Archive for February, 2017

The sum of all parts

It is hardly a surprise that the holiday season saw a resurrection of the row over the renewable energy target. This is an issue that is not going to go way until there is a settled national approach to both climate change and energy policies — and we seem to be as far from this in 2017 as we were in 2007.

What’s notable about the current ruckus is that neither the Andrews government in Victoria nor federal opposition leader Bill Shorten is prepared to address the real issue of the cost of a much larger RET — while the Palaszczuk government in Queensland has so fudged the discussion as to defy rational appreciation of their Shorten-esque ambitions.

It is a bit early in the new year to be handing out awards for egregious political behaviour, but the effort by Victorian Energy Minister Lily D’Ambrosio, who has cited “cabinet confidentiality” for refusing to release detailed costings of the State’s 40 per cent by 2025 renewable energy target, deserves note. Why she isn’t being mauled by the Victorian parliamentary opposition and the State’s media for this dismissal of the community’s right to be fully informed is a good question? The ABC and the Fairfax Media, for two, wouldn’t rest for a moment if this boot was on the Coalition foot.

What’s at stake, to quote Malcolm Turnbull in another context, is accountability, transparency and integrity. D’Ambrosio’s stance fails on all counts and she (and her leader) should be called out on it.

One of my friends and co-travellers in this energy vale of tears makes the absolutely correct point that “it is the system costs that are all-important and grid systems have to be designed to provide secure power in extreme weather conditions.” In a nutshell, this is where the Finkel task force’s close attention should be focused and to where policymakers’ next best efforts should be directed for the regions of the NEM as well as the SWIS in Western Australia.

The political problem is that the idea of energy from the wind and sun (and other such sources) is highly popular in a naive, general way with the Australian community — and ideologically popular in many parliamentary seats, most of them in inner metropolitan areas, that are continuously up for grabs — so offering large targets seems great politics. It is not great policy, however, which is why we are where we are right now in the goings-on encapsulated by the collective decision (via CoAG) to farm out the issue of energy security to Finkel & Co.

It is timely, I think, to remind all concerned of a fundamental part of the “national electricity objective” that is the guiding spirit for the NEM. It commits the jurisdictions to “promote efficient investment in, and efficient operation and use of, electricity services for the long-term interests of consumers with respect to price, quality, safety, reliability and security of supply.

If you lay down the green-tinted glasses through which so many (and especially so many political figures) view the power issue, this remains what consumers — whether householders, commercial businesses, public institutions or manufacturers — expect of the grid-connected service and what a considerable number of them, I imagine, don’t believe they are necessarily getting now or can be sure they will get in the foreseeable future.

The current chapter of the RET saga, sparked by Tony Abbott and happily kicked along by Labor, in both cases seeking to jostle Malcolm Turnbull, as well as carried forward by media like¬†The Australian, is focused on the simple premise that killing the measure (to the extent possible given existing investment) will change the game — which is probably true, but the bigger question is “to what end?” closely followed by “what comes next?”

Only in La La Land is it not necessary to look to the guiding principle of the market (see above).

Only in la La Land, too, will we all live happily ever after in a market that has embraced 40 per cent, 50 per cent or more of variable renewable energy without due care and attention to total system costs and the delivery of affordable, secure supply while pursuing efficient carbon abatement against a national target. (And if I hear emoting on “net-zero emissions by 2050” one more time I am going to have to go out and buy a hat so I can jump up and down on it — as I keep saying, projecting 2050 from here is the same as trying to project 2017 from 1984.)

Fundamentally, the issue is not the RET; effective policy needs durable climate change directions and full acknowledgement of the realities of electricity supply in markets for the gamut of consumers — users like those in New South Wales in the case of the past two day’s horrible weather (just as an example) who ramped their needs up from 6,770 megawatts at dawn to 11,400 MW five hours later and beyond to almost 13,000 MW in mid-afternoon before, after the semi-relief of a cool change at least on the coast (which didn’t do much for residual heat indoors), taking them down to 9,900 MW in mid-evening. Through this roller-coaster of a regional market, black coal plant shouldered 88-plus per cent of the load both early and late in the day and around 73 per cent in the middle of it, mainly supported by gas turbines and hydro power. What would the picture be, in a policy environment of a much higher RET, in terms of the total system cost of ensuring system security in such conditions?

Bill Shorten, speaking to National Press Club, was quizzed in question time about what modelling Labor has done on its proposed 50 per cent RET? He ducked, dodged and weaved, providing an answer answerless. Ditto D’Ambrosio in Victoria, who offered a relatively meaningless response about “modest” cost while refusing to display her government’s modelling advice.

How will the Finkel task force deal with the role of the RET, the realities of total system costs and the broader issue of the national electricity objective? It may be the single most important aspect of their work.