Yet another bureaucratic report promoting more spending on electricity

I have a piece in Quadrant this morning addressing the latest piece of energy market advice and regulation cornucopia of advice and regulatory ground preparation from the Australian Energy Market Operator (AEMO).   This is the sixth major report on electricity in the past year.

In my pioece, I draw attention to the massive expansion of transmission that AEMO is planning to accommodate the poor reliability and greatly dispersed nature of renewable energy it sees as coming to dominate the national market.  It takes that view of the triumph of renewables at the very time when the effusive Fatih Birol at the renewable-promoting IEA is worrying that renewable investment is in decline.

With her finely tuned political antennae the head of AEMO, Audrey Zibelman is stressing that coal will continue to have a place for thirty years or more.  But she contemplates no new coal generators, a position that may be at odds with the recent ACCC horse-choker that opened up a window for government support of coal in recognition of the disaster renewable subsidies have created.  And the increased strides for roof-top renewables AEMO contemplates appears to take no cognisance of the ACCC call for removing theirsubsidies.

We have a superabundance of bureaucrats analysing, reporting upon and and pontificating about the electricity market – a shifting bunch that has presided over the very situation they now offer solutions to correct!

In today’s AFR, a piece by Sarah McNamara, the new head of the generators’ lobby group, the Australian Energy Council, which attempts to offer a more balanced view of the AEMO report.  The AER article notes that AEMO doesn’t actually advocate much immediate spending (nor does it quantify how much its various options might cost).  Perhaps so, but the promotion of the report by Ms Zibelman ensures that its proposals will be widely accepted by politicians, some of whom are even calling for an ending of those pesky analyses that seek to ensure new transmission spending is justified.

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22 Responses to Yet another bureaucratic report promoting more spending on electricity

  1. Roger

    …the promotion of the report by Ms Zibelman ensures that its proposals will be widely accepted by politicians, some of whom are even calling for an ending of those pesky analyses that seek to ensure new transmission spending is justified.

    Platinum plated poles and wires?

  2. woolfe

    The science is settled

  3. Habib

    Heard her ignorant dribble on the ABC yesterday. Another leftist Septic academic here to fuck things up- they’re everywhere. We seem to get the ones too retarded even for Berkley, and idiot politicians listen to them, rather than throwing a few canisters of CS into their office and whaling on them with billyclubs. maybe we need to also import some Oakland cops and Ohio state national guardsmen.

  4. Bruce of Newcastle

    It is very simple.

    Only four technologies deliver baseload on demand:

    Nuclear
    Hydro
    Coal
    Gas

    The Green-Progressive religion wants to ban coal. Ok, that gives us nuclear, hydro and gas.
    They refuse to build dams: that gives us hydro and gas.
    They lock the gate against gas: so that just means nuclear.
    Therefore any report which fails to criticise the banning of dams, coal and gas extraction must recommend nuclear power stations.
    If it does not it is political arse covering rubbish.

    Blackouts will enrage the population. High electricity prices will enrage the population.
    Remember this, politicians.

  5. Bruce of Newcastle

    Sorry for the typo: refusing to build dams leaves us nuclear and gas of course.

  6. RobK

    From the graph in Alans quadrant article, i find it interesting that the AEMO expects electricity demand from 2018-2040 will go from about 200 GWh to 270 GWh, say about a 30% increase. Would this even keep up with population growth? Does it accommodate all those EVs that will have the fast chargers loading up the grid? No more heavy industry? Blockchain ?
    Moving on to the basic desire of RE:
    Fact of the matter is increased intermittent supply means all infrastructure is poorly utilized due to intermittent need/use of that infrastructure . There is no way around it. Worse still when the intermittency is on a wide variety of time scales, not simply a 24hr cycle such as that of pumped hydro for baseload.
    Someone pays for all this occasionally required transmission and storage, increased complexity. Finkel’s point about more “oversight” is a certainty, happening now, to shed any blame. This experiment is not a good plan.

  7. RobK

    Also, as RE penetration increases, storage will need to increase but there will be times when all storage is full. This will decrease the capacity factor of RE even more. No one is going to do well out of this in the long run. The parasite will kill the host.

  8. Singleton Engineer

    My take is different.

    The gold-plated poles and wires were not the same issue as the interconnectors which are essential in order to connect the remaining generation units to the loads – essentially, QLD-NSW and NSW-SA, with perhaps another TAS-VIC or TAS-SA. The renewables folk should be asked to pay for them; they are primarily needed for when the wind isn’t blowing or the sun isn’t shining.

    The gold plated distribution systems were essentially within each state (NEM-speak: “Region”). They were designed to achieve very tight reliability objectives that amounted to something like 8 minutes loss of supply per year for the average retail customer.

    How to pay for it?
    The report suggests a few good places to start, initially by doing away with the SRET and FIT handouts for small, uneconomic, unreliable, infirm PV, etc.

    It also identifies and recommends action to reduce the level of predatory rip-offs by some retailers. That might not turn into cash to build the interconnectors, but will still be cash left in the hands of the customers instead of being windfall profits for the retailers.

    The most interesting part of the report, by far, was the table which showed in dollars, state by state, per average retail customer the various subsidies for PV and Wind. Hundreds of dollars, some above $500. There are about 10 million private dwellings in Australia. That suggests $5B each year – to support green dreamers who continually bombard us with claims that they are now cheaper than anything else.

    Cheaper? Then discontinue all the subsidies and ask for the money paid through the various subsidies over the past 20 years to be returned.

    I’m sure that would pay for as many nuclear power stations and grid upgrades as can be justified on engineering grounds, with cash left over for one or two coal capture and storage demonstration plants if desired.

  9. .

    It also identifies and recommends action to reduce the level of predatory rip-offs by some retailers. That might not turn into cash to build the interconnectors, but will still be cash left in the hands of the customers instead of being windfall profits for the retailers.

    How do you think this incentivises building new infrastructure? Some of those firms are vertically integrated.

  10. DaveR

    Zibelman has to be replaced. You cannot have a green idealogue running AEMO. The previous head was much more pragmatic.

  11. Leo G

    Zibelman has to be replaced. You cannot have a green idealogue running AEMO

    Indeed!

  12. hzhousewife

    Blackouts will enrage the population. High electricity prices will enrage the population.

    I pray for one every day (yes I’m evil in that regard).

  13. Rohan

    Roger
    #2766439, posted on July 18, 2018 at 11:00 am

    Platinum plated poles and wires?

    No. Just really long and expensive extension cords.

    And let me tell you something I know for fact. Maintenance spending is now under hardcore siege by the transmission/distribution company bean counters. The engineers I talk to who are trying to maintain their networks are very concerned.

  14. hzhousewife

    A blackout I mean.

  15. Herodotus

    I’m already enraged, Bruce.
    “AEMO is planning to accommodate the poor reliability and greatly dispersed nature of renewable energy it sees as coming to dominate the national market. ”

    Very expensive bandaids. Renewables will only “dominate” in a market that is a shadow of its former self. More of a circus, but one where the clowns can no longer get the audience to laugh.

  16. Singleton Engineer

    @ Herodotus: “Renewables will only “dominate” in a market that is a shadow of its former self. ”

    Agreed, but read the report again. It recommends that future generation capacity be on the basis of firm capacity. That translates to a requirement that new wind and solar come packaged with the gas/coal/hydro/nuclear/geothermal capacity that is needed to ensure that it is reliable (ie, firm).

    The report has some very good nuggets within it – which those on the public teat under the name of wind+solar will have started already to be defeated. Their business models depend on continuation of the current scams, one of which is claiming that their cost is lower than all others. That is, of course, absolute BS. If that were not the case, then the subsidies would be dropped and the market allowed to operate.

  17. ArthurB

    I would be a rich man if I had a dollar for every article on the global warming scam and the disastrous consequences of our political class’s obsession with renewable energy, that I have read on Quadrant, the Cat, and sites such as Jo Nova’s.

    I doubt whether anything will change the collective mindset of our political class, because global warming and renewable energy have become a new religion, and its adherents are impervious to reason.

    To me, one of the most depressing aspects of the matter is the silence of the engineers who are responsible for producing electricity. I have a friend who used to be an engineer in the power business, he tells me that anyone in the industry knows that renewables can never produce reliable base-load power. He told me that he was involved with the planning and design of a proposed plant which would harness the tide to produce electricity, but it was a complete failure, resulting in the waste of a lot of money, including government subsidies and grants.

    If the engineers know that renewables can’t produce reliable base-load power, why is the government persisting in this folly? Do the civil servants and economists responsible for advising politicians on energy realise that a continuation of the present policy will bankrupt the nation, and have no discernible effect on global climate?

  18. RobK

    one of the most depressing aspects of the matter is the silence of the engineers who are responsible for producing electricity.
    The engineers haven’t been silent. There are many reports going back decades warning of the pitfalls. The thing is technically almost anything is do-able if the price is right. A political impost such as CO2 abatement is not an engineering call, hence Finkel and the AEMO do not challenge that…..but costs must rise.

  19. Tim Neilson

    I have a friend who used to be an engineer in the power business, he tells me that anyone in the industry knows that renewables can never produce reliable base-load power.

    I’d be reluctant to say “never”. Our society is full of technology that does things which could “never” be done.

    But I agree in principle. It won’t happen until and unless (and it’s an enormous “unless”) there’s something discovered or invented which is off the charts by current knowledge.

    And basing our energy policy on the assumption that it will happen to order is at the loony end of cargo cult wishful thinking.

  20. Roger

    If the engineers know that renewables can’t produce reliable base-load power, why is the government persisting in this folly?

    Because in between the engineers and the politicians sit the expert advisers who are anticipating massive steps forward in battery storage options just over the horizon. From what I can gather, though, such a system is going to be very expensive to produce, maintain and replace as it ages. Sort of like buying a Mercedes Benz on a Holden budget. Pity the customer getting the bills.

  21. stackja

    Tim Neilson
    #2766623, posted on July 18, 2018 at 1:55 pm

    Doctor Morbius’ Krell underground machine complex?

  22. Graeme Couch

    The technical issues are fixable, but (as I have written) that won’t matter if the policy vacuum remains. It will require political willingness to fill (which the parties seem to not be seeking).

    I propose the following six functional objectives:

    1. Lock in a 30-year stable, low sovereign-risk (state and commonwealth) climate (including any explicit framework for costing greenhouse emissions to be based on “competitive parity” with policies of Australia’s principal emitting trading nations).
    2. Open up energy resources (especially gas [and coal and wind etc] that have been arbitrarily quarantined or discouraged by governments).
    3. Demolish arbitrary generation technology targets and subsidies (implicit and explicit), including any un-costed network support benefits for (intermittent and unstable) distributed sources.
    4. Monitor and put a stop to market power exercise in contestable elements of the end-to-end energy supply chain (including natural resource exploitation and plant withdrawals)
    5. Modernise network services pricing to properly reflect their costs, focussing on impacts of congestion, demand response, intermittent, mobile and distributed resources, and third party owned and controlled connected assets
    6. Appoint an effective (independent, strong, technically and economically sound, visionary, and persuasive) industry coordinator – who will not be cowered by the “usual protagonists” – to champion adjustment to the market rules, and the legislative changes, needed to give effect to these objectives.

    The extent to which these objectives are effected will dictate the sustainable price reductions and overall improvements that can result. Conversely the extent to which any of the objectives is limited will thwart what is achievable.

    This is not a prescription to discourage renewables and distributed energy generation (or favour any other technology). Experience suggests that if subjected to “level playing field” disciplines it will expand competitively as its technical and cost advantages continue to improve.

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