Give it up, Innes

We all know that the Ai Group is a blot on the landscape but Innes thinks he is quite the expert on energy, although the RET can’t be changed – his green rent-seeker members couldn’t stomach that.  (Mate, the RET is causing all the problems.)

And don’t you love his solutions:

  • Turn the fridge down (gosh, those smart meters have really been a hit);
  • Bribe the farmers to extract gas, which is banned by state governments in any case;
  • Mind you, if you have to pay a lot to the farmers (as well as state royalties), there will be no commercial case to explore and exploit gas;
  • Gas in Australia is now a globalised commodity and will attract the world prices (net of transport costs);
  • You cannot get all forms of power competing as long as the RET is in place (8 coal fired power stations have closed and another 8 are set to follow; no new gas plants and two mothballed, including one in Queensland owned by the government).

In other words, go to jail, do not pass go.

I guess this is the bipartisan gibberish that Ai Group signed up to with the other likelies.

An Australian Industry Group member running a national company with an international parent showed me his electricity bill last week. It had doubled in the past year. His European head office pretty much told him to forget further investment while it considered its ­options.

This is a typical experience and our close liaison with our industrial members finds that the cost of electricity for many industrial users (excluding network charges) has risen over the past two years by 106 per cent in Queensland, 150 per cent in NSW, 163 per cent in South Australia and 168 per cent in Victoria.

It is not surprising then that power has in recent years gone from a top 10 to a top four expense for many businesses.

Enough is enough. By turning an obvious strength with our abundant coal, gas and renewable resources into a competitive weakness, Australia has gone from a ­potential energy powerhouse to being put in the too-hard basket in some international boardrooms.

It is not too late to turn things around but there needs to be ­bipartisan and nationally co-ordinated political and policy action. (Sure mate) And it needs to happen now. We need short, medium and long-term solutions to our malaise or else we risk losing competitiveness, real investment and jobs.

Energy security, affordability and sustainability must be at the top of everyone’s list of national priorities. We need to elevate these to leading priorities on behalf of households whose bills are rising; on behalf of industries — particularly the more energy-intensive industries that, without action on reliability and affordability, face an existential threat; and, of course on behalf of the many thousands of employees who work in these industries and along their supply chains.

For our trade-exposed manufacturers, the costs of higher energy prices and the costs of the buffers needed to protect against unreliable supply cannot simply be passed on. Their competitors in other countries where energy supply is better managed will be only too keen to step up and supply customers both in our export markets and in our domestic market.

Among the immediate steps is finding ways to encourage businesses and households to flatten out and reduce energy use. Becoming more efficient in energy use can make a real difference. It is particularly important for the times and places where lower demand can cut systemic costs.

We need to better use existing resources and there is a lot that individuals and businesses can do in this regard. Demand response systems can stabilise the grid, for instance, by remotely turning thermostats in fridges and air conditioners up a degree for an hour.Governments could lead the way on this.

We also need agreement between the commonwealth, states, industry, environmentalists and rural communities on how to get gas out of the ground. Abundant gas on the east coast is locked up by state bans. We have more gas on the west coast that we can’t get east. Meanwhile, tight gas supply and higher prices are damaging industry and driving much of the recent surge in electricity ­prices.

Arbitrary bans are nonsensical and damaging. Now is not the time for timidity. We must surely be able to access our considerable reserves of gas on a carefully evaluated, case-by-case basis with firm regulation based on science to ensure environmental and aquifer impacts are managed properly.

We must also be able to reward our farmers who choose to use their land for gas development, such as with direct access to royalties to reinvest into their land.

Then we need to settle an energy market design that allows all energy sources — coal, gas, renewables and even nuclear — to compete to power our industries and households. Those that can deliver low-cost power, increase system stability and help meet our international emissions reduction commitments should prosper. There is room for diversity in our energy system but not ideology.

A new coal power plant would take five to 10 years to go from idea to production. Apart from questions around emissions intensity, flexibility and bankability, we don’t have that long to wait. But the technology should get its chance in the marketplace.

The cost and performance of renewables and energy storage are improving fast, but right now there are limits on how high wind and solar use can go without costs escalating and stability declining.

As a result, gas power is by far the most available option at scale for stabilising the grid. Those challenges can be solved, but they are simply ignored by feel-good state renewables targets. The states should drop their targets and work with the commonwealth on a ­national energy policy and national greenhouse gas emissions reduction strategy.

Meanwhile, further amending the commonwealth’s 2020 renewable energy target would wreck the only bipartisan certainty business has in energy and provoke more state action.

The time for a reality check is now. When South Australia’s industry and the shipbuilding program have to install expensive, dirty and typically idle diesel generators just to keep their doors open, you know we have a problem, if not a crisis.

When Hazelwood closes in six weeks, South Australia will become perilously dependent on supply conditions in NSW and Queensland, not just Victoria. As an Ai Group member told me, that’s a very long extension cord.

We now have a national economic security problem. If global boardrooms turn their back on Australia over energy or businesses are forced offshore, it will represent the biggest collective policy failure in decades.

Delivering the much-vaunted trifecta of energy reliability, ­affordability and sustainability needs bipartisan and national co-operation. Fixing the debacle is a massive test of our political leadership and our federal system.

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23 Responses to Give it up, Innes

  1. sabena

    Curious that he thinks the problems can be partly solved by a reduction in usage.
    Prosperity in the 20 century was as a result of the use of electricity which was cheaper and cleaner that alternate sources of energy.Now we want to throw that away.
    Why?All for some fear that CO2 levels are rising when CO2 is not a pollutant and is necessary for plant life(and that’s before the claims that this is happening are verified rather than predicted).

  2. cohenite

    BZE in 2010 developed a plan whereby Australia could exist entirely on renewables by 2200. Professor Barry Brook, an alarmist, and a couple of engineers, Peter Lang and Martin Nicholson agreed with BZE with 2 conditions: firstly all Australians had to reduce their power use by > 60% and it would cost >$4 trillion (in today’s money $5 trillion).

    Not bad, eh?

  3. Econocrat

    Bipartisanism = when everyone agrees with me.

  4. MAGB

    This moronic idiocy will only be dealt with when we have a few more coal-fired power stations closed and lots of blackouts. Then the voters will revolt, and put into power some normal people who act on the advice of expert engineers rather than the priests of the Climate Change Cult. Let’s vote Green for a couple of years and bring it on.

  5. incoherent rambler

    There aint gonna be a sane policy until the ABC is forced to stop preaching religious stuff on CAGW and start providing some reality based information on the subject.

  6. the sting

    If this Innes character is an example of Australian business group think,what hope have we got ?

  7. Let’s vote Green for a couple of years and bring it on.

    Even better, explain to a group of rabid greenies here in QLD just how easy it is to sabotage a coal fired power station without doing any permanent damage, or endangering anybody. Once Hazelwood closes, let’s see how well the entire East Coast fares with no peak load power for six hours or more a day, for a fortnight or so.

  8. Historyintime

    So what’s the solution? Nobody’s going to invest in a coal fired power station, of 30 years life, given that more climate change mitigation action is inevitable over that period, if only because there will eventually be another ALP government.

  9. This is a typical experience and our close liaison with our industrial members finds that the cost of electricity for many industrial users (excluding network charges) has risen over the past two years by 106 per cent in Queensland, 150 per cent in NSW, 163 per cent in South Australia and 168 per cent in Victoria.

    Sinc posted a graph the other day that showed this increase took place over TEN years and largely under Krudd-Gillard which, from memory, I would say is accurate.
    So what is this “over the past two years” BS? An attempt by yet another left infested cesspit to pin all the blame on Abbott and diminish the abolition of the Co2 tax?

  10. Leo G

    Applying the pleonasm filter, Australian Industry Group groupists want bipartisansheep.
    Hardly surprising.

  11. Senile Old Guy

    Demand response systems can stabilise the grid, for instance, by remotely turning thermostats in fridges and air conditioners up a degree for an hour.

    Just what I want: my AC and refrigerator being remotely turned up and down by someone with no idea of my circumstances. This is a recipe for disaster.

  12. NewChum

    Among the immediate steps is finding ways to encourage businesses and households to flatten out and reduce energy use. Becoming more efficient in energy use can make a real difference. It is particularly important for the times and places where lower demand can cut systemic costs.

    Why not suggest we do away with electric power tools and do consecutive with hand tools as well?

    ‘Peasants! Your electricity is enslaving you! Go back to the days of warm beer and hot nights!’

    No, just no.

    Build more power stations. The beginning, middle and end of the solution.

  13. NewChum

    Among the immediate steps is finding ways to encourage businesses and households to flatten out and reduce energy use. Becoming more efficient in energy use can make a real difference. It is particularly important for the times and places where lower demand can cut systemic costs.

    Why not suggest we do away with electric power tools and do consecutive with hand tools as well?

    ‘Peasants! Your electricity is enslaving you! Go back to the days of warm beer and hot nights!’

    No, just no.

    Build more power stations. The beginning, middle and end of the solution.

  14. JohnA

    It is not too late to turn things around but there needs to be ­bipartisan and nationally co-ordinated political and policy action. (Sure mate) And it needs to happen now. We need short, medium and long-term solutions to our malaise or else we risk losing competitiveness, real investment and jobs.

    Econocrat #2295589, posted on February 14, 2017, at 9:48 am

    Bipartisanism = when everyone agrees with me.

    Alternatively, Appleby-speak for “we wish to ensure that it never happens” or “we wish to ensure that it is never removed” because the politics of such “non-partisanship” is impossible to achieve.

    In fact, we do not need long term solutions, five year plans or any such nonsense. We just need the RET removed, and let businesses make their own plans accordingly. If lowest cost power generation is via coal-fired base-load thermal power stations then they will be built.

    Second step: lift the stupid ban on hydro and dams.

    If you haven’t guessed, my basic strategy is “government, get out of the bloody way and let us invest”.

  15. Squirrel

    “We now have a national economic security problem. If global boardrooms turn their back on Australia over energy or businesses are forced offshore, it will represent the biggest collective policy failure in decades.”

    And have had for some time, but things will have to get somewhat worse before pragmatism can cut through.

    It’s hardly surprising that we have got to this point on energy policy – just as the majority of the public have come to believe that we can have ever rising wealth and living standards (without actually earning such) and ever increasing government spending (with someone else paying for it), so we can have sweetness-and-light-and-a-hundred-flowers-blooming energy at no extra cost.

  16. OneWorldGovernment

    Judith,

    Come on Judith, you know that Innes can’t wait until the ‘i’ in ‘Ai’ is completely gone because it’s all too difficult.

    I would think that the founders of the Metal Trades Industry Association and the Australian Chamber of Manufactures would be spinning in their graves.

    Who needs ‘i’ when you can be handed taxpayers money.

    Biggest growth in jobs is in ‘education’, ‘health’ and ‘services’ both public and private.

  17. Defender of the faith

    Judith the world price for gas is a rort. If you suggested that Australian domestic prices were related to either the Henry hub or the euro hub in the U.K. Local oil majors would have kittens. The apac “market” is a collection of large long term lng contracts of varied price that is not at all transparent.
    Have a close look at Australias conventional reserve estimates versus production. The squatters are killing us.

  18. classical_hero

    The plan is working perfectly.

  19. a reader

    Meanwhile in Mainland Tasmania…both Weather-all and Teflon Tom are going it alone on an ETS. F***ing idiots.

  20. .

    I’ll say it again:

    We’re King Coal, King Uranium and King Thorium. We could even be King Oil and King Gas.

    AGW is disproven statistically – the cosmic ray theory has been proven, the maximum CO2 forcing is not enough or permament/long lasting enough (per cointegration & unit root analysis) and the temps and sea level rise show a broken model.

    Furthermore, if they were serious, we’d go in hard with nuke – as in the government building capacity immediately, selling it off and offering the private sector a 30 year tax holiday for construction, mining, processing, generation, distribution and retailing.

  21. OneWorldGovernment

    What I would like to ask, and propose, what if we did nothing about Global Warming.

    What if we said yes you have a good argument but so what?

    When has the Earth environment been any different?

    Why not do nothing except continue on the path we have evolved over 100’s of years to utilise fossil fuels?

    After all, if agw doesn’t kill us then something else will so what is the point?

  22. sfw

    Late here but, “Bribing Farmers” the US system has a royalty for the landowner and they don’t have much trouble getting new fracking etc. You and Henry Ergas may hate it and claim it has always been the Crown that owns what’s under the earth but it doesn’t have to be that way. If we had a royalty payment system similar to the US we wouldn’t have all the farmers getting gas and other exploration shut down. It works in the US and they manage to extract it and make a profit, until we do it here we will always struggle to develop new resources.

  23. incoherent rambler

    OneWorldGovernment + sfw

    What they said.

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