Coal is not king
Another report confirms the future is renewable powered
Who to believe? Reporting on the Australian Energy Market Operator’s new 20-year Integrated System Plan for the national electricity market, The Australiandeclares [$] “King coal to rule for 20 more years”, while TheGuardiansays the plan “is a blow to Coalition MPs campaigning for new coal-fired generation”. Neither is being misleading, they are just each taking a different slant on AEMO’s modelling, which assumes Australia will take a least-cost approach and allow its remaining coal-fired power stations to reach the end of their natural lives. It’s a measure of how sorry our energy debate has become that a plan to do so little about climate change feels like progress. But it does, and there is a silver lining in the report in the form of an official map of 33 renewable energy zones, from Queensland to Tasmania. On the ground, the future is taking shape.
AEMO has to plan for the future high-voltage transmission lines that will keep the electricity grid running, and while that sounds boring it’s where the rubber hits the road, because it goes beyond abstract discussion of less coal and more renewables to look at where and when. AEMO assumes an order of closure of existing coal-fired power in line with industry forecasts, and assumes development of renewable energy projects under existing national and state targets in Victoria, Queensland and the ACT. (New South Wales, far from being “Australia’s answer to California” as the Baird government trumpeted in 2014, is a complete no-show). Today AEMO’s chief executive, Audrey Zibelman, likened it to running an old car until it’s no longer cheaper to run. “The existing coal is the cheapest resource we have now and we want to make sure we can maintain that,” Zibelman says.
Energy Minister Josh Frydenberg is running hard on this today, claiming that the government has “turned the corner” on energy prices, and offering reassurance that our 20 remaining coal-fired power stations have an average of 27 years to run. Why wouldn’t he? Talking about energy prices is a lot easier than talking about climate change. And it’s working. A special Newspoll in today’s Australianshows [$] the Coalition ahead of Labor as the most trusted party to deliver lower-priced and more reliable power, and the findings in an Essential poll in The Guardian are not dissimilar: 47 per cent of respondents think that coal-fired power is cheaper than the electricity produced from renewable sources, and 40 per cent agreed that the Turnbull government should provide $5 billion to build new coal plants or extend the life of existing ones. Lost in the noise is the fact that existing coal-fired power is cheaper, not because of the fuel source (which is much more expensive than free sun or wind) but because the plant has already been written off.
Nevertheless, RenewEconomydescribes AEMO’s report today as “ground-breaking”, because it does confirm that when it comes to renovating our energy system, the lowest cost replacement for this retiring coal capacity will be solar, wind and storage, complemented by flexible gas plant and transmission investment. That’s no renewable ideologue speaking, that’s the technologically agnostic market operator, with access to the best information going, and it’s fully consistent with the ACCC’s findings last week.
Another way of thinking about AEMO’s report is to remember that only a decade ago we were debating whether gas would be a fossil-fuel bridge to a renewable-powered future. That scenario, which would’ve involved building a fleet of brand-new gas-fired power stations to replace shuttering coal generators, is gone now, because gas prices have doubled and tripled to hit export parity, courtesy of the east coast LNG industry out of Gladstone. It’s good export income for Australia, but it has made a big dash for gas untenable domestically. I have never seen these numbers calculated, but it is quite possible that overall emissions turn out lower if we keep dirty old coal-fired power stations going a bit longer, and jump straight to renewables, than if we’d built new gas-fired power stations, which are a bit cleaner but run for another 40 years.
It’s important not to get too distracted by the politicking. As the ABC’s business editor, Ian Verrender, wrote yesterday, “those despairing Australia will ever solve its energy crisis should take heart. Canberra appears to be increasingly moving into a parallel universe, fighting ideological battles over coal-fired power generation, while the nation simply moves on. Like many other countries, Australian business and consumers have left their political leaders behind, opting for renewables backed up by gas, hydro and, to a smaller but growing extent, batteries.”
AEMO has set out a politically palatable, least-cost pathway. If the industry renovates our energy infrastructure using the most economically rational technology option, we will hit our very weak renewable energy and emissions reductions targets ahead of time.
since this morning
Malcolm Turnbull has said that the Liberal National Party candidate for Longman, Trevor Ruthenberg, made an “innocent mistake” in claiming to have won a medal for distinguished military service instead of a lesser honour for long service, following an exposé in TheCourier-Mail.
Long-time Textile, Clothing and Footwear Union boss Michele O’Neil was expected to be elected president at the ACTU’s triennial congress in Brisbane today, replacing federal Labor MP Ged Kearney. ACTU secretary Sally McManus urged 1000 delegates to take the fight against big business and the Turnbull government to a new level.
Crikeyreports [$] that the ABC has released a review into analysis and opinion writing – five months after a piece by
economics correspondent Emma Alberici was pulled for not meeting editorial standards. Also in media news, SBS chief Michael Ebeid will step down [$] after seven-and-a-half years at the helm, and journalistic giant Evan Whitton, most famous for uncovering police corruption and his coverage of the Street royal commission, has died aged 90.
IN CASE YOU MISSED IT
While most Australians are experiencing stagnating wages, The Guardian reports that chief executives are doing better than ever, with pay up 12.4% for those running ASX 100 companies, bringing their remuneration to the highest level ever.
Treasurer Scott Morrison has warned [$] that the deepening US tariff war with China could derail a global economy that has finally shaken off the effects of the financial crisis. “No one wins from a global trade war and that statement is more true today than at any other time in global economic history,” the AFR quotes Morrison as saying. Meanwhile, the International Monetary Fund has warned [$] that financial markets are being complacent in
the face of growing risks to the world economy from trade protectionism, rising interest rates and political instability.
An investigation [$] by The Australian’s Anthony Klan has found five million superannuation accounts holding $260 billion, and managed by the big four banks and financial services companies AMP and IOOF, have delivered average annual returns less than the risk-free “cash” rate over the past decade. Many of these accounts have performed below the rate of inflation.
In The Conversation, University of Queensland PhD candidate Robert Sobyra writes that “there is very little evidence that jobs are any less secure than they were decades ago”.
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?
Who to believe? Reporting on the Australian Energy Market Operator’s new 20-year Integrated System Plan for the national electricity market, The Australiandeclares [$] “King coal to rule for 20 more years”, while TheGuardiansays the plan “is a blow to...