Australia’s dismal energy future

I have an article in the Spectator on-line which traverses the disaster that has been created in the energy market with renewables and gas search restraints. The result has been the dearth of new investment in reliable power, with $72 billion spent on negative value-added wind and solar.

As a result we have seen a doubling of wholesale prices leading to even more desperate efforts to paper over the cracks, most of which, like price controls, exacerbate the problem. Compared with prices at wholesale now at about $100 per MWh (compared to under $40 just a few years ago) new wind and solar offer no relief and while new coal generation can be as low as $40 per MWh the sovereign risk created makes this unviable; the only paliative of any merit, short of dismantling the ediface of subsidies, is some form of subsidy to new coal to countervail that in place for wind/solar.

The malaise is further compounded by the assault on coal through the courts, politicians and agitators within those representing institutional investors.

I conclude:

Almost all the portents for the immediate future of the Australian energy system (and hence for the Australian economy) are negative.  Aside from the minor conservative parties and a handful of Coalition politicians, the politics is driven by focus group analyses which report people being in favour of ‘free stuff’.  There is little stomach for leadership by politicians who either support the prevailing ideology or, valuing their careers above the public good, prefer not to explain that the free stuff is both paid for and undermines the low cost electricity from which Australia should be benefitting.

Sub-optimal economic performance is therefore set to continue. 

Longer term relief for Australia may have to await the results of the outcome in strong economic performance stemming from the leadership that President Trump is demonstrating in abandoning costly measures that require suppression of carbon dioxide emissions. Trump has shown commendable scepticism about climatic catastrophism.  Moreover, he has recognised that actions by the US – indeed the entire western world – can have no climatic effect in view of the explosive growth of India, China and other developing nations, growth that is powered by fossil fuels, the resulting emissions of which now dwarf those of the rest of the world. 

Trump’s leadership is already paying dividends with US growth outpacing that of other developed countries.  Energy intensive industries, including those of the Pratt Group, are responding by shifting the balance of new venture spending towards the US.  But it may be some time before Australia awakens to the self-inflicted injurious policies that have transformed the nation’s energy supply from the world’s cheapest to among the world’s most expensive. 

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13 Responses to Australia’s dismal energy future

  1. stackja

    When people start having blackouts and high energy prices, politicians might get the message.

  2. Mark M

    Morrison could announce he spending eleventy squillion dollars and it won’t prevent the doomsday global warming apocalypse that is here, now.
    It hasn’t yet.
    Oliver Yates, former CEO of the Clean Energy Finance Corporation explains:

    “The $2 billion Climate Solutions Fund “is completely inadequate … I spent $5 billion in 5 years.”

    https://twitter.com/abcnews/status/1099928040417579008

    ROI on $5B x 5 years: Up to 500,000 drought-stressed cattle killed in Queensland floods

    https://www.theguardian.com/australia-news/2019/feb/11/up-to-500000-drought-stressed-cattle-killed-in-queensland-floods

    How much must Australia spend before Australia prevents its first global warming flood?

  3. If he desired, SCOMO could take the election in a canter simply by following the lead of POTUS 45.

    Assemble a debating team consisting of such people as Ian Plimer, Peter Ridd, Murry Salby, Alan Moran, Malcolm Roberts, and Jennifer Morohasy for instance, sponsor a series of national televised debates with whoever the Left could muster, explaining to the plebs the fruitlessness in chasing this superstitious nonsense, and the tremendous cost of doing so.

    Acknowledged, the other side could not find anyone wiling to debate, because they know they would get creamed. But surely some skillful politics would corner them in either trying to launch an argument without logical fallacies, or admitting that the are full of bull. Granted, if SCOMO were serious and not a shill for the ALP, he would have got on this months ago. There probably isn’t sufficient time left.

  4. Dr Fred Lenin

    Correct stackja. When the political careers of the useless bastards pursuing them are threatened with sudden termination, the climate change shit will be flushed down the toilet . They will be claiming they were never in favour of it and fought against it , any lies to disconnect themselves from their own mistakes .
    If it came to a choice between u.n,lefty climate action and the loss of their place at the trough which would they chose .?

  5. mem

    Alan many thanks for your dedication and professionalism in pursuing the so-called renewable revolution which, rather than providing a solution to a non problem, is creating its own tsunami of problems and now threatens to undermine one of the most important drivers of our economy and way of life, the provision of cheap, reliable energy. If only everyone could see the vast amounts of land that are already dominated by whirling (or not whirling) pieces of imported metal and concrete, connected by a new web of poles and power lines that reach into some of our most beautiful natural landscapes and bush lands and realize that even if we quadrupled their numbers this would not provide sufficient reliable energy to power even one of our capital cities. It sounds clean and modern, but it is far worse than an isolated coal mine or two that is confined to a specific site. And besides we all know, that unless more coal and hydro is built the whole fragile network is going to come crashing down at some stage. On a related note I see Morrison has allocated funds for another inter connector cable to Tassie hydro. Do you think this is because someone has remembered what happened when a contractor damaged the existing cable and now realizes that without Hazelwood, if the connctor goes down the whole Eastern grid plus SA will be on lights out mode? Or is it another issue?

  6. Alan Moran

    Mem,
    I think the second Bass Strait connector is partly an insurance policy as you describe it. It is also a conduit where greater amounts of surplus SA/Vic wind can be exported and a greater flow of tas hydro power can move north. It would not make sense in a market based system with baseload covering 85 per cent of supply needs

  7. mem

    Thanks Alan. I did note that the company that owns the hydro facility lost a lot of money when the connector went down. No doubt they will be happy for someone else, ie tax payers, to pay for the future insurance. It is interesting to see who owns these things by the way. so you might like to follow it up if you get a spare second or two..

  8. RobK

    But it may be some time before Australia awakens to the self-inflicted injurious policies that have transformed the nation’s energy supply from the world’s cheapest to among the world’s most expensive. 
    Im afraid so. They may not actually awaken at all, given they have come this far and the penny is yet to drop. As each day passes, the prospect of efficient electricity generation slips away and commitment to a complex utopian experiment of a low energy-density harvesting, lots of extra transmission and storage requirements; lots of costs and diminishing utility.

  9. wal1957

    Sth Aust in theory has enough renewable power for that state.
    In practice however……..
    I agree with other posters here. I don’t know whether the penny will drop with the voters, irregardless of how many blackouts occur.

  10. John Constantine

    The oligarchs will have all the power they desire.

    The proles will have Cheerful Squalor.

    Western industrial capitalist civilisation cannot run on ruinables.

    Complete societal struggle towards fundamental transformation is the whole point.

    Comrades.

  11. Cameron

    How can the penny drop when all the information the public gets is filtered through the alarmist main stream media. If things continue we could become the next Venezuela and the public would still be non the wiser as to the cause.

  12. Jeremy

    The sad state and prospect of the energy grid is the product of a lopsided debate, where voices of science and reason have been silenced. The purge has been accomplished through self-serving academia like James Cook and Macquarie university. It has left us with real science replaced by media clowns like Flannery and Stefin.
    .
    What Australia now has is a cricket match with only one team on the pitch.
    Of course, for balance there’s always the ABC.

  13. Any conversations or technology preferences that are not encompassed by Climate Change constraints are of zero value.

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