Guest essay by Eric Worrall
Australia’s Chief Scientist Alan Finkel has strongly criticised the impact of renewable energy policies on the poor, working class people and migrants.
Renewable energy push to hit Labor’s heartland
The Australian12:00AM December 29, 2016
MICHAEL OWEN SA Bureau Chief Adelaide @mjowen
Dr Finkel, who is conducting a review of the electricity market for the federal government following the statewide blackout in South Australia in September, said people who rented properties or lived in apartments were limited in their ability to install new technologies.
Migrants with limited English, people with poor financial literacy and those struggling to make ends meet were at risk of paying increased costs to subsidise households or businesses able to invest in new technologies. Passive or loyal consumers who were not engaged in managing their electricity demand and costs were vulnerable too, Dr Finkel added.
The danger was that, as more consumers took greater steps with the aid of technological advancements to rely less on the grid, the cost of building and maintaining the network would be spread over a smaller number of “vulnerable” users.
The Australian Energy Market Commission has warned that electricity prices are set to surge during the next two years, largely driven by the close of coal-fired power stations in South Australia and Victoria and ongoing investment in wind generation.
Australian Stock Exchange data showed yesterday that base future contract prices for March were highest in South Australia, which yesterday had its third major blackout in four months. For companies to buy a megawatt of electricity in March, it would cost South Australian buyers almost $152.91, compared with $100 in Queensland, $63.75 in NSW and $54.50 in Victoria.
South Australia, under Labor Premier Jay Weatherill, has a renewable energy generation mix of more than 40 per cent, the highest of any state. The state’s last coal-fired power station closed in May.
Climate Institute head of policy Olivia Kember said there was a real risk of large numbers of households leaving the grid, which likely would be the result of ongoing policy failure by federal and state governments. “It’s not just a problem for lower-income households, but also apartment dwellers and large industry that needs grid-based power,” she said. “Currently we are seeing coal stations close with only six months’ notice, and no signals to tell the market what is needed to replace them.”
Australian Energy Council chief executive Matthew Warren said all consumers ultimately would want to be connected to the grid, even as a form of back-up, although there was a risk more would be less reliant on it. “The reality is if we are going to have a decarbonised system that is going to be reliable, it will cost more and we’ve seen that in South Australia — it is living proof,” he said. “There are a lot of inequities in the system and they are difficult to answer. The inequities can get worse.”
With a major coal plant closure scheduled in Victoria for March 2017, which up until now has been South Australia’s fossil fuel backup buddy, the situation can only get worse.
Victorian consumers, already suffering the cost of their state government’s multi-billion dollar desalination plant fiasco, are likely in the near future to have to pay for South Australian style energy price rises.
Australia is on negative credit watch with international ratings agencies, because of ballooning public debt levels. Forced energy price rises, and the rapid deterioration of Australia’s baseload generation capacity, is unlikely to impress. The financial shock of a downgrade would hit every level of Australian society.