TiP

One of the more farcical soundbites in the current Australian carbon debate is “Losing the renewable energy race is not an option.”

What race is this? Against whom? To what end?

Even if we opted to close down all fossil fuel power production in Australia and bankrupted the nation by also abandoning fossil fuel exports, we would achieve no more in terms of global abatement than those poor sods who set themselves on fire to make a political point.

The Greens, who espouse the “race,” attract about one in eight votes across in Australia.

At the recent Queensland election, where they could offer themselves as an alternative to the Coalition in a seminal vote to throw out Labor, they achieved 7.52 per cent of the vote, down on their showing in 2009.

The false rhetoric used in this debate grows ever more shrill.

I see one Greens booster in the media today describing the annual investment in electricity networks as a multi-billion annual subsidy for the “public/private national energy market,a payment for upgrades of our last-century baseload grid of coal and gas generation,” hidden, it is alleged, from the view of consumers.

Given the vigorous public debate over network investment and the major “Power of Choice” inquiry being undertaken by the Australian Energy Market Commission as well as the AEMC consideration of proposals for changes to network capex and opex rules, this must set a new standard for hiding things in plain sight.

This is farcical and not least because the zero carbon mob have acknowledged themselves that junking the existing electricity system in favour of a wholly-renewable supply would involve $90 billion (their estimate in an overall costing that is widely considered to be much too low) for transmission expenditure.

Rather than be distracted by this Hyde Park Corner-style babbling, we could look at the fact that, against our own widely-supported desire to add renewable energy to the generation mix (the Renewable Energy Target), Australia has fallen short of its intentions in the past five years.

Among the many things to hold against Labor in its sometimes shambolic turn in federal office since late 2007, the poor showing of wind farm development is definitely one.

Start with the fact that it took Kevin Rudd’s government a long time to put the enlarged renewable energy target to the federal parliament, although this was policy on which it had Coalition support in the 2007 election.

Then shift to the way in which the government stuffed up the new RET by using the measure to push populist solar subsidies, ensuring a surplus of renewable energy certificates.

On current trends it will be 2014-15 before the REC surplus is washed out of the market, leaving little more than five years to chase the 2020 target, which may well not be met.

At the same time that a fuss was growing over coal seam gas developments in New South Wales and Queensland, the federal government totally ignored the pushback from rural and regional communities to wind farms encroaching on their living space.

Development of a standard set of rules, accepted by the States, for wind farm construction across the country would have been possibly one of the easier things to do in 2008-09, but it was never attempted.

Instead, Rudd, Wong and Garrett devoted some of their time to creating a mess in the RET market and, as a result, orderly development of wind power is well and truly lagging while new, Coalition State governments are buying rural popularity by imposing more strict conditions on wind sites, creating differing standards along the east coast.

As the Bureau of Resources & Energy Economics modelling demonstrates, the “clean energy future” postulated by the Gillard government requires the generation mix in 2035 – a quarter century from now – to include about 49,000 gigawatt hours annually of wind farm output, 12 times today’s supply from this source.

Getting to this point will require a substantial capital outlay on wind – perhaps $50 billion, although such calculations are fraught with difficulty because one cannot know the input costs over such a period of time.

The energy white paper also foresees some $26 billion being spent on transmission out to 2030 and a fair bit of this will be needed to connect remotely-sited renewable energy (mostly wind farms) to the main grid.

Meanwhile, the biggest single investment in renewables to serve the east coast market isn’t to happen inside Australia at all and its costs are not included in official calculations.

This is the Purari River hydro-electric project in Papua New Guinea, to be linked to Australia by undersea transmission cables, a project by Origin Energy for which there is no official capex estimate, but which analysts claim will cost at least $10 billion.

Origin Energy managing director Grant King was recently in the media arguing that the Purari River development could be the catalyst for a new manufacturing hub in northern Queensland.

Nuclear power proponents – of an approach that is anathema to the Greens and not likely to be taken on board the sinking ship that is the Gillard government – will look at all this and argue that the biggest single zero-emission step Australia could take over 25 years is to embrace the latest in reactor technology.

The federal government’s official view is that we should drive on with renewable energy and only consider nuclear if this falters.

The government’s view also, as modelled for Treasury in the “clean energy future” scenarios, is that the largest source of new electricity technology beyond 2035 will be coal power and gas power with carbon capture and storage, but it has banned support for CCS by the Clean Energy Finance Corporation under pressure from the Greens.

Go figure, as they say.

My Latin teacher, when I was a pimply schoolboy 55 years ago, used to make me write out “Quem deus vult perdere, dementat prius” over and over again on the blackboard as punishment for (not infrequent) misbehaviour.

It translates as “Those whom the gods wish to destroy, they first make mad.”

(By the way, average household electricity demand in Australia in 1955 was just two megawatt hours a year.

(By 1970 this had doubled and it has virtually doubled again now. To which, one can add that the number of households with air-conditioning has risen from 23 per cent in the 1970s to 72 per cent now, with half of us running two or more units, and continues to rise.

(As well, since the 1970s, manufacturing’s requirement for electricity and that of the commercial and public services sector have each risen more than three-fold.

(Much of the network system serving this demand was constructed 30 years ago and longer. Hence the current networks capex outlays.

(They are not a “subsidy” for fossil fuelled generators.

(They are the cost of the requirements we place on an essential service – one for which the vast majority of users have security, reliability and price as their highest concerns.)

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