Why Far Right should embrace solar + storage energy revolution

When new Australian prime minister Malcolm Turnbull promises a government that will embrace and even pursue new disruptive technologies, one senses that the principal roadblock will be those vested interests about to be disrupted, and their supporters in the conservative right.

Conservatives, by their nature, do not easily accept change. But as Turnbull notes, change is happening, and Australia has got to get in board. This is particularly so in the energy sector, where rooftop solar and battery storage and other smart technologies are promising a revolution that will sweep aside the business models of incumbent networks, generators and electricity retailers.

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The pace of that revolution could be accelerated by Turnbull, or it could be slowed. Much will depend on the attitude his government adopts to regulatory reform, and whether his Coalition government continues to try and dismantle institutions like the Clean Energy Finance Corporation and the Australian Renewable Energy Agency.

Both these bodies are playing key roles in developing new business models that could make solar and storage more accessible to lower income families, apartment dwellers and community groups. It includes such concepts as power purchase agreements and “virtual power plants” (where the output of many households are pooled and traded).

Conservatives are dismissive of such ideas, as they have been of much of what the CEFC and ARENA have tried to do. But even if they don’t get inspired by the actions of the so-called Green Tea Party in the US, which has taken up rooftop solar and the power it gives the individual consumer as a conservative cause, they might like to heed the words of one of their own, the current energy minister and treasurer of Western Australia, Mike Nahan.

When Dr Nahan was elected to the WA parliament in 2008, his views seemed pretty much unchanged from the days he headed the ultra conservative think tank, the Institute of Public Affairs, and many others in the hard right of the Abbott government, and who still sit in the Coalition ranks.

Those views included skepticism about climate science, a disregard for renewables, and a contempt for the workings of environmental groups, unless they happened to be the IPA-sponsored Australian Environmental Foundation group which campaigned against concepts like Earth Hour and Environment Day whaling and forestry bans.

But since Nahan became the state’s energy minister, in 2013, and then the state’s treasurer as well, he’s had to change his tune.

The WA energy market, he has discovered, is anathema to everything that Nahan has ever stood for. Actually, it is a basket case, created by an ideological blindspot towards renewables, and an equally blind attachment to fossil fuel solutions.

It is a market that is heavily subsidised by the government – which pays more than $600 million a year, or more than $500 a households – to keep electricity prices at an artificially low level. Without them, electricity bills would be 30 per cent higher. As recently as 2008, the government subsidised 72 per cent of the cost of electricity.

The WA energy market also has lousy regulation that are gamed by participants. A so called “capacity market” has resulted in taxpayer’s money being used to build fossil fuel peaking plants that have not, and will not, ever been switched on.

And the state policy making has been built around an attachment to base load fossil fuels, even blowing $300 million on trying to extend the life of a 45-year old coal generator, and it has a complete blind spot on renewables. Unlike the main market in Australia, the WA market operator has no effective wind forecasting mechanism.

When the first utility-scale solar farm in Australia was opened in Geraldton north of Perth in 2012, the then energy minister Peter Collier gave the impression he hoped it would be the last. Even Nahan said the following year that the hoped no more wind and solar projects would be built in the state. Solar was not even mentioned in a government-mandated review of the state’s energy choices, which came up with the bizarre proposal of importing coal from Indonesia to keep its ageing coal plants running.

Now, Nahan concedes, solar will dominate the future of the grid. Within a decade, he said earlier this month, the bulk of the state’s daytime demand could be met by solar, most of it generated on the rooftops of the state’s households and businesses.

The energy of the future was not just cheap, it was democratic too.  And it was likely to force out coal-fired generation. “It’s low priced, it’s democratically determined, and it’s something we are committed to facilitating,” Nahan declared at a conference in Perth.

His former colleagues at the IPA might have thought so, but Nahan wasn’t hallucinating when he made those predictions. The state’s Independent Market Operator, which manages the main grid in the south-west corner of the state, predicts by 2035, 90 per cent of homes and three quarters of all businesses could be producing their own electricity.

Within a decade, there could be 2371MW of rooftop solar capacity in the local grid, more than average demand. The peak would shift from mid to late afternoon until after 7.30pm.

WA – with its ageing infrastructure, dependence on expensive fossil fuels and lop-sided subsidies, is emerging as ground zero for the energy revolution that everyone is predicting. Like Hawaii, which has a huge fuel import bill, the authorities are realising that cheap energy can only be provided by renewable energy, solar and storage in particular. Already they are talking about cutting off regional towns from the grid and powering them with renewables and storage to save costs. Some businesses are already doing it.

Everyone is watching with interest with how Nahan goes about his reforms. The man who would have been in the back row of the push to renewables, is now at the cutting edge of adopting it.

Already, Nahan’s has been damming when presented with evidence that the state-owned electricity retailer, Synergy, had effectively banned solar households from adding battery storage and electric vehicles. What was really banned was the ability to export electricity back into the grid if those technologies were installed, but the standard contract was worded so badly it gave the impression they were not allowed.

Nahan called it “red tape gone mad”, and promised a review. He said regulators were being too slow to adapt to the “revolution” in the energy market, which includes not just rooftop solar, but also battery storage and EVs.


The next moves are going to be just as intriguing. In broad terms, Nahan wants to remove the government subsidy on electricity bills and throw open competition to the monopoly-government owned utilities.

The removal of the government subsidy – and the resulting surge in electricity bills – will likely accelerate the uptake of solar and storage even more attractive. Synergy rival Alinta Energy has already forecast that it will offer solar and storage to customers.

It could be a test case for what happens in the rest of Australia. Already, networks and retailers are starting to look at battery storage, but only on their own terms, and they want competition to be kept out of the market.

The national regulators are also slow moving, postponing reforms that could have saved customers billions in avoided network costs. They are all likely to get a big shock as solar costs continue to fall and battery storage enters the market. A decade ago, consumers had no choice. Now they do. That should fit into the conservative narrative.

 

Comments

19 responses to “Why Far Right should embrace solar + storage energy revolution”

  1. Beat Odermatt Avatar
    Beat Odermatt

    I think it is too simplistic to use terms such as “far right” or “far left”. In some areas we have an unholy alliance between various interest groups trying to stay in the coal age. We have companies with coal mines, we have Governments depending on income from electricity and we have unions depending on income from mine workers. The environment and intergenerational justice are issues which should remain out of party politics.

    1. suthnsun Avatar
      suthnsun

      Not just remain out of party politics, override party politics. Setting up any viable framework which overrides politics is usually doomed to failure. Reserve bank and interest rates perhaps is working? But even there the framework is badly out of date imo, so heading to politicisation soon..

    2. Jacob Avatar
      Jacob

      The NSW Gov can buy 51% of Sydney Airport and get guaranteed profits.

      The Vic government should do the same with MEL Airport.

      Gold-plating the grid is killing manufacturing in AUS.

    3. Alastair Leith Avatar
      Alastair Leith

      I would never call the pro-coal unions you refer too “far left”, just saying.

      1. Beat Odermatt Avatar
        Beat Odermatt

        When I working in the coal industry, some unions were from the “far left”. How strongly we want more renewable energy, we cannot afford to ignore the realities. Many families depend on incomes from the coal mining industry and its support services. Central Queensland and the Hunter Valley would become become “ghost districts” without coal mining.
        I do not know what the answer is, but changes will create hardship for many. I suggest we have legislated gradual changes towards a low carbon economy without taxes.

        1. Calamity_Jean Avatar
          Calamity_Jean

          The article says the coal industry gets a subsidy of $600 million per year. Why not take that money, which is already in the budget and pay it directly to the workers for the rest of their lives? It’s way more efficient, because the plutocrats can’t skim anything off. Work out a formula so that people who have worked longer in the coal industry get more and those that have worked a shorter time get less, and make the payments conditional on the people never working again in mining. However, they can work and earn as much as they want to or can at any other occupation.

          Older workers would probably retire, younger ones would find other work and could afford to take lower pay because they had a secure base of income from the ex-coal-miners settlement. The payment scheme would gradually sunset as the former coal miners died as everyone eventually must. Coal mining areas may still become “ghost districts” but much more slowly and with less hardship.

  2. mike111ryan Avatar

    Instead of pointlessly attacking individuals or groups with political afiliations the author disagrees with, or holds in contempt, a better course would be to build a valid business case to support your assertions. There in a three letter acronym lies the “far left’s” challenge – justifying the Return On Investment (ROI) for renewable energy. If the input cost for your raw material – wind or sunlight – is ZERO then why is it beyond the skills of a committed “Green Renewable” advocate to provide a valid business case that does not require subsidies? Input cost – ZERO.

    1. Pedro Avatar
      Pedro

      The same could be said about the ROI for the FF industry that is subsidized massively, especially in WA. While we are at it how about internalizing the external costs as well.

      Overall I thought the tone of the article was congratulatory of Nahan who seems to be using economically rational common sense.

    2. howardpatr Avatar
      howardpatr

      Because those deniers like Abbott, Warburton, Newman, etc, etc who “look” at such matters virtually ignore the issue of EXTERNALITIES.

    3. mick Avatar
      mick

      wise man once told me never argue with idiots

    4. Chris Fraser Avatar
      Chris Fraser

      This business case has been made several times assuming a level playing field.

  3. Petra Liverani Avatar
    Petra Liverani

    How wonderful that the numbers are too stark to ignore for renewables in WA and that the switch there will probably provide a big impetus for the rest of the country to follow.

    Yes, the numbers still dropping significantly for solar and supposed to be dropping massively for storage too should surely suggest that by 2020 it will simply be a battle to roll it all out – assuming nothing catastrophic intervenes.

    1. Pete Avatar
      Pete

      We’ve already had the catastrophe; it was called Tony Abbott.

  4. howardpatr Avatar
    howardpatr

    Have a look at Emu Downs wind farm west of Badgingarra, north of Perth.

    Eighty odd wind turbines occupy in the order of 25 square kilometers. There are large areas within the farm where tracking PV and/or concentrating technology like that being developed by Raygen could be incorporated.

    Great to see Dr Nahan might be seeing the light, (photons), but there are lots of people like like Abbott populating the LNP.

  5. halslater Avatar
    halslater

    Stop believing their nonsense about being for independence and freedom. The right stands for corporate welfare, it is their only consistent position. There is no left anymore, center and far-right only.

    1. neroden Avatar
      neroden

      Nahan seems to have seen the light, though — he seems to be supporting independent ownership of solar & batteries & electric cars — which is anti-corporate-welfare. Does that make him a centrist now? 😉

  6. Alastair Leith Avatar
    Alastair Leith

    Anybody who needs a laugh check out Senator Disruption Democracy thesis. He recently said traditional businesses and organisations are “being replaced by what’s called disruption”. Not with disruption but by disruption. I think the term has jumped the shark, he’s even citing The Greens as a traditionalist old party, unconnected with activism. Up here for thunkin, hey?!

    http://www.senatorbobday.com.au/consilium-speech-disruption-democracy/

  7. Alastair Leith Avatar
    Alastair Leith

    “Within a decade, there could be 2371MW of rooftop solar capacity in the local grid, more than average demand. The peak would shift from mid to late afternoon until after 7.30pm.”

    Is there a source for this Giles?

    I’ve done some basic cost and capacity projections using WA capacity trend-lines and Natan’s claims, while potentially credible, are not an accurate reflection of the deployment or learnings (costs) curves. If however Governments got the deployment rate closer to the international growth trend (which is still exponential after three decades of growth) then it would easily be possible. But Natan has not articulated a single policy initiative to achieve this shift that’s required for his prediction to come true.

  8. Ron Horgan Avatar
    Ron Horgan

    I guess the fact that WA has poor coal resources and so relatively low vested interests in the fossil industry makes adoption of renewables easier.
    The situation in SA is similar and SA leads Australia in renewable energy.
    Victoria with large low grade coal reserves and a well developed power industry will probably follow the lead of the states with poorer coal resources.
    GDF Suez, owners of Hazelwood now have a policy of divesting brown coal power stations. The reinstatement costs will be substantial.

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