It appears that some energy grown-ups have had a quite word in the ears of prime minister Scott Morrison, and his advisors who appear to be locked in the world they inhabited when heading up the country’s most ardent fossil fuel lobby, the Minerals Council of Australia.
Morrison on Sunday revealed a back-flip of epic proportions, saying that the government was no longer threatening to build a 1 gigawatt gas plant in the Hunter Valley, because it now understood what everybody else had already understood – that private investors are busy planning to build other stuff that works, including big battery storage.
“The 1000 megawatts are already being made up in part by some investments which I believe definitely will go ahead,” Morrison told the ABC Insiders program on Sunday, before citing a possible EnergyAustralia gas generator and various projects for big batteries, a technology he once dismissed as being as useful as the Big Banana, or the Big Prawn.
That meant that the government and its wholly owned Snowy Hydro were looking, at most, at building a 250MW gas generator. There’s probably no need for that either, given AGL’s own extensive plans – unless the government maintains the threat of its intervention which will dissuade the private sector from committing money.
EnergyAustralia said last week that the government should be more focused on “enabling” rather than building. But Morrison insisted on Sunday that the federal government was very good at doing things, because that’s what it does.
“I’m more interested in the doing,” he told the ABC’s Insiders program on Sunday morning. “We can do that (250MW gas plant) and deliver it on the ground. And that’s important, a lot of people can talk projects but they got to get approved and they got to be built in time. It won’t be on the wish list, it will be on the done list.”
Of course, the track record of the Morrison government shows that the claim his government is any good at “doing” is little more than marketing spin.
The federal government’s own plan to underwrite new “dispatchable” generation – the Underwriting New Generation Investment (UNGI) scheme – has been a complete failure: Nothing has come of it two years after it was first announced, when Taylor had sought to ram it through before the election that had been due seven months later. The one that he and the government expected to lose.
That didn’t happen, and despite two gas generators being short-listed for government underwriting or subsidies more than 10 months ago, nothing has happened on that front either.
The scheme might better be known as FUNGI, given the amount of time it has spent in the cupboard. But it’s had one big impact – it’s scared off private investment elsewhere, which is why the government thinks it now has to resort to proposing that its wholly owned Snowy Hydro will step in, using taxpayers money, of course.
Morrison also declared that reaching net zero emissions was very likely for Australia, but he wouldn’t be making that a target. But it was essential, he said, that the mandates of the Clean Energy Finance Corp and the Australian Renewable Energy Agency be changed to accomodate “low emissions” fossil fuel technologies to get there.
“I think that [net zero] is very achievable, but it involves making the investments we have set out for ARENA and the CEFC this week,” he said.
“I know people get very focused on the politics of these commitments, but what I’m focused on is on the technology that delivers lower emissions, lower costs and more jobs.”
That probably means more “doing”, because that’s what he says he does. At least he appears to have finally recognised that big batteries can do things, and amount to dispatchable energy. Which is a step forward. See Does Scott Morrison have any idea what a big battery can actually do?
But what a shambles this government’s policy is. It has spent the past week insisting that 1GW of additional capacity was needed, and that Snowy would build it if no one else did. Even the Australian Energy Council said such threats were a guarantee that no one else would commit to any new projects, including the ones that had already been planned.
Atlassian billionaire Mike Cannon-Brookes, who had proposed to build up to 1GW of battery storage himself if that’s what was needed, and as long as it wasn’t gas, Tweeted soon after Morrison’s comments.
“So let’s be clear. It doesn’t have to be gas anymore. It only has to be 250MW (not 1,000). And where are these rules written down? Where does one apply to get them?”
The market operator has suggested the remaining gap is a lot less than 250MW, and will likely be filled anyway over the next few years. It has forecast no reliability gap.
But Cannon-Brookes wanted to know whether the projects being sought by the Morrison government needed to be “24/7” baseload, as energy minister Angus Taylor and his gas advisor Andrew Liveris had suggested. If true, Cannon Brookes noted, it would be very expensive. (And Australia’s so called “baseload” gas generators are currently running at a capacity factor just 30 per cent).
“It’s awfully expensive to run gas 24×7 and will drive up electricity prices for households and businesses a lot – as well as likely lose money for investors” Cannon-Brookes said.
This week, the government will apparently unveil its “technology roadmap”, which it says will be its substitute for targets and taxes. Expect to hear some more nonsense about carbon capture and storage and gas as a transition fuel. Hopefully, there will be at least something positive on storage, more smart technology for grid integration, and on electric vehicles and the electrification of transport and industry.