Australia's Power Crisis
29 August 2018
By Nyunggai Warren Mundine AO
Australia’s electricity system is in crisis after years of political mismanagement. And our political system has followed suit. This is the second time Turnbull’s leadership has crumbled as a direct result of his approach to emissions policy. It also brought down Rudd and was at the heart of Labor’s downfall.
Whoever is Prime Minister next week or next year, Labor and the Coalition have never been so unpopular. Neither is above low thirties in the polls. In the Longman by-election, 31 percent of voters didn’t vote for Labor or the Coalition in primary voting.
Why? Because for years Australia’s political leaders have been lying to the Australian people and lacking courage and determination to implement policies and reforms they know are required. On welfare, the pension age, national debt, tax reform and certainly on energy policy.
Political leaders have been telling voters Australia can reduce CO2 emissions without increasing power prices. That we can have 25 per cent, even 50 per cent, intermittent electricity without our standard of living or economy suffering. That’s a lie.
Without energy, the industrial and technology revolutions wouldn’t have happened. Before them most humans lived in extreme poverty; today only a small percentage. Humans have never had better quality, healthier or longer lives. Because of cheap, abundant energy. Global primary energy consumption increased 2500 per cent in the past two centuries and is increasing still. Globally, more than 80 per cent of primary energy consumption is from fossil fuels, less than 1 per cent from wind and solar.
Fossil fuels produce CO2 emissions and scientific models say this will adversely change climate. To address this there are two options. One is to apply the wealth and innovation of modern economies to adapt to the change; but suggest this and you’re howled down as a monster and a denier. The other is moving to non-emitting energy that can still meet the needs of 8 billion people in the modern world.
This is what Australia’s political leaders pretend to adopt. Actually they’ve taken a third course: telling us we can switch to substantial intermittent power while maintaining industry and technology and not paying prohibitive prices.
There’s no standalone electricity market in the world the size of Australia’s generating more than 20 per cent of electricity from intermittent power. The handful of countries with substantial intermittent capacity have much smaller electricity markets or are in the European electricity market, with ready access to despatchable power and the most expensive electricity in the world.
Activists argue wind and solar are the cheapest per MWh. So they should be: there’s no guarantee when they’ll generate power. An intermittent power source can only provide a guaranteed supply in combination with despatchable power like a gas plant. An additional cost. The battery hype isn’t matched by reality. I can’t find any example of a stand-alone intermittent-plus-battery power source that can reliably power a heavy user, like a factory or data centre, let alone a national system. There’s also no robust Levelised Cost of Energy estimate for such a power source and ball park estimates vary wildly.
So intermittent power is thrown into the mix with other power sources and it’s all supposed to work in the aggregate. When it doesn’t we’re told we need new delivery and transmission mechanisms. Some markets now have excess capacity, reducing profitability for individual generators, and/or excess generation at times and not enough at others. All these factors add costs. With few exceptions, every market that’s increased intermittent power has seen increased prices.
Australia’s Paris commitment means higher power prices and scaling down industry. One enables the other because higher prices drive industry away. We’ll also have to scale down agriculture: culling herds, reducing exports and importing more food. But industry and agriculture won’t stop, just move elsewhere. Australia won’t reduce emissions but export them.
Even if every country complies with Paris, temperature increases won’t stay under the critical 2 degree threshold under the modelling. Paris acknowledges its targets are just a start. But even this token effort has started to bite. Europe isn’t on track to meet targets. The USA has pulled out.
Reducing electricity usage and reliability and increasing prices has severe economic cost; and political cost as the last decade demonstrates. Countries won’t de-carbonise energy if this means de-industrialising and de-technologising. With current technology and engineering, the only way to rapidly achieve zero emissions and meet growing global energy demands is nuclear power. But few political leaders embrace it and Australia has banned it.
Australia’s efforts have no effect on global climate. And because global emissions will continue increasing, Australia will face climate change adversity anyway. That’s another thing political leaders don’t say. To address that we’ll need a strong economy. Instead we’re weakening it. We should get out of Paris, repeal intermittent subsidies and lift bans on nuclear power and gas extraction.
You can only lie for so long before the truth catches up with you. Regular people have figured it out. The revolving door of governments will continue until our political leaders do the same.
An edited version of this article was first published in the Herald Sun and Daily Telegraph on 24 August 2018.
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