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Jan 15, 2014

Tony Abbott’s half-baked war on renewable energy

The Abbott government seems to hate renewable energy, but the march of progress is unstoppable at this point. The only question is, when will the government get out of the way?

solar panels

Last week it was quietly announced that the Australian Cleantech Competition would henceforth be known as the Australian Technologies Competition. It was another subtle reminder of how the new Australian conservative government is going about the rephrasing of Australia’s energy future. Anything that involves the words climate, clean energy, or cleantech are considered projects or institutions non grata.

In the public arena, it’s not just a renaming that’s taking place, but a concerted attack on renewables. For the second time in as many weeks, Prime Minister Tony Abbott has criticised renewable energy, its intermittency and its supposed costs — repeating the force-fed lines from his main business adviser, Maurice Newman, extremist blogs and some mainstream media, and encouraged by the fossil fuel incumbents, whose greatest fear is that their coal- and gas-fired generation is being sidelined and rendered unprofitable by the growing capacity of wind and solar.

Abbott’s complaints fail on numerous counts. For a start, the Renewable Energy Target is having little impact on retail prices. The Queensland Competition Authority notes in its latest finding that the large-scale renewable target (the apparent subject of the new government’s attacks) will cost Queensland households $26 a year, or about 1.3% of their bills — about half the rise in retail bills caused by soaring gas prices.

Wind and solar do not need new back-up power. South Australia has got to 31% wind and solar without the need for any new equipment. That’s because most of the peaking plants that respond to changes in demand — and supply — already exist to cope when a whole bunch of people switch on air-conditioners at the same time, or when coal- or gas-fired generation has unexpected shutdowns, such as when the Millmerran coal-fired generator shut down last March, or the two major gas generators lost large amounts of capacity in South Australia. The difference with wind and solar is that at least their output is predictable.

Abbott’s outburst are cheered, and sometimes inspired from the sidelines, by elements of the mainstream media. The Australian took another bash at Germany last weekend, which it likes to cite as what happens to a country when it moves away from baseload — coal and nuclear — and towards renewables. The newspaper’s principal complaints were there were more coal plants, more emissions, and more costs.

Germany is the nightmare scenario for the fossil fuel industry because if the biggest manufacturing economy in Europe can wean itself off nuclear, coal and gas, then so can everyone else — which is why its policies are attacked with such gusto.

What The Australian omits to tell its readers is that coal-fired generators coming on line now were planned and construction was begun well before Fukushima, and before the extent of the rapid growth in renewables was acknowledged. The net impact is a lot more coal projects are being abandoned. The country’s big three utilities — RWE, E.ON and Vattenfall — have made it clear they intend to build no new fossil fuel plants, because some of them are having to close new plants almost as quickly as they are opened.

Investment bank UBS, for instance, predicts that one-third of Germany’s fossil fuel capacity will need to be closed by 2017 because it is no longer economic, and they are no longer needed. Germany industry has not been affected by the renewable energy roll-out because it is only charged the wholesale price of electricity, plus a margin. Its costs have fallen substantially in recent years, not risen.

To try and illustrate its lament, The Australian sought to create drama by pointing to a period in early December when renewables contributed just 5% of generation needs on some days.  I presume these charts reflect the issue.

renewables

Actually, it’s not the dips that are worrying the incumbent utilities or the grid operators — it’s the big lumps of clean energy that are forcing their generators offline when they produce. Currently, Germany gets just under 25% of its electricity from renewables over a year, and this will rise to around 60% by 2035 (the new government’s new target). As that happens, those gaps will disappear, the lumps will get bigger, and new storage solutions will mean there will be even less need for fossil fuel or “baseload” generation. A similar scenario would take place in Australia, which is why the incumbents are so keen to neuter the Renewable Energy Target so they can extend their revenues as far as possible.

The problem with the current debate in Australia is that much of this information will simply be ignored. The new government — like its noisy boosters and spokespeople — has shown itself to be uninterested in clean technology, even when it makes environmental, economic and financial sense.

Take the Clean Energy Finance Corporation as an example. It has now established that it will be able to do its job of investing up to $10 billion in low-carbon technologies, while achieving up to half the government’s emissions reduction target, and return a surplus to the budget.

Too good to be true? Must be. Because even though Treasurer Joe Hockey accepted the CEFC’s numbers in his budget update just before Christmas, the government has given no indication it will abandon its attempts to scrap the CEFC.

As some industry insiders suggest, it’s about time the PM accepts that Australia has a “super-abundance” of wind and solar, just as it has of coal and gas. The only difference being is that wind and solar generation will be cheaper — as the government’s own economic adviser suggests — and cause a lot less pollution.

The renewable energy industry is currently fearing the worst. If, as The Australian suggests, the only two cabinet ministers supporting the renewable energy target are Industry Minister Ian Macfarlane and Environment Minister Greg Hunt is true, there is big trouble ahead.

Macfarlane, it should be remembered, was responsible for neutering John Howard’s Mandatory Renewable Energy Target nearly a decade ago, but the new government is so extreme he is now considered a moderate. Hunt is said to have little within cabinet. The reality is, however, that there is more support than The Australian lets on. It may be less an observation of the cabinet dynamics than a threat.

Of course, if the PM is serious about limiting electricity price rises, he’d focus on reining in network charges, which, according to every analysis, has been by far the leading cause of electricity price increases. Of course, this might not be so easy in NSW and Queensland; this would mean less revenue for those state governments, as they own the networks. And more renewables mean less revenues for the generators — be they government-owned or private.

*This article was originally published at Renew Economy

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41 comments

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41 thoughts on “Tony Abbott’s half-baked war on renewable energy

  1. Paracleet

    They are such retards; if they want to prosecute their adgenda why get rid of the RET? If they leave it in place they will be able to blame ANYTHING on it over the coming years. Any price rise, any failed coal plant costing hard working Aussie battlers their jobs, etc. etc. Are they so blinded by ideology that feel they have to go after everything?

  2. JohnB

    Take a deep breath, Giles and look around you and consider what others are saying.

    You have been inside the “renewables only” box for years now, during which time you have shown an increasing tendency to ignore anything not to your fancy.

    First, your friends, the dirty brown coal fired units being constructed in Germany due to shutdown of the carbon-free nuclear power stations weren’t all committed before Fukishima. They were pipe dreams of the brown coal industry, which was only too happy to accept the task when it was offered.

    Second, there is no such thing a “new storage solution” on the horizon. It would be great news if this was so, but there has been no news on this front for years… it is as dead as carbon capture and storage.

    Third, to blame high transmission costs for the high cost of electricity is to ignore the massive increases in capital cost of the transmission grids which are essential for networks with high percentages of wind and/or solar, which are notable for their needing to be very much interconnected, constructed in unfortunate locations and which themselves are immensely large. Transmission costs can only rise under any believable scenario which involves high renewables percentages, certainly not the other way around.

    Unfortunately, the author is a very good example of one who has closed his mind to the real costs and benefits of some sources of electricity. Nuclear power is nowhere near as expensive as he paints it, and renewables are nowhere near as cheap.

    NB I have intentionally not included references because this comment is already too long.

    Besides which, the author has many times received copious references which substantiate what I have said. The problem is not lack of comprehensive data – it is lack of comprehension.

  3. Mark Duffett

    Not only do Parkinson and others of his ilk make blithe invocations of ‘gaps will disappear’ as ‘lumps get bigger’ (never mind the implied massive overbuild) and ‘new storage solutions’ that don’t exist yet, they don’t even perceive their glaring internal contradictions.

    South Australia has managed to attain 31% electricity from wind and solar ‘without the need for new back-up power…because most of the peaking (i.e. gas) plants that respond to changes in demand — and supply — already exist’ (not to mention the ability to pull other fossil-generated power across the eastern border when needed). Yet a couple of paragraphs later it seems those same utilities aren’t going to be investing in reliable generators any more because solar and wind are eating their lunch. So what happens when the current baseload infrastructure on which renewables are coasting reaches the end of its working life?

    And the minuscule nature of those yellow blips in the chart should cause everyone who trumpeted rooftop PV reaching a million Australian roofs to stop and think very long and hard indeed.

    All the while, German CO2 emissions continue to rise. The climate system doesn’t care two hoots what percentage of renewables we have, it’s only the stuff we’re pumping into the atmosphere that counts. It’s very telling that Parkinson doesn’t mention the e word once.

    Oh, and what JohnB said.

  4. Electric Lardyland

    And still it seems, that the only ‘direct action’ being taken, is against people who believe in climate change and who are acting on those beliefs.

  5. AR

    This country is in for a very difficult couple of years with the current government – they are not just unintelligent & ideologically driven but bad at even enunciating (never mind implementing)their own, ignorant intentions. How Turnbull can bear it I do not know – unless he goes rogue or Indi he will not waste anymore of his life after the next election keeping shtumm while TT & his Uglies trash conservatism.

  6. Liamj

    There is nothing inevitable about renewables, the brown-tech luddites in LNP & corporate media have been keeping us in the dark ages for decades. They see warming & depletion as splendid drivers of profit, and thats all they ken.

  7. Chris Hartwell

    Paracleet, expect that future cost rises will be blamed on the legacy of the carbon tax, or on any EFT implemented in the future.

  8. @chrispydog

    Those ‘lumps’ of solar/wind output are given mandated priority to the German grid, are heavily subsidised by retail users, and go nowhere near the red line ie demand.

    Wind and solar are diffuse sources of energy which require large capital inputs to harness and are intermittent.

    Germany’s CO2/KWh is about 450g and rising, while France’s is 80g and has been that low for decades.

    Spain just boasted of producing over 20% of it’s electricity last year from wind, and hence lowered its emissions. What was its other big source? You guessed it, nuclear, which unlike Germany they haven’t switched off.

    Without nuclear, that big grey area on the graph is filled with fossil fuel power.

    These are real world choices: we look like France, or we spend a motza like Germany and make not one iota of difference to our CO2 emissions.

  9. Reechard

    It is not so much that Abbott is so dumb that he does not like or see the need for renewables. He likes his mates in the filthy fossil fuel lobby better!

  10. Reechard

    JohnB
    No new storage???
    So what is Hot Salt for Off Peak? BZE and their very do-able 10 year plan to build CO2/emission free power production in Australia at a cost of approx 3% GDP per annum. Have you heard of it? I doubt it because you do not acknowledge it Or you are keeping quiet… Bit like Bishop some time ago when, even after being briefed on the BZE technology, plan and costing etc, said the same thing.
    Hey, there’s a use for that $1.7 trillion Super pool. I’d invest.

    @chrispydog
    Any idea the size of subsidies to the filth fossil fuel industry?

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