Australia’s energy future by 2050? The scary vision of the Right

Australia’s clean energy industry says it has been reassured this week, after using the forum of the Clean Energy Week to obtain assurances from all sides of politics that they support the Renewable Energy Target. That is a significant achievement. But what should worry them most is what happens beyond 2020, or what happens when the Coalition sweeps to power, as is widely predicted, in 2013.

The industry got an insight into Coalition thinking at a specially convened debate about what Australia’s energy mix might look like in 2050. A range of views were sought, from global energy systems manufacturer Alstom, Australian energy giant AGL, a right-wing thinktank, a UNSW renewables specialist, a leading representative from the clean energy industry, and a former Liberal politician.

It was this latter, the former Senator Nick Minchin, that gave the scariest insights into Conservative thinking on clean energy. He said that even the Labor government’s relatively conservative predictions of 40 per cent renewables in 2050 were “ridiculous, laughable and a joke.”

He didn’t think wind or solar would supply much more than their current 3 per cent because they couldn’t provide baseload power. He told the audience of wind and solar developers that the “ground is moving out” from underneath them.

“My problem with the renewable debate at the moment is that you’re just talking about windmills and solar panels,” he said. “Windmills and solar panels are not going to do it for a modern sophisticated economy. They ain’t going to cut it.”

It might be tempting to dismiss Minchin’s remarks as irrelevant, because he no longer holds office. But the man most responsible for the Coalition turning its back on the CPRS and for installing Tony Abbott is still influential.

Indeed, his views on wind and solar, were virtually a carbon copy of the views expressed a day earlier by the Coalition’s energy spokesman Ian Macfarlane – who dismissed them as expensive and unreliable. Like Minchin, Macfarlane wants money spent on R&D but not on deployment.

As we suggested yesterday, and previously, this is the common narrative of conservative energy policy: delay the deployment of renewables, and keep them in a test tube. But around the world, it is clear that renewables are charging down the cost curve and will intersect with fossil fuels all along the value chain by the end of the decade – as McKinsey recently noted. Politicians such as Minchin and Macfarlane, and their Republican counterparts in the US, are basically the principal line of defence for the fossil fuel industry.

The only notable difference between Minchin and Macfarlane is that Minchin said the RET should be dumped altogether. Macfarlane on Thursday pledged his support (pending the outcome of a review from the Climate Change Authority, an institution the Coalition has pledged to close down).

It should be remembered that it was Macfarlane, as energy minister in the Howard government, who rejected the Tambling inquiry’s recommendation that the modest 2 per cent renewable energy target at the time be doubled. That was a decision that brought the deployment of renewables in Australia to a virtual halt.

Even more scary, however, are the views of Alan Moran, the director of deregulation of the Institute of Public Affairs. The IPA actively campaigns against the idea of anthropogenic climate change and wind farms. In Minchin’s words, Moran “makes me look like a pinko.”

Moran’s vision of the future was to look 50 years into the past. “We had communism then, we got the Greens now,” he grumbled. He said the energy profile in the 1960s was not much different from today, and “I expect that continue into the future.”

He didn’t expect the cost difference between fossil fuels and renewables would change. Clearly he hasn’t read any reports by the International Energy Agency, or noted that wind is cheaper than coal in the US, gas in Brazil and Europe, and will likely be cheaper than the lot in the US, China and India by the end of the decade.

It’s not easy to dismiss his views as just those of an ultra-conservative think-tank. The IPA holds enormous sway of much of the public debate in Australia; they are prominent in newspapers, on the internet, on talkback radio and the ABC. Coalition politicians often defer requests for on-the-record comments about the energy market to the IPA. NSW’s energy minister was repeating the same nonsense at a function hosted by AECOM on Thursday night.

Fortunately there was some commonsense in the panel. Mark Diesendorf from UNSW pointed out that every energy source has received massive government subsidies at their time of their deployment, and fossil fuels still do (by a ratio of nearly 10 to one according to the IEA). And he noted subsidies for sources such as nuclear were rising, while those for renewables were able to fall as the costs of technology and deployment came down. Diesendorf and his colleagues have already outlined a model that shows that Australia could have powered itself on renewables in 2010, with currently available technology.

The CEC deputy CEO Kane Thornton said that by 2050, distributed generation would have a much greater role, giving consumers greater opportunities. Fossil fuels will have faced significant price pressures, while energy from solar, wind, geothermal and wave will have fallen rapidly, and will have zero operating costs. “By 2050 we will be exploiting those to the maximum.”

Alstom’s Gwen Andrews said she expected around 40 per cent renewables by 2050, while AGL’s Paul Simshauser said it was impossible to forecast, and noted economists such as he had gotten it completely wrong on the cost curve of solar PV (too conservative) and gas (too optimistic). But he noted that by 2050, virtually all existing coal plant would have been replaced, and he couldn’t see how asset managers or bankers would fund new coal.

Ken McAlpine, the director of policy relations in Australia for Danish wind turbine manufacturer Vestas probably best summed up the discussion with a tweet; “Minchin and Moran were highly entertaining. The rest of them stuck to the facts.”

Sadly, very few in the political arena are able to stick to the facts.

But there was one very revealing moment. Moran had predicted that renewables would account for just 1 per cent of global energy by 2050. But in what must have been a Freudian slip, he acknowledged that there was a “slim chance” that a global accord to fight climate change could be implemented – in which case, he said, “there would be 60-70 per cent renewables.”

And that just about sums it up. The fossil lobby knows that as soon as they lose the debate over climate change, the game is up for fossil fuels. Which is why the IPA fights so hard to keep up the charade over global warming. It’s the Maginot Line of the coal industry, and the conservatives this week have shown their true colours.