17 June 2022

Energy crisis shows governments need to power up to put consumers first

| Ian Bushnell
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Solar farm

It’s time for governments to show real leadership on energy and the transition to a decarbonised economy. Photo: Mugga Lane Solar Park.

Prescient renewable energy contracts have generally insulated Canberrans from the power bill shocks coming for the rest of eastern Australia but the ACT is not immune to the electricity crisis wracking most of the country.

It’s been a called a ‘perfect storm’ but the situation the country, and the new Labor Government, finds itself in only exposes the fraud that is the electricity market and the dereliction of duty both Labor and Coalition parties are guilty of.

I am old enough to remember when the electricity supply was a government supplied essential service not a commodity to exploit for profit, or marketed in multi-million dollar advertising campaigns.

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It was not perfect so there is no point painting a nostalgic picture of cheap, plentiful and uninterrupted power because there were also blackouts as unions flexed their considerable muscles and fat costly bureaucracies.

That was why when the neo-liberal disease that infected governments of all persuasions in the 1980s and 90s came along they were all too willing to corporatise or offload electricity generation to the private sector to bolster their bottom lines, all the while assuring consumers that competition would mean better service and cheaper bills.

That palpably was nonsense.

Now decades later, Australia has a “market” unable to withstand the challenge of renewables, fossil fuel generators at the mercy of the international coal and gas prices, and the consumer coming a long way behind shareholders.

The Gillard Government should have ensured a gas reservation mechanism like Western Australia, while a near-decade of Coalition governments should not have waged the climate wars but paved the way for a sensible transition to a decarbonised system. But above all, the duty of generators should have been to consumers first, both residential and business.

Some will argue that the regulator stepping in to ensure supply means the system is working and there is no need for change. But after hearing of reduced power station maintenance and generators shutting down supply if they could not make a profit, not many will agree.

Nor will many understand how coal and gas rich Australia can even have an energy crisis.

Others have seized on the disruption to energy markets caused by Russia’s war on Ukraine and the threat to electricity supplies to roll out the now-familiar arguments against moving to renewables, arguing that they cannot provide reliable power when the wind doesn’t blow and the sun doesn’t shine.

They conveniently forget the imperative of climate change, and the developments in battery storage, not to mention hydro and wave power, and green hydrogen. There are even solar panels on the way that can produce electricity after dark, according to research from Australian and US universities.

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The Labor Government has rightly rejected pulling the plug on the transition away from fossil fuels, something that requires national leadership.

The emphasis is on transition. That doesn’t mean the abandonment of coal or gas before the new system is sustainable.

But it is regrettable that so much time has been lost when that is a commodity increasingly in short supply.

Most of us are mystified by energy markets, and perhaps that opaqueness is no coincidence, but the government needs to rewrite the market rules to account for household solar and the transition to a renewable-based system, ensure bridging supply is available from coal and increasingly gas, and put the consumer first so the lights stay on.

That means coal-fired power stations being properly maintained until they are no longer needed and generators not being able to game the system at the expense of consumers.

It should also ensure enough gas is reserved for domestic use.

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The government must forge ahead with the policy settings that will provide the certainty needed to drive renewables and commit to the research investment required to develop the energy systems of the 21st Century.

The market failure this week shows that when it comes to essential services like electricity there needs to be stronger regulation and more government involvement.

It may be a mess right now, but the Commonwealth, in partnership with the states and territories, should make the most of this crisis to finally set the nation properly on the path to a clean energy future that transforms the economy and also helps reduce global heating.

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Capital Retro9:06 am 20 Jun 22

Soviet power + electricity = Communism – (Lenin)

In another thread, Capital Retro, you suggested that a poster might “one day communicate in a language that we can all understand”. Perhaps for the benefit of those of us who don’t speak the shock jock or Sky ‘right at night’ dialects, you could translate your above formulaic comment into English.

HiddenDragon8:33 pm 18 Jun 22

“They conveniently forget the imperative of climate change, and the developments in battery storage, not to mention hydro and wave power, and green hydrogen.”

Unfortunately it’s the fine print that’s always the problem with the miraculous (supposedly) options for storing renewable power and/or generating it 24/7 which have – according to the dreamers and spruikers – been about to become a practical reality for at least the last 10 to 15 years.

We’ve had hot rocks, molten salt, wave power promoted (and later quietly dropped) by a prominent entrepreneur and now it’s “green hydrogen”, which the US National Renewable Energy Laboratory (with resources Australia could only dream of) hopes to make commercially viable in 10 years rather than the more likely 30.

Reality has likewise caught up with Snowy 2.0 – not just the almost inevitable blowouts in cost and timetable, but a mounting campaign on environmental and cultural grounds, as set out in a beautifully filmed report on the ABC’s 7.30 this week. Similar problems would doubtless arise with other such schemes.

Human ingenuity being what it is, we will likely get there eventually, but the problem is the unholy alliance of purists and profiteers who want to close down the older power generation technology before replacements are (to use an overused term) fit for purpose. If this week’s fiasco injects a sobering and enduring dose of reality into that debate, it will have served a very good purpose.

Vinson1Bernie5:42 pm 17 Jun 22

Good article on the last century stuff – the ALP designed the national electricity market for competitive reasons as the monopoly powers of the government ownership/union cabal meant electricity consumers were overcharged and state budgets were bloated and less beholden to federal grants. WA didnt have much coal (unlike the eastern states) so needed to reserve gas but after negotiation meant less attractive investment , lower royalties. The main gas investments in Oz are economic for south east export (which have strategic implications) and long distances from the southeast pop’n centres Kimberleys/Central Qld) so now the teals bizarrely demand we keep all the gas here (despite the distances required for pipelines) and yet they were against southern developments like Narrabri? We have spent $45bn on renewable and still are only 10-15% electricity renewables supply. Meanwhile we are still exporting gas and coal yet fossil fuels locally are less than 0.5% of worlds emissions. Smoke and mirrors doesn’t adequately describe it.

Vinson1Bernie5:54 pm 17 Jun 22

erratum – south east asia export on line 6

Nice avoidance of reality, Vision1Bernie. In 10 years the Coalition did nothing to undo the folly of your so called ALP national electricity market. Also the true facts are that renewable energy is to receive subsidies of $2.8bn per y

Ooops cont’d … $2.8bn per year to 2030 (https://www.afr.com/politics/renewable-energy-subsidies-to-top-28b-a-year-up-to-2030-20170313-guwo3t) whereas in 2021-22 federal fuel subsidies to fossil fuel industry was $10.6bn.

Where on earth have you pulled the figure of 10-15% renewables from?

Seems your about 10 years behind. Last year, renewables accounted for over 30% of total electricity generation, with huge growth. They will be more than 50% of the total generation in around 5 years at current growth rates.

Capital Retro6:00 pm 18 Jun 22

Federal fuel subsidies (rebates) apply to all vehicles that do not use government maintained roads. That is mainly the mining and agricultural sectors. but it also includes the vehicles that develop roads and infrastructure for the construction and maintenance of solar and wind farms.

How much are home solar generators being subsidised for the electricity that they sell to the grid? There are still many in Canberra getting .45c per kWh for many years to come and what about our virtue signaling ACT government who pay massive amounts to commercial solar and wind farms for electricity so we can claim to be using 100% renewables?

I think you are trying to compare chalk with cheese, unsuccessfully as usual.

Capital Retro,
Perhaps you should back up your statements with some evidence then?
You claim there are massive subsidies for specific things.

Evidence please. How much exactly are these things? Links for the specific subsidies you mention.

My bad, Capital Retro. I mistakenly included the word “fuel” when I referred to the over $10.6b in federal subsidies paid to fossil fuel energy producers (https://australiainstitute.org.au/post/australian-fossil-fuel-subsidies-surge-to-11-6-billion-in-2021-22/). As you can see in the article there is no reference whatsoever to renewable energy producers in that subsidy.

A few coal plants are required in the short term.

Perovskite solar cells and pumped hydro.
However the pumped hydro needs to be offshore or on the coast.

Labor or LNP is like whether you want AIDS or cancer.

And Greens permanently brain dead.

Stephen Saunders7:23 am 17 Jun 22

The Gillard-Coalition-Albanese sponsored gas cartel is an object (or abject) lesson in how immensely difficult it is for our LibLab Governments to put voters ahead of donors. Thus far, Bowen and King are firmly backing the rort. A few trendy teals won’t shift them.

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