Guest post. The Australia Institute vs sensible power policy

Left-wing think tanks and renewable energy rent seekers are ramping up their campaign against reliable sources of power.

Last week, the Australia Institute published its quarterly National Energy Emissions Audit to boost RE and rubbish nuclear power. The report concludes that the construction of new sources of baseload power just does not stack up.

South Australia gets a gold star for generating more than half of its electricity through wind and solar. For a total of forty-four hours last July, wind and solar could have met all demand!

These factoids cover up the real crisis that has been produced by injecting unreliable energy into the grid in advance of the storage capacity that is required to even out the highs and lows of intermittent energy.

In the same report we find that wholesale electricity prices for the state have more than tripled since the introduction of renewable energy. South Australia is home to some of the highest electricity prices in the world.

We have the resources to generate the cheapest power in the world but instead we pay twice or three times as much American families and businesses.

The crisis will come when more renewable energy comes into the market and the reliable sources of baseload power are crowded out. Intermittent surges in renewable generation drive energy prices downwards and the coal-fired plants operate for much of the time below their optimum level of production. Even while they provide the vast majority of power across the 24/7 period they become less economically viable with every addition of wind or solar power to the mix.

As long as they survive we are spared from the disastrous consequences at the “choke point” in wind supply. That is when there is virtually no wind, when the wind fleet is delivering as little as 2% of its plated capacity. We have survived the choke points so far but the situation will be very different when one or two more coal-fired plants go out of service.

We know that the Liddell power station set to close its doors next in 2022. This will make the grid less reliable and more prone to blackouts. It will also drive up prices. The real crunch will come when another reliable station is missing, whether it is closed for economic reasons or for scheduled or unscheduled maintenance.

Under normal circumstances the various energy providers would compete on level terms but the renewable providers have two advantages: they are subsidised and they have first preference to access the grid when the wind is blowing and the sun is shining. The Australian Financial Review reports that these subsidies are set to hit a whopping $2.8 billion a year up to 2030. Politicians are making us pay to make electricity more expensive and less reliable!

The solution to Australia’s energy woes lies in government pursuing a technology neutral approach. Remove all subsidies for specific energy and ensure that energy rebates for those suffering economic hardship are applied on a source-neutral basis. Abandon renewable energy targets that distort the market and allow private developers to focus on the cheapest and most reliable forms of power.

Coal, nuclear and gas will most likely win on a level playing field. Data from a 2017 Heartland Institute report suggests that existing coal, nuclear and gas facilities in the United States produce energy at one third of the cost of new wind facilities.

By contrast, the current status quo of heavily subsidised yet unreliable renewable energy ensures that wealthy energy companies can attract a premium price for their natural gas to provide base-load power as cheap coal-fired generation continues to lose profitability and get phased out due to successive government policies.

Australia can enjoy cheap power prices once again if government policy stops distorting the market at the expense of struggling energy users.

Sam Jacobs is a Research Associate with the Australian Taxpayers’ Alliance.

This entry was posted in Global warming and climate change policy, Guest Post. Bookmark the permalink.

34 Responses to Guest post. The Australia Institute vs sensible power policy

  1. Herodotus

    Politicians have been bluffed (conservatives) or are complicit (the rest) and we can only blame them for not realising that the big scam is a scam, and going right ahead and regulating our formerly reliable and affordable power system out of existence.

  2. Dr Fred Lenin

    Who the hell elected these corrupt career politicians to ruin our country ? They are as treasoonous as the UK surrender mmonkeys to EU fascism . They ought to be punished severely . The world has been driven mad by socialist fascist globalism mand thats a fact .

  3. egg_

    Left-wing think tanks and renewable energy rent seekers are ramping up their campaign against reliable sources of power.

    Because it’s unpopular with the masses and there’s now pushback from some European countries and the US in the West, whereas China and India are going hammer and tongs on coal fired power?
    The climate scam now reeks of desperation in drafting elites, including the Royal family, to the neo-Pagan cause.

  4. mem

    The only reason that NSW, Vic and Sth Australia are not having rolling black-outs tonight at 7.10 pm is because there are coal fired generators in Qld pumping out extra electricity which is transferred down the south eastern coast and siphoned off to the three states mentioned above. Currently, as has been the case for a couple of weeks, the inter-connector between Tas hydro and Vic has been down, so no extra electricity is coming up to fill the gaps. We are travelling on a knife edge when it comes to ongoing and reliable electricity and no amount of renewables, apart from Hydro can replace base load supply. You can monitor this at any time of day on the AEMO site here https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard#nem-dispatch-overview.

  5. egg_

    Malcolm Turnbull hired a New York lawyer to run our grid.

    Guaranteed to fvck up.

  6. Fat Tony

    egg – it’s not a Neo-pagan cause – it’s outright greed and theft.

  7. Ben

    Should remove the ‘semi-scheduled’ generator category too

  8. Leo G

    Even while they provide the vast majority of power across the 24/7 period they become less economically viable with every addition of wind or solar power to the mix.

    Coal-fired generators will have to be short cycled, increasing costs, reducing reliability and reducing capacity factors.

  9. egg_

    it’s not a Neo-pagan cause

    That’s the marketing hype for the plebs.

  10. mem

    Malcolm Turnbull hired a New York lawyer to run our grid. A young lady. Between the two of them they ruined our grid. It may as well have been a foreign attack. It may have been a foreign attack. To have a grid being run in a constant state of near emergency has national security implications.

    My understanding is that Malcolm had a big IOU to Goldman Sachs and would not have been eligible to stand for government let alone PM if Goldman Sachs hadn’t made a settlement of some $300 mill plus to avoid a criminal record for MT over the FIA debacle. Goldman Sachs subsequently invested a very large amount into Australian renewable pursuits just before Malcolm became PM. And coincidentally his son Alex made a mozza in company re-evaluation in the renewable sector a little later resulting from a policy decision by the Government of which his father was PM. I think more likely Turnbull’s enthusiasm for renewables was driven by these factors rather than some international conspiracy. Nevertheless I agree the outcome was just as devastating. .

  11. Nob

    Locked into laws requiring reliable hydrocarbon-fuelled generators to spend a fortune in ETS credits that have no value.

    This means drastic political action required to dismantle these obligations, which in turn presupposes disengagement from any supranational agreements requiring them.

    Sorry but feeling polysyllabic right now.

  12. RobK

    The subsidies need to go asap. Even so, the existing contracts will take a decade or more to unwind, if I understand it correctly. So much damage is done in the longer term already and prices will not return to the best practice prices we enjoyed for many years. The longer the delay, the worse it gets.

  13. Mark M

    A good effort, Sam, but, you missed the #1 KPI of the debate; stable climate/extreme weather.

    The cost, stability and use of energy is the distraction debate, saving the planet is the goal:

    At UN Environment, we believe that sustainable energy presents an opportunity to transform lives and economies while safeguarding the planet.

    Why does energy matter?
    https://www.unenvironment.org/explore-topics/energy/why-does-energy-matter

    Queensland (32.9%), South Australia (32.3%) and Western Australia (26.7%) continued to have the highest proportion of households with rooftop solar (APVI 2018; Figure 3)
    https://www.climatecouncil.org.au/wp-content/uploads/2018/10/States-Renewable-Energy-Report.pdf

    One look at SE Qld at the moment and you can see renewable energy is not safeguarding the planet, nor is it sustainable.

  14. Mother Lode

    I don’t know why the are so attracted to grandiose names.

    The Australia Institute?

    I suppose they hope it seduces peoples’ imaginations into presuming a stature and prestige that would add seeming weight to their tenuous claims.

    I bet that every meeting where they brainstorm names for the next think tank includes ‘Justice League’.

  15. Mark M

    “Thousands of people who bought solar panels have complained to a financial watchdog that they are not bringing them the returns they were promised.”

    https://www.bbc.com/news/uk-england-49566130

    Of course, the ‘big’ claim is that it will stabilise the climate.
    That would be a 100% fail.

  16. Mark M

    “Although solar panels absorb energy from the sun, hotter temperatures actually make them less efficient. Surprisingly, they perform worse as the temperature rises!”

    https://www.sciencefocus.com/science/do-solar-panels-work-better-on-hot-days/

    Put solar panels in the desert to save the planet?
    We’re gonna need a bigger desert.

  17. Percy Popinjay

    It may have been a foreign attack. To have a grid being run in a constant state of near emergency has national security implications.

    Time for some heads on pikes (aka HOP Time).

  18. Charles

    Politicians are making us pay to make electricity more expensive and less reliable!

    That is the line that should preempt anything anyone says about renewable energy or climate change. The Libs need to know that not everyone is as stupid as they are, and they have a responsibility to make things work, not stuff them up.

  19. egg_

    The subsidies need to go asap. Even so, the existing contracts will take a decade or more to unwind, if I understand it correctly. So much damage is done in the longer term already and prices will not return to the best practice prices we enjoyed for many years. The longer the delay, the worse it gets.

    From Judith’s figures, there’s a squared increase in Energy costs relative to the penetration of renewables, so the sooner that is halted, the better and yes, minimise subsidisation of the racket currently in place – let investors take their money elsewhere, rather than fleece the taxpayer.
    Bring some sanity back to the market, before we end up with a Third World grid at premium First World prices.

  20. egg_

    Politicians are making us pay to make electricity more expensive and less reliable!

    Dad’s traded in the family Toyota for an exotic European sports car that breaks down?
    Must be a new bird at the office?

  21. egg_

    CSP solar?

    Hasn’t that been covered already?
    Needs gas overnight to keep the boiler hot – which Greenies are trying to attack funding of in the US?
    Plus they are bird “smokers”.
    Not-very-Green at all.

  22. Abolish all energy subsidies and taxes (incl. excise).

  23. Rayvic

    Dysfunction at its best:

    . our reliable, low-cost coal-fired baseload power has to be turned down to give preference to subsidised unreliable, high-cost renewable energy;

    . the economy has to bear the resulting electricity-price escalation, declining productivity, negative stimulation to industry output and employment;

    . for what benefit? No measurable impact on global warming.

    This is what happens when our misinformed politicians capitulate to bureaucratic groupthink.

  24. BoyfromTottenham

    Why has not one Lib politician suggested winding down or killing the LRET? Why is it untouchable? The longer it remains, the more base load power we lose, and the more unstable the grid becomes, until the lights go out on a regular basis. What is going on?

  25. egg_

    Dapper Happer
    #3152097, posted on September 10, 2019 at 3:12 pm

    What about saline heat exchangers instead?
    Low efficiency?

  26. egg_

    Saline ponds, as used on some farms.

  27. egg_

    Yeah 2 different applications.

  28. Bruce of Newcastle

    But we want a workforce with molten salt expertise so that they can more easily cross over to nuclear.

    I’ve direct and indirect experience with molten salt processes.
    Awesome problems with corrosion of materials of construction.
    My recommendation is don’t go near the stuff with nuclear.
    Use conventional fuel elements like the Indians and Canadians.

  29. Bruce of Newcastle

    DH – Inconel 625 dissolved rapidly in one of the systems, which was a tonne scale pilot unit. I was working closely with the project team in support but wasn’t directly working on that project. In another lab scale project I was doing myself we did the work with a uni contractor from a molten salt specialist group. I told the researcher what materials to use, going on experience from a Russian process which is in commercial operation. They didn’t listen and used what they thought based on their experience from a different salt system. It was a mess.

    Both projects were just non-nuclear high temp molten salt baths with no pumping and salt handling. New processes, not Hall-Heroult. As soon as you start making the stuff go round a loop you will get big issues with wear as protective layers erode off. In a recirculating loop if you spring a leak you will have a major issue. That’s what the Japanese experienced with their FBR sodium loop. The leak caused a big political fight leading to the reactor being shut down.

    Obviously I can’t be specific about the projects themselves, sorry, both for contractual and my own anonymity.

  30. Bruce of Newcastle

    I’d prefer thorium to be well commercialized in a fairly standard fuel-element reactor. Then after several plants are operating steadily it would be ok to try a demo MSTR. I fear if the MSTR projects now underway fail in a radioactive mess that will kill all thorium nuclear work irrespective of the design. Rather like the leak killed the Japanese fast-breeder project. The fear factor amongst the voters from the hysterical reporting of Chernobyl and Fukushima means the political tolerance will be wafer-thin.

  31. Bruce of Newcastle

    And you can bet the Greens will be furiously hostile.

  32. egg_

    you can bet the Greens will be furiously hostile.

    The biggest obstacle IMHO.

  33. Squirrel

    Ignore these pests until they can point to working examples of reliable, low-cost, mass-storage options for the intermittent power sources they are obsessed with.

    Likewise ignore their demands for a carbon tax (supposedly to level the playing field between fossil and intermittent energy sources) until they are prepared to factor in the costs of storage and unreliability etc. into the claimed generation costs of intermittent sources.

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