He may have already had one, but Australia prime minister Malcolm Turnbull has just been given a blueprint by the Trump administration in the US on how to protect dirty “baseload” coal, and extend his fight against the energy future.
As RenewEconomy reported on Monday, courtesy of Joe Romm from Climate Progress, the Trump administration has stunned the US energy industry by ignoring the findings of a major government study into grid security, and ordering regulators to draw up new rules to protect coal and nuclear generators.
It puts the US on a similar path to Australia, where the conservative government shares its support for “saving coal”, building new coal fired generators, forcing states to open their lands to fracking for gas, and doing their best to put a cap on renewables.
Indeed, as bizarre as it may seem, there is little to differentiate the climate and energy policies of the Trump administration – with its cabinet of climate science deniers and others vowed to dismantle the very department they are in charge of – and the Abbott/Turnbull administration.
Abbott, of course, held the same climate-is-crap view of science widespread in Trump’s cabinet and among Australia’s Coalition MPs. Turnbull ostensibly holds a different view, but dares not do anything about it for fear of upsetting the right wing of his own party.
The two administrations also share a disdain for independent advice beyond climate science. The US has ignored its own report on grid reliability, much in the same way that the Coalition has turned a deaf ear to the CSIRO, the networks, chief scientist Alan Finkel, the Australian Energy Market Operator, and AGL Energy.
Now they are both pushing for ways to boost the stocks of existing baseload, which in Australia means ageing coal generator, and in the US means both coal and nuclear. Their plans are remarkably similar.
The initiative by US energy secretary Rick Perry, famous for once vowing to close down the department he now heads, means coal and nuclear will be favoured over renewables and gas, and contradicts the DEO’s own study that showed no reliability issues from having more renewables.
As Romm reported at the time, the DoE study debunked Perry’s preconceptions about baseload, finding that recent sharp increase in renewable penetration doesn’t harm grid reliability or flexibility, but it did offer major benefits.
Combined with storage and electric vehicles, Romm noted, it actually offers a pathway to 100 per cent renewables.
The findings had been reinforced by Colette Honorable, a commissioner at the Federal Energy Regulatory Commission (FERC), who said the introduction of greater amounts of renewable energy has “absolutely not” harmed grid reliability.
“I have seen no problems with reliability,” she said. “Bring on more renewables.”
But Honorable no longer serves on FERC, and the Trump administration has appointed its own commissioners, most of whom are favourable to coal.
Those new commissioners are now being asked by Perry, as a matter of urgency, to design new rules to ensure that coal and nuclear plants, which can’t compete with wind and solar, or gas for that matter, do not suffer losses as a result and can continue operations.
“In the simplest terms, Perry wants to stop cheaper, cleaner renewables like solar and wind from shutting down more dirtier and more expensive plants like coal (and nuclear),” Romm wrote this week.
“This is an especially brazen move because Perry’s own grid study, the one he asked DOE staff for back in April, totally undercuts any rationale for such a move.”
(Perry has also doubled down on the US administration’s efforts to save “new nuclear”, adding another $US3.7 billion in loan guarantees to the last remaining new nuclear plant being built in the US, the Vogtle installation in Georgia).
Deutsche Bank raised its concerns about the initiative, saying it sounds like a de facto re-regulation of coal and nuclear in competitive markets – “a truly dramatic change to the status quo” if actually implemented.
“While the Administration’s focus on this issue has been no secret, the scope, timing and format of this proposal is much bolder than most in the industry have been expecting,” it said.
“This could be a major subsidy to competitive power companies with struggling coal and nuclear plants … and raises considerable existential questions for competitive power markets as we currently know them, with two out of the three primary fuels potentially getting a separate set of rules which presumably would have significant implications for future supply and demand balances.”
The Perry approach is little different to what is happening in Australia. Having disbanded the Climate Commission and ignored the Climate Change Authority (even after it was reformed with Coalition sympathisers), the Coalition took a similar line with its attempts to kill the renewable energy target.
Notably, it ignored the conclusion from a report commissioned by its hand-picked review committee that renewables would not force up prices (in contrast to the huge jumps since the Coalition repealed the carbon price).
Now, it is taking a similar stance with the Finkel Review and the reports by the Australian Energy Market Operator.
Despite their focus on flexible “dispatchable” generation, the Coalition has chosen to focus on “baseload coal”, and chosen to focus on trying to keep open the country’s oldest, least reliable and most costly generators and promise funding for a new coal generator that would unlikely be delivered for nearly a decade.
It has even sought to demonise the country’s biggest generator of coal-fired power, AGL Energy, for daring to want to shut down the ageing and decrepit Liddell coal-fired generator in NSW when it turns 50 in 2022.
Turnbull and energy minister Josh Frydenberg have been unable, or unwilling, to push through the clean energy target proposed by Finkel, and supported by virtually everyone bar the Far Right in politics and media, and the Minerals Council of Australia.
The problem is that however a CET is sliced or diced, it will still end up favouring renewables – because, if you accept climate science, you need to reduce emissions and wind and solar are easily the cheapest way to do that in the electricity sector.
The talk now, according to newspapers, is to change the whole thing and call it a “reliability target” – and re-engineer the proposal to one that is designed to favour baseload, and penalise wind and solar unless they act like a baseload generator.
This ignores the technology options from storage, smart software and a new approach to managing the grid, one that focuses as much on the demand side as it does on supply. And it ignores the principal of the generator reliability obligation already included in the Finkel recommendations.
“Baseload”, in the modern energy market, has become a defacto term for dumb and inflexible. The advice from the DoE, Finkel, AEMO and any number of analysts, investors, and operators could not make it any clearer. But vested interests have all the political power right now.
