Energy minister Taylor digs in on baseload, pumps up Snowy 2.0

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Taylor says any more action on climate would be “insane”, and contradicts IEA report and digs in on need for more baseload, and Snowy 2.0.

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Minister for Energy Angus Taylor and Prime Minister Scott Morrison speaks to the media during a press conference at Parliament House, Tuesday, October 23, 2018. (AAP Image/Mick Tsikas) NO ARCHIVING
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Energy minister Angus Taylor has continued the government’s scatter-gun approach to energy and climate, seeking to downplay the back-flip from corporate Australia on carbon pricing and emissions targets, ignoring the IEA’s calls for a rapid transition to clean energy, and pushing again for the need for so called “base-load”.

In a 10-minute interview on Radio National on Wednesday morning, Taylor managed to mention the word “base-load” nearly as many times as the International Energy Agency did in its entire 650-page World Energy Outlook, which concluded that if the world was serious about climate change, it had to dump coal in favour of wind and solar.

The IEA says the world needs to dramatically accelerate its energy transition.Taylor wants to slow it down, focusing on a “sensible pace of transition” and arguing that the country is already moving too quickly.

Taylor is fighting battles on numerous fronts, because its policy decisions have become so whacky it is antagonising traditional business allies. Big energy is protesting against his plans to set a default price, and force divestment if any coal plants are closed early, arguing that such moves will put prices up, and are probably unconstitutional.

He has also dismissed the push by Woodside, one of the biggest agitators against carbon pricing when Labor was in power, to now consider a carbon price, saying it was talking its own book on gas supplies.

Taylor also dismissed the calls by Woodside, BHP and Rio Tinto for higher targets, even claiming, wrongly, that Australia is well on its way to meeting its Paris targets “well ahead of time,” and also claiming that no other country has done as much on emissions reductions as Australia.

“Pursuing an even more aggressive emissions target when we are already facing a tsunami of intermittency is simply insane,” Taylor said in a later speech.

And he is pushing ahead with his own plans to underwrite new generation for “24/7” power to help deal with the “tsunami” of “intermittent” wind and solar plants that have and will connect to the grid this year and over the next three years.

The underwriting terms – which now bear little semblance to the original recommendation from the ACCC –  is seen as an effort to extend the life of some coal generators.

Taylor said 45 submissions to the government’s consultation paper had been received, and inquiries made about investments in coal, gas, pumped hydro and solar thermal (no mention of battery storage).

But Taylor reinforced that the tender would be open to upgrades of existing generators, and will need to be delivered “relatively quickly” – which would seem to rule out investments in new plants, be they coal, pumped hydro or solar thermal.

Still, Taylor did declare his support for the Snowy 2.0 pumped hydro scheme, which is not surprising given that his grandfather was the chief engineer and commissioner for the original Snowy Hydro scheme, first designed for irrigation and then later adapted for hydro generation.

Snowy 2.0 is likely to cost more than $6.5 billion. Taylor says its business case is yet to be made – a point discussed in some detail in this analysis by ACIL Allen’s Paul Hyslop – but he is confident it will play a key role in Australia’s energy future.

“Put simply, we need to effectively firm that generation, providing solution for when the sun isn’t shining and the wind isn’t blowing.And that will matter most when we face solar and wind droughts.  

“Inevitably, there will be extended periods of time  two, three or four days or more  when there isn’t enough sunshine or wind. 

“In that case we will need accessible long life storage. Batteries won’t do it because they can’t store enough power at a sensible cost.”

Taylor also took aim at the South Australia and Victoria Labor governments and their respective renewable energy targets. 

South Australia, he says, went to 50 per cent renewables “too quickly”, and is now facing supply issues. He did not mention the fact that there have been no outages in South Australia for the past 18 months, since AEMO changed its operating procedures, and the risk of outages is as great or greater in coal-dependent grids like NSW, as the recent outages illustrated.

He pointed to the increase in market interventions by AEMO. This, however, is not due to a shortage of capacity. This is because the gas generators refuse to switch on because they can’t make enough money when the wind is blowing, and AEMO wants them on for :system strength”. Going forward, they won’t be needed so much.

Taylor said Victoria’s recent reverse auction plan meant that “it’s the consumer that picks up the tab”, but didn’t explain why..  

The government’s underwriting proposal – which it wants to rush through and complete by March, so it can be signed off before the caretaker period that will come before the election that must be held by May – has been criticised by the Clean Energy Council, former CEFC chief Oliver Yates, and now The Australia Institute.

In its submission, TAI said the program could jeopardise rather than improve the reliability and affordability of electricity, and questioned whether the Government even has the authority to sign such contracts.

“The Government is rushing to fund its pet projects: coal power, clearing the decks before the election,” says Richie Merzian, Climate & Energy Program Director.

“Asking for expressions of interest before it’s even completed the funding guidelines is Minister Taylor putting the cart before the horse. The electricity sector is suffering from poor policy planning and the Government’s knee-jerk response is policy on the fly — possibly without the authority to do so.”

He said that to make matters worse, Taylor wants the Australian taxpayer to take on the liability arising from future climate policies by offering to indemnify any such investors against a future carbon price.

Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

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