It was Albert Einstein that forecast the Australian approach to energy policy when he defined insanity as: “doing the same thing over and over again and expecting different results.”
Queensland’s capital, Brisbane is barely 1,600 km and 2 hours, 20 minutes flying time from Adelaide, but it appears that the news from South Australia has yet to reach the Sunshine State. Notwithstanding the self-inflicted power pricing and supply calamity unfolding in SA, Queensland’s Labor government has just determined to follow suit.
Last week, Queensland’s energy Minister, Mark Bailey announced that his government is in bitter earnest in its blind pursuit of a 50% RET by 2030.
Bailey, a former drama teacher (oh, yes! a drama teacher, no less), must think South Australia is an aberration. However, luckily for Queenslanders there are still one or two banana benders with their feet placed firmly on terra firma.
Stanwell Corporation, which provides Queenslanders with an affordable and reliable electricity supply, has set the ball rolling by attacking the sheer lunacy of what Premier, Annastacia Palaszczuk, Bailey & Co have in store for Queensland, as did EnergyAustralia.
Former Labor Treasurer, Keith DeLacy also chimed in with his observation that the only thing Queensland would achieve by following South Australia’s lead is social and economic disaster.
‘High-cost’ hit from renewables, warns generator
Annabel Hepworth & Sarah Elks
18 October 2016
Annastacia Palaszczuk’s ambitious 50 per cent renewables energy target has been undercut by Queensland’s largest government-owned power generator, which has warned Australia is moving from being one of the lowest-cost electricity nations to one of the highest.
In a submission to a landmark review into electricity security, the Queensland government-owned Stanwell Corporation said renewable energy policies had “emphasised ‘energy’, while neglecting to value other electricity market services which are required to maintain a secure and reliable electricity supply”.
“This has led to the weak system and instability problems in South Australia,” Stanwell said, while also ringing the alarm about energy affordability. “It is disappointing that Australia has moved from one of the lowest-cost electricity nations to one of the highest cost, to the detriment of Australian industry and economic growth.”
The comments, which are focused on the national energy market and do not single out Queensland, have reignited debate over renewable targets and are significant as the Queensland Premier pursues a 50 per cent renewables target by 2030.
Former Queensland Labor treasurer Keith DeLacy warned last night that high renewable energy could send energy-intensive industries offshore, which would mostly have an impact on those on lower incomes. “There is no place for hi-vis shirts in a high-renewable energy state,” he told The Australian. “All manufacturing jobs will be gone, exported offshore to all those countries who are more interested in growing the economy and providing electricity than they are in saving the world.”
EnergyAustralia chairman Graham Bradley backed Stanwell’s warning about energy affordability as “dead right”. “We have had the cheapest electricity due to abundance of coal, mine-mouth power stations in proximity to our cities,” Mr Bradley said. “That has given us a competitive power price advantage over probably 40 years. We’ve had an ideally balanced east coast electricity supply situation. That is no longer the case … As we move towards more renewables, we are by definition reducing our comparative competitive advantage.”
Stanwell operates 40 per cent of Queensland’s coal-fired generation capacity.
Energy Minister Josh Frydenberg said last night that, as Australia shifted to a lower-emissions future, “the means and the method for getting there is vitally important”. “That is why the government is urging the states to harmonise their renewable energy targets with the federal government, because a number of Labor states have been driven by ideology which is putting pressure on the affordability and reliability of the system,” he said. “If we don’t address the challenges posed by intermittent generation there is an increased chance of blackouts.”
State Energy Minister Mark Bailey said the state was taking a “planned and sustainable” approach to renewable energy, adding an expert panel’s draft report “clearly states that Queensland can maintain security and reliability with increasing levels of renewable energy in the market”.
The warning from Stanwell comes as hundreds of millions of dollars in annual dividends to the cash-strapped Queensland government will be put at risk by its renewables target. Last week, an expert panel’s draft report predicted that the state’s coal-fired power generators would be hit by a drop in revenue of up to $1.1bn by 2030, while being broadly cost neutral, as renewables proliferated. In 2015-16, generators Stanwell and CS Energy paid dividends to shareholders of $311.6m and $13.8m respectively. It was CS Energy’s first dividend payment in seven years.
The expert panel recommended Treasurer Curtis Pitt and Mr Bailey consider the hit. Mr Bailey said the “potential impact on dividends will be further considered by government once we receive the final report from the expert panel at the end of the year”.
Former Labor lord mayor of Brisbane and CS Energy chairman Jim Soorley said the panel’s modelling suggested there would be “some implications” for business. “They’re the government’s figures, so if they’re suggesting there would be a decline in revenue, there will be some implications for the business,” Mr Soorley said.
Opposition Leader Tim Nicholls said the government’s “headlong rush to renewables” was threatening the revenue-earning potential of the government-owned companies.
“The Labor target would have a catastrophic impact because any further impact on coal generators’ profitability would inevitably drive down payments to the government via dividends and tax-equivalent payments,” Mr Nicholls said.
Internationally, debate about green energy costs is raging. Free-market think tank the Institute of Public Affairs Australia seized on developments in wind-rich Germany, where consumers will have to pay an 8 per cent higher renewables surcharge next year.
Stanwell’s comments were made to the energy market tsar, which is reviewing the rules for system security in the national electricity market as renewables proliferate.
The “inertia” of the electricity system determines whether it can withstand big frequency changes when a generator or transmission line goes down or heavy industry sheds load.
Conventional coal, gas and hydro generators, which have large spinning generators, provide inertia as they are synchronised to the frequency of the system and have a role in keeping that consistent. Wind and rooftop solar are not synchronised.
Last night, a Stanwell spokesman said the submission focused on “ensuring the security and reliability of the national electricity market as a whole rather than state based jurisdictions”.
“Stanwell supports Minister Bailey’s and the COAG energy council’s recent assertions and goals that continued system reliability is paramount in Queensland,” the spokesman said.
Last month storms plunged South Australia into darkness in an event that sharpened the focus on energy security and sparked debate over the speed at which states are shifting to renewables.
Could there be any clearer example of the so-called “workers party” abandoning the working class that created it?
Once upon a time, the Australian Labor Party explicitly represented blue-collar workers; and, to make sure that they had work to do, openly supported the industries in which they operated.
Indeed, the ALP was born out of a shearers’ strike at Barcaldine in Queensland in 1891, where shearers were pushing for better wages and conditions.
These days, however, modern Labor apparatchiks seem wedded to pandering to an inner-city, lunatic fringe, who haven’t the faintest clue about electricity generation (or much else, for that matter).
Instead of gunning for the rights of workers (and, more importantly, the right of workers to have gainful employment) clowns like Mark Bailey and his boss Annastacia Palaszczuk appear obsessed with destroying the jobs, income and wealth of Queenslanders, across the board.
It’s little wonder then that Queenslanders are preparing to punish Labor at the next election, with the big winner predicted to be Pauline Hanson’s One Nation party.
As South Australia’s vapid Premier, Jay Weatherill has learned to his great political cost, economies don’t run on sunshine and breezes.
While there might be plenty of people in ‘favour’ of renewable energy, no one wants to pay for it. And fewer still are keen to sit freezing (or boiling) in the dark. Just ask a South Australian.