Today, the Coalition government released its energy white paper — the document that is supposed to outline the nation’s energy vision for the short and long term future. But there are no surprises for guessing that this is a document that is largely focused on the rear-view mirror.
The energy white paper begins with a false assumption: that “Australia’s large quantities of traditional energy resources provide low cost, predictable and reliable power for Australia and the world”.
They don’t. Coal might be cheap to shovel into a boiler, but it is mighty costly to transport. Grid (delivery) costs make electricity in Australia some of the most expensive in the world. Transport and shipping costs make coal and gas expensive, to the point where they are now being undermined by local, renewable alternatives — or a new focus on environmental policy — even in major markets such as India and China.
Like the Abbott government’s discussion paper on emission reduction targets released late last month, this document also works on the principle that the world will do nothing new to address climate change. The energy white paper’s assumptions are based on the International Energy Agency’s “new policies” scenario, which sets the scene for what would be a catastrophic rise in temperatures to an average 4 degrees.
No matter, the Abbott government concludes: “Ongoing access to large volumes of coal and gas will also underpin our energy generation mix for some decades.” Although it does at least acknowledge that these fuels will be “increasingly exposed to competition from renewable energy”.
Not that it intends to accelerate that transition. Quite the opposite. Unlike the actions of the US, China, Europe and other emerging economies, there is no talk of environmental impacts, emissions standards, enhanced renewable energy targets, or climate goals. It is almost entirely focused on the technologies of the past, rather than the future.
When the green paper was released last August, RenewEconomy did a quick analysis that found that in the 78-page document, gas was mentioned 434 times, coal 100 times, followed by nuclear on 67. Storage got 32 mentions, solar 26, and wind energy just 13 mentions.
The ratio is pretty much the same in the more discursive 81-page white paper, even if the numbers are different. Gas leads still with 173, while coal gets 47, and nuclear 23. Solar gets 19 mentions, battery storage six, and wind energy gets just the one mention — in a generic sentence that says Australia has “world class” solar, geothermal and wind resources.
But the energy white paper doesn’t say much — or anything — about how it is going to develop those resources, apart from repeating its opposition to the current renewable energy target of 41,000GWh, and its determination to make it a 20% target, meaning a cut to around 32,000GWh.
The energy white paper also continues its attack on solar. It describes interventions, such as the Renewable Energy Target and solar feed-in-tariffs, as market-distorting signals that cause “unintended disruptions” to competitive energy markets.
“Policy interventions in the market framework should not be used to force market outcomes beyond the reliable and competitively priced supply of energy,” the white paper said.
“They should allow markets to operate efficiently for competitive outcomes, while providing consumer protection. Interventions, such as the RET and solar feed-in-tariffs, can distort market signals and cause unintended disruptions to competitive energy markets.”
It doesn’t mention what these are, but does spend a bit of time on “cross subsidies” of rooftop solar, and while it does recognise the much higher cross-subsidies inherent in the widespread adoption of air conditioning — it proposes to solve this only with “time of use tariffs” — a mechanism derided by some as simply an excuse for utilities to charge higher rates for longer periods, and increase the incentive for consumers to look after their own energy needs.
Indeed, the energy white paper does acknowledge that the development of cost-effective energy storage could bring about a “paradigm change” in the way Australia produces, transports and consumes energy.
The most profound effect, it says, will be in renewable energy, as storage can help overcome current limitations of intermittency in generation. And with Australia’s long, thin electricity grid and large share of remote power generators, Australia could benefit significantly from major advances in storage technologies, as Ergon Energy is already finding.
And the energy white paper notes that as affordable storage develops, it is important that Australia’s existing regulatory framework can accommodate this change. It makes mention of the Future Grid Forum work led by CSIRO — which, 18 months ago, warned that nearly half of all demand could be sourced by “local or on-site generation” and that, unless utilities adapted their business models, one-third of customers could choose to leave the grid.
The energy white paper acknowledged that:
“[T]he growth of disruptive technologies and advances in energy storage (including electric vehicles), combined with greater consumer engagement through demand response and self-generation, could have major implications for electricity markets.
“Networks may need to adapt from the generator-to-customer transport system of the past to acting more as trading platforms between distributed energy users and producers.”
In other highlights of the energy white paper, the government says:
- It will not pursue policies to “pay” for exit of surplus generation capacity. It says “this could unfairly shift costs onto either consumers or taxpayers”. Fossil fuel generators have been arguing for the payments, saying that owners of coal-fired generators would rather “mothball” capacity than pay remediation costs — which could amount to $200 million per installation — if they closed. This has left Australia with vast amounts of surplus capacity, which, in turn, has been used to argue against new renewable energy; and
- It will be keeping an open mind on nuclear energy. Interestingly, it says it recognises the argument that nuclear is a costly alternative to renewables, uses lots of water and has waste-disposal issues. But it also says others argue that it is “adequate” affordable and reliable, and has significant environmental benefits and public health advantages over other existing base-load technologies. It says it will consider the outcomes of the South Australian Royal Commission into the nuclear fuel cycle, including its use as an energy source.
The paper notes electric vehicles are commercially available in Australia and have the potential to be a more mainstream transport option. It notes their advantages in lower running costs, environmental benefits and their ability to assist with managing demand on the electricity system if consumers are provided with an incentive to charge outside of peak energy use times.
“Charging electric vehicles at off-peak times improves the utilisation of electricity infrastructure by increasing demand on the electricity grid at these times. Batteries in electric vehicles could also be used as a storage device to meet household demand or demand on the electricity grid through feeding back to the grid at peak times.”
No surprises here as the super subsidized tax avoiding energy industry need protecting to guarantee the LNP election war chest for 2016. It would have been prudent for Abbott to take note that the Coalition partner the Nationals (the N in LNP) are to obliterated in rural Queensland, NSW. WA and Victoria as the Greens become the party for the anti fracking farmer a position long vacated by the Nationals.
A Parliament without Barnaby Joyce will be seventh heaven. The White Paper makes little of Climate Change and emissions abatement it would seem either and how the fossil industry is allowed to emit as sea levels rise.
The only good news is that this rabble (cannot call them government anymore and Mob is already taken) is over “half done” and the next election comes into view to the relief of everyone.
There will need to be some tough sanctions on the fossil industry to reduce emissions faster post 2016 with the obselesence of the lignite fired power stations by 2025.
It obvious that this white paper was written with the leasing of power generation and transmission in NSW — Abbott cannot allow all that “gold plating” go to waste now can we?
Finally if market forces are to apply deregulate the power industry and cut the subsidies and allow the inefficiencies to become a reality for the high cost coal fired sector — it will go long way to healing the hole in the budget Joe.
The non- quarantining of gas for local demand is mindbogglingly stupid.
Would it be reasonable to conclude . . that the predictable argument, content and priority of the Federal Government’s Energy White Paper is best met with silence . . and disgust!
They serve The Nation NOT!
Actually, I wouldn’t mind seeing some video footage, on the process that Abbott’s apparatchiks went through in order to prepare this report. I mean, I’m curious how they managed to type with their eyes closed and their fingers in their ears?
From the Coal-ition Government?
I understand that the coal industry is heavily subsidised but I’m not sure how. This govt seems to enjoy pointing out the subsidising of alternatives without acknowledging that coal is as well.