The energy industry’s virtue signallers and pragmatists

I have a piece in The Spectator addressing the zero emissions by 2050 vogue, which most energy companies, their industry associations and controlling government agencies have climbed aboard.  But two of the 24 members of the Australian Energy Council (AEC) have broken ranks pointing out that the technology is not here.

The AEC’s zero emissions majority is not quite as overwhelming as it appears since most of its 24 members are retailers, subsidy-seeking renewable businesses or owned by (ALP) state governments, while the Big Three (AGL, Origin and EnergyAustralia) are retailer-generators and have learned to profit from renewable subsidies.

For their part, industry association executives need to provide value to their members and this requires them to have strong relationships with the appropriate government agencies.  As those agencies overwhelmingly favour green energy and carbon taxes, industry association personnel think that they face reduced access by being energy neutral.

Many leaders of the industry associations, like those in regulatory bodies, are besotted by the notion that, in a future world dominated by wind/solar, Australia has an advantage.  But world industry is actually becoming dominated by coal-loving countries like India and China and, in any event, Australia’s solar advantage is only true if we all move to the Great Sandy Desert! Solar radiance in populated areas is not markedly great.

In an industry where most of the boots on the ground are male, a disproportionate number of regulatory/industry associations (including the AEC, BCA, and AER) are headed by women.  This is no coincidence.  Indeed, one regulatory head, being chided by an energy minister for not making a senior appointment on the basis of “diversity”, responded, “With the current industry staffing, a middle-aged Anglo male is diversity”. But I digress.

In the Spectator article I note

Establishing a goal for 2050 is absurd.  Any industry member punting on a position 30 years hence would be wise to reflect on how their predecessors in 1990 might have envisaged the industry in 2020.  In 1990, the industry comprised state government-owned integrated monopoly generator, transmission, distribution and retail entities.  There were no subsidised wind/solar renewables.

But the industry was poised to become market-oriented and largely privatised and would, within 10 years, become the world’s lowest-cost electricity supplier. It is now once again focussed on government policies and favours.  This has meant sacrificing the magnificent coal deposits that allow low-cost electricity for households and industry alike and substituting them for high-cost, low-reliability wind/solar. 

Compounding the issue is the announcement today that the industry’s largest firm, AGL, is to restructure its executive bonuses to reflect progress in moving towards a “zero emissions by 2050” target. While AGL has had two of the industry’s most, err, colourful CEOs its present CEO, Brett Redman, is firmly grounded.  Indeed, on close examination, the move depends upon cheaper sources of power emerging and customer preferences for non-fossil supplies. AGL is seeking to become credentialled for green consumers and the all-important institutional investment community.

Climate News, issued yesterday, provides the latest global developments on these matters.

 

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14 Responses to The energy industry’s virtue signallers and pragmatists

  1. From the Climate News article:
    “As part of its zero emissions by 2050, the UK is to have a stand-alone Emissions Trading System – a carbon tax – at a £15 per tonne”

    To which I would like to add that UK emission reduction plans use a target not of “zero emissions” but of something called “NET ZERO” that means not really zero but an accounting zero.

    Three links below address this issue.

    Link#1: The distinction between carbon cycle flows and fossil fuel emissions:
    https://tambonthongchai.com/2020/06/19/vegandiet/

    Link#2: What does net zero mean?
    https://tambonthongchai.com/2020/02/25/net-zero/

    Link#3: Contradictions in the carbon credits market
    https://tambonthongchai.com/2019/09/30/cer/

  2. Pyrmonter

    For how many industries are the technologies of 2040, still less 2050 known? Looking backward, how many technologies from 2000 or 1990 remain in operation unchanged? Even organisations of neanderthal-like operation and a conservatism that would embarrass even Currency Lad like the NSW railways have managed to innovate since 2000 (now managing to use ticket systems developed in the 1990s.

  3. Archivist

    Even organisations of neanderthal-like operation and a conservatism that would embarrass even Currency Lad

    That’s a bit harsh!

  4. Genghis

    Alan,
    Sent this letter to the Australian newspaper this morning – unlikely to be published as it goes to close to the truth.
    Good Morning,
    I would like you to consider the following letter:
    Michael Shellenberger – spot on.
    I appreciated the courage of the Australian Newspaper in publishing the article by Michael Scellenberger on his new book, Apocalypse Never: Why Environmental Alarmism Hurts Us All. Publications like this have been a long time coming. Michael Moore (US Left Wing Greenie) recently showed the hypocrisy of the RE sector and big business in bed with each other – absolutely no morals shown, just profit, costing you and I. For too long the Woke Folk have lied about Climate Change and pushed unreliable RE with climate scare tactics. Australian has to remove the anti-nuclear legislation passed in 1998 and adopt a program of building a series of small modular nuclear reactors. We could pay for this by stopping subsidisation of RE and ripping up the farcical submarine contract with France. We could also buy six modern nuclear submarines from America and still save money.
    Graeme B. Weber, Malvern, VIC

  5. Rob

    Good luck with your worthy letter to The Australian.
    By the time the Letters Editor has hacked it to pieces and got it down to less than 100 words, he will deem it unsuitable for publication.
    Why bother?

  6. jupes

    But two of the 24 members of the Australian Energy Council (AEC) have broken ranks pointing out that the technology is not here.

    What an indictment of the members of the AEC.

    Stop all subsidies now.

  7. Professor Fred Lenin

    When I was young if the politicians stuffed the energy industry and the pub couldnt chill the beer ,there woukd have been politicians hanging from trees everywhere . No one stood between an Aussie man and a cold beer . Bloody bundy and coke stuffed the present youngsters ,bloody Yank stuff.

  8. Here’s an interesting article:

    Rio Tinto compensation call after NT mining town Nhulunbuy left in dark for 17 hours

    A major blackout saw a Northern Territory town without power for 17 hours, leaving businesses reeling from a loss of stock and residents frustrated at a lack of communication from mining firm Rio Tinto.

    Nhulunbuy MLA Yingiya Guyula called on the mining giant to “provide compensation for loss of income” to businesses hit hard by last week’s power outage in Nhulunbuy and nearby Indigenous communities.

    I like the sound of this. If it does go ahead in court and Rio Tinto is required to provide compensation, then it sets a precedent that could apply to future blackouts caused by ruinable energy. Perhaps it may end up being the governments that have mandated/forced ruinables onto us that get sued.

  9. Alex

    “Indeed, on close examination, the move depends upon cheaper sources of power emerging and customer preferences for non-fossil supplies.”

    The easiest way to determine customer preferences is to ask them. Send out an epistle to all customers listing energy source versus price per kW and request the customer tick their preference and return such to their supplier. London to a brick that the answer would be coal first by a country mile, second and third. Come on ScoNoMore from marketing do some market research, get them to ask us.

  10. NoFixedAddress

    30 years to wait for zero emissions!

    We’ve gone from Blue Sky Mining to Unicorn Power in the blink of ASIC’s eye.

    It will be morbidly entertaining to hear what wind blown tales the AGL mob come up with to justify their renewables bonuses.

  11. Nob

    Pyrmonter
    #3500596, posted on July 1, 2020 at 12:45 pm
    For how many industries are the technologies of 2040, still less 2050 known?

    RE fans think they know.

    no morals shown, just profit

    That’s how any business working within the law should run.
    “showing morals” is for Pharisees and hypocrites..

  12. Nob

    Alex
    #3500749, posted on July 1, 2020 at 4:57 pm
    “Indeed, on close examination, the move depends upon cheaper sources of power emerging and customer preferences for non-fossil supplies.”

    Expensive renewables can be made cheaper in the blink of an eye. Poof! as if by magic!
    Just do what green-tinged governments are doing almost everywhere: apply sovereign risks, regulatory overload and direct costs to competing power sources until RE looks cheaper.

    As with “fairer”, “safer”, so with “cheaper”.
    The question as always, is: “compared to what?”

  13. NoFixedAddress

    Surely somewhere the Australian Unicorn Energy Council are pissing themselves with laughter.

    Obviously consumer protection law doesn’t protect us from the vacuous evil filth that dream this crap up and put their hands in the taxpayers pockets.

  14. MACK

    The STATE OF THE ENERGY MARKET 2020 report is worth a look:

    “Investment in wind and solar plant slowed from mid-
    2019, as technical issues with integrating new plant
    into the system delayed projects. Coordinated planning
    reforms aim to better integrate renewable plant, rooftop
    solar PV, demand response and battery storage into the
    system, with a focus on ensuring the transmission grid
    can meet transport needs.
    • As the market transitions, intervention to manage power
    system security and reliability risks has risen, imposing
    significant costs on energy customers
    . The Australian
    Energy Market Operator has directed some generators to
    operate even when not economic, and constrained some
    low priced plant from operating. South Australia and,
    more recently, Victoria and Queensland have been the
    focus of these interventions.
    • Investment in ‘firming’ capacity (such as fast start
    generation, demand response, battery storage and
    pumped hydro plant) is needed to fill supply gaps when a
    lack of wind or sunshine curtails renewable plant.

    Translation: Due to renewables, the electricity system is a dog’s breakfast, and the poor are paying more.

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