Taylor launches extraordinary and ill-informed attack against wind and solar

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Energy minister Angus Taylor says high levels of renewables cause “de-industrialisation” and will wreck the economy.

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New energy minister Angus Taylor has launched a new and extraordinary attack against wind and solar, saying they cause “de-industrialisation” and claiming that Labor’s 45 per cent emissions reduction target would send a “wrecking ball” through the Australian economy.

The comments came in an interview on Sky News on Sunday night, and little more than a week after Taylor told radio shock jock Alan Jones that there was already “too much” wind and solar in the grid.

On Sunday, he went even further: Asked by Sky’s Chris Kenny what he thought of Labor leader Bill Shorten’s comment that Labor was still thinking about adopting some aspects of the National Energy Guarantee, now dumped by the Coalition government, Taylor trotted out all the usual diatribe about wind and solar.

“It’s worse than that – they want to revive it (the NEG) with a 45 per cent emission reduction target. It is virtue signalling with other people’s money,” Taylor said.

He then claimed such a target would “drive up the price of electricity, drive out baseload power, make the whole system less reliable and far less affordable” and pointed to South Australia, where he blamed the high share of renewables for the state having the highest electricity prices in the country.

“That has led to …. de-industrialisation …. and the loss of jobs,” Taylor said. “Bill Shorten wants to take that state government experiment and take it national. It will be a wrecking ball to our economy.”

He went on to complain that new renewables “will push out baseload power…. the intermittent generation that is being stuffed into the sector will have to be backed up, and that’s extremely expensive … networks will have to be rebuilt to absorb all of this new intermittent capacity coming in, and we all going to pay for it.”

The fact that the right-wingers Jones and Kenny hold such extreme and ill-informed views about climate and energy is well known, and not of great consequence.

But the fact that the country’s energy minister goes on to their programs and agrees with them, despite all the evidence to the contrary, is deeply troubling – for investors and consumers.

These are scare tactics reminiscent of the Abbott and Joyce attacks against the then carbon price – remember the ‘Whyalla will be a ghost town’ campaign, and the ‘$100 lamb roasts’? For a quick rebuttal of these South Australia energy myths, this might be useful.

The notion of “de-instrialisation” will be news to the likes of UK billionaire Sanjeev Gupta, and the new SA Liberal government. Gupta has rescued, and is planning to expand, the steelworks at Whyalla, based around a huge investment in solar and storage – a plan he intends to repeat with his steel operations in Victoria and NSW.

Half a dozen other major energy users have also signed up with Gupta’s Simec Zen Energy for cheaper electricity delivered largely by renewables and storage, and more are set to follow. Zinc refiner Sun Metals, brewer CUB, confectionery maker Mars, and vegetable grower Nectar Farms are all turning to wind and solar, as are many other companies.

The South Australia Liberal government has also embraced the state’s high renewables share, and is lifting its commitment to battery storage, both large and small. A plan for $100 million in household grants has already had an industrial pay-off, with German battery giant Sonnen to build a manufacturing plant in the old GM Holden factory in Elizabeth.

And why not? As we pointed out last week, South Australia stands to benefits in multiple ways from its commitment to renewables – in emissions, prices and investment. AEMO seems comfortable with the fact that the state is heading towards 73 per cent renewables by 2021 and equivalent to 100 per cent by 2025.

Taylor’s antipathy to “intermittent” generation is well known and long standing, and in the interview with Kenny he didn’t stop there, trotting out a series of claims that are in direct contradiction to the findings of institutions such as the Energy Security Board, the ACCC, the Australian Energy Market Commission and The Australian Energy Market Operator.

He said of the various state targets – well, Victoria and Queensland in particular – that the “result will be very clear – it will push out baseload power, intermittent generation that is being stuffed into the sector will have to be backed up, and that is extremely expensive ….. networks will have to be rebuilt to absorb all of this new intermittent capacity coming in, and we all going to pay for it.”

That’s not true at all. AEMO’s Integrated System Plan contemplates that existing targets of the state governments, and Labor’s nation-wide target, and finds no issues. Yes, some extra investment in networks will be needed, along with other measures such as the need to orchestrate distributed energy sources, but it sees no threats such as the lights going out.

In fact, the AEMO report highlights the fact that the biggest shift from what Taylor likes to call “fair dinkum” baseload power towards wind and solar and storage will be in NSW – the one state without a renewable energy target. That’s because its coal generators are old, expensive and dirty, and nearly all will need replacing in coming decades.

Nor does AEMO’s or the ESB’s 10 year outlook see any prospect of the reliability obligation – which is still in the works –  being triggered.

Even if the definition of reliability is changed, to address the concern raised from exceptional and extended heat-waves, and the fear that country’s existing coal and gas generators will be unable to cope, the answer to that issue is not more “baseload”, but more dispatchable generation.

Taylor describes himself as the minister for getting prices down, but as the Energy Security Board, and any number of analysts, including most recently the Australia Institute, have pointed out, price falls in the next couple of years will be delivered by the influx of renewables from the renewable energy target.

Kenny made the baseless claim that renewables had been the primary cause of Australia’s electricity price rises. Taylor readily agreed.  Even the ACCC report notes that by far the biggest contributor was the increase in network prices, following closely by wholesale prices driven mostly by the lack of competition and a jump in gas prices.

Taylor was asked by Kenny why the government will not kill the large scale renewable energy target now.

Taylor’s response was interesting. He said “federal subsidies are disappearing in coming years,” a belated acknowledgment perhaps, that most new wind and solar is factoring in zero value for subsidies, and the spot price of large scale generation certificates (LGCs) is expected to plunge to negligible values from 2020/21 onwards.

When Kenny asked about ditching the Paris climate target, Taylor dodged the question, saying only that the electricity sector will meet its share of the target easily (thanks to the new wind and solar being built).

If only he could be explicit about the benefits of the renewables that he has just mentioned: they are bringing down prices, and they are reducing emissions.

Many of Taylor’s other claims are full of hot air.

Taylor says the government will ensure that new “dispatchable” generation is built, but a new report from S&P says that the lack of any coherent policy under this government will be the biggest factor against building new capacity.

It was interesting to note that Taylor said it may be months before an outline of the government plans to underwrite “new 24-hour baseload” would be unveiled. That’s an indication of the difficulties ahead. To achieve his desired outcome, would go against engineering and economic sense, and it won’t be in place before the next poll.

Taylor also threatens to stop any company from closing coal-fired generators by forcing divestment. But he admits he doesn’t actually have the power to do that. “We will create powers of divestment,” he promises. But how?

Taylor also talks about the gaming of the markets. If he was serious, he’d start at Snowy Hydro, the generator that the federal government owns lock stock and barrel. It was one of the main authors of the outrageous gaming in South Australia in July, and according to the Australian Energy Regulator was at it again in August.

Taylor said admit that nuclear is not a solution, renewable energy subsidies will disappear soon, wind and solar are already bringing down emissions, the government doesn’t have the power to force divestment and it hasn’t yet how it can devise a scheme to have more “fair dinkum” built without huge cost.

The rest of it – talk of the lights going out, de-industrialisation and the like is just one-eyed rhetorical nonsense, and demonstrably wrong even if you rely only on the word of AEMO and the ACCC.

Which is not to say that Taylor stands alone. Business Council of Australia boss Jennifer Westacott also thinks that highly levels of renewables will be a “wrecking ball” to the economy, and said so in an opinion piece in the AFR a few weeks ago.

The Australia Institute, in publishing a new report highlighting the impact that wind and solar are already having in reducing electricity prices, and will in the future, picked up on Westacott’s claims, including her accusation that the TAI had falsely predicted the now defunct National Energy Guarantee would put a stop to all investment in large scale solar from 2021.

As the TAI pointed out, it wasn’t them making that claim, but the modelling prepared by the Energy Security Board. This was one of the wished-for outcomes of the BCA.

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