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Energy Chaos in Australia: Closing the Liddell Power Station

Australia is having an energy crisis. A country with such abundant resources is incapable it seems, of handling matters of reliable supply, either in terms of affordability, or in terms of delivery. The situation has been further muddied by the inability of the parties in parliament to find common ground. The gloves are off, and there is blood in the chambers.

The blame game is being fanned with the enthusiasm of Tourette syndrome sufferers. The impoverished state of Australian political speak is evident in the use of various terms of derision. Labor frontbencher, Joel Fitzgibbon, has become “No coal Joel” to members of the government.

The leader of the opposition, Bill Shorten, has been labelled by the uninventive Prime Minister “Electricity Blackout Bill”. “There’s never been a more exciting time,” rues comedian Mark Humphries, “for crap nicknames.”

A political form of schizophrenia has developed towards the energy market, though it had already announced its arrival with the previous Prime Minister, Tony Abbott. Apparently leaving matters to the market, the religious bread and butter of the conservative coalition government, is not the way to go on this one.

This interventionist approach has manifested itself in two ways. Companies, like AGL, are battered (at first glance) into making business choices that favour the LNP’s policy agenda. Monsters like Adani are rewarded with subsidies to further mine a commodity that is fast reaching economic obsolescence.

The Turnbull government, in a state of numbing panic, has badgered AGL boss Andy Vesey who is intent on moving his company from coal generation to renewables. This would see the coal fired Liddell power station in New South Wales’ Hunter Valley closed.

In horror, the government is intent on treating the energy issue as an ideological one, though it has shaped it as a matter of necessity more for their survival than anything else. This necessity was borne, supposedly, by the assessment by the Australian Energy Market Operator (AEMO) that much of the east and southern coast of the country could face the prospect of intermittent blackouts this scorching summer. Just to add some zest to the forecast, the AEMO also suggested these might continue for many more summers.

Prime Minister Malcolm Turnbull and his colleagues, preferring to turn their minds away from the repeated comments by Vesey that the Liddell power station’s days were numbered, took the insistent route. Insist, for instance, that the station be sold to a third party rather than close. Insist that this agreement would enable the station to produce electricity for five years beyond 2022 so that it might make up for the possible 1000 megawatt shortfall in dispatchable base load power.

Coal, the Turnbull government has decided, cannot be factored out. Never mind what the penny counting banks say; or the somewhat unscrupulous energy companies themselves. Or the bleeding heart environmentalists and the cool calculating economists, the latter reminding the government that using coal for electricity is no longer viable.

As one of the doyens of the Australian science establishment, Alan Finkel, noted in his independent review of Australia’s national electricity market, wind and solar sources are proving more attractive, with coal losing its economic edge. Listening to members of the government coalition, and you might be tempted to think otherwise.

Caught in a dinosaur’s twilight zone, the Turnbull government has brought its knuckledusters to the political podium. The opposition Labor party has been clipped around the ears: Do you really want to be responsible for putting coal workers out of work in your electorate, No coal Joel?

The result of hectoring Vasey yielded a minor, if only distracting concession – 90 days, in fact – during which options to keep the station open, selling it, or finding a suitable market equivalent to ensure supply, will be considered. In the cocksure words of Energy Minister Josh Frydenberg, the outcomes would ensure that there would be no “adverse impact on consumers in terms of those price and reliability on the system.”

The bully of the show, in this case the prime minister, was less sure. AGL had not “articulated what [the plan] is, so we don’t know and, frankly, I don’t think they do either.” Naturally: having wished to close the plant and move off coal, the board was now being asked to revise, renege, and repudiate.

The Greens climate change spokesman Adam Bandt MP was unimpressed by the proceedings: Turnbull was simply delaying the sword of inevitability: “All the government has done has forced AGL to bring forward its planning for new renewables. AGL’s board will discuss what they were going to discuss anyway.”

Vesey’s own comments suggest that. “Short term, new development will continue to favour renewables supported by gas peaking. Longer term, we see this trend continuing with large scale battery deployment enhancing the value of renewable technology.”

Even after receiving a mock bruising from Turnbull, Vesey could still maintain the unflappable line on coal. “In this environment, we just don’t see new development of coal as economically rational, even before factoring in a carbon cost.”

Turnbull’s handiwork had not extracted everything government members had wanted.  Taking the truncheon to the energy companies has been fashionable of late down under, and the identifiable Vesey has certainly left his mark on members of the Coalition. “It appears,” claimed an accusing Craig Kelly MP, “AGL speaks with forked tongue.” Less forked, perhaps, than realistic.

 

Dr Binoy Kampmark is a senior lecturer in the School of Global, Urban and Social Studies, RMIT University. He was a Commonwealth Scholar at Selwyn College, University of Cambridge. He is a contributing editor to CounterPunch and can be followed on Twitter at @bkampmark.

 


28 comments

  1. Keith

    Privatisation of Energy producing sources has not helped with having a stable energy environment, we are now witnessing the outcome of those previous ideological decisions. Once power assets are sold governments have no control over the decision making of private companies. It seems that Mr Vesey has been polite and not told Turnbull to rack off, which he could legitimately do.

    From a climate change perspective the Finkel Report was extremely poor; but, from a political point of view it was very good. The Report allowed for saving of face for all politicians.

    Katherine Murphy gets it right in her Guardian article, the headline being … “Australia’s energy policy is a world-class failure and Abbott wears the gold medal of blame.” There has been a continuation of poor management since Abbott; the LNP have been in power for four years, enough time to have created a coherent policy. But, as per usual the fall back position is blame Labor. It would appear more appropriate to blame the extreme right of the LNP.

    South Australia gets flack in relation to the power towers being knocked to the ground by extreme winds, the source of power being immaterial; there are no murmers from the LNP after the same kind of events have happened in Eastern States. Which involves lying by omission.

    https://www.theguardian.com/environment/2017/mar/09/australias-energy-policy-is-a-world-class-failure-and-abbott-wears-the-gold-medal-of-blame?CMP=share_btn_fb

  2. Harquebus

    I am glad that energy is on the discussion table however, I think that it will be quite some time before physical realities are accepted and addressed.

    Something that I read recently.

    “The findings of this paper show that solar photovoltaic (PV) energy contributes no additional capacity to the grid at a penetration level of 6 percent or beyond. Indeed, additional solar above the threshold is actively harmful to the ability of operators to maintain the capacity of the grid because it undermines the economics of those energy sources that must continue to provide the capacity to meet peak demand.”
    “In the absence of effective storage capability, any subsidies, mandates, or incentives for solar penetration above a 5-percent threshold are actively harmful to the reliability and economics of the power grid.”
    http://instituteforenergyresearch.org/studies/solar-value-cliff-diminishing-value-solar-power/

  3. townsvilleblog

    If energy chaos is allowed to occur the fault can be sleeted back to this LNP government because they are aware that the power station is closing in 2022 so if they don’t either encourage investment in renewable energy to take its place or build something themselves they will be neglectful in their duty to keep the lights on.

  4. auntyuta

    Here is Vesey’s ‘unflappable’ line on coal:

    “In this environment, we just don’t see new development of coal as economically rational, even before factoring in a carbon cost.”

    I wonder, why the government wants to go for new development of coal? What is actually behind their unrealistic reasoning?

  5. Carol Taylor

    This of course is all very “clever” of Turnbull. Turnbull’s clear goal is to make energy companies the villain, so that his own government’s abject failure on energy policy is overlooked. This has zero to do with anything other than it being a case of: It’s not US, it’s THEM.

  6. Möbius Ecko

    Also a wedge against Labor Carol. This government, ever since the rise of Abbott, frames every tactic and plans every strategy as an attack on Labor. They never make a policy announcement, a speech, a presser or a comment anywhere without pointing the finger at Labor. To me it seems they spend more energy and capital on attacking Labor than they do on governing.

  7. Harquebus

    jimhaz
    Thanks for that. I also regularly read desmogblog.com.
    I tend to listen to the message before shooting the messenger. Did you find anything to be critical of besides the source?

    Something from today’s reading list.

    “But IER [Institute for Energy Research] also claims that the sense of urgency for climate action is due not to the science that shows the real and growing consequences of global warming. Rather, IER suggests that researchers “exacerbate the sense [that] policies are urgently needed” for monetary gain, noting that “issues that are perceived to be an imminent crisis can mean more funding.”
    IER has received funding from both ExxonMobil and the Koch brothers.
    http://www.ucsusa.org/global_warming/solutions/fight-misinformation/global-warming-skeptic.html

  8. Michael Taylor

    For a little while after Rudd’s 2007 victory I put my hand up to be the branch’s ‘quality control’ ninja for all ministerials that were being responded to that required the PM’s or a Minister’s signature. (Yes, it was boring as batshit).

    Whilst most responses were standard ‘pre-recorded’ waffle, there was one golden rule that had to be adhered to: do not denigrate or blame the former government for anything.

    (It reminded me of what I was told in 1986 when I was sent to Adelaide as State Manager of a finance company. The place was a mess and it was my job to fix it. My MD said “the mess isn’t your fault, but if it’s still a mess in 12 months time … then it is your fault).

    But I digress …

    Compare Rudd and Gillard to Abbott and Turnbull. The former set about the task of fixing the mess and taking ownership of it. The latter do nothing. From Day 1 the former blamed no one. For four years the latter are still blaming someone else.

  9. Kaye Lee

    The IER’s President was formerly Director of Public Relations Policy at Enron.

    They also got funding from the American Petroleum Institute among many other fossil fuel groups. I assume your continued linking to them is to show how completely they lack any credibility. The “scientists are in it for the money” excuse is as old as the hills and bloody ridiculous.

    I agree with jimhaz. If you are not going to be discerning about your sources then following your links is a waste of time.

  10. stephengb2014

    Great article,

    The Australian Energy Market Operator (AEMO) is a private organisation who have effective control over energy production in Australia. When I say a private organisation the government is a 60% share holder.
    When we look at the mission statement (yes I know) it is not so easy to see as a mission statement it just states it’s vision as “Energy Security for All Australians”, but I digress.

    As the 60% largest share holder the government has of course significant influance on this organisations direction, activities and of course its public statements, so when the AEMO comes out with the scary public pronouncement such as the forecast of power black outs in the coming summer and indeed for the forseeable future summers, I have to ask who is profiting by this announcment?
    It is not the energy companies, per chance?
    It is not the government, per chance?
    It is not the other share holders, per chance?

    Surely the energy companies dont want to scare the public into thinking that scarcity will mean (shock horror) higher prices (out of their control)!

    Surely the government would not be interested in scaring the public into thinking there is no alternative to relying on (yep you guessed it) coal, not gas, not oil, not battery storage, or heaven forbid, investment into better and greater renewables, just coal!

    The other shareholders? Well they are in the minority anyway it suits them if prices do escalate, no matter how its achieved!

    Yes I know, I am getting cynical, sorry

    S G B

  11. helvityni

    Was it Shakespeare who said; there’s something rotten in Denmark…? I would say: something has gone badly wrong in Australia, we have all that sun and plenty of wind too, yet we have not been able to make the solar energy our major source of electricity. Those ‘rotten’ Danes, and no doubt the Germans too, would have achieved that many many years ago….

    Our political parties don’t seem to achieve much, for them it’s a constant battle to get in and to stay in power…the citizens’ needs do not come into it…

    The ‘clean’ coal was a joke, and god only knows what’s going to happen with the Snowy scheme…it’s all too far in the distant future…

  12. diannaart

    Turncoat claims his energy plans are NOT about any ideology. Does planning to be re-elected, by whatever means, an ideology?

    Since Abbott, blaming Labor for anything and everything has become a visceral reaction by the conservatives/IPA. Is this the same pattern in other OECD countries? If so, then it is probably the last gasp from the fossil fuel industries playing out on the greed and fears of the far right.

    I have been wondering when an energy supplier would finally reject coal as an energy source and it turned out to be AGL – I guess they have people who can plan further ahead than 3 or 4 years.

    Will the LNP (probable) mantra of “cheap, reliable energy” fool enough of the voting public?

  13. Harquebus

    Kaye Lee
    “If you are not going to be discerning about your sources then following your links is a waste of time.”
    I see. It’s source and not substance that counts. I thought that the issue raised was worth consideration. My apologies for wasting your time.

    I keep forgetting, it’s only me that needs to learn. You have always known better. All these years of me harping on about energy and growth was because, I know nuffing. The likes of you and others have always known better and look where we are because of it.

    The energy, resource, environmental and economic problems that we are facing have not come as a surprise to me, unlike some and still, I get comments like that coming from you.

    “You are worse than a dripping tap H. To be so limited would drive me insane. To think that you know all there is to know and that there is no possible outcome except that which you foresee is not only incredibly arrogant, it stops you from learning and thinking.” — Kaye Lee

    Can you not see this in yourself?

  14. jimhaz

    Harquebus

    [I tend to listen to the message before shooting the messenger. Did you find anything to be critical of besides the source?]

    Nope. I turn off as soon as I know that group is involved. There is simply no point is reading their spin.

    BTW, I’m very very pessimistic about the future like you, but do not see energy as an unresolvable problem, thus do not concern myself with it. I’m very confident that we can produce renewable energy to replace what fossil fuels can provide.

    What I have little to no confidence about is the holistic picture of GW, population increases and resource availability – and so I am actually a supporter of your overall dire point of view. As GW progresses the resulting destruction and conflict may make energy into something that is a major problem – but it will not be because of technical limitations, but human failures such as greed, ignorance and fear. We’ll waste so much energy and resources killing each other. For example, I can see the US needing a wall due entirely to GW. Mexico’s productive areas will become desert.

    Technical limitations do apply to other resources such as the ability to produce decent food (not vat grown rubbish) and GW will make those limitations unresolvable without a significant decrease in world population.

    If I was young, I’d concern myself with energy production limitations only post our overcoming the GW problem and a reduction in world population.

    In some ways it would be good if you were right about energy limits – as efficient renewables will not force us to face the need to reduce the world population as early as something like peak oil with no replacement would. I really wish we were saving more of this oil for plastics as there will be zero land available for its production from plants.

  15. Rossleigh

    diannart, of course, he also claimed to be a STRONG leader. i guess this means that he considers his leadership on the Republican Movement, which he lost, and his leadership on climate change action, which he abandoned, are good examples of this.

    When it’s all said and done, isn’t everything about ideology? Wouldn’t the Amish consider the need to ensure cheap and reliable electricity an example of our strange ways? Ok, I’m not Amish and I get quite agitiated when the power goes off and I either freeze or swelter, but I don’t see how one can argue coal MUST be part of the mix, because coal is “good for humanity” and say that you’re agnostic on energy.

  16. diannaart

    @ H

    I do not seek white-supremacy blogs for information on peace. Nor do I seek pseudo-science blogs for peer reviewed science – I prefer proof.

    …and I also seek those scientists and other great researchers who can change their opinion as new information is re-evaluated or discovered.

  17. Rossleigh

    Oh, Harquebus, here’s something you might be interested in. It’s from a talk show host who believes that the Sandy Hook shooting was made up, but hey the source shouldn’t concern you.

    https://www.youtube.com/watch?v=pV09QWZPOVM

  18. diannaart

    @ Rossleigh

    I guess I am post-agnostic on Turnbull’s leadership abilities.

  19. paul walter

    All I know is that they have had ten or fifteen years, culminating in the disasters of last year, to get the bloody thing fixed and working.

    An entire winter has passed and still we are told that summer looms as a disaster repeat. How so?

  20. Harquebus

    jimhaz
    With the energy debate, we will see. Renewable powered civilization will be attempted. A last ditch attempt to power an economy dependent on growth. On the other issues that you raise, I believe that you are correct.

    Rossleigh
    I am very suspicious of the Sandy Hook shootings, 9/11 and the London and the Boston bombings and few other things. There are other skeptical sources besides Alex Jones. I also think JFK was accidentally shot by a secret service agent from the following car when the motorcade accelerated.
    Do you prefer the official conclusions?

  21. Glenn Barry

    Hmm – year 5 in power and still attacking Labor – has that good government commencement date been postponed indefinitely?

  22. guest

    Harquebus, clearly the source of your information has a bearing on the reliability of that information. It might in fact be misinformation. There are institutes etc which are paid to spread misinformation (which is of course one of the claims made by sceptics and deniers about scientists such as the IPCC).

    Earlier on this thread you mentioned the lack of “effective storage capacity” – which one of the things being investigated and implemented. Besides that, photovoltaic cells are not the only source of renewable energy. But the photovoltaic cells on roofs is now a giant electrical grid and it is changing the economy of power creation.

    As well, we should be careful to check any figures or statistics given by sceptics/deniers.

    Recently The Australian’s Graham Lloyd wrote a piece under the banner: “Hurricanes like Irma and Harvey are not caused by Climate Change.” (11/9/2017) Well, there have been hurricanes long before we started talking about Climate Change, but no one can say that Climate change must not have an effect on hurricanes- because Climate Change is part of the present climatic conditions.

    So what does Lloyd quote? “Surface temperatures where the hurricane formed was 26.5 degrees C, about 2 degrees C below what is considered necessary to build a major hurricane, climate scientist Judith Curry said.”

    Now Curry is one sceptic who says Climate Change is real, but it is not so bad. She questions how bad it is. She questions the details.So here, she claims 26.5 C is not enough, but 28.5 is about right for building hurricanes, she says; ie, what is “considered” enough. And who is it who “considers” 28.5 is enough and 26,5C is not? Why, Judith Curry, of course.

    So what did make these hurricanes so big? No real explanation. But Curry hopes she has created some doubt – enough for Lloyd to publish it without question and to dip-feed the sceptics/deniers who read his rag.

  23. Barry

    A Lib Tasmanian Government made overtures about privatising our state owned HEC. A few threatened political lynching’s changed their mind. If enough people are concerned enough to act up decisions can be changed

  24. Wun Farlung

    I was disappointed that Malfunction, Bananaby didn’t cite the good old reliable (ring the lobbyist alarm bell) ‘commercial in confidence’ to avoid answering some/most of the questions asked of them in the past few days.
    However they have remained true to form by blaming ALP

  25. Kronomex

    The photo – Turnbull praying for just ONE DAY WITHOUT A (pardon the language) F#CK UP.

    Harquebus, “I also think JFK was accidentally shot by a secret service agent from the following car when the motorcade accelerated.” How about some sort of evidence backing up your “suspicions”. I reckon Kennedy was shot by aliens using mono-filament controlled bullets while they were in their invisible rotating circular spaceship above the route. They were hired by the Mafia to put the hit on him.

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