Turnbull’s energy plan will entrench coal and delay the shift to renewable energy—while delivering next to nothing to cut power bills.
Yet the mainstream media is full of praise. Fairfax’s Peter Hartcher extolled it as a “minor miracle for Australian politics”.
Turnbull’s new “national energy guarantee” is supposed to deliver reliable power, reduce power bills as well as meet the government’s climate change commitments.
If the policy does cut the price of power, it will be hard to notice. The government seized on the claim power bills would be $2 a week less between 2020 and 2030. But this relied on, “a ‘least-cost trajectory’ maintained over 10 years”, as journalist Malcolm Farr put it. And it was just a preliminary estimate.
The plan’s will see Turnbull force energy companies to both maintain a set level of “dispatchable” generation, able to send power into the grid whenever it’s needed, as well as meet an “emissions intensity” level designed to reduce carbon pollution.
But it abandons any serious effort to tackle climate change, in yet another effort to please the climate deniers in the Liberal Party. The new policy, Turnbull says, will see the energy sector reduce emissions by 26 per cent, in line with Australia’s Paris commitment.
Electricity generation, however, is the easiest and cheapest place to cut emissions. So if Australia is going to reach its reduction target, power generation should be carrying much more of the load.
“Either the PM has abandoned Abbott’s miserly 26 per cent reduction,” the Australia Institute’s Ben Oquist explained, “or he has decided we will embark on more costly emissions reductions, for example in agriculture or transport.”
Never mind that the Paris commitments have no chance even of delivering the target of 2 degree warming. Or that the government’s Climate Change Authority has called for Australia to reduce emissions by between 45 and 65 per cent by 2030.
Now, after the Renewable Energy Target expires in 2020, there will be no further government investment or subsidies to boost renewable energy.
All the decisions about new power plants will be left to the energy retail companies and the market.
Energy journalist Giles Parkinson cites existing official estimates that suggest there would be, “virtually no new wind and solar projects [built] in the country between 2020 and 2030”, apart from household rooftop solar panels.
Coal plant closures
The energy system is already changing rapidly. Coal power stations are closing. Nine more of the largest remaining coal plants are due to close within 20 years. The lack of any long-term climate change policy, however, has put a question mark over whether energy companies would invest in new generation to replace them.
Wind and solar power are also becoming cheaper and more widespread. For new generation, wind turbines can already generate power more cheaply than coal.
But so far they do not have sufficient storage attached, through battery systems, to allow them to operate when the wind isn’t blowing or the sun isn’t shining.
This means the risk of a shortfall in power, leading to blackouts.
The obvious solution is what is happening in South Australia—the installation of the world’s largest battery system to back up renewable energy. Wind and solar power already provide 50 per cent of the state’s power.
Demand management, through reducing the power use of household air-conditions and appliances when needed, can also help.
South Australia is also building a large solar thermal plant, which can provide power 24 hours a day using a molten salt storage system.
This technology works. But battery storage is still expensive. Its cost, however, has almost halved since 2014. Bloomberg New Energy Finance estimates it will drop another 40 per cent by 2025.
But in the short term, renewables for 24 hour a day power require government investment or subsidies.
Instead Turnbull wants to extend the life of the existing coal power stations, and encourage new power plants to be gas-fired. These may be more expensive than renewable energy within a decade. But once built, we will be stuck with them for 30 years, the life of a power plant.
The power system can’t be run on the basis of the free market. There has to be an overall plan to ensure it meets total demand, and can deliver power when needed. And we also need planning to transition to 100 per cent renewable energy.
The government says that more renewables, including Labor’s 50 per cent target by 2030, will increase power prices.
But there is no reason ordinary people should pay through higher power bills. The big companies who have made millions out of polluting the planet should foot the bill. We can tax corporations and the rich and make them pay.
By James Supple