Finkel’s canny energy blueprint has a fundamental flaw

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The much awaited review by Australia’s Chief Scientist into the ‘Future Security of the National Electricity Market’ does a canny job of plugging holes in the country’s manifestly inadequate climate and energy policy framework.
The centerpiece recommendation of a new Clean Energy Target could solidify long-term investment in renewable energy, and help renew Australia’s decaying fleet of power stations.
It will in effect cement a fact that many know, and others refuse to admit – wind and solar will dominate new investment in power.
Although new gas, and perhaps even new coal may be eligible under the yet-to-be-determined settings of the new scheme, they will be outcompeted by renewables at every turn.
Wind and solar are already cheaper than new coal and gas in Australia, and due to their lower emissions, will gain an even greater advantage under a Clean Energy Target.
What about dispatchable capacity, I hear you ask? Finkel’s plan is simple. Legacy coal and gas will survive for long enough to meet Australia’s capacity needs, and renewables will have to make more use of storage to plug any gaps.
What this doesn’t provide, a beefed up market operator can demand through regulatory procss. This, again, is a canny approach that will probably work for Australia’s grid at current rates of change. But is it future proof?

Finkel’s framework however has a major flaw. It may not be truly durable. The review has not stress tested the effectiveness of its proposed blueprint and mechanisms against a 2 degree, net zero by 2050, emissions reduction pathway.

This is the core sensitivity that smart businesses around the world are assessing their resilience against. However Finkel has focused purely on Australia’s current pledge of a 26-28% cut on 2005 level emissions by 2030, which is not consistent with keeping global temperature rises below 2 degrees.
Developing policy for today’s Paris pledge is one thing, but tomorrow is arguably more important for durable policy. Developing a ‘blue print for the future’ means the plan has to be resilient against how the world could change.
And if the world is to bend the arc of emissions and get any closer to the long-term ambitions of the Paris Agreement, Australia will have to lift its game, and pledge to do more. There is little in the Finkel review to indicate that his plan is future proof – it tackles today’s challenges, not tomorrow’s.

However, for the long-suffering Australian energy industry, this is probably good enough. The most important thing is that Dr Finkel has nominated a plan that stands a good chance of achieving bipartisan support.

This will likely be the review’s greatest achievement, because a plan – any plan – is better than stumbling in the dark like Australia has for the last 10 years

Kobad Bhavnagri is head of Australia, Bloomberg New Energy Finance

Comments

22 responses to “Finkel’s canny energy blueprint has a fundamental flaw”

  1. suthnsun Avatar
    suthnsun

    ..before stumbling came the Dark Abbott..casting his intended pall of darkness over the land.. can australians withstand his dark arts this time around?

    1. Shane White Avatar
      Shane White

      Australians chose Abbott. We got what we deserved and continue to do so.

      1. suthnsun Avatar
        suthnsun

        Redemption is not out of the question. It looks unlikely.

  2. Steven Gannon Avatar
    Steven Gannon

    Thanks KB for a concise appraisal.

  3. Alastair Leith Avatar
    Alastair Leith

    Thanks for the summary, insights, and positive take, Kobad Bhavnagri.

    Correction though, 2.0º C does not mean zero net emissions for Australia by 2050. To have just a 33% chance of warming peaking at no more than 2.0º C it requires developed nations to fully decarbonise their economies by 2030 according to Kevin Anderson of UK’s TyndallºCentre for CC Research.

    We could well see 1.5º C even if all human emissions ceased at midday tomorrow due to climate lag (positive feedbacks) and removal of the short lived cooling aerosols currently emitted from coal stacks and aircraft.

    2.0º remains very, very tough ask, even for a less than even chance of it. If we allow developing nations like China and India until 2050 to get to zero emissions that leaves 10% p.a. reductions for the rest of us developed nations. And we are the worst historical emitted per capita in the world and are a very rich nation with world class renewable resources — so have exactly nowhere to hide from the CC challenge.

    http://www.carbonneutraluniversity.org/delivering-on-2-degrees—kevin-anderson.html

    1. Just_Chris Avatar
      Just_Chris

      The Paris agreement is very pragmatic it talks a lot about chance. If we reduce our emissions dramatically there is a chance there won’t be massive changes in the earths climate. It translates the problem into a series of challenges people can start to address but it is not black and white. If we globally meet our emissions target we could still have a problem especially if we ruin the environment doing it. WE need to start somewhere and Paris is that start. .

      1. Shane White Avatar
        Shane White

        Chris, “If we globally meet our emissions target ”

        then we end up a 3C Hell.
        http://www.wri.org/sites/default/files/uploads/INDC-Temp-Analysis.png

        1. Alastair Leith Avatar
          Alastair Leith

          3-4º C in current pledges. And with USA (now in alliance with petro-Russia) dragging her feet who knows what will happen.

        2. Alastair Leith Avatar
          Alastair Leith

          Do these estimates include “overshoot” and stabilisation at that given temperature (I’m very skeptical that overshoot can be overcome) or are those peak warming numbers, Shane?

          1. Shane White Avatar
            Shane White

            Don’t know Alastair – I spent all of breakfast and more trying to find out. Anyhow, like you’ve said, 3-4C.
            That brings me to the IPCC’s Paleoclimate chapter, that states “During the mid-Pliocene (3.3 to 3.0 million years ago), atmospheric CO2 concentrations between 350 ppm and 450 ppm (medium confidence) occurred when global mean surface temperatures were 1.9°C to 3.6°C (medium confidence) higher than for pre-industrial climate. During the Early Eocene (52 to 48 million years ago), atmospheric CO2 concentrations exceeded ~1000 ppm (medium confidence) when global mean surface temperatures were 9°C to 14°C (medium confidence) higher than for pre-industrial conditions.”
            And 2C will lead to disastrous sea level rise, which I believe is why Hansen called the Paris Agreement a fraud.
            This modern way of life we call now call Normal is very strange; definitely will change the planet in less than a century to make it inhabitable for our global civilisation. Surely we can’t possibly continue to grow sufficient food, provide sufficient drinking water and maintain stability in global financial markets with a metre or more of sea level rise, mass migration, population growth to about 9 billion, and the US becoming one giant dustbowl.
            The future seems filled with war, famine, natural disasters and species extinction. Lovely.

      2. Alastair Leith Avatar
        Alastair Leith

        Hi Chris, I’m not sure where you drew any inference from my comments about Paris. We need to be clear about what it is and what is not though. Watch Kevin Anderson’s presentation I suggest.

        “agreement is very pragmatic” so what? I’m not against Paris, but I’m aware of how far the pledges and aspirations fall short, and that 1.5ºC peaking will never happen due to lag and aerosol removal.

        We already have lost the Great Barrier Reef but nobody is prepared to say it in public (except marine scientists who get laughed at in parliament by ignorant politicians). 50% of the reef was already gone by 2012 thanks to sedimentation and nutrient loading from ag, the lions share due to overstocking and land clearing for livestock in QLD. Then global warming cause another half of what’s left to be destroyed. If that keeps happening at the rate of once every ten years what’s left of the reef can never recover, and livestock production will continue to destroy whats recovering from bleaching.

        Ice free arctic summer just years away now (not centuries as early IPCC ARs indicated), will the land life just float for summer? Western peninsular of Antarctica in terminal decline now, that is unstoppable without a 2º or more reduction in average temperatures to refreeze the glacial system and the land/sea interface. That’s just two examples from the many I could have chosen on todays damage, don’t forget all this stuff has a lag effect from positive feedbacks.

    2. Shane White Avatar
      Shane White

      Alastair, atmospheric CO2 is now at 409ppm, more than enough for 2C if/when cooling aerosols are removed. See below –
      https://www.scientificamerican.com/sciam/assets/Image/articles/earth-will-cross-the-climate-danger-threshold-by-2036_large.jpg

      1. Alastair Leith Avatar
        Alastair Leith

        Thanks for the link, Shane. Frankly even if 409ppm wasn’t enough (and it also depends on the reduction rate of course), I can’t see the world getting it’s shit together to stay under 2.1ºC, I work everyday towards that goal in my own very limited, mostly invisible way but I just can’t see it from where I stand I what I know of politics. Technology is on our side now, but not enough. Especially when land sector emissions are 44% (GWP100) or 56% (GWP20) of Australian total, depending on how you do the maths and whether you emphasis long term or short term warming.

        There’s so many opportunities to address those emissions too, but it’s a matter of seeing them first and agreeing to action second (pricing C and addressing the absurd level of land clearing going on in QLD and soon to be in NSW).

        http://www.bze.org.au/landuse

  4. solarguy Avatar
    solarguy

    I don’t agree that any plan is better than no plan. This plan is the wrong plan and that’s worse than the right plan. This gives the LNP and their coal benefactors a chance to argue for tax payers money to squandered on a big new coal mine and coal burning plant, because as we all know the banks don’t want a bar of it.
    Corporate welfare is crime against the people. Labor throws this stupidity no bouquet’s and until they win government in 2yrs time, it’s up to all of us to send Adani packing.

  5. Colin Avatar
    Colin

    Thanks KB. It appears that Finkel deliberately chose not to run the models using realistic (climate change mitigation) numbers. I suspect this was done to avoid antagonising Abbott and the deniers, plus to give both Turnbull and Shorten some “plausible deniability” when they go and talk with their fossil fuel backers.

    Might I suggest that the next logical step is for someone to quietly re-run the models, but this time we factor in genuine attempts to achieve no more than 1.5 or 2 degrees above pre-industrial levels? It will be very interesting to see if Finkel’s proposals will actually contribute to Australia getting its emissions down rapidly – just keep it quiet in case it derails the bipartisan support! I genuinely hope that Finkel has been smart enough to propose changes that will achieve what is required, and he has attempted to hide these behind modelling that is deliberately unrealistic.

    1. Alastair Leith Avatar
      Alastair Leith

      1.5º is a pipedream, 2.0º slipping between our fingers ATM.

      1. Joe Avatar
        Joe

        …we are already at 1.1 degrees and emissions are still going up and up. The 1.5 is now impossible…The 2.0 just another dream.

    2. Alastair Leith Avatar
      Alastair Leith

      Except he hasn’t when you consider the measures to keep coal and gas on the grid in some kind of assumption that they are better than renewables + storage.

  6. Kevan Daly Avatar
    Kevan Daly

    ” …and he has attempted to hide these behind modelling that is deliberately unrealistic”. You really shouldn’t say that even in jest. A lot of people think that the CMIP5 models did just that to justify climate alarmism.

  7. Patrick Comerford Avatar
    Patrick Comerford

    “However, for the long-suffering Australian energy industry, this is probably good enough”
    Not sure how the author can justify this statement, the long suffering energy industry has been doing just fine. Nobbled action on emissions with their crusade against Labors Emmissions trading scheme backed abbots farcicle Direct action, no doubt they managed to skim off a fair slice on that little rort. Over invested in networks and got the mug consumer to pay for it and managed to see the labor government blamed for it. Now milking the cost of generating energy for all its worth, nice little earner that one and as a bonus getting the msn to keep quiet about it. The good professor has conveniently left the door open for the Coal-ition to continue with its dangerous fairy tale that fossil fuels still have a place in our future power generating sources. No it’s the consumer who is long suffering and the finkle review will ensure that that state continues.

    1. solarguy Avatar
      solarguy

      My thoughts exactly.

  8. Joe Avatar
    Joe

    The Finkel report is all well and good. But urgently reducing emissions to avoid dangerous climate change is not on the radar of Finkel’s report. The report is a political copout so that Turnbull has something to talk about without actually doing what needs doing right now. All this talk of Coal being an important part of the energy mix for decades to come and giving a lifeline to “Clean Coal” whatever that is, is not being real. Coal use isn’t safe for the planet and it is already uneconomic, so why the fixation with “Coal…Now and Forever”.

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