities, such as carbon pricing, in combination with renewable targets has repeatedly been shown to deliver a lower-cost energy transition.
The Energy Minister is clearly also ignoring the rapid price developments of large scale solar and wind, in his advocacy for “supercritical coal and gas” generation. Whether these lowe(er) emission generation sources can compete in the coming years given current large scale renewable cost trajectories is highly debateable.
Frydenberg, in his Australian opinion piece, then turns his attention to South Australia. He argues that the “forced” closure of coal in South Australia is behind high electricity prices and then says that low-income households are bearing the brunt of additional costs.
Strangely, Frydenberg didn’t mention Queensland. He should have, because then he would have understood that the issue is not about renewable energy, but market rules and market competition.
Queensland is similar to South Australia in that the wholesale electricity market is dominated by just a few companies who control some two thirds of the generation. In Queensland, the owners are government owned, and it has not yet got any large scale renewables to provide competition.
So the predictions for this summer was that prices in South Australia would soar, proving that renewables were a dangerous and costly diversion.
But wholesale prices in January in South Australia have been less than NSW, little more than in Victoria and Tasmania, and less than half what they have been in Queensland, where the lack of competition to the coal and gas generators (apart from rooftop solar) has meant prices have average more than $200/MWh.
There have been numerous spikes above $13,000MWh, which the regulator is to investigate, and days when the price has average near $500/MWh. The smelter in Gladstone is so appalled it has flagged possible downsizing.
There is a lot more to be written about Queensland, and its focus on LNG exports, the extra 1GW of demand that that is sucking from the grid.
The Labor government is trying to address that issue by encouraging 5,000MW of wind and solar in its own 50 per cent renewable target, a move it says will result in lower costs to consumers.
And while the Coalition carps on about the high cost of wind and solar, with the wholesale prices at their current levels, there is really no argument, which is why the likes of Sun Metals have decided to built their own large scale solar plants.
GetUp’s Miriam Lyons weighs in on the South Australia debate, saying that it is indeed “an example of what’s wrong with the current system” with its botched electric utility privatisation and the lack of competition.
“The Liberal Olsen government didn’t break up the generators when it privatized electricity – they chose to make as much from the sell-off as possible in the short term, rather than creating a genuinely competitive market,” says Lyons. “The price-gouging by gas companies that we saw in South Australia last year is a direct result of that.”
GetUp notes that it is encouraging to see public support for renewables and RETs hold fast, but that the battle against the demonization of renewables on the basis that they leads to higher electricity prices is far from over.
“This polling shows that the fossil fuel lobby’s campaign isn’t convincing most Australians – yet.”
