Essay by Eric Worrall
Australia has embraced a worst of both worlds energy policy, in which both renewables and fossil fuel providers will receive generous subsidies to maintain their services.
‘Stakes never higher’: energy board releases capacity market blueprint
Energy Security Board says fossil fuel generators might need to be paid to stay in business to retain capacity
Peter Hannam Mon 20 Jun 2022 03.30 AEST
Coal- and gas-fired power plants could be paid to stay in business to bolster the stability of the main electricity grid and attract enough investment to build the equivalent of 50 times the original Snowy Hydro scheme by 2050, according to a high-level design paper released by the Energy Security Board.
The fossil fuel generators would be required even as Australia continues to decarbonise the electricity sector, the paper released on Monday said.
The report by the ESB backs payments for not just supplying power but also retaining the capacity to do so, as one of the most viable options to reform the faltering energy market after 2025.
It also recommends that states be able to pick technologies suited to their carbon-cutting ambitions, in a bid to mollify anticipated opposition from some regions to the inclusion of fossil fuel plants in a new capacity market. The imperative, though, would be to improve investor certainty and incentives to fund a major revamp of the market.
…
“Designed well, the capacity mechanism will enable a swifter, less risky and more orderly transition to a net zero emissions energy system,” the paper argues.
…
Read more: https://www.theguardian.com/australia-news/2022/jun/20/stakes-never-higher-energy-board-releases-capacity-market-blueprint
On one hand, this offer of subsidies hopefully reduces the risk of blackouts. The government is effectively directly paying for maintenance required to keep fossil fuel power plants operational.
But this offer of subsidies is a commercial disaster, in terms of cost to taxpayers. Every power provider, fossil fuel or renewable, will have their hand out.
It could all have been so different. There was a time Australia had a technology agnostic electricity market, in which suppliers competed on price, rather than jockeying for handouts. All politicians need to do to restore this low cost market, is to provide a credible bipartisan commitment that they won’t play favourites anymore.
But our politicians have chosen to meddle and favour renewables.
If renewables worked, if they were a viable replacement for fossil fuel, our politicians might have gotten away with their meddling. In a few short years renewables would have replaced fossil fuel, and everyone would have settled into the new arrangement.
But renewables don’t work – Australia will for the foreseeable future require reliable, dispatchable fossil fuel backup to prevent blackouts, for when the wind stops blowing and the sunlight is blocked by clouds.
Fossil fuel providers have their hand out, and have no motivation to show restraint in their demands for government payoffs to keep operating.
Every Australian will pay, and pay dearly, for maintaining the political fantasy that renewables can add value to our electricity grid.
And another country comes to the realization that the shoot – ready – aim method employed by the Green crowd to control their energy is a failure. The dominoes are falling.
The centre-left Labor party has been in power for a month. If there is any blame to apportion most of it must go to the centre-right Liberal/National coalition who were in power the previous nine years. The Australian Greens held 1 seat out 150 in The House of Representatives, that increased to 4.
Hahaha. That was funny. More of that please, it cheers me up.
Loydo, the threat of green radicals winning power was enough to suppress investment in fossil fuel infrastructure. But I agree the previous government made mistakes, I heavily criticised their embrace of Net Zero.
Clearly, there is a shedload of wriggle room between “Net Zero Emissions” and “Absolute Zero Emissions”.
In my catholic religious indoctrination days, this was the equivalent difference between “Venal Sin” and “Mortal Sin”.
Religions (incl AGW) are all based on the same template when it’s all boiled down.
They are opposite:
Religion: Fallen nature of man.
AGW: Utopia
I hate the way some grumpy atheist troll comes along with some lame excuse to tie the Catholic Church to the new green religion – if people still had faith in Christ instead of what their various screens are telling them they wouldn’t be falling for the Climate Emergency. If the trolls were comparing greens to JWs or Scientologists I could understand.
Disclaimer: I am very unhappy that Pope Francis has jumped on the green bandwagon and thrown everything else under the bus under the guise of helping the poor. The poor are not going to be helped by expensive and unreliable green power.
Pope Benedict never fell for this stupidity and I expected more from P. Francis as he has a science degree (chemistry iirc). But then again, we have been told to the point of deafness that “97% of scientists agree” in climate doom, so what more could be expected if most of the Western elite has lost its mind.
If he wasn’t delusional he wouldn’t be much of a Pope.
Is Utopia dark and freezing cold? Lol! And a sickly shade of Green?
Mmm, embracing net zero is only for green radicals. I’d love to hear Barnaby Joyce’s reaction to being described like that.
The operative words are “aspirational goal” for net zero emissions by 2050 based on research and development of new technology (if possible to develop) and with no damage to the economy – COP26, PM Morrison.
By new technology, I assume you mean unicorn farts?
Why would anyone care what Humpty Barnaby thinks … that a bit like caring what Nick Stokes or you think Loydo?
I don’t ask you to believe what I do … I do ask you believe data and facts.
Before the election the Nats were forced into the Net Zero tent and now Barnaby is no longer leader and the moderates are in control.
This puts the party in an awkward position on climate change, because the Liberal Opposition leader is determined to eradicate green slime.
When parliament resumes Dutton will savage the government with ridicule of the scathing kind.
Barnaby is an “agrarian socialist” in the old Nationals tradition. He has been forced out of the top job by the CWA who have high moral standards and also by the green slime in the farming organisations.
Embrace? I don’t think so. He agreed with the net zero dream through gritted teeth. He believes in net zero as much as I do.
But I admit the LNP made a huge mistake going along with the green slime (head nod to ironicman for such a wonderful epithet) and what’s more, the so-called moderates are doubling down on that position.
Agree with the other side that there is a problem and then expect to win an argument about it. Should work well!
Prev Gov was more like Centre-Left. And – all relevant daily and monthly wholesale electricity data for the NEM is published free on the www by AEMO and a 12yo could use Excel to have known with crystal clarity that an AEMO wholesale electricity price crisis was steadily brewing up through 2022 way before the election was called. Our mythical 12yo would also be well aware global coal and gas prices were blasting higher way before the end of 2021 Assuming our 12 yo was not brain-dead he/she would know that these global coal & gas increasing price trends must feedin to our Australian NEM.
Australian brown coal is undesirable enough on the world market that it could still serve as a cheap source of fuel if keeping electricity prices down was the priority.
With suitable scrubbers and such, it could provide safe, efficient and economical power, while saving the more expensive black stuff for export. And keep the coal miners employed instead forced to government assistance.
Brown coal may be undesirable to climate alarmists and that includes most socialist governments such as in Victoria where nearly all of this huge resource lies in Australia. Its a bloody shame they cannot get their heads out of their arse’s and see what’s happening to them due to their own stupid ideological climate related decisions. However Brown coal has been an energy drought savior for both Germany and Turkey so they have seen the light to some degree.
Victoria has been the hotbed of AGW alarmist in Australia and so they deserve all that’s coming to them regarding energy poverty and blackouts when the interstate interconnectors fail again. They can’t keep sponging electricity from the rest of us forever, particularly in Queensland where we have some modern coal fired power and plenty of gas, but still a lack of energy investment from our boring -do nothing and try and keep under the radar-Labor government.
All Australian governments state and federal are guilty of swallowing the AGW climate lie and have restricted investment in needed repairs and upgrades to old dispatchable coal and gas power generation. Even after 20 years of this stupid process we have learned nothing about creating or purchasing new reliable technology e.g. HELE for dispatchable power. So we have done this to ourselves and remain in denial that new coal and gas are the answer, due to climate curse. Renewables can be in the system to support the main power systems but they can NEVER replace them. Time for a rethink by the inner city elites who seem to control the energy dialogue in this sadly deluded country.
That’s only true if you consider socialism to be the “center”.
Wouldn’t you describe the US Republicans and UK Tories as centre-right? They each seem to be of a similar stripe.
Not really. BTW, there was ZERO need to subsidize fossil fuel energy, UNTIL green policy handicapped the industry, drove UP the cost of said energy, and now, desperate to keep power on, MUST subsidize for the costs and inefficiency THEY created.
It really is insane stupidity. BTW, reduced taxes on profit is not a subsidize.
The new PM is on the job a month and this already? Made news across the globe.
Not even close.
So for you even the GOP is a leftist organisation?
Loydo
We used to have a reliable grid and cheap power.
Now we don’t.
What changed?
This is only hard for some.
I was part of a group of electric power experts that warned of the negative outcome of Leftist fiddling with the electric power markets in the late 1970s. When things went to shit in 1999 & 2000 we reiterated our caution about ongoing socialist fiddling.
In the 2020s it seems like every 20 years things get progressively worse and unmanageable. Today there may be no way to recover without severe societal dislocation.
All we can say is we told you so many times and in many ways. You can all thank a “free” press for failing to inform the average citizen and feckless poll-driven “leaders.”
The green transition cancer didn’t come from the right side of the political spectrum – this is all on the left, and the left-dominated media that is pushing the green suicide agenda. Now conservative politicians are forced to agree they believe in the divinity of the green emperor or face political banishment.
Loydo, reasonable people would agree in general that you don’t understand much having to do with real world technology and economics, but I guarantee you that you don’t understand anything about U.S. Republicans. Your European Leftist media leaves you woefully misinformed about real Americans.
Many Republicans are labeled “right wing extremists” for supporting individual rights and small governments. Tories not so much. Republicans are closer to UKIP.
I was discussing the general state of the world with my manager, he’s an extremely nice guy and highly intelligent, but… he told me that the world has seen a worrying swing to the extreme right. I was sort of startled by this, I know he’s a very “progressive” sort, but his center must be almost all the way to the left if he thinks what is happening now is a right wing scenario. We discussed it a bit and I opened him up to the possibility that the political landscape was not one dimensional (left/right), there are also other dimensions, one of the more important of which is the libertarian/authoritarian axis. The world, as we both came to agree has certainly shifted much more towards the authoritarian pole of that axis, though the left/right debate remained unresolved. For context, we live in Victoria, Australia, which has seen some of the longest and most stringent lockdowns throughout COVID, imposed by the far left authoritarian, and arguably highly corrupt Andrews government.
The “center” has been pushed so far out of whack that people can’t make sense of it anymore. Any slightly conservative beliefs, which are in reality very much moderate right, are considered to be “literally Hitler”. The Overton Window has been slid all the way to the left, and it’s right side almost entirely closed. The pendulum will swing back, hopefully not too far (as it is entirely possible to go too far to the right), but far enough that the extreme left is put in its proper place. There are hints of this in various places, from academia to popular culture, but everything seems to be up in the air still and the coming collapse may very quickly take the “civilized” out of “civilized society” for a while.
I just want to be left alone, to grow veges and make toys for my son, but I cannot stand by while the world is destroyed around me by fools who know not what they do and much worse types who know full well what they do.
Of course Hitler was a socialist.
As to swinging to the right, it’s pretty rare for too much freedom to be a problem.
Authoritarian Leftist: National Socialist Workers Party.
How do you discover if you are Alt Right?
Just wait. The Left will tell you.
Don’t worry, Mark: We stable citizens in the U.S., protected by our 2nd Amendment, will preserve Western civilization for you. The coming economic and societal dislocations will be recoverable if freedom loving people pull together.
Well the liberals in your country are already discussing amendments to get rid of gun rights, and to enshrine abortion (since that is like sacrament to them) so I would not put too much faith in that piece of paper.
And don’t forget how quickly a bad cold got turned into a global emergency requiring unconstitutional restrictions.
That’s why the left has insisted on the Climate Emergency label for the past few years – the more they say it, the more the media trumpets that, the more the crazy idea is accepted without question.
PCman, “that piece of paper” can be changed only through a lengthy process, ultimately requiring a supermajority vote of 3/4 of the States, currently 38. That ain’t going to happen in today’s U.S.
There no right-left. Politics are a disk, with the nutbar dictators on the edge and sensible, rights respecting people in the middle.
They have been influencing policy for decades … policies that were enshrined by Rudd and Gillard socialist governments and concreted into place with a partisan bureaucracy.
2010-2011 the Gillard Labor Government created the Renewable Energy Target of over 30 per cent plus incentive subsidies to attract private sector investors. They also created a carbon tax and a renewable energy surcharge, both 10 per cent, added to electricity bills.
The State Government owner-operators of power stations and transmission lines interconnected State to State based on Federal Labor’s RET privatised those State public assets, or leased them or demolished them and relied thereafter on private sector electricity supply sources.
It is well understood in Australia that Australian Greens are to the left of international greenism. They are also supporters of the Australian Labor Party and receive donations from the Union Movement as the ALP does. And the Greens mostly direct election voter preferences to Labor candidates and in Parliament the Greens mostly support Labor legislation, with concessions extracted for their support. So for all intents and purposes the Greens have far greater influence than their elected MP numbers represent.
After the 2010 Federal Election that Labor lost Labor formed a minority alliance government with Greens and others support. One of the Greens’ concessions from Labor was that carbon tax and renewable energy surcharge, and the RET.
And the Greens have influence in State and Local Government Councils, and of course as employees in government and local government departments.
Electricity supply is primarily a State Government responsibility, most services are, and they are responsible for approval of Development Applications and processing for projects, power stations and renewable energy installations for example.
your argument would have more weight if not for two words.
Malcolm.
Scott.
your argument would have even more weight if you could go back into those past years of centre left leadership and find the example of the electricity grid being Pluka Ducked to the extent it is now.
And regardless of what has happened in the past, the point is that as of the most recent election and associated swearing in, LABOR ARE NOW IN CHARGE.
It doesn’t matter who caused the problems in the past, it matters what the CURRENT ‘leaders’ are going to do to fix it.
There is plenty of blame to go around to all for the stupidity the Eastern States finds itself in. The problem is everyone wanted to court a green ideal only to find out that there is no working way to do it and every country that has tried has failed.
You would have to wholesale restructure a countries entire economy and infrastructure to go to this green unicorn world and the problem is once you say that openly you can’t win government.
The best you can do at the moment is transition from coal to gas which will bring your emissions down but still leaves most of your economy viable.
Gas is the way it should go until they discover that CO2 doesn’t cause global warming.
A new gas fired power plant cost $600 million, completed in two years, its the most likely option for the interim.
The market refuses to build them because in a renewable world they would only be backup, under utilised capacity.
Ultimately the states will decide the mix and they may have to underwrite the construction of gas fired power plants. Socialism with Australian characteristics.
of course yes , only those 9 years, yep thats where the damage was done eh?
Both parties are full of the climate Blarney Science
So what you’re saying is that they never should have moved away from fossil fuels?
If that’s about as far back as your blinkered vision will allow you to look then fine, be willfully blind for all anyone cares just don’t be surprised when this whole mess blows up in your face. These are problems that have been bubbling and festering away under the surface for 30-40 years or more, nothing’s been done to drain them away so, finally, we’re seeing the same stupidity and ignorance erupt in countries all around the world, now it’s going to take decades of work to sort this out.
one pollies told the truth on abc tonight re the cost of renewables is NOT low at all its only when they manage to produce briefly something like power of decent output. the rest of the time theyre MORE costly to run and maintain than coal etc
Government can use taxpayers as money withdrawals cash-machine or have container ship-loads of free money by activating printing presses.
The UK Government printed 100s of billions during lockdown. Now we’re going to see levels of inflation last dealt with at the end of Margaret Thatcher’s premiership. Bunter does not have North Sea oil and gas revenues to fund unemployment one of the tools she used to curb inflation – it doubled in the first five years of her reign and she was only saved by the Argentine Junta.
Not to worry because the U.S. will go into default first making Australia look good by comparison. Better copy the Swiss banking laws to get ahead with money changing instead of making stuff.
Maybe sometime eventually people will figure the greens are grossly incompetent at anything but writing fundraising appeals.
That’s not entirely true. Unfortunately they’re good at convincing ordinary people they have a viable solution, otherwise the world wouldn’t be in such a pickle.
Eric, a slight refinement if I may –
Perhaps we have more immature people than we knew.
Not entirely true.
They are extremely good at exploiting the ‘Youth Vote’ and gaining the support of first time voters who still live with Mummy and… other Mummy… and have yet to be properly exposed to the concepts of bills and taxes.
We are the Greens! We shall make rich people give you free stuff!!!
(YAAAAA!!!!)
Problem is that once the ‘Youth Vote’ ages they start to realise the ‘Free Stuff’ is aimed at people younger than them and the so called ‘rich people’ are now people like them.
As people age they trend towards the Right.
Proof? The Greens dominate ‘Youth Vote’. This is new people joining the system. So if they were dominating the new intake then slowly over the years there overall share would grow as stuffy old white people died at the top and new Green voters replaced them at the bottom until a time that the Greens would be claiming a clear majority of the first preference vote.
This.
Hasn’t.
Happened.
Deal with it.
In democracies all around the world, the Green parties struggle to win 10 – 12% of the primary vote.
But they often manage to get a back seat in the clown cars that are usually leftist governments.
I know plenty of old Greens
Green representation is slowly growing
You are seeing what you want to see
curiously almost all the older hippy age people I know that used to be a tad greener as I also was…are now angry and very ANTI greens
I believe it is more like gullible people looking for over-simplified answers rather than trying to understand the complexity of climate and all its inputs.
Too much hard work to comprehend scientists who specialise in one area or talk in theoretical concepts.
Expect something very similar – though under a totally different name, and with, most likely, a different rationale – here in the UK.
A rose by any other name ….
The Kool-aid has been drunk by our ‘leaders’.
And the result will most likely be a Chinese hegemony, despite their demographic problems, and internal opposition.
Auto
“Improve investor certainty”
Sounds so much better than government guaranteed profit.💰
This outcome was inevitable. Germany reached the same point a few years ago.
Subsidize renewables to create high penetration unreliable intermittency while forcing dispatchable generation to become unprofitable since underutilized. Then subsidize dispatchable generation to keep it available standby to avoid renewable induced blackouts. Irching CCGT was a good example of this inevitable double idiocy.
Yes, that is what it seems, Rud. I’m as amused as you are – these people have finally reached peak bloody-mindedness. It’s not stupidity since this is all deliberate and been brewing for over 30 years.
However you are missing a very real point. Yes, the ESB has backflipped in recommending that coal-fired generators be paid to maintain unused capacity, but ultimate legislative control is vested in the various State Govts (not the Federal Govt), and all of these, without exception, have been relentlessly pushing coal-fired generators out the door for years. The immediate crisis is passed now, with a fiercely cold winter period easing off – these State Govts have no incentive to make a decision on the ESB recommendation right now, and the next State election is not for another 6 months.
To understand Aus politics, one has to view it as a cantankerous mix of State and Federal power plays. The State Govts will now propagandise the Federal Govt as causing the scare while simultaneously playing to their parochial green constituents. This ain’t nearly over.
While they’re keeping it as an available standby to avoid blackouts, they’re also HEAVILY
promoting carbon capture which will let them keep it as a permanent part of their long-term
plan. Right now. battery backup’s way too expensive to make solar & wind reliable. That’s
the “dirty little secret” they’re not talking about.
David Wojick did a rough estimate of the cost to have enough backup for a “5-day dark
period” for solar. His estimate was 200 hrs of storage for each hour of production- ~ 8 days.
This would cost $50B/GW just for battery storage. (CFACT 1/19/22 Unreliability Makes
Solar Power Impossibly Expensive)
David cited a paper where Gregory calculated the cost of replacing the 3 TWh produced
annually in the US by reliable 24/7 solar with solar & wind. His result was up to 30 days of
backup.for each hour of production- almost 4 times as much as David had “guesstimated”
with solar alone. The main reason it was so high was seasonality which peaked in
May/June- after the winter season which uses a lot of energy.
Gregory also ran scenarios that left some 24/7 solar in the mix, as it’s “blessed” as being
okay because of carbon capture. This reduced the cost a lot & is their “backdoor way” to
keep RE from totally failing. They NEED 24/7 solar LONG-TERM. Sneaky little beggars!
https://www.cfact.org/2022/06/16/breakthrough-in-u-s-grid-storage-estimating/
https://blog.friendsofscience.org/2021/12/21/the-cost-of-net-zero-electrification-of-the-u-s-a/amp/
OOPS- paragraph three, first line- “3 TWh” s/b “3k TWh”
Hey! All they have to do is plug in “dispatchable renewables” into their out-year Resource Plans like New York State. Problem solved until retirement.
Carbon Capture is the next “Oil for Food” in terms of money making potential (looting taxpayers and rate payers).. A lot of people in every political party are lining up for their cut of the loot. This thing is huge and the big boys have all signed on.
hate to tell you the cold is NOT over yet
another sth coldwave is due to hit the sth of aus shortly
and days of 13c arent what youd call warm except they are warmer than the 10 11 12 recent days
And then gas becomes scarce and expensive. What could possibly go wrong? At least you in the UK are on track to reach your Nut Zero goals. [He, he.]
“Green Aussie PM Caves, Offers Subsidies for Coal and
Gas”
The usual level of accuracy here. The PM hasn’t “caved”, or offered anything. The ESB, which is created by the commonwealth and state governments, has produced “a high-level design paper released by the Energy Security Board”. This wasn’t rustled up overnight.
It is a very reasonable proposal; the cost of maintaining the grid does need to be distributed fairly. If the report is adopted, no-one would be caving. The PM, in office now for less than a month, has not, AFAIK, ever opposed such a proposal.
Good try Nick, but we all saw the public argument about whether developing Narrabri gas field would delay the Net Zero transition. These fools were ready to toss fossil fuel to the wolves, until reality smacked them in the face, and they realised they needed fossil fuel.
Total non sequitur. The Narrabri development was held up by farmers in the NSW state court. The Commonwealth Energy minister backed the development; I’m not aware of the C’wlth taking any other position.
But this has nothing to do with the ESB making a sensible proposal to improve functioning of the grid. And the headline is still totally wrong.
Nick, not being an Aussie I don’t know anything about your politics. Being a bulk power expert, however, I can tell you your Leftist politicians and activists have so distorted your wholesale power delivery systems that they are now forced to slap on expensive band aids. It is inevitable they will stagger from this crisis to the next more serious one caused by mindless ideology. It will get worse until your average citizen gets fed up with increasingly stretched excuses. Thanks for being a crash test dummy.
I have to agree. Using fossil fuels to get a stable grid is sensible.
Not only the farmers, the local indigenous population was also miffed, but the Court has finally ruled in favour of Santos.
The ESB ‘recommends the capacity market should not exclude existing resources – such as coal and gas.’ (AFR)
“The cost of maintaining the grid does need to be distributed fairly”. It is the cost of augmentation of the grid that needs to be distributed to the renewable generation sector which has created the need. Perhaps then the true cost of renewables will become more transparent.
It doesn’t really matter: The artificial increases in the cost of production will result in your competitors out-competing you economically. Learn Mandarin and Hindi.
The cost of maintaining the grid plant may need to be distributed fairly, but the cost of backup (dispatchable) electricity should be born by those electric generators that can not meet the dispatchable requirement.
That is what is being done now. Penalizing the taxpayer while also paying unreliable generators a subsidy is stupid personified. The unreliable generators should meet the cost of providing backup even if it bankrupts them.
Customers get what they pay for. They want cheap renewables when available, and they want grid security. Via the ESB proposal, they can have more of the latter, but will have to pay the cost.
I get it, in the left-green utopia of the future having access to 24 hour power is to be a luxury only the wealthy can afford.
People really want heat in winter at night, and AC in mud summer heat.
Total BS Nick.
Ratepayers don’t make that choice, politicians do.
.
I ratepayers and taxpayers had been told that “renewables” were and are unnecessary fur the functioning of the electrical grid and their use would, by force due to the redundancy provided only when the wind is blowing and/or the sun is shining, would be an excess expense and by necessity drive up rates.
And as I have been asking posters of your religious persuasion, why do you hate poor people so much? Unreliables have been a net drain of overall net worth of society while only benefitting the crony capitalist “green” moneygrubbers and the politicians who favor their worthless “farms” . EVERYONE ELSE looses when government forces taxpayers and ratepayers to fund these rent seekers. You know, the politicians cronies and the oligarchs,
So, again Nick, why do you hate the poor?
Customers want reliable energy at a fair price. Grid security is part of that. It should have been looked after from the start.
Yes, the process should have started earlier. But it is consultative, and so necessarily slow. From their report:
“In March 2019, the then COAG Energy Council tasked the ESB with advising on a long-term, fit-for-purpose NEM design. This has become known as the Post 2025 Market Reform Project. This request reflected a general concern about reliability, security and affordability in the NEM as the rapid uptake of renewable generation occurs and the existing ageing generation fleet progressively retires.
The ESB provided its final advice to Ministers on the Post 2025 Market Reform Project in July 2021. The advice included a recommendation for Ministers to provide in-principle support for a capacity mechanism for the NEM and, in recognition of significant stakeholder concerns, to instruct the ESB to work with stakeholders and jurisdictions to develop the detailed design of a capacity mechanism for Ministers’ agreement.”
Hi Nick – Sorry to be a bit sharp with this wording, but I read your comment as apologism for stupidity. NB. The stupidity is not of Anthony Albanese and his newly elected government, it is of the previous spineless Scott Morrison’s government and the idiotic demented ideological unrealistic greens that he pandered to in the forlorn hope that it would win them votes. You say: “the process should have started earlier“, and in a way that’s correct, but the reality is that the process would not have been needed at all if the previous government had got the energy system right in the first place.
Anthony Albanese is now between a rock and a hard place. The rock is a collapsing energy system. The hard place is his daft net-zero policy (yes, Scott Morrison’s net-zero policy was ultra-daft too), Hopefully AA will successfully navigate a way through by seeing that he can keep up the rhetoric on net-zero without actually doing anything about it until long after the next election (or two), and at the same time ensure that coal and gas play a full, effective and profitable part in electricity generation.
He hasn’t started too well in the latter, because he has left the real decisions up to the states ….. or maybe he has been very clever because he is now forcing the states to take reasonable actions on pain of being seen to be the real problem. We will see. At this point, I am still prepared to give AA the benefit of the doubt on the basis that actions speak louder than words and his actions may yet have a good outcome (his words cannot).
Mike
” The rock is a collapsing energy system”
Our energy system is not collapsing. In terms of fuel, we remain huge exporters. In terms of generation, the system is stressed by high fuel costs (world prices) but there haven’t been any actual grid failures.
Underutilised generator capacity is nothing new. Generators have always had to cope with the very large daily cycle in demand, as well as the day to day variations due to weather. The fluctuating renewable supply is just an addition to these very large fluctuations.
One of the main issues for the ESB is that they didn’t want to have the generators claiming those large and ancient costs under the new scheme. I don’t know how well they will avoid that.
They need to build new gas fired power stations at government expense, then reliability is assured.
Not correct, Albo is a zealot and deserves no slack to be cut. He has clearly stated he knows what to do and he has a mandate. Therefore he needs to state what his plan is in detail and how he intends to implement it, disaster or not come what may.
Do you believe that pile of words conveys any intelligence, Nick? People allowing our “leaders” to get away with spouting meaningless verbiage is one of the primary reasons our standards of living are going down. Leftists cannot deliver the goods to the economy nor a functioning society.
Getting flash backs of the Soviet Union. The Ministers will decide. It will work out just the same.
“Grid security is part of that”
In the UK as demand has been going down partly due to de-industrialization (industrial demand has fallen by 20% since 2000) capacity has had to be increased by over 20GW to accommodate the effect of unreliables on the grid.
The more unreliables you have the more capacity you need to meet any given demand. The UK is pressing ahead with 40GW of offshore wind which will require a lot more capacity for the times when the wind isn’t blowing.
BS Nick … cheap renewables lives only in the minds of fools and charlatans.
Wind turbines & solar panels, charging submarine scale banks of batteries, have been very useful for remote cattle station and mining operations for decades now.
They provide supplemental power when conditions are right, and help to reduce the consumption of diesel in the diesel generators that supply the mainstay power needs of the stations and mines.
But it takes a special deficit of rationality to claim that these wind & solar dabbles can be scaled up and used for grid-scale 24×7 dispatchable power.
This is where religion kicks in and takes over.
Customers were promised that renewables would deliver grid security. That was a lie which is becoming increasingly evident. Having paid a fortune to subsidize the renewables, they’re being forced to pay again for other energy sources that actually work.
And lower electricity rates.
Notice how Nick tries to pretend that these diktats from government are merely, “what the customers want”.
Renewables have never been cheap, that lie is getting old, but Nick hopes he can get a little more traction out of it.
Double down on stupid. “Cheap renewable” energy creates “grid instability.” It is a direct cause effect relationship. Most customers, having been LIED to about CAGW AND RENEWAL ENERGY, have very little cognition of this.
No Nick
Customers want cheap reliable power.
I have never seen a politician run and win on a promise of higher power costs, the promise is always that it’s going to be cheaper.
So they lie
And you cover for them
Why is it always the stupid word games with you?
Your like a squid that releases a cloud of ink whenever someone draws close.
I used to read your stuff and not comment then the one time you simply bullshitted about the content of emissions from burning diesel, it took me about 30 seconds to confirm your BS.
You just seem to wish to be contrary for the sake of it.
Why is that?
You should talk to someone about that. There are people who can help.
“cheap renewables” is a BS concept that doesnt exist
Cheap renewables, Nick? Subsidies, both taxes and rate-based, and market distortions belie that ridiculous assertion.
most of dont give a damn about reneables at all what we want is what we had CHEAP reliable coal fired power
“grid does need to be distributed fairly.’
Ah.. so they are going to subsidize coal.. Thanks Nick !
The ruling Labor Party is financed by the Australian Council of Trade Unions that is also the owner of AustralianSuper the largest superannuation and pension fund in the country, contributing to superannuation being compulsory for all employed.
AustralianSuper plans to have investments of over $1 billion in renewable energy projects by the end of 2022.
As the saying goes: ‘follow the money’.
Even government money can’t float renewables forever, these guys are still operating under the delusion the green transition will succeed.
The fund trustees must be confident that their renewable investments don’t compromise their fiduciary obligations, good luck with that guys.
Plenty of work for plaintiff lawyers down the tracks I suspect.
Chris, yes, this is a hope, but a weak one, for energy reform away from unworkable W&S. The take or pay contracts W&S generators get under RE portfolio requirements insolates financial institutes from risk for their loans or investments. No threat from “fiduciary” requirements at present.
If the mandates don’t end nothing good follows. We see the same thing with bio-fuels. Bio-fuels have had a huge political constituency for decades, and W&S now has the same level of political support.
IMHO W&S mandates will never end, but regulators will eventually accept nuclear under the same arrangements as with W&S and nuclear will crush W&S on the merits.
US, UK, EU and Australia, and others, all slightly different RE portfolio requirements and mandates, but essentially all the same.
Governments can only buck free markets for so long. But eventually reality comes crashing in as they always run out of other people’s money.
I keep reminding our Tory MP that it was the UK crashing out of the ERM that killed their parties reputation for sound economic management. The irony is most MPs and the general public thought the mistake was being forced out, when that was actually the solution to stopping our spiralling interest rates. The mistake was the original policy of joining the ERM.
Same with renewables and net zero. When governments can no longer prop up the stupid policies it will be spun as a catastrophe as we ditch them. Actually ditching these policies will be a blessing.
They are stupid beyond words or parody. My Cocker Spaniel has more brains than all the net zero supporting MPs in the UK parliament.
That’s why no government of any stripe is brave enough to put an end to this unreliables fiasco. Nearly every worker would be a victim of the almighty crash of super funds that would result. 10 million angry workers would be too much for any politician to face, so the farce will just keep on going until, like every Ponzi scheme, it crashes under its own weight and the politicians can (as usual) absolve themselves of all responsibility.
Subsidies is not the right word, surely the government will be making up the shortfall that Fossil Fuel generators will face, burning fossil fuels that cost x$/handful, and selling the power at x-1$/handful; they will quickly become insolvent and close down – no more back-up?
In case anyone is interested, the ESB design paper is here. It has nothing to do with the recent election. It follows a project initiation paper which was released in December 2021, which called for submissions due Feb 10, 2022. Target date for legislation is Feb 2023. The PM has had nothing to do with it so far.
I believe you Nick.
The back-room plotting, scheming, wheedling for replacement of reliable, economical power generation & distribution with unreliable, uneconomic wind & solar installations has been going on for years.
And where has it landed Oz?
Up shit creek without an adequate means of manual propulsion.
“Australia has embraced a worst of both worlds energy policy, in which both renewables and fossil fuel providers will receive generous subsidies to maintain their services.”
********
Put on your cowboy hat, saddle up and ride that fence cowboy. Yeeeeeeeha!
You keep on telling those porkies to the Guardianistas Albo-
Anthony Albanese backflips on national cabinet secrecy and refuses to say why | Australian politics | The Guardian
Life will be sleazy under Albanese lefties. LOL.
PS: You were warned what he was like well before the election campaign watermelons-
Eutility – Anthony Albanese accused of ‘humiliating’ backflip on Kurri Kurri gas-fired plant
You can’t just flip a switch to restart a high temperature coal plant. The whole chimney must be entirely rebuilt due to contraction when it cooled. Where the boilers and turbines properly maintained? Will probably take some overhaul at least.
Suppose you have a coal plant with 5 boiler/turbine/generators that traditionally ran 4 with the 5th always being for refurbishment. Then you’re getting dumped on by solar and wind and told the lot has to go. How would you handle your 5 generator investment now given number 5 is up for refurbishment and generators 1-4 are in the queue at different timed stages to be refurbished likewise? Duh!
It never ceases to amaze me how far politicians will go to emulate, poorly, the markets they have destroyed.
Eric,
What if Australia has already hit Net Zero?
https://agforceqld.org.au/knowledgebase/article/AGF-01458/
If Dr. Bill Burrows’ recent paper ( May 2022) is correct, Australia and Bhutan are the only two countries worldwide which are Net Carbon sinks not Net carbon emitters.
Impossible?
The Department ( DISER) has FUFCL (net carbon sink figure) at 24.5MtCO2-e in the September 2015 National Greenhouse Gas Report while Burrows says the figure based on 2011-2018 is 455 MtCO2-e annually!
My queries to the Department asking if Burrows’s paper is correct are ignored.
See if you or some of the Australian commentators here can solve the conundrum.
Eric,
Typo -The Report is “September 2021 National Greenhouse Gas Report”.
I think it is likely you are right Herbert, but as I don’t think CO2 emissions are a problem my focus tends to be on the destructive impact of climate policy, rather than on whether we have actually hit net zero.
Australia always has been and always is (all year round) a carbon dioxide sink.
For the very same reason it cannot be a net source – because it is effectively a desert. A desert that is trying to re-grow itself back into being a rainforest.
Because the CO2 everywhere is actually coming from out of farmland.
It is from out of the soil, not out of plants or trees that are being chopped and burned.
Rising levels of atmospheric CO2 are caused by falling levels of soil organic matter.
Because Australia doesn’t have any soil organic matter, it cannot emit – it can only stay the same or absorb
And absorb is what it is doing
Attached is a screenshot of a document I created from the original OCO library/gallery at NASA, before they changed it all.
It shows the month of August but it doesn’t matter which month you choose, Australia is always low compared to the ocean around it and everywhere else.
Here is Bill Burrowes document, telling us that Australia, and according to OCO, is absorbing 800 Megatonnes CO2 annually
OK, seems nice.
But but but, Australia is nearly 3 million square miles in area.
Convert that to acres and assume it is planted with reasonably vigorous trees pulling down 5 Tonnes per acre per year, Australia would be pulling down over 9 Giga Tonnes annually
Thus Australia is a desert (pulling down one tenth of what its capable of) but at least it’s making an effort
If only a few people, especially those claiming to be scientists, followed that lead
Australia is proof that fossil fuel burning is not causing the rising CO2 levels and OCO Sputnik clearly showed that.
Hence why NASA were duty bound to completely change (trash) the original OCO gallery and so now present something less than useless – unless you enjoy getting migraine or epilepsy from watching fast moving GIF graphics
This whole climate thing is quite horrible – the lies and deceit are off the <expletive> scale.
I would seriously be worried about my superfund going all in on renewables. Redirect your funds while you can.
Warren Buffett has already said that investments in wind & solar farms are good value, provided the taxpayer-subsidised guaranteed dividends and overly-generous tax concessions are locked in.
Otherwise, he says they just don’t stack up as sound business propositions.
But the industry super board political-left appointees have the inside running on which renewable projects are going to be “protected” with taxpayer $$$s injections.
“It’s all been organised”, as the family hierarchy operatives used to say in “The Godfather”.
The recently defeated Morrison Coalition Government set an end date of 2030 for the Renewable Energy Target and incentive subsidies for private sector investors.
The 2030 date has been in place since 2015 curtesy Abbott. The RET scheme has been going since the Howard period. Rudd boosted it and Gillard introduced the carbon tax.
As Eric notes above “government money can’t float renewables forever”, it must come unstuck eventually.
Vladimir Lenin had a saying: Sometimes it is necessary to take one step backwards to take two steps forward. Not an exact quote but this is what the PM is doing. At least in my opinion.
In reality going to coal as a bailout should be looked at as a step forward.
Is “power costs will go down under Labor” the 1st election promise broken?
They’re ramping up the pressure on the true believers and their new kid on the block theory-
Australia’s energy crisis caused by ‘an extremist theory’ | The Chronicle
Lefties are ‘eating their words’ over coal use | Townsville Bulletin
Like I said this Labor Gummint will be on the skids by Xmas as they knew all about the wholesale power price roller coaster this year and what it meant. They’ll have the airhead Teals and crazy Greens on their hammer all the way down-
Australia News Live Update: Allegra Spender says gas companies need to help with energy prices.Today’s Cabinet | Australian News – Sydney News Today
The pale greens are not the only leftists demanding that businesses act like charities and “help with energy prices”.
Socialism.
Of course renewable are the future, all that is needed is more batteries.
The new Federal Minister believes.
/sarc.
If the Government can force the ‘big’ power producers to keep producing power for the Greater Good, what is to stop them forcing the small producers to do the same thing?
And by ‘small’ I mean home solar.
You want to feed into the grid then you are part of the overall power solution.
If you cannot provide supply then should you be fined or otherwise forced to supply at a loss?
Open question.
No wind scale grid or solar can guarantee any capacity. They will not be eligible for the capacity payment but they still get the payment for the LGCs created (until 2030 at this stage).
So rooftop solar will work the same as the grid W&S only the benefit is paid up front as deemed output rather than actual. The deemed output of rooftop that attracts the STCs is now only 7 years as it disappears in 2030 unless it is extended – unlikely because the grid already has indigestion at lunchtime when rooftops are singing.
Retailers who have a high number of rooftop solar in their customer portfolio would be looking in good shape compared to those who have higher exposure to the wholesale price.
You want to feed into the grid then you are part of the overall power solution.
Funny you should ask as the AEMO had a solution for rooftop solar owners bludging on the grid-
Why Solar Owners Shouldn’t Panic About the “Sun Tax” (energymatters.com.au)
You see paying a service charge for the transmission poles and wires doesn’t cover the costs of dumping your surplus electrons back the other way but naturally the numpties reckon it’s a sun tax. Of course if owners thought they were being ripped off they could always install say Powerwalls to use all that valuable treclicity themselves. No prizes for guessing why suddenly homus economicus doesn’t.
This statement is wrong. Electricity consumers will pay the subsidy. So they already pay for the W&S subsidies (thank you) and now the capacity subsidy will be added.
The proposal is for retailers to buy capacity through the NEM market and then add the charge to the wholesale price in a similar way that the cost of buying LGCs is recovered.
I wonder if batteries will be eligible. They offer a well defined power capacity but the energy component is next to nothing.
You have to think someone will wake up to all the waste some time.
At least if the Coal generators are saved the RE leeches will have someone left to buy their certs
A lot of money circulating doing nothing very productive
“Designed well, the capacity mechanism will enable …” Says it all: Our lousy energy mechanism created a crisis, but our brilliant capacity mechanism will fix the problem.
Time to move from yellow vests and protest signs to body armor and firepower. Our governments are killing us.
This reminds me of a politician I was talking with on my doorstep. I was complaining to her about how high my property tax was and my homeowners insurance and my utilities. She sympathized with me and informed me that is why she is leading the effort to subsidize constituent’s energy, insurance and taxes. I informed her that was exactly the wrong solution, I don’t need other people to pay my bills. I struggle because my taxes, utilities and insurance are to high. I’ve lived in the same place for nearly 50 years, my income is not going up but all the things out of my control continue to race higher and higher. She looked at me in disbelief and couldn’t understand why I didn’t appreciate all she has done for me. These people just don’t get it.
well the smug “so green” SA govt n public just got told that their bills will rise 1k per yr…because their solar takeup is too good, the actual bulldust behind that is paywalled unfortunately
but it will be the usual rooftop solar high influx to grid story.not enough battery storage at near 10k a pop on homes etc
the batteries they do have are all in the mid north near the birdshredders as far as I know theres few/None? in suburbia etc and 18k homes powered for 1hr at best?
I have a friend who likes options, he has a massive solar system. Lucky we live in a place where you don’t need much heating or cooling, he uses neither unless absolutely necessary. Rooftop solar can just about run lights and fridges, and maybe a little cooking, but forget heating and cooling.
But..but..couldn’t concerned climate changers band together and buy cheap Green power from Gaia instead of the nasty expensive stuff?
Green energy electricity retailer Enova enters voluntary administration – ABC News
Typical left wing logic, force prices lower, realise it is impossible, then tax the consumer to cover the difference.
What a joke.
And all they needed was less CO2 phobia.
Grant Kenny can’t put it any clearer for our gormless overlords-
‘Lunacy beyond belief’: Australia’s energy situation is ‘dire’ | Gold Coast Bulletin
I know next to nothing abut Australia, just what comes up here and what I have looked up as a result.
The key quotes from Guardian piece seem to be these:
I looked up what current generating capacity as supplied is (not raw capacity, but what the source of supply is), and it seems to be about 55GW total, of which about 70% is coal and 5% gas. Wind and solar are about 20%.
It puts things into perspective. The piece talks of 45GW of new storage, but does not say how many GWh this will carry. If its anything like New York State or the UK, it will take at least 2-3 weeks worth of capacity. Just do the math. Its a huge number, and one where there is no working example anywhere in the world of anything like it. Its 45GW times the number of continuous hours you need to provide coverage for.
Well, looking at these numbers as an outsider, I need a lot of persuading. Can they really, will they really, build this much wind? Can they install and manage this many batteries? And in this timetable?
It looks from here like the same disastrous plan the UK is embarked on. Lets close all the reliable generating capacity at the same time as we double demand for power. And lets provide unparalleled amounts of battery storage to back up the unprecedented of installation of wind and solar.
Well, I know how I would be voting. And I’d be buying a big tank and a generator.
The ESB report is more precise:
“AEMO’s Step Change scenario estimates about 122 GW of additional wind and solar (collectively variable renewable energy (VRE)) firmed by approximately 45 GW of new dispatchable storage capacity, 7 GW of existing dispatchable hydro and 9 GW of gas-fired generation will be required by 2050 to meet demand as coal-fired generation withdraws.”
It leaves open how that “dispatchable storage capacity” might be formed, but clearly envisages that it could include gas generation with appropriate response times (and also pumped hydro etc). They are writing from a market point of view – people would bid whatever kind of capacity they can deliver.
The report also notes that this is not a new concept, and capacity is now paid for directly in various ways. But it thinks that should be formalised into a market mechanism.
Australia 1.3% of global emissions, so why?
This is a bad move for Aussie energy; the subsidies will come with government control.
Liberalism truly is a mental disorder. This pain is all self inflicted. Unless the western world leaders will acknowledge in a united fashion that fossil fuel usage is not causing a climate emergency, we will repeat the Australian mistakes over and over.
While the feed in tarrifs and mandates gave wind and solar a great start in getting developed and prices down, the very nature of intermittent power is cancerous to the grid. Green power frequently makes lots of power when no one needs it and drives the price down below zero even. This forces reliable plants to curtail – they can’t run efficiently if they have to shutdown and restart over and over again, or waste fuel by keeping running. And that would happen even if there were no subsidies for wind and solar. If the mandates forcing utilities to take all the wind/solar power available were removed then no one would agree to buy power they don’t need, and certainly wouldn’t pay producers to reduce output.
I love the free market system but I think the nature of electrical utilities really doesn’t allow for spot markets.
The original people that designed most grids recognized that electricity generation and delivery to all, rural and cities, was a “NATURAL MONOPOLY”. This also applied to land-line telephones, water, roads, and sewer provision. They are a mix of private, public, government but still monopolies. Duplicate provision of capital and physical plant would not be the cheapest or most efficient.
That’s why most Western countries at least do not have free markets for the provision of these services. It appears likely that those who hope to make their provision thru free markets are having problems both in costs and in reliability.
Fossil fuels will need subsidization only because the politicians can’t be trusted not to rip the rug out from under their investment as soon as it suits them. As with everything, the politicians are the cause of all problems and the solvers of none.