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Canberra’s power play is leaving Australia in the dark

The world’s biggest factory opened this year in the Nevada desert. The Gigafactory, as it is known, covers an area of almost 100 American football fields.

Powered entirely by renewable energy, the Gigafactory has been built by Tesla to dramatically increase production of batteries — for cars and for homes.

Construction of the Gigafactory hasn’t finished, and there are plans for more around the world as Elon Musk’s Tesla establishes itself as the biggest player in the battery field.

The cost of battery storage is falling through the floor, in part thanks to Musk and Tesla, in a development that will have global ramifications for power generation and supply.

These batteries will enable people to store power generated by their own homes. They’ll allow power companies to store power from renewable energy sources such as wind and solar farms.

On the other side of the planet the debate started by Prime Minister Malcolm Turnbull is whether taxpayers’ money should be thrown at so-called “clean coal”, whether South Australia is a Third World country because of recent blackouts and whether a renewable energy target of 28 per cent or 50 per cent by 2030 will have us living in caves and eating spam from a can.

If ever there was an example of reality running smack bang into Australian political stupidity, the current energy “debate” would be front and centre.

On one continent the private sector is driving technological change that will transform energy networks in a very short time. On another … politicians are squabbling while the lights go out.

In fact, the Australian Energy Market Operator reckons the lights, air-conditioners and fans could go out regularly across NSW, Victoria and South Australia through the 2018-19 summer. There’s even some doubts about the coming winter.

The operator (who some also believe has a hand in the energy problems facing the country), last week made the warning that the east coast is facing a gas shortage.

That’s right. Australia, about to become the world’s biggest LNG exporter, is running short of natural gas to supply to its local consumers and businesses.

The organisation’s chief operating officer, Mike Cleary, says there are a string of measures that need to be adopted ASAP.

“Energy supply shortfalls could be mitigated in the short term by an increase in coal-fired generation and renewable energy output, combined with an uptake in technologies such as battery storage, together with increased gas production and the possibility of LNG exporters redirecting a small portion of their gas production to the domestic market,” he said. Let’s break that down.

We need an increase in coal-fired power and renewable energy.

We need new technology like battery storage to store the power we create.

We need more gas production but (and it’s a very important but) we have to force LNG producers to redirect some of that increased production to the domestic market.

That last point goes to the very issue that even if you lift gas production, because there are better prices for that gas on offer overseas, it could simply be shipped to export markets while local prices will continue to climb.

This clanging cymbal should not be new to the Federal Government. It’s own Energy White Paper, released in 2015, highlighted the issue.

“Increasing supply and improving market function are key to easing these price pressures, but continued movement towards parity with higher international prices are nonetheless inevitable,” it found.

In other words, you can increase supply but the price of gas will still increase.

Turnbull has been talking energy security and electricity prices this year.

So the Australian Energy Council, in a submission to the current inquiry into the nation’s power system by Chief Scientist Alan Finkel, called out Turnbull and all MPs over their performance through recent years.

“The lack of national policy certainty is now the single biggest driver of higher electricity prices,” it said in its submission.

It puts the cost of “sustained national policy inaction” at effectively a carbon price of more than $50 a tonne. Or, for those keeping score at home, more than double the actual carbon tax before it was abolished.

The chickens within the Liberal and National parties that demanded the axing of the carbon tax have come home to roost. Yes, they got rid of Julia Gillard and managed to elect Tony Abbott for a couple of years. But now they’ve wrecked the energy debate, what have they got?

So clever have these policy chickens been that we now have the situation where Australia’s greenhouse gas emissions are increasing while paying even more for its energy.

That’s the opposite of win-win. We’ve managed to get a lose-lose. High fives all round.

Remember, John Howard went to the 2007 election promising an emissions trading scheme (then Kevin Rudd and then, finally, Julia Gillard put that price on carbon).

That would have given energy companies the security they needed to make investment decisions on power stations that will operate for 30 or 40 years.

It’s not a surprise then that, given the to-and-fro of the past decade, we’ve got to the situation facing the east coast.

We’ve ended up with the second or third-best option of a renewable energy target which itself is now being blamed by the Government and defended by supporters as if it’s the energy bee’s knees of Australia.

The Government took for ever to lock-down its position on the renewable energy target but only a fortnight ago the prime minister who oversaw that legislated position, Abbott, was out saying it needed to be revisited.

That’s not policy certainty. That’s uncertainty with a capital TONY ABBOTT.

Then there are the rent seekers looking to protect their patch. First prize for chutzpah goes to the Minerals Council of Australia, which represents the coal industry.

It is demanding the removal of policies that give renewable energy a ladder-up into the electricity sector. But it wants government assistance to look at clean coal and carbon capture and storage.

And it backs removing the ban on nuclear energy which, as every case in the world has proved, needs government assistance and subsidies to operate.

In Europe, the cost of offshore wind is now about $US30 a megawatt hour cheaper than nuclear and on its way to being cheaper than coal.

So many energy problems, so many who’ve been in office over the past decade who should be held responsible.

All the while our future energy demands are changing as technology moves so much faster than slow politicians.

Musk hopes to send space tourists around the Moon next year and perhaps send humans to Mars in a decade. It may be pie-in-the-sky. But given his track record in the Nevada desert, the power is with Musk.

Not with Canberra.

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