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Trump gives Turnbull blueprint to defend coal and “fight the future”

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He’s with me. Trump meets Turnbull in the US earlier this year. Photo: AAP

He may have already had one, but Australia prime minister Malcolm Turnbull has just been given a blueprint by the Trump administration in the US on how to protect dirty “baseload” coal, and extend his fight against the energy future.

As RenewEconomy reported on Monday, courtesy of Joe Romm from Climate Progress, the Trump administration has stunned the US energy industry by ignoring the findings of a major government study into grid security, and ordering regulators to draw up new rules to protect coal and nuclear generators.

It puts the US on a similar path to Australia, where the conservative government shares its support for “saving coal”, building new coal fired generators, forcing states to open their lands to fracking for gas, and doing their best to put a cap on renewables.

Indeed, as bizarre as it may seem, there is little to differentiate the climate and energy policies of the Trump administration – with its cabinet of climate science deniers and others vowed to dismantle the very department they are in charge of – and the Abbott/Turnbull administration.

Abbott, of course, held the same climate-is-crap view of science widespread in Trump’s cabinet and among Australia’s Coalition MPs. Turnbull ostensibly holds a different view, but dares not do anything about it for fear of upsetting the right wing of his own party.

The two administrations also share a disdain for independent advice beyond climate science. The US has ignored its own report on grid reliability, much in the same way that the Coalition has turned a deaf ear to the CSIRO, the networks, chief scientist Alan Finkel, the Australian Energy Market Operator, and AGL Energy.

Now they are both pushing for ways to boost the stocks of existing baseload, which in Australia means ageing coal generator, and in the US means both coal and nuclear. Their plans are remarkably similar.

The initiative by US energy secretary Rick Perry, famous for once vowing to close down the department he now heads, means coal and nuclear will be favoured over renewables and gas, and contradicts the DEO’s own study that showed no reliability issues from having more renewables.

As Romm reported at the time, the DoE study debunked Perry’s preconceptions about baseload, finding that recent sharp increase in renewable penetration doesn’t harm grid reliability or flexibility, but it did offer major benefits.

Combined with storage and electric vehicles, Romm noted, it actually offers a pathway to 100 per cent renewables.

The findings had been reinforced by Colette Honorable, a commissioner at the Federal Energy Regulatory Commission (FERC), who said the introduction of greater amounts of renewable energy has “absolutely not” harmed grid reliability.

“I have seen no problems with reliability,” she said. “Bring on more renewables.”

But Honorable no longer serves on FERC, and the Trump administration has appointed its own commissioners, most of whom are favourable to coal.

Those new commissioners are now being asked by Perry, as a matter of urgency, to design new rules to ensure that coal and nuclear plants, which can’t compete with wind and solar, or gas for that matter, do not suffer losses as a result and can continue operations.

“In the simplest terms, Perry wants to stop cheaper, cleaner renewables like solar and wind from shutting down more dirtier and more expensive plants like coal (and nuclear),” Romm wrote this week.

“This is an especially brazen move because Perry’s own grid study, the one he asked DOE staff for back in April, totally undercuts any rationale for such a move.”

(Perry has also doubled down on the US administration’s efforts to save “new nuclear”, adding another $US3.7 billion in loan guarantees to the last remaining new nuclear plant being built in the US, the Vogtle installation in Georgia).

Deutsche Bank raised its concerns about the initiative, saying it sounds like a de facto re-regulation of coal and nuclear in competitive markets – “a truly dramatic change to the status quo” if actually implemented.

“While the Administration’s focus on this issue has been no secret, the scope, timing and format of this proposal is much bolder than most in the industry have been expecting,” it said.

“This could be a major subsidy to competitive power companies with struggling coal and nuclear plants … and raises considerable existential questions for competitive power markets as we currently know them, with two out of the three primary fuels potentially getting a separate set of rules which presumably would have significant implications for future supply and demand balances.”

The Perry approach is little different to what is happening in Australia. Having disbanded the Climate Commission and ignored the Climate Change Authority (even after it was reformed with Coalition sympathisers), the Coalition took a similar line with its attempts to kill the renewable energy target.

Notably, it ignored the conclusion from  a report commissioned by its hand-picked review committee that renewables would not force up prices (in contrast to the huge jumps since the Coalition repealed the carbon price).

Now, it is taking a similar stance with the Finkel Review and the reports by the Australian Energy Market Operator.

Despite their focus on flexible “dispatchable” generation, the Coalition has chosen to focus on “baseload coal”, and chosen to focus on trying to keep open the country’s oldest, least reliable and most costly generators and promise funding for a new coal generator that would unlikely be delivered for nearly a decade.

It has even sought to demonise the country’s biggest generator of coal-fired power, AGL Energy, for daring to want to shut down the ageing and decrepit Liddell coal-fired generator in NSW when it turns 50 in 2022.

 

 

Turnbull and energy minister Josh Frydenberg have been unable, or unwilling, to push through the clean energy target proposed by Finkel, and supported by virtually everyone bar the Far Right in politics and media, and the Minerals Council of Australia.

The problem is that however a CET is sliced or diced, it will still end up favouring renewables – because, if you accept climate science, you need to reduce emissions and wind and solar are easily the cheapest way to do that in the electricity sector.

The talk now, according to newspapers, is to change the whole thing and call it a “reliability target” – and re-engineer the proposal to one that is designed to favour baseload, and penalise wind and solar unless they act like a baseload generator.

This ignores the technology options from storage, smart software and a new approach to managing the grid, one that focuses as much on the demand side as it does on supply. And it ignores the principal of the generator reliability obligation already included in the Finkel recommendations.

“Baseload”, in the modern energy market, has become a defacto term for dumb and inflexible. The advice from the DoE, Finkel, AEMO and any number of analysts, investors, and operators could not make it any clearer. But vested interests have all the political power right now.  

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  • Peter F

    I would not worry too much about it. The US is still closing coal plants when they can buy coal from powder river basin for $11/ton and compared to us they still have some relatively modern plants. In the first quarter of this year US coal production was up 17% as gas price almost doubled from its lows, however in the last month or so it has fallen back below levels of last year. There is 25GW of wind in development and once it is built it drives out coal on about 1.3GW of wind displacing 1GW of coal.

    The main beneficiaries of a policy like this will be nuclear plants which have a lower marginal operating cost than coal plants. There may also be a number of coal plants which remain “open” but with one or more generators on long term shutdown

    Mostly inefficient Australian plants competing with exports for coal at US$85 and rising and ever falling costs of renewables and storage might hang on a year or three extra but with industrial customers like One Steel and Sun Metals swinging more and more to renewables, it is extremely hard to see anyone investing in coal other than token upgrades to Bayswater and Loy Yang B. Coal plants in Australia do manage higher capacity factors than those in the US so we need about 1.6GW of wind or 2.2 GW of solar to drive out 1 GW of coal. At the current installation rate of wind and solar that means we will lose the equivalent of 2GW of coal every 3 years

    • trackdaze

      Coal is less than 30% of US generation.
      Australia is what over double that.

      Plenty of scope to close more.

    • Chris Drongers

      At last! PeterF has put a figure on the amount of renewables needed to replace a given amount of coal. The more numbers are out there, the more the models can be verified or the costs/generation required can be queried and estimates improved.
      Back of the envelope calculations – 2 times as much capacity in wind or solar to replace a given capacity of coal. Need to adjust this for the actual capacity factor for coal plants – if a coal plant is running at 50% capacity over a week does this mean the the amount of solar needed to replace it drops from 2.2GW to 1.1 GW?

  • howardpatr

    In October Liberal Party leader Malcolm Turnbull said, ” I will not lead a party that is not as committed to effective action on climate change as I am .”

    What more needs to be said about Turnbull – little wonder he is so effusive around them; especially when he is doing the bidding of Mad Monk Abbott and his fellow RWandRNJs wanting Australian taxpayers to financially assist Adani with his polluting and corrupt activities.

  • Thucydides

    >The Perry approach is little different to what is happening in Australia.

    Maybe not so different. Today NSW National Party leader Barilalo is telling his party’s conference that new nuclear is the way to go. Why is this? Seemingly because there always has to be a way for their cronies to make a buck, which they can do with public subsidies to build nuclear power plants. Then there is the expensive fuel cycle and all the business opportunities involved in that.

    • Ken Fabian

      It’s certainly not about a “better” low emissions option or even nuclear for national vanity’s sake, to prove Australia has the techno-nous. Amongst people who do not accept there is a serious climate problem it has to be something else – because, being antithetical to his party’s opposition to strong climate action and support for coal, it comes with no real commitment.

      So the unanswered question is what is the real point? A rhetorical blunt instrument for bashing “greenies”, certainly, given the National Party’s determination to make everything about climate and emissions problem appear, from it’s very existence as an issue to the success of solar and wind at undermining support for Coal Quarry Australia, to be the fault of extremist ideologues.

      But I do suspect he and his ilk know well that is a failed PR line, which leaves the likelihood nuke spruiking is purely for internal political purposes, aimed at those within his own party that know the climate problem is real, who need to be distracted before they break unity. Blaming “greenies” still has some traction with that audience, if only because it’s an ingrained and enduring prejudice and the delusion that they would fix anything with nuclear – if only greenies weren’t stopping them – probably does delay defections.

  • Ken Dyer

    If Turnbull follows Trump, he is an idiot. And no more so than has been demonstrated by Turnbull’s continued support for the Adani mine.

    The recent report “Adani – Remote Prospects – 2017”,
    http://ieefa.org/wp-content/uploads/2017/04/Adani-Remote-Prospects-Carmichael-Status-Update-2017_April-2017_SN.pdf

    unequivocally illustrate how if Australia persists with this Adani madness, a huge wate of taxpayer funds will ensue.

    India has an aggressive clean energy program going (75% by 2022) Indian coal exports have decined 25% in 2017, and Adani is going into Indian renewable energy boots and all. Adani’s strategic projects are of more benefit to them in India, and they have already deferred the Carmichael project a couple of times, retrenched staff, and now it is looking more and more that this project will become a stranded asset in the very near future, leaving Turnbull and Palaczuk with much egg on face and a bunch of very dis-illusioned North Queensland denizens. Australia is being conned by Adani.

  • I can’t even stomach to read this one. Do they honestly think this will achieve anything, whatever it is they are doing? I mean do they really imagine a future where coal is burnt?

    • hydrophilia

      Absolutely! The idea is to come up with some rationale to favor coal and nuclear and then sell, sell, sell. And too many base voters only listen to Murd Media (here that would be the Wall Street Journal and Fox News) and believe all the others are liars. News sources have become so splintered that we humans have no idea who tells the truth, so we just stick with our political tribe instead.
      So, now that this silly experiment with “intelligence” is nearly over, anyone want to place bets on the biosphere’s new top idea? My money is on beetles, but I’ve placed a side bet on going back to single cell algae.

  • nakedChimp

    We should really stop calling this ‘conservative’.. it’s more like retarded (if one is naive) or racketeering (if one has a clue).

  • DJR96

    Swim against the tide and you risk drowning.
    Pick the wrong fight and you will lose.

    The energy transition will go down in history as one of the biggest shifts in human history.

  • Michel Syna Rahme

    The Thermal Coal lobby have made their move! If (when) it’s defeated, where then for thermal Coal?
    Prepare the hearse and a day to say thank you for it’s contribution and send it off into the history books!

  • DevMac

    It sounds as if Trump is buying his way to a second term. Keep all the existing coal workers employed to ensure their continued support. Then, once Trump has completed his second term in office and is replaced by, potentially a Democrat President, then the US economy will flatline and it will all be blamed on the Democrats.

    It will be the election no-one wants to win because it will be remembered as a colossal failure and whichever party is at the helm at the time will be held responsible in the hearts and minds of those who can’t see beyond the immediate – ie. the majority of the voting public.

    • Calamity_Jean

      Keeping all the US coal workers employed wouldn’t help Trump’s re-election chances all that much; there aren’t enough of them.