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“Keep coal to encourage renewables:” Is this the silliest energy headline ever written?

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If energy and climate policy could be decided by slogans and newspaper headlines, then federal energy and emissions reduction minister Angus Taylor would probably find his job a lot easier than he does right now.

As we reported on Thursday, Taylor this week did his normal practice of preceding an official release with a media bombardment (to friendly and accommodating and some would say credulous journalists) on his take on the issue at hand.

This week it was the promotion of his preferred “Coalkeeper” subsidy, an element of the Energy Security Board’s Post2025 market proposals that nearly every energy utility and energy analyst, and most states, think is an incredibly dumb idea.

Not the Murdoch media or the Australian Financial Review, however.

They were given privileged access to the minister and cheerfully echoed his push for “Coalkeeper” and the need to pay coal to stay in the system, even as he insisted, as he always does, that the mechanism was “technology neutral”.

“Grid and bear it: subsidise coal”, trumpeted the Australian as its front page lead, and the AFR did much the same with “Coal will be paid to firm up the grid.”

But it was this headline, on page two of the AFR, that evoked most comment for its sheer idiocy:  “Keep coal to encourage renewables.”

Just the very idea that this could even be the beginning of a coherent argument was too much for some, given that anyone with a basic understanding of economics, engineering and the environment would see the problem.

Environment Victoria said it was absurd. And as one energy analyst noted in an email to her peers: “The idea that this sort of capacity market complements renewable investment – it’s bullshit – the NEM is transitioning to renewables, this will slow it down.”

That much has been noted by nearly all in the energy industry, including coal generation companies, network owners, gas and hydro companies such as the federal government’s very own Snowy Hydro, and every renewable, battery, inverter and smart software company, along with independent energy analysts.

It’s a running joke in the energy industry that if you want an opinion or modelling to support your ideology or business case, you just need to pay for it. What was striking about the hundreds of pages of documents released by the ESB was the absence of an independent assessment of its most controversial proposal.

The word is they ordered one, and got one, but it didn’t support their position. So they didn’t publish it, or even mention it. Wouldn’t that make great reading!

It might have gone along the lines of one that they did publish last year: “There is no guarantee that capacity procured will be “deliverable” to meet the real-time requirements of the power system,” it said of the controversial physical retailer reliability obligation, the official name for Coalkeeper. If that’s the case, what’s the point?

The AFR followed up its entry into this year’s silly headline competition with an editorial on Friday declaring that “Energy capacity key to stable path to a clean future.”

It managed to convince itself that it was only the “green lobby” that was opposing it, which it said simply didn’t understand that something had to be done for when the wind don’t blow and the sun don’t shine.

The AFR suggested that if there wasn’t a capacity market, then Australia would inevitably suffer price spikes and power shortages that would “destabilise the economy”.

It talked about the primacy of “baseload”, even though most big energy utilities and even the market operator have moved on to a more relevant concept – flexibility and dispatchability.

Perhaps the AFR was too overcome with the warmth of Taylor’s words to study the documents and the submissions in detail. The reality is that the minister’s preferred version of the “capacity market” has little support – in the industry itself, or even among the states.

The state ministers know there are better ways forward. Some think they might be able to find them amongst the entrails of the ESB’s two years of deliberations, because it is so surprisingly vague given the time spent and it presents so many different options. But we won’t know what that might look like for another 18 months.

The states also know that you don’t try to keep coal if you are trying to manage a transition to renewables. What you need to do is to have a coherent plan – both for the coal exit, and for the replacement.

These plans exist, but not in the world that Taylor inhabits. You start with a target for zero emissions, and listen to the scientists on when that should be, and then you listen to the engineers for what needs to be built and put in place to replace the coal generation business that is dying before our eyes.

And then you get on with it, as NSW energy minister Matt Kean is doing. And now he has 34GW of wind, solar and storage projects to choose from in the backyard of Barnaby Joyce’s electorate and another 27GW in the central west. There is, after all, a green light at the end of the tunnel.

Giles Parkinson

Giles Parkinson is founder and editor of Renew Economy, and of its sister sites One Step Off The Grid and the EV-focused The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.

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