Australia’s power pricing and supply calamity was entirely self-inflicted; the consequence of an obsession with heavily subsidised and totally unreliable wind and solar.
The recent policy announcement by PM, Scott Morrison (referred to as his ‘Energy Roadmap’) is like using a Band-Aid to treat a severed leg. Everything that features as an ‘answer’ to the chaotic intermittency of wind and solar merely serves to compound the debacle.
There’s so much wrong with what’s proposed, that it’s difficult to know where to start.
So, in an effort to cover the field, we’ve collected four pieces, starting with this cracker from Alan Moran.
The low emissions technology statement: a (hydrogen) bomb
23 September 2020
Matt Canavan’s lucid insights published in the Australian this week show how little understanding politicians and officials have of the electricity industry where supply must exactly equal demand and into which they have “force-fed” intrinsically unreliable, high cost renewables. This created a Frankenstein made more monstrous by every additional piece of tinkering.
Yesterday’s Low Emissions Technology statement and announcements last week show the government pursuing a further iteration of its tragic energy policy. It is sinking the industry deeper into a morass of central planning and control conditioned by carbon dioxide mitigation.
Angus Taylor now defines policy as resting on five pillars: clean hydrogen; energy storage; green steel and aluminium; Carbon Capture and Storage; and soil carbon projects. It is supported by $1.9 billion in new expenditure commitments.
All of these pillars can only exacerbate the migration of the electricity industry from the low-cost competitive energy which created present living standards. The new agenda maintains the ascendency of raucous climate activists and venal renewable energy subsidy seekers in replacing cheap reliable energy.
In the case of hydrogen as a fuel for the 21st century, Angus Taylor committed $70 million last week, on top of more than $400 million in earlier spending. Hydrogen has nearly three times the energy of gas but the trick is to extract it cheaply. The Minister has set a price goal of $2 per kilogram hydrogen; yet, this is equivalent to $16.68 per gigajoule or more than threefold the present price of gas. Even with technological advances (and assuming none with gas), BloombergNEF forecasts the cost of hydrogen generated electricity will still be double that of gas 30 years from now.
An unanticipated breakthrough might occur and IEA identifies 319 hydrogen research projects underway around the world (eight in Australia). But it is a long shot and not one for government “winner-picking”, which used to be a derisory epithet, but apparently no longer is.
The second pillar, “energy storage” refers to batteries, the Snowy 2 pumped storage facility and the Tasmanian “battery of the nation” Marinus transmission link. All of these have a place only because the force-feeding of renewables into the system is creating unreliability. This has to be countered at considerable cost – at least $14 billion for the two hydro facilities. In a system that had remained unpoliticised, as intended, none of these costs would have a place.
The third pillar, green steel and aluminium at a competitive cost to fossil-fuelled counterparts is a pipedream.
The fourth pillar is Carbon Capture and Storage. The Global Carbon Capture and Storage Institute was funded by an initial grant of $315 million from Kevin Rudd. Tony Abbott tried, unsuccessfully, to grab the funding back and it has since had infusions from Malcolm Turnbull. In spite of its funding by the Australian taxpayer, the institute does not publish its financial accounts. CCS is a priority for spending under the new policy. The area is a black hole that at best offers some alleviation of the costs that climate policies impose.
Finally, in an initiative redolent of the Country Party’s “protection all round” we have a policy to sequestration of carbon in the soil. If the goal of 90 million tonnes were to be reached at the price goal of $20 per tonne set for CCS, that would be a handy $1.8 billion a year injected into the farming sector.
The government itself expects to spend $18 billion in low emission technologies over the next ten years and sees this as enticing 3-5 times as much in private “investment”. Mr Taylor does not seem to realise that this is compounding the wasteful spending. The technology initiative represents a subordination of energy policy to climate policy. Some of the ambiguities created include:
- Electricity use has evolved to be on-demand, but we are building intermittent power sources
- Electricity storage is expensive, but we are building power sources that require storage
- Networks are the largest component of power bills and create the most outages, but we are building power sources that depend on larger more complex networks
- Rooftop PV reduces reliance on the grid, while wind and solar farms require a larger more expensive grid, but we are building lots more of both
- Synchronous generators inherently provide auxiliary services – such as inertia, reactive power, fault level and bulk power – but we are building a more complex fragile power system where each of these auxiliary services are provided by a separate piece of the system
- We are building a power system so interconnected that an hour of low wind in South Australia (the smallest most distant part of the grid) creates a price spike across the entire network.
It is ironic on the day of the Technology Statement, de-industrialisation from the politically induced reduction in energy competitiveness became even more evident. The Tomago aluminium smelter in New South Wales (which accounts for 10% the state’s electricity) announced that the much more expensive power it now faces brings it higher costs than its rivals overseas. Such a situation was inconceivable 20 years ago before policies undermined our cheap electricity supply. Tomago and Portland in Victoria, two of the nation’s crown jewels, are being sacrificed on the altar of policy irresponsibility. Their demise – alongside our living standards — is inevitable unless we reverse course and embrace the cheapest energy sources.
Angus Taylor may think that by adopting a slightly differentiated version of green left orthodoxy he will gain some supporters. Precedent shows this to be unlikely. Offering Danegeld never works – it simply motivates the recipients to seek more.
Bludgeoning the electricity industry corpse: the government’s technology policy
23 September 2020
Compounding the further retreat from a rational energy policy that the government announced last week, this week the government announced the curiously titled ‘First Low Emissions Technology Statement’.
The statement flags further interventions in energy supply and elsewhere to reduce greenhouse gas emissions.
I have a critique of the policy proposals in the Spectator, The low emissions technology statement: a (hydrogen) bomb. Essentially, the Statement involves an $18 billion ten-year program of support for:
• R&D and energy funding, the highlight of which is funding hydrogen R&D, the “stretch” goal of which is get hydrogen at $2 per kilogram in order to displace fossil fuels; even if achievable this would price hydrogen at over $16 per gigajoule, three times the cost of the natural gas it is supposed to supplant!
• Measures, costing at least $15 billion, to ameliorate the adverse effects of high cost and unstable wind and solar, now comprising 15 per cent of supply, none of which would have been installed without subsidies; measures include derating the Snowy by converting it to pumped storage facility, the Tasmanian “battery of the nation” link and actual batteries.
• Pouring more money down the rabbit hole of carbon capture and storage, a dead-on-arrival technology designed to soften increases in fossil fuel costs that a carbon tax entails; Australia is a world leader courtesy of largesse distributed to the secretive Global Carbon Capture and Storage Institute by Kevin Rudd and Malcolm Turnbull.
• Holding out the prospect of subsidies to farmers for sequestrating carbon in the soil
Johannes Leak brilliantly encapsulated the message.
On the day of the launch the head of Tomago, one of Australia’s big three smelters, announced that the policy disaster created by force-feeding renewables into the electricity supply is causing the smelter to fail. This was followed by AGL announcing it is not going to participate in the bail-out of a second smelter, Portland, with a discounted price. It did so partly because the ACCC’s Rod Sims was requiring assurances from the electricity suppliers that the price would not be offset by higher charges on other customers. If only Sims and his predecessors had taken such “principled” action with the renewable energy requirements that now impose a $13 billion a year cost on the nation.
The loss of these smelters is an inevitable consequence of the sabotage of the formerly low cost electricity industry by successive governments, federal and state. Their closure will confirm the nation prefers for deindustrialisation and reduced living standards over the energy intensive industries that would be among the world’s most competitive if a market based energy policy were to be followed.
Angus Taylor loyally quoted the Statement’s claim that the policies would mean 130,000 additional jobs. That’s a preposterous outcome for policies that will add considerable costs – one wag suggested the additional jobs would all be public servant drones.
Energy Roadmap: $18 billion wasted pandering to pagan climate religion
Jo Nova Blog
24 September 2020
The Morrison government has released a new roadmap for low emissions technology. The nicest thing that can be said is that it’s better than the Turnbull plan. It gives no joy to the Renewables multinational octopus, it steers a Qango in a less damaging direction, but still isn’t brave enough to just say “No” to the low-carbon bullies.
$18 billion for technologies we don’t need
The Coalition plan is an investment in five low emission technologies that private investors have mostly already looked at and don’t like:
- Hydrogen made with renewable energy,
- Low-emission steel and aluminium,
- Carbon capture and storage, and
- Adding carbon to soil.
Since emissions don’t change the weather in a measurable way, no one in the world “needs” low emission steel or aluminum. It doesn’t solve any problem, apart from giving guilt-free passes to Ecoworriers to help them feel better about buying a new car. We-the-people are investing in a fashion empire dedicated to a niche market, so they can brag at dinner parties.
Of the five technologies, the only useful outcome is richer soil. Batteries are handy, but if we burnt coal for power we get all the storage and stability we need and at half the price. The renewables industry needs batteries. The Australian people need cheap electricity.
The roadmap allows Ministers to say they are reducing carbon faster than the opposition. It’s a bland defensive chess move for a group of people who feel constantly harangued to reduce the sacred carbon. Effectively this $18 billion dollars buys government ministers some comfortable answers to hold off the hostile activist-press. That’s expensive insurance.
UPDATE: To expand on this: This $18b buys a cone of protection from media hate.
The voters have never voted for climate action. Surely our PM knows that by now. What no PM wants is to be targeted by the green machine like Tony Abbott was. Winning 90 seats in a landslide isn’t attractive to any pollie if they think the Green Blob will force them out of power in two years.
What do we call this money? Extortion?
As a fuel, hydrogen has some big shortcomings
As far as hydrogen goes, as David Archibald said Great civilizations are built on Coal Gas and Nukes, not Hydrogen:
Hydrogen has low energy density, so a big, high-pressure tank of the stuff doesn’t take you far. It has an explosive range in air of 18% to 60%. It causes embrittlement of steel. There is a plot at the moment to add hydrogen to the natural gas distribution system — which then might start leaking like a sieve. It has a colourless flame, so leaks that have caught fire can’t be seen. In the days before infrared cameras, workers at a rocket fuel factory in Texas used to detect hydrogen leaks by walking with a straw broom in front of them. When the broom caught fire they had found the leak.
Chasing the Carbon Capture and Storage rainbow
Despite relentless failure and ominous laws of physics, the government is hoping to use Carbon Capture and Storage to stuff a valuable fertilizer in a hole in the ground. If they succeed it will be a net loss to the nation.
As I’ve said:
With CCS, the hard part is deciding which obstacle is the most stupidly unachievable. One ton of solid coal generates nearly three tons of CO2 in a puffy, fluffy, expanded gas form. It doesn’t take a genius to know it won’t fit back into the same hole. And even if you get it down there, it may not stay there. The gas has to be compressed, or refrigerated (or both). Underground holes are hot. Not surprisingly, this takes a lot of energy, so that to build a coal plant with the capability to “store CO2″ we must spend 60% more dollars, and then throw away 40% of the electricity as well.
We already know how this experiment turns out. The EU has tried CCS and it blew £520 million on carbon capture project that stored no carbon. The UK government blew £168m on Carbon Capture Projects that were cancelled. The US likewise has tossed millions and achieved nothing.
Wind and solar are so competitive “they don’t need subsidies anymore”.
There are minor wins: The roadmap holds the renewables industry to their own propaganda. It’s “mature” now and doesn’t need subsidies. So Minister Angus Taylor has redirected the ARENA green machine. This is the renewables QANGO set up by Julia Gillard with about $3 billion to help, cheerlead and market for the Renewables Industry. Now it will still waste money but not on wind and solar. It could have been axed.
Missed opportunities — throwing away great electoral advantages
The Liberal party (the conservatives in Australia) are still playing the role of a mini-Labor-Green Party. There’s still the slavish acceptance of the fantasy that human carbon dioxide emissions control the weather in a meaningful way, or that even if they had some effect, it was worth spending ten cents to achieve an unmeasurable cooling effect in one hundred years, even though the models all fail, warming will save lives, CO2 feeds plants, and China and India are doing nothing.
The Liberals can’t poke fun at the Labor party for grandiose fantasies to stop storms when they are positioning themselves as just being better at the same grandiose fantasies.
The new roadmap echoes the Tony Abbott strategy of finding ways to reduce carbon emissions without feeding the crocodile. Abbott put in an auction system, and let the market find the cheapest solution (at $14/ton), which Morrison keeps, but Morrison also tries to pick some winners. The plan will, no doubt, be able to reduce carbon emissions at a lower cost than Labor’s $5,310 per ton carbon tax. It will also be “more effective” than the gold-plated windmills and solar panels plan, which are spectacularly useless at cutting carbon emissions. But none of the Greens care about that anyway. Morrison will still be called a climate denier by people who use namecalling to set public policy, even though the Coalition will achieve more useless carbon reduction than the Labor-Green party.
It’s a roadmap for expensive electricity
If I’m not mistaken, the government is aiming for wholesale electricity that only costs 230% more than that sold by the 53 year old Hazelwood Coal Plant in it’s last month of operation in 2017. The new “stretch goal” (whatever that means) for batteries, is apparently “consistent with an average wholesale electricity price under $70/MWh”.
The average price for most of the last 20 years was $30/MWh. Now, apparently, it’s going to cost a fortune more just to get prices down to twice what we used to pay.
The new normal in electricity prices is far higher
The small upside
Malcolm Turnbull doesn’t like it. This is the closest thing to a ringing endorsement of the Technology Roadmap that I’ve seen:
Malcolm Turnbull says Government’s energy plans are ‘crazy’ and ‘a fantasy’
Mr Turnbull said Mr Morrison’s reluctance to commit to the 2050 target was at odds with the Paris agreement, which aims for climate neutrality.
“The idea that you crash the economy by cutting your emissions is just again, that’s ideology taking the place of what should be sound environmental and economic policy,” he said.
“There is a reason just about every other developed country in the world apart from [Donald] Trump’s America is taking a very different approach.”
The ABC let Turnbull take a free swipe at Donald Trump and imply that Australia is somehow backwards in carbon reduction. They didn’t mention that Australians are the renewables superstars who have installed more renewables per capita than anywhere in the world, and pay the highest prices too.
The things they don’t mention matter so much more than the things they do.
Technology Investment Roadmap: First Low Emissions Technology Statement 2020, Australian Government, Department of Industry.
AEMO Quarterly Report, 2019, Q4.
Jo Nova Blog
Energy crisis or stupidity?
24 September 2020
Now that the Coalition has joined the fairy seekers, removing any difference between themselves and idiot Labor, I revisited some work done last year where I looked at the split between generators on 18 and 19 January 2018. This article looks at what might have been, if the “emissions” madness did not exist.
January 18 and 19 were 2 “hot days” and wholesale prices in good old SA reached $14,500.00 per MWh during the day. The data comes from Andrew Miskelly’s “Aneroid” files and comprises the output MW of every generator in the system every 5 minutes of the day so the charts below have 576 intervals on the X axis. January 18 starts at 1, January 19 finishes at 576.
It is a good example of the grid operating at the maximum, those days were the days of greatest demand for the whole of 2018. The demand curve is simply the summation of all output because electricity is an instantaneous commodity. What is generated is used immediately; it cannot lurk in the system waiting for someone to turn the lights on. The first chart shows the situation as it was.
Notice 2 peaks. January 18 peaked at 29,945 MW at 4.20 p.m. and January 19 peaked at 30,728 MW at 4.35 p.m. Over the 2 days coal produced 72.5%, gas 12%, hydro 10%, wind 5% and solar 0.5% of the total consumption. The contribution from solar is the yellow just visible above the wind.
Over the 2 days the CF for wind was 20% and for solar was 4%.
The next chart suggests how things might have been handled if sanity prevailed. BTW, there is no “demand” line in the chart above because the separate component generator output sums to the demand.
This chart shows coal, (24,316 MW installed capacity), and gas, (9,841 MW installed capacity) generators operating at a capacity factor of 0.8 with the peaks filled by hydro. Interestingly coal is right on the mark for giving a constant supply over the period and gas would be ramped up/down from zero to full capacity as required. The peaks require the use of only 41% of the total installed hydro capacity of 8,355 MW.
The “commercial arrangement” would comprise a firm contract for coal generators for their total output, (at 0.8 CF), every day of the year. The gas component would be a payment for having the facilities available, (9,814 MW capacity ready to go at a CF of 0.8), and an extra payment for actual MWh produced and hydro would be treated similarly.
This sort of arrangement would permit generator operators to have a steady predictable “market” for their product and if contracts had long term time frames the price structure should be stable and relatively cheap. It would get rid of the insane “spot pricing” that the RE people use to rip everyone off.
There you have it, a simple, reliable and cheap way to keep the lights on. No bullshit wind and solar and no bullshit “storage”. The winners are the consumers and the losers are the RE parasites.
I must confess that I am old, and I am an Engineer, so all the “new” stuff just makes me yawn. Every time I hear politicians telling us how they will “save us” I think of Bertrand Russel, who said:
“One of the peculiarities of the English speaking world is its immense interest and belief in political parties. A really large percentage of English speaking people really believe that the ills from which they suffer would be cured if a certain political party were in power……..A man votes for one party and remains miserable; he concludes that it was the other party that was to bring the millennium. By the time he is disenchanted with all parties he is an old man on the verge of death but his sons retain the beliefs of his youth and the see-saw goes on”.
One thought on “No Future: Australia’s Renewable Energy Roadmap = Road To Economic Ruin & Despair”
We have seen in recent elections a reduction in votes for the big 2 – Liebor and Liberal. Reasons vary of course. For me, I will not ever again vote for any party that supports the nonsense of renewables as an energy source. I think we are going to have some very messy governments in the next decade which will hopefully scare the c&@p out of the existing leeches.
For Australia to be in this position with the abundance of raw materials on our continent is a disgrace. All politicians of all flavours are to blame.