The high priest was at it again. 2GB radio commentator Alan Jones had environment and energy minister Josh Frydenberg on his program on Thursday and he was giving him heaps:
“You are wedded to renewable energy. You are wedded to green energy … you’re as green, you’re as green as the Labor Party and the Greens.”
And Frydenberg was returning serve with interest:
“Alan, if we could only bottle your rage this morning, we’d have a new energy source.”
Beneath the bravado, however, was an insight into so much that is wrong with Australia’s climate and energy politics, and how far to the right the debate has shifted.
How else can a government that has no coherent climate and energy policy in place, and which has been a trenchant critic of high renewables targets and of states and territories when they try to fill the gap, and absurdly critical of technologies such as battery storage, is branded as left wing and green by ageing white commentators and internal critics.
Jones was fulminating, and absolutely convinced of himself.
“I actually read, you know Josh. I do the homework,” he insisted.
But what does he read? One suspects, given his ill-informed comments, that they are mostly right-wing blogs and climate denier web-sites. Or the Murdoch media, which often amounts to much the same thing.
Jones’ grasp of historical fact is poor. Frydenberg pointed out that it was John Howard who introduced the first renewable energy target. Jones protested that it was only because he was “panicked” by Kevin Rudd.
The MRET, which aimed for 2 per cent share of renewables by 2020, was actually introduced in 1997 and was junked (because it was too successful and amounted to a threat to the incumbents) well before Rudd appeared on the scene. (Maybe he was confused with Howard’s plan for a carbon price).
Jones also claimed – as so many right wingers do – that re-elected German chancellor Angel Merkel has “stopped the subsidies” and renewable development in Germany and was ploughing ahead with coal,
That’s not true. Germany sourced 36.1 per cent of its demand from renewables in 2017, this is running at around 40 per cent so far in 2018, and the target has just been lifted by Merkel to 65 per cent by 2030.
Renewables still get subsidies in Germany, but rather than a fixed tariff, they bid for them in a competitive tender, like this one this week. Sometimes it reduces them to zero, sometimes not.
And coal is on the way out – the last of the country’s black coal generators will retire soon and the new coalition government is putting together a plan to finally phase out brown coal. The formation of a coal commission to manage this exit is expected to be announced next week.
But Frydenberg chose not to challenge Jones, although the facts are well known.
Jones then turned to renewable energy subsidies in Australia, adopting the line perpetuated by the likes of the Institute of Pubic Affairs, BAEconomics, and the right-wing media, that these subsidies amount to billions of dollars a year, and will do so for another decade.
This is claptrap, as we have pointed out on many occasions, here, here and here.
Jones reckons that 28.6 million renewable energy certificates will have to be delivered this year at cost of around $85 each, and so that amounts to a total of $2.4 billion, and he also claims that this will continue, or even increase until the scheme ends until 2030.
But the price he cites only applies to the spot market for these certificates, known as LGCs, and the spot market represents just a fraction of the market.
Most LGCs are and will be delivered under contract at a fraction of that price – and in many cases for nothing, such as with the country’s biggest wind farms at Stockyard Hill.
And the spot market will crash too, sometime after 2020 if not before because of the over-supply of certificates. The futures market is already pricing in that crash.
That means the cost to consumers from 2020 to 2030 will be negligible, but the benefits could be significant, as the government has modeled in its push for the National Energy Guarantee – most of the price benefits of $400 a year per consumer come from renewables and the RET
But Frydenberg again chose not to dispute Jones’ claims, saying only “I don’t like subsidies”, and explaining that this was his rationale for the NEG.
Jones then launched into an extraordinary rant against Energy Security Board chair Kerry Schott, who had the temerity this month to point out that new coal won’t be built under the NEG, because wind and solar and storage was cheaper.
“This woman” Jones fumed (he appears to have problems with strong women who speak their mind, such as former prime minister Julia Gillard and AEMO boss Audrey Zibelman), “why haven’t you called her in” to explain herself, he demanded of Frydenberg.
“Where is the evidence? Because there is none.”
Frydenberg defended Schott as a woman of substance and character and said she was a “distinguished” figure.
But yet again he chose not to contradict Jones on the detail, or provide the evidence demanded by radio host. That’s a shame, because neither he nor Jones would have far to look.
He could have started with US investment bank Lazard, hailed by Jones only minutes earlier as an institution of international reputation, that were “experts” in the field, and had been around since the 1840s.
Experts indeed. In Lazard’s latest report on electricity generation costs, released in November, showed that wind and solar were half the cost of coal, and were still cheaper even when adding storage.
And it should be noted that the Lazard analysts added 10 hours of battery storage to their solar farm modelling, would no-one in their right mind would attach to a solar or wind farm, unless it’s off grid, because it’s not needed in an interconnected grid.
They could have looked at the Finkel Review, the CSIRO and ENA report on the future grid, at AGL’s estimates of the cost of replacing Liddell, or even the government-owned Snowy Hydro 2.0.
The only time that Frydenberg did argue with Jones about the detail was when Jones’ took to the federal government’s pet project, Snowy 2.0, as a likely white elephant, quoting extensively from a Lazard report on pumped hydro.
Frydenberg was right across the detail on this out that Lazard’s estimates were based on a new pumped hydro storage unit, where new reservoirs need to be built, and where there is only eight hours storage, rather than Snowy’s proposed 175 hours.
And therin lies the problem here.
Frydenberg is clearly across his brief, but only chooses to fight the causes that suit him.
Despite the bluster and the nonsense espoused by Jones and his ilk, and particularly within the Coalition party rooms, Frydenberg and Turnbull refuse to take them on.
Frydenberg offered this: “You can’t be sentimental about the energy system Alan, it is changing before your very eyes.”
Too true. As Frydenberg has said before.
“There’s a dramatic transformation that’s taking place in Australia’s energy system, a once in a lifetime transformation as we move into the world of micro-grids, demand management, rooftop solar and battery storage.”
He has no better argument – what with the plunging cost of renewables and th emergence of storage – to pursue a rapid transition that even the networks and major energy retailers and institutions are talking about.
Turnbull knows this too. And so do their advisors. But they dare not take on the right wing of the party, for fear of … people like Alan Jones. It’s barely credible.
Note: This story is a (partially) restored version of the original which was lost in circumstances as yet unexplained by our web host company. Apologies if earlier comments are missing.
