Australia’s Renewable Energy Disaster: Self-Inflicted Power Crisis Goes from Bad to Execrable

Josh, they’ve worked it out. What’s your next bright idea?

 

As witless as they are gutless, the Federal Liberal/National Coalition government is tearing itself apart over energy.

In particular, renewable energy; and the choice between the existing annual 33,000 GWh Large-Scale RET – roughly 26% of annual consumption, which is already destroying businesses and punishing households with 20% year-on-year price increases (even though the annual target this year is a mere 26,000 GWh and doesn’t hit 33,000 until 2020) – and a 42% RET, which is the cornerstone of Alan Finkel’s fantasy of running Australia on sunshine, breezes and mythical grid-scale battery storage.

Conservatives within the Coalition, rallying behind their only hope, Angus Taylor, have finally tumbled to the fact that power prices matter; and that when power prices are exorbitant and rocketing, routine-load shedding and mass blackouts matter even more. This group have worked out that enough is enough, and have determined to not only kill off Finkel’s 42% RET, but to do whatever is necessary to bring Australia’s self-inflicted renewables disaster to an end.

Unfortunately, for the time being at least, Australia’s future is in the soft, clammy hands of the aloof and patrician, Malcolm Turnbull; with his youthful ward, Josh Frydenberg providing gormless comments from the sidelines which, every time he opens his mouth, reveal something more than heavily-practiced ineptitude. No wonder Australian businesses are beside themselves and, justifiably, bereft of all hope.

During the last month businesses saw their power costs triple, as retailers reset prices in long-term contracts, catching up with the fact that average wholesale prices for power have tripled in just on 2 years.

Now, industries (ie the businesses that produce stuff, create wealth and employ Australians) are pressing Turnbull & Co to grow up and stop pandering to lunatics from the green-left.

Until Australia harnesses its abundant reserves of uranium, like it or not, Australia will continue to generate the vast majority of its electricity using coal.

Coal is abundant in Australia, whereas, as a result of anti-fossil fuel campaigns and the anti-fracking crowd’s manipulation of state governments, domestic gas supplies are tighter than a drum, so gas is not only expensive but unavailable for power generation. Unless, of course, its being used in Open Cycle Gas Turbines to cash in on wind power output collapses (see our post here).

Hundreds of high efficiency, low emissions (HELE) coal-fired plant are planned, being built or commissioned across Asia, including 45 plants in Japan, alone.

Which simply highlights how ridiculous is the position that Australia now finds itself in: exporting high-grade, low-sulphur coal to fuel hundreds of plants across Asia, that will provide them with reliable, affordable and secure power for generations to come; generating jobs and prosperity, all within the bargain.

Australia’s power market calamity was totally unnecessary and totally avoidable. Whether or not it can dig itself out of a hole depends on what happens next. Here’s a couple of articles from The Australian spelling out the most obvious escape route.

Clean-coal cheaper option than renewables
The Australian
Geoff Chambers
3 July 2017

The construction of a new high-efficiency, low emissions coal-fired power station, being considered by the Turnbull government, would cost $2.2 billion — considerably less than the $3bn of subsidies handed out to renewable projects each year, a new technical study shows.

With Australians facing further hikes in their electricity and gas bills following moves by ­energy companies over the weekend to increase bills by up to 20 per cent, Malcolm Turnbull is under pressure to deliver relief for households, small businesses and manufacturers.

New analysis, compiled by power and energy sector specialists GHD and Solstice Development Services, reveals it would cost $2.2bn to build a 1000MW ultra-supercritical (USC) coal-power plant and that it would ­deliver the cheapest electricity on the market.

The HELE coal plant, which the Turnbull government has not ruled out funding, would produce electricity at $40-$78 per megawatt hour, compared with gas at $69-$115/MWh and solar at $90-$171. The 550-page technical study, commissioned by the Minerals Council of Australia and the COAL21 Fund, reveals that clean-coal plants would drive down energy­ prices, and offers the Prime Minister an economic blueprint on the viability of new coal-fired ­stations.

It comes just four months after it was revealed taxpayer subsidies to meet state and federal renewable energy ­targets reached $3bn in the 2015-16 financial year, with about 75 per cent of the cost being collected from consumers paying extra in their electricity bills.

The overall cost of subsidising ­renewable energy generation has nearly doubled since 2011, and the RET continues to be a political headache for the Turnbull government.

It is sticking to the 23.5 per cent target by 2020, despite calls by former prime minister Tony Abbott­, who was ­involved in ­establishing the RET, to freeze it at the current rate of 15 per cent — a move he says would dramatically lower power bills.

COAL21 chief executive Greg Evans, who is also an executive ­director of the Minerals Council, said the report showed that HELE coal plants, which would have “operating lives of several decades­”, were viable and affordable options to replace the ­nation’s ageing coal-fired power stations. “The report confirms that USC coal generation can deliver­ on the priorities of affordability, reliability and low emissions,” he said, adding that coal-fired generation remained the “cheapest and most reliable energy­ source in Australia, available 24 hours a day, every day”.

Mr Evans, whose COAL21 Fund has invested $300 million in low-emission coal technologies since 2006, said the report estim­ated the current construction cost of a modern HELE plant, or USC black-coal station, at $2.2m/MW, or $2.2bn for 1000MW capacity. “It (the report) notes electricity prices paid by manufacturers have doubled in the past decade and that USC coal is able to lower the cost of generation across the Nationa­l Electricity Market, given current wholesale electricity prices.”

The report stipulates that cost comparisons assume that the power plant’s revenue be “underwritten” in the form of a long-term government agreement covering the purchase of the output or ­capacity of the plant.

Industry chiefs and Coalition MPs concerned about the retirement of coal plants in NSW and Victoria have identified opportunities for new investment in coal plants, using low-emissions technology including viable carbon capture and storage options.

With up to 1200 HELE plants being planned or built in Asia, and similar technology anchoring electricity production in Japan and Germany, senior government MPs, including Mr Abbott, have backed investment in coal-fired energy. Mr Turnbull said last month his government remained open to using cleaner-coal technol­ogy to replace existing generators, in what he said would be a “long-term commitment”.

The Turnbull government has asked the Australian Energy Market Operator for advice on how to best ensure “new continuous dispatchable power is provided”.

Resources and Northern Australia Minister Matt Canavan has said cleaner coal-fired power station­s could potentially save up to 30 per cent in carbon emissions, as well as additional savings on ­operational costs. He has predicted the construction of a new coal-fired power plant would take “about three years”.

“They do cost a little bit more to build, but overall they come out at the same cost or cheaper than the older coal-fired power stations that we have right now,” he said.

He said investors in Asia and Australia were interested in selling cleaner-coal technology and some were open to the idea of “owning a station here”.

The government has adopted 49 of the 50 recommendations made in a review led by Chief Scientist Alan Finkel, aimed at deliveri­ng a blueprint for the future­ of the electricity market.

The Finkel report, which did not rule out new coal-fired power plants as being part of the nation’s energy mix, analysed how the government could work to secure energy supply, drive down prices and cut emissions. Dr Finkel’s final recommendation for a Clean Energy Target is expected to return to cabinet over the winter break, and to the partyroom, where conservative MPs have argued­ against new emissions regimes­.

In its analysis, GHD and Solstice Development Services provides details of how construction costs for a new HELE plant could be driven down by building it at “an existing power plant location”.

Mr Evans said the report showed such coal plants should “figure prominently in our electricity system, complementing and supporting other technol­ogies including renewables”.

“The report authors reviewed and costed different technology options that are capable of replacing retiring capacity. These were considered on their merit using a range of sources cross checked against published studies and their respective assumptions.”

The Minerals Council of Australia says the nation faces an energ­y shortfall, with 8GW of coal plants to retire by 2030, and a total of 25GW by 2040, and that if all existing plants in Australia were upgraded to modern HELE technology, it would reduce emissions by 45 million tonnes a year.

“It (the report) concludes that the imminent retirement of coal plants in NSW and Victoria provides opportunities for constructing and replacing them with USC plants by the early 2020s. Addit­ional capacity may also be required in Queensland,” he said.
The Australian

Reliable & cheap, H-E-L-E spells V-O-T-E-S.

 

That Matt Canavan is championing the construction of HELE coal-fired plant in Queensland is hardly surprising. Queensland not only produces energy – using its abundant coal reserves – its mining and mineral processing businesses, among other industries, use mountains of it.

However, the ambitious young Canavan has yet to grasp the reason why such plant are not on the drawing board, already; or, if he has, his silence is deafening. [Note to Matt: stop worrying about upsetting Turnbull and Frydenberg, and start worrying about what Pauline Hanson’s One Nation is going to do to your LNP in rural and regional Queensland]

Irrespective of how efficient conventional generators are, for so long as the Large-Scale RET (or any such equivalent) remains in place, their ability to dispatch electricity to the grid and, therefore, to earn revenue is increasingly dictated by the weather.

In South Australia, Australia’s so-called ‘wind power capital’ the fortunes of conventional generators are entirely determined by the wind; how fast it blows – whether it blows too fast, too slow, or blows at all.

When the wind blows for a few hours at a stretch in SA, its last remaining base-load plant (AGL’s Torrens Island 1,280MW gas-steam plant) is unable to dispatch power to the grid and, accordingly, receives no revenue; but continues to incur fuel, maintenance, wage and other costs. It’s that combination that destroyed the profitability of South Australia’s last coal-fired power plant at Port Augusta and helped to destroy the viability of Victoria’s Hazelwood plant. These pictures (care of Aneroid Energy) tell the story:

The subsidies paid in the form of Renewable Energy Certificates (aka LGCs) enable wind power outfits to flood the market, either giving away power or even paying the grid manager to take it, leading to the perverse outcome depicted above, for the reasons explained in this post: Turnbull’s Reliable Power Play: Australian PM Pushes Coal-Fired Future

The Australian’s Graham Lloyd picks up on the very same point in the piece below.

Political courage needed on coal
The Australian
Graham Lloyd
3 July 2017

The fast money will back wind, solar and batteries, but political courage and government money will be needed to get new-generation coal plants across the line.

High-efficiency, lower-emissions coal has put forward its best financial case, sweetened with the promise of 24/7 reliable power. The industry places itself at the lowest end of the price curve, much less than wind, solar and gas, and a tiny fraction of renewables with battery storage.

To get there, the modelling assumes the government agrees to buy all the power produced.

To become a reality in Australia, however, HELE coal faces significant hurdles. It will require strong political will and lenders prepared to back it for decades in a changing market.

HELE coal must win public acceptance as a low-emissions solution, even though it is much higher than the other options. Resource industry modelling suggests that, with carbon capture and storage, HELE is still competitive on price but international sentiment is turning against the economics of CCS.

Ideologically driven lobby groups and climate-change activists are unlikely ever to buy the HELE coal case. The mainstream may be persuaded. But lenders will weigh the risk both of reputational damage of being involved and the high financing risk that comes with such a long-term investment.

Even if the argument can be won on emissions-reduction potential, strong government backing will be needed.

The positive case is that HELE is a proven technology with thousands of plants being built around the world. If the numbers are correct, HELE coal represents a pathway to stable power supplies and eventually lower prices. But, for HELE to work, the big challenge will be to find a way to guarantee that new plants can sell nearly all the power they generate.

Coal plants are closing because they are being undercut by renewables with no fuel costs and generous subsidies.

There are several options, all requiring strong government support: renewable subsidies can be scrapped to level the field; the Finkel report recommendation that renewable power sources find partners to guarantee they can supply “dispatchable” power can be used to underwrite new coal; or the government can enter “take or pay” contracts with developers to effectively take over the risk, as happened before privatisation.

It is a big risk. Over several decades, the potential is that technology will find a better, cheaper way to achieve stable power with lower emissions. All eyes are on cheaper solar and batteries, more gas, bigger hydro and advances in network management.

But many are still puzzled that nuclear has effectively been taken off the table in Australia.

The Herculean political challenge for nuclear would be equal-to-lower-emissions coal but the payoff would be baseload power with no CO2 emissions at all.
The Australian

The answer my friend, ain’t blowin’ in the wind.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. estherfonc says:

    Hi,

    Here’s the link to the Petition on the Federal Government website for Australia to Withdraw from The Paris Climate Agreement.

    Please Sign it by clicking on the link below and please also share it with everyone you know. There are only 1497 signatures to date, so it needs to move FAST !

    Closing date for petition is 19/7/17.

    http://www.aph.gov.au/Parliamentary_Business/Petitions/House_of_Representatives_Petitions/Petitions_General/Sign_an_e-petition?id=EN0264

    Thankyou.

    Esther

  2. Here is my new eBook on the wind farm corruption and fraud perpetrated in New Zealand. A ton of evidence is cited. This eBook will help anyone facing an inappropriate development as it shows what can be done to counter criminality. As I write the NZ government is doing all it can to suppress this scam. I would be happy for this to be a separate post on stopthesethings.

    • Since the link I posted for some reason did not work just go to Amazon.com and search for “New Zealand corruption” The book is a Kindle publication. “The People’s Wind Farm, Turitea New Zealand, Corruption and Fraud, The Untold Story”

  3. “Now, industries (ie the businesses that produce stuff, create wealth and employ Australians) are pressing Turnbull & Co to grow up and stop pandering to lunatics from the green-left.”

    Too little, too late! The Australian population has been hoodwinked en masse to believe climate change is a major issue and that it is essential to proceed on the anti-fossil fuel path. Turnbull and his incumbent supporters in the Liberal party have not only supported this narrative; they’ve been champions of the cause. And this has been with the full support of industry leaders in the past!

    Any change in energy policy will not succeed without the removal of the standard bearers first and foremost. And yes, that includes Turnbull, Abbott and many of the previously vocal industry CEO’s who supported the policy too. Limiting the RET to 15% is like putting a Band-Aid on a decapitation. Any further discussion or suggested recommendations about options is moot. The two articles from “The Australian” might be supportive of a view, but they are submissively apologetic as they appeal for consideration to coal and nuclear options. If this is indicative of the pace of change in political consideration, then it’ll be decades before a decision is reached on new, reliable electricity production methods.

    IMO, businesses should be pulling all support for the Lib/Nat coalition and throwing their weight behind the political party or parties that openly and loudly support cheap, reliable and sustainable electricity supply. There isn’t time to be politically correct and diplomatic on the subject. The businesses will be out of business by the time their diplomatically expressed political recommendations elicit policy change.

    But the major hurdle is the ABC. It controls the media narrative on the subject. This is why I am convinced the pain will only continue. Like an alcoholic who must reach rock bottom before he stops blaming others and admits that the problem emanates from within before he can start on the road to recovery, I see the nation on a similar downhill slide of addiction and denial of responsibility.

  4. songhees says:

    My latest books and documentary.
    ‘The Deliberate Corruption of Climate Science’.
    My latest documentary and video of my presentation.

    My website is
    The Trans-mountain Pipeline will add 3/10,000 of 1% CO2 to the atmosphere.
    Besides, CO2 is not a pollutant.
    “Human Caused Global Warming”, ‘The Biggest Deception in History’.


    http://www.drtimball.com

  5. swan101 says:

    Reblogged this on UPPER SONACHAN WIND FARM and commented:
    Watch out UK, EU and everywhere else – the clear message is that wind power is economically unsustainable and environmentally disastrous. Negative health impacts for humans and animals are only just emerging into the ‘light’ & understanding of the public having been buried/denied by the industry since its inception.

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