Imagine driving a Porsche down a road with no traffic lights or roundabouts, stuck behind a whole lot of Model T Fords — and then complaining that the Porsche doesn’t go as fast as the car dealer promised. That pretty much sums up the state of Australia’s energy system today.
A decade of energy policy failure has led to the creation of a chaotic and inefficient energy system that is increasing system unreliability and costs, while not delivering the scale of renewables investment that we need to deal with the challenge of climate change.
Critics are right about the chaotic nature of the energy system and the integration of renewables into it — last week’s announcement that the regulator is taking legal action against wind generators over the 2016 South Australian blackout is evidence of this. But the problem has little to do with the types of generation being introduced.
The fundamental problem is not a technological one: we already have the technology to get to a 100% zero-carbon electricity system within 10 to 15 years. The problem is the system’s reliance on an outdated and complex market mechanism and an almost complete absence of sensible planning for energy transition.
The old coal-fired system was built by government agencies using centralised planning to meet consumer and economic development needs. Ensuring profit-making opportunities for companies wanting to make a buck out of the energy system was not something they had to consider. This focus on broad public interest is why the development of the electricity system in the first place was much smoother than its now-necessary transformation.
The complex National Electricity Market (NEM) and other market rules are necessary not for any technological reason, but to make the transition to a new energy system profitable for private capital. This is because of the ideological commitment to market and private capital-driven transition, the result of a belief that public investment can’t do these sorts of things, despite the historical evidence that it can — it did — and would do it better now.
Electricity generation and distribution make great sense as a public monopoly. It makes it much easier to plan, coordinate, deliver and keep costs down. The small-government ideologues should remember that privatisation hasn’t meant the exclusion of government involvement in electricity supply. Rather than building, owning and operating the infrastructure in the broad public interest, governments now play the role of market creator, manager and enforcer in the interests of the private (largely; some public generators remain in Queensland) owners of generation, distribution and retail assets.
What governments don’t do any more — especially Coalition ones — is plan the system. A misplaced faith in the capacity of markets to deliver optimum investment and resource distribution outcomes is now obscuring the reality that those markets are not delivering what they are supposed to — reliable, low-cost, low emissions electricity.
Uncertainty around the timing of coal plant closures, grid upgrade requirements, renewable energy developments and location, storage integration and so many other elements of the power system are not only causing systemic reliability risks, they are driving up costs that are flowing through to consumer power bills, and causing broad community anxiety. This is the fault of the Commonwealth government and its refusal to develop meaningful, intelligent and clear climate and energy policies.
Despite all the hand-wringing about the difficulties of moving to a zero-carbon electricity system, what we need to do is actually quite clear: by 2035, every coal-fired power station should be closed.
We should have a staggered timetable for the closure of each one, and for the construction of the replacement renewable generation capacity, and a plan for where it will be located. We should have a plan for the upgrade of grid infrastructure to manage closure and new generation capacity and storage coming online. We should have a plan to ensure that no worker or community is left behind during the transition, and that new jobs are secure and well paid.
We should have a long-term budget allocation for all of this. These plans should be subject to regular review to make sure they keep up with changing circumstances. Similar plans should be implemented for other areas of the economy that need to be decarbonised. All plans should involve local communities, workers and their unions, and businesses — anyone who wants to get involved.
The transition to a zero-carbon energy system is not simple, but what we need to do is very clear: we need to replace coal-fired electricity with renewables and storage. Let’s concentrate on doing that; not on designing complex and ineffective market mechanisms designed to make private profits at the expense of a clean energy system for all of us.
Colin Long is the Just Transitions organiser at the Victorian Trades Hall Council.
Bravo ! Excellent article Colin succinctly explaining the problems and outlining solutions. Here in Vic the old SECV wasn’t perfect but was a damn sight better than the rent seeking mafia of today. And without the ignorant econocrats of the AEMC and AER.
I’d also add we lost something very important and valuable with the loss of various state instrumentalities such as SEC, Vicrail MMBW and CRB – a continuous flow of apprenticeships cranking out essential tradies. Now we either human asset strip our poorer needier neighbors for them or just hope for the best with private employers and a gutted TAFE sector.
Too true, as economic managers the LNP are as poor as their Republican heroes in the States, and sadly getting worse.
If they just came straight out and admitted that their only real skill is helping the rich get richer, quickly and without regard for the future of either the rich or the poor, then the great unwashed public might be able to make better decisions at election time
Bingo. Nailed it, and provided a simple one page strategy for anyone keen to actually do something. Well done. Unfortunately, today as I write this, the Australian prime minister is facing the people’s of the Pacific and justifying or just talking around why doing something about fossil fuel electricity generation is not even a thought bubble for him, his government or his party. One can only hope that somewhere out there in ‘Current-governmentland’ there is a thinking, strategic being who reads these words (and others) and goes ‘Right, to work to sort this debacle out!’.
We read that to achieve a “zero-carbon energy system… we need to replace coal-fired electricity with renewables and storage”. However the enemy is carbon, not coal. Crucially, the statement needs to replace gas as well as coal. Thus…
The proposition would then be to replace all coal- and gas-fired electricity with wind backed by gas, solar backed by gas, and storage backed by gas. After all, the wind doesn’t always blow, the sun doesn’t always shine, and storage always runs out when you don’t want it to. All of those require gas turbines to be idling, ready to provide the full power of grid. We can’t have it both ways.
Anyone who agrees that we must commit to early 100% decarbonisation must agree that we must get rid of gas as rapidly as we get rid of coal. Even if we have to give up on wind and solar.
More utter bollocks from the nuclear power shill. There are plenty of carbon containing fuels that are either carbon neutral or even slightly carbon negative, that could easily be used in conjunction with wind, solar, geothermal, tidal & hydro based power systems, to get us 100% away from coal…..& even natural gas.
BTW, gas turbines don’t need to “idle”. Most modern gas turbines can actually be spun up extremely quickly-much quicker than coal or nuclear powered turbines……though numerous forms of energy storage mechanisms can provide more than sufficient excess power to transition between renewable energy & gas very smoothly.
Marcus Hicks, I am not a “shill” for anybody. The way you use it sounds like you are calling on the other drunks at the bar to throw the outsider out. Crikey readership does not have such blind obedience, like a dog pack.
A system with high penetration of wind needs to be backed by both closed cycle gas turbines (which includes steam), and the much less efficient open cycle gas turbines. Closed cycle gas turbines do indeed need a long time to ramp up.
You have led us to believe that there are carbon-based fuels which do not emit carbon dioxide. Then you don’t say what they are. Perhaps the other drunks at the bar believe you, but the rest of us think you’re talking bollocks.
Nice sentiments, great argument but the Federal Government and the North Queensland voters are determined to make a Custer’s Last Stand on this issue. The eventual whack from external reality will then be much harder that it needed to be.
With helpers like the charming mr. jones, with yet another misogynist missive at this time Jacinda Ardern today.
A logical, intelligent summary that makes what needs to be done quite clear to logical, intelligent people.
Unfortunately, we need something that convinces ScoMo and his mates. The guys who will insist until Hell freezes over that there isn’t even a problem.
We’re screwed.
Oh and who, even if we could get them to acknowledge that the problem exists, would then insist that a market-based solution is absolutely the best way to achieve it.