Australia’s Rocketing Prices & Looming Summer Blackouts Ensure Coal-Fired Power has a Long Way to Run

What keeps the lights on and the economy humming.

 

Reports of the ‘death of coal’ have been greatly exaggerated.

Around 80% of Australia’s electricity comes from coal-fired plant; with most of the balance from gas and hydro, in that order.

No amount of statistical finessing from the wind and solar industries can budge their presently risible contributions to Australia’s power needs above more than a few percent of demand.

Sure, the wind industry, its parasites and spuikers will continue to talk about planned (but stalled) projects worth hundreds of millions of dollars each, and the billions of dollars’ worth of turbines and panels that have already been speared and splayed across the country (all thanks to power consumer and taxpayer subsidies, of course).

However, Australia’s beleaguered power consumers aren’t really interested in that end of the equation.

What they want is power: as and when they need it, rather than when the wind is blowing or the sun is shining; and at a price that every one of them can afford.

As presently configured, the only contributor to Australia’s power market that has the ability to meet those, quite reasonable, demands is Australia’s coal-fired fleet.

Here’s The Australian’s Janet Albrechtsen reporting on what really powers Australia.

Coal loses as Pearson leaves Minerals Council
The Australian
Janet Albrechtsen
4 October 2017

Sensible voice for coal lost as green activists unnerve and industry giant

We lost a valuable voice last week when Brendan Pearson was effectively shoved out of his job as boss of the Minerals Council of Australia by those who prefer feel-good corporate bromides and green myths over energy facts and figures.

Those with Australia’s best interests at heart and who know Pearson understand that there isn’t a surplus of sensible voices on energy such that we can afford to lose this one. Those who don’t know him ought to know he has worked tirelessly so that coal, a critical source of baseload power, is now part of a wider national debate about getting energy policy right.

Since taking over the Minerals Council’s reins in late 2013, Pearson has transformed a moribund conversation about energy into one that is evidence-based and devoid of emotion and ideology.

Pearson’s role in public debate means that more people understand that coal-fired baseload power is the key to our living standards and the competitiveness of our businesses, that coal provides about 80 per cent of electricity usage on Australia’s east coast every day of the week, and that coal power covers us when the sun doesn’t shine and when the wind doesn’t blow

Day in and day out, Pearson has confronted green emotion with cold, hard facts and figures.

He has gathered evidence from local and international bodies and injected it into policy formulations. He has pointed to the fact high-efficiency, low-emissions coal generation is being used in China and India, where it is the cheapest available energy option.

The same is true of Japan, where the government is building 45 more HELE coal-fired plants. Even the “poster person of renewable energy, Germany” is embracing new HELE units, as Pearson wrote earlier this year.

“How is it that these plants are the lowest cost option in dozens of coal-importing nations but not in Australia, which is the biggest exporter of high-quality coal in the world?” Pearson asked.

Malcolm Turnbull’s January statement that clean coal was needed to ensure baseload power because gas was too expensive and renewables were too intermittent was far from inevitable.

As Andrew Michelmore, a former director and chairman of the Minerals Council, tells The Australian, “Energy policy was all going in the wrong direction in terms of misinformation” until Pearson’s strong advocacy, based on what is happening in the rest of the world, and working with ministers behind the scenes to settle on an energy policy based on the national interest.

“That certainly influenced the government’s position and the Prime Minister’s position,” Michelmore says.

That influence has been snuffed out — Pearson departs next week — because BHP Billiton, a powerful member of the industry group, has adopted green politics in a way that works against Australia’s national interest in having secure, stable and cheap energy.

Earlier this month, an activist group called the Australasian Centre for Corporate Responsibility put forward a shareholder resolution to BHP asking the Big Australian to reconsider its membership of the Minerals Council. BHP has not abandoned the industry body yet, but has caved in by agreeing publish its differ­ences with the Minerals Council.

That wedge is the end of consensus-driven energy policy based on Australia’s national interest. BHP’s craven capitulation will embolden more activists to pick off other companies too, preventing industry consensus around sensible policy in the national interest.

As Michelmore says of these green activist groups: “They will go and find others, they will use BHP as an example. They will demand that others do the same.”

Writing in The Australian Financial Review in the lead-up to Pearson’s ouster from the Minerals Council, Matthew Stevens noted that “even people inside the council have decided that (the Council) is an evangelist for the past” and “this is no time for the MCA to entrench a reputation as a father of lost causes”.

BHP and green activists must have loved reading that baloney.

Pearson’s “problem”, says one industry insider, is that “he understands coal”, and that jars with the current crop of faith-driven green corporates.

Another industry insider tells The Australian that BHP didn’t like Pearson stating the bleeding obvious: that ill-conceived energy policy leads to “energy poverty”.

It’s a neat reminder of the deep disconnect between corporate bigwigs on multi-million-dollar salaries and Australians struggling to pay their power bills. Pearson also dared to challenge the quick fix of “certainty” that BHP wants by accepting the Finkel review holus bolus. He sought real reform of energy policy in the national interest.

In June, Pearson wrote that the Finkel review, which describes itself as a “once-in-a-generation” opportunity to develop a reliable, low-emissions energy system, studiously ignored the only zero-emissions baseload power source: nuclear power.

Moreover, Finkel’s report implies that HELE coal generation doesn’t qualify as “clean energy”. That may suit BHP’s green agenda but it doesn’t serve the nation’s need for reliable energy.

When the Big Australian is uncomfortable with an industry group boss who presents the facts about coal, you have to ask whether its corporate executives have forsaken both the national interest and shareholder value for feel-good green agendas.

It’s a virus that infects plenty of modern corporations, which, pushed by a few noisy activists, search for some illusory holy grail of stakeholder and community support, only to sacrifice shareholder value.

One industry heavyweight points to BHP’s recent “Think Big” advertisement that draws on the “seven ordinary men” who gathered on a small parched plot in Broken Hill 130 years ago to create the company.

“These men who founded BHP, like those who ran BHP in the 1930s, 40s and 50s, understood the national interest, could see the corporate interest, and were prepared to give and take, and to build what is now one of the world’s great companies and the world’s biggest minerals house,” he says.

This chap, who has also had a role in directing a fact-based energy debate, poses this question: “Do you clowns running BHP company today think that in 50 years somebody will have you in that picture?”

With Pearson’s voice snuffed out, who replaces him matters to this country. While BHP will want someone who parrots its internal green belief system by going quiet on the facts about coal, Michelmore says we need someone who has Australia’s interests for the long term locked in to their heart.

“We have to look at why is Australia, with (its) unbelievable energy-to-population ratio in the ground, has electricity costs double what they are in the US and 60 per cent higher than what they are in Canada.

“This is crazy. It should be the other way around. This has happened in the last 10 years … and it’s only going to get worse. Why are we going the wrong way?”

The former chemical engineer with a long career at resource companies suggests three possible replacements, all former resources ministers who understood what was at stake, though they were stifled by their respective parties in government: Liberal Ian Macfarlane and Labor’s Martin Ferguson and Gary Gray.

“They put Australia first, second and third. You need someone of that ilk, credibility and background to pick up these positions,” Michelmore says.

But given BHP’s strongarm tactics that precipitated Pearson’s early departure, you’d have to be a mug to put your hand up. The losers from this debacle are Australians who deserve cheap, reliable and stable energy in a country rich in precisely that.
The Australian

Macfarlane & Hunt: the wind industry’s best mates.

 

A pretty solid effort from Janet Albrechtson, a journo more skilled as a political commentator than energy expert. But, at least she’s trying to tackle the most critical policy issue in this country.

Where Janet goes completely off the rails, is her suggestion of slotting Ian ‘Macca’ Macfarlane into the position which BHP drove Brendan Pearson from.

Macfarlane is well-known for his mercenary traits and, therefore, likely to play any tune he’s paid for. However, while he was Minister for Industry and Energy in the Abbott government, he ran a very solid line of interference for his wind industry mates at Infigen.

While then PM, Tony Abbott was looking to scrap the Large-Scale RET, outright, Macfarlane blocked him at every turn; teaming up with the Environment Minister, Greg Hunt to ensure that the LRET was trimmed rather than axed, precisely as his wind industry buddies demanded.

On his past form, STT wouldn’t trust him anywhere near energy. As they say, a leopard’s spots might fade some, but they never entirely disappear.

The suggestion of putting either Labor’s Martin Ferguson or Gary Gray in charge of the Minerals Council makes a whole lot more sense. Ferguson has long been a champion of Australia’s miners and mineral processors; and has consistently hammered the insane cost of Australia’s renewable energy policies. On his past form, Gary Gray is pretty much in the same camp.

The Chinese character for crisis and opportunity is one and the same.

Australia’s energy crisis has thrown up an opportunity to thrash those responsible for the greatest public policy fiasco in our history. One of them was Ian Macfarlane.

It’s also thrown up an opportunity to take an axe to those policies, and put Australia back on track with reliable, secure and affordable electricity.

In the meantime, Australia will keep chugging merrily away on coal. BHP should bank on it.

BHP’s coal powers it, but this one’s in China…

About stopthesethings

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

Comments

  1. Crispin Trist says:

    Wait a minute.

    Energy blackouts during a heatwave when the sun is shining?

    Isn’t that when solar is supposed to be working at its best?

    Yet another con job.

    Build HELE.

    Nuclear too if CO2 is the problem ‘they’ say it is. With gas and hydro to vary the load. Biomass could also play a part.

    But there is another form of energy generation that could perhaps be included and is predictable to a degree.

    Tidal.

    Just stop building bigger and bigger sonic torture devices. They do not help. They just destroy any community, grid or environment that they are built in.

    NO to Wind FARMAGGEDON!

  2. As I think it was Alan Moran who mentioned recently that the actions of the current BHPB board makes one ashamed to be a shareholder in the big but shrinking Australian. Whether the BHPB board truly believes its own PC incantations who can say. Maybe the board of this once great company subscribes to the view that the Green monster will eat it last if only it loudly recites the litany of the Green religion. Not so, to the ideologically besotted Greens, BHPB’s coal exports are the equivalent of alarmist, former NASA scientist James Hansen’s coal, death trains.
    BHPB must learn, like Tony Abbott has, that walking on egg shells only makes you an even more defenceless target for the screaming, irrational abuse of the Green/Left media. By becoming a Quisling to the Green/Left anti-coal putsch, BHPB has done a grave disservice to the resources industry, to its own shareholders and to the Australian people in general. BHPB’s failure to argue for rational energy policy makes it easier for the dark Green forces to divide and conquer.

    • Agreed. Abbott worked out the need to slay the dragon, but too late as PM. Now he has to rally as many troops as possible before they get flogged at the next election.

      • John McKerral says:

        Are you aware that we live in a democracy and how a democracy works. Tony was not a dictator able to arrange things to his liking at the drop of a hat. He had to have the party on side and then faced a hostile senate.
        You are hard on him for no good reason. I am sure if he had support he could have done much good on this front and I really dislike all of the criticism of him just because he is working within the system as is his only option. The papers are full of such drivel.
        I really don’t know why you are against him? His speech at the GWPF was great. He sees what needs to be done but cannot do it alone.
        John

      • If you think this country is a true democracy, you are kidding yourself. Explain how democratic process gave us Malcolm Turnbull in September 2015?

        And if you want to engage in democratic debate with us, we suggest you read carefully what we wrote. Then point out how STT was hard on Tony Abbott. You will struggle. Our criticism was directed at Hunt and Macfarlane. But now that you mention it, Abbott could have made the same speech when he was PM, but he didn’t, and that had nothing to do with the composition of the senate.

  3. Terry Conn says:

    What we want is power as and when we need it – spot on STT, today, however, Turnbull is spruiking Audrey Zibelman’s philosophy ie stop demanding power as and when you need it, but when the wind blows and the sun shines – time to bring back the kangaroo court and string these idiots up.

    • Terry, if this was the USSR of old or North Korea we would all be corralled into the town square to cheer and applaud with tears of joy spiĺling from our eyes. Thankful that we hadn’t been shunted off to a gulag.

      The good denizens of NSW and Victoria haven’t enjoyed SA style blackouts and load shedding yet, but they will. When they do, expect Zibelman to flee back to New York. The reckoning comes when Sydneysiders and Melbournians are boiling in the dark. Their smugness and indifference will soon melt away and turn to anger.

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