Renewable target scrapped as CLP goes all in on ageing gas plant, and is warned of blackout risks

The new Northern Territory CLP government has officially scrapped the 50 per cent renewables target set by the previous Labor government, but is being warned of the risk of blackouts if it continues to rely on the ageing gas plant that still provides the bulk of the region’s power needs.

The announcement by the newly appointed minister for energy and renewables, Gerard Maley, is not surprising given the inability of the previous Labor government to follow its own renewable roadmap that set out a detailed path to 50 per cent renewables by 2030, but which was largely ignored.

In a statement issued on Thursday, before a planned speech to parliament, Maley says the renewable target has been abandoned because “it will have cost $5 billion, and put the territory’s main grid at the risk of major blackouts.”

It did not provide any context or numbers for that $5 billion claim, which analysts said appeared wildly inflated. “That’s a lie, it’s an out and out lie,” Tom Quinn, the author of the Recharging the Territory report, which favoured renewables, told local ABC Radio.

Indeed, local experts say the CLP plan also risks blackouts if it relies on the ageing gas turbines at the Channel Island facility – the main one in Darwin, where replacement parts and replacement machines are difficult to find. It has previously announced plans to keep the turbines running for another 10 years.

Maley says the CLP includes a cap on consumer bills, to protect them from any rising costs, and also planned investment in energy infrastructure.

Interestingly, it notes that it will expand large-scale solar and battery storage “to reduce the cost of supply whilst maintaining grid stability.”

But it also cites the development of the Beetaloo gas basin – described as a ticking carbon bomb by environmental groups – “to provide an abundant and reliable source of gas to underpin our energy security and economic growth.”

It makes no mention of any planned new gas generators, which energy experts observe will be difficult to obtain in any case.

In his speech to parliament, however, Maley notes that the NT has long subsidised electricity consumers. Its grid, dependent 80 per cent on gas, requires a subsidy of 11.5c/kWh from the government, or $1,200 per householder per year.

“If the Northern Territory government didn’t do this, Territorians would pay the highest power prices in the nation,” Maley said, also noting that the three government energy utilities accounted for 29 per cent of the territory’s debt.

The NT renewable transition has been something of a disaster, caused by a mixture of political hubris, a refusal to follow a sensible plan, and over-reach from regulatory authorities.

Four big solar farms were built several years ago but were not allowed to supply power into the grid because of rules imposed after their construction that required them to pair with battery storage.

They are now being allowed into the grid, but the ageing gas turbines at Channel Island are being forced to run as “spinning reserve” – not because of any solar issues, but because the privately built transmission line is not regarded as reliable. This, in turn, is putting pressure on the gas turbines, local experts tell Renew Economy.

“Labor failed our electricity system in three key areas Madam Speaker, not having a backup plan for a lack of gas, sitting on their hands as rooftop solar created grid instability and failed to invest in new equipment forcing the Territory to rely on old generators that are at the end of their life,” Maley said.

However, Maley’s speech says the cost of gas generation could be mitigated by sourcing it from Beetaloo, but it made no mention of replacing the ageing Channel Island generators, which he admitted was old and reaching the end of life.

He blamed the issue on solar, and its impact on grids. But such issues have been addressed in other states and countries through smart reforms, better grid management, and battery storage. None of that has been done yet in the NT.

Maley said in his statement that the NT is only running at around 20 per cent renewables. Local experts agree that the delays over the last few years, mean that it would be difficult to reach that 50 per cent target, despite the interest of Sun Cable and Quinbrook Infrastructure in building large scale solar and battery storage to foster local manufacturing.

The NT is not the first jurisdiction to see the ripping up of renewable energy targets on the return of a Coalition government. In Queensland, the new LNP government has forced major wind projects to re-submit themselves for planning approval and announced $1.4 billion in funding for coal fired power station.

It has made clear that it does not favour large scale renewables, and least of all wind. But the state’s biggest industries clearly do, with Rio Tinto signing a huge contract for solar and battery storage that it says is essential for the future of its Boyne Island smelters and refineries in Gladstone, which are the biggest energy consumers in the state.

The federal Coalition intends to follow suit. It has made clear it wants to put its energy eggs in the nuclear basket, and seek to extend the life of coal fired generators and burn more gas, as it threatens to “tear up” any Commonwealth underwriting agreements for large scale wind and solar.

But it too is being warned that could be a recipe for blackouts. The Australian Energy Market Operator has made clear that the biggest risk to energy reliability is the performance of ageing coal fired generators, which can no longer be relied upon to supply power at critical times.

Renew Economy reached out to Maley’s office for more information about the $5 billion renewable cost claims, and plans for future generation, but did not hear back before publication.