Turnbull has often shown poor judgement in politics, but his decision, or the decision that is being thrust upon him, to attack Labor over energy policy and renewables is downright crazy.
According to the Coalition, our looming energy crisis is the fault of Blackout Bill, No Coal Joel, Labor state governments, gas companies, electricity retailers, the decision to close dirty old coal-fired power stations, and, of course, those evil renewables – anyone but them.
Tony Abbott told us we have to get over “Labor’s climate obsessions” saying, after he had saved us from the carbon tax, it would be “unconscionable to go further down this renewable path.”
But an examination of the future energy outlook just before the coal lovers took over the reins of government was very different.
Australian Energy Market Operator (AEMO) Electricity Statement of Opportunities (ESOO) – August 2013:
“Reduced growth in energy use across the National Electricity Market (NEM) compared to 2012, rising domestic rooftop photovoltaic (PV) generation, increasing consumer response to recent growth in electricity prices, and the development of new large-scale renewable generation is expected to defer new thermal electricity generation investment. These changes result in all regions except Queensland having adequate generation capacity over the 10-year outlook period.
The NEM generation fleet continues to evolve in response to government renewable energy policies. For example, the Large-scale Renewable Energy Target (LRET) continues to drive the entry of renewable generation capacity. Currently, almost 30,000 MW of publicly-announced new generation capacity is on the investment horizon”
They did, however, ring a small warning bell:
“Any changes resulting from the forthcoming 2013 Federal Government election may also impact current energy policy settings and investment drivers. Potential changes may impact the future mix of generation projects, either through changed incentives for withdrawing existing plant, or a reassessment of the timing and/or technology of proposed future projects.”
The Energy Update from AEMO a year later in August 2014, after two years of carbon pricing, was still optimistic.
“For the first time in the history of the NEM, no new generation capacity is needed over the next decade to maintain supply reliability, due to the continuing decline in electricity consumption.
The ESOO estimates there may be up to 8,950 MW of surplus generation capacity in the NEM in 2014-15, with around 90% located in New South Wales, Queensland, and Victoria.
The oversupply of generation capacity in the NEM follows continuing reductions in electricity consumption driven by a decline in energy-intensive industries, including the closure of Victoria’s Point Henry aluminium smelter, and strong growth in energy efficiency savings and rooftop PV generation in Queensland and Victoria.
“The magnitude of the oversupply is such that even if we saw 10 consecutive years of consumption growth, by 2023-24 more than 4,500 MW of generation capacity could still be withdrawn from the NEM without affecting supply adequacy,” said AEMO Group Manager Planning Louis Tirpcou.”
And then Tony Abbott “axed the tax”, abandoned the bipartisan support for the RET and the solar roofs program that he took to the election, started his jihad on wind power, and told us that coal was the future.
And, in so doing, sent the NEM to hell in a handbasket.
AEMO’s 2017 Electricity Statement of Opportunities (ESOO) modelling shows reserves have reduced to the extent that there is a heightened risk of significant unserved energy (USE) over the next 10 years, compared with recent levels. The projected USE risks increase if maximum demands are higher than forecast (for example due to higher usage and/or lower than projected uptake of energy efficiency measures or rooftop PV). The projected USE risk decreases if the modelling assumes increased investment in renewable generation.”
Whilst the early closure of Hazelwood in March this year did have an impact, it only had a 1,600 MW capacity which, according to the market report in 2014, we should have been easily able to absorb. The station was listed as the least carbon efficient power station in the OECD in a 2005 report by WWF Australia, making it one of the most polluting power stations in the world, and, according to its owner, no longer economic to operate.
“Engie in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation,” said Engie Australia chief executive Alex Keiss. “Given current and forecast market conditions, that level of investment cannot be justified.”
“The closure of Hazelwood is in line with ENGIE’s strategy to gradually end its coal activities,” the company said in a statement. “This is laid out in the Group’s transformation plan that aims at concentrating solely on low-carbon projects for power generation, renewable energy and natural gas.”
As for energy prices, the Australian Energy Market Commission’s (AEMC) 2016 Residential Electricity Price Trends report said, over the next two years, Victorians are anticipated to receive the cheapest electricity bills and South Australia can expect decreases as more wind power comes on line.
Customers in the Northern Territory, where 90% of energy is currently supplied by natural gas, are expected to face average bills $670 higher than those paid by Victorians and $176 higher than South Australians.
In the NT, prices are set by the territory government and are “less than the cost of supply” but still second highest in the country. One of their big problems is the very low take-up of solar energy. Only 11 per cent of NT homes have solar cells on their roofs, probably due to the high number of renters, and the large proportion of public housing in the jurisdiction.
Last week, head of BHP’s Australian operations, Mike Henry, used an address to an Australia-Israel Chamber of Commerce lunch in Melbourne to renew its call for a Clean Energy Target.
The evidence supporting renewables is overwhelming. As is the evidence of the positive effect that carbon pricing and a clear renewable policy had on affordability, reliability and sustainability.
Tony Abbott has been using climate and energy policy for his own cynical political opportunism for a decade and his selfish wrecking must be stopped.
But unfortunately, Paul Keating’s assessment of Malcolm Turnbull when he first put his hand up (unsuccessfully) for the party leadership in 2007 has proven astute:
“I fancy Malcolm is like the big red bunger. You light him up, there’s a bit of a fizz, but then nothing, nothing.”
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