Coal to the rescue?
20 June 2022
What sort of a third-world country have we become, with an abundance of natural resources, that ‘load shedding’ or electricity rationing was forced on businesses and residents up and down the eastern states of Australia last week?
New South Wales residents were told by their Energy Minister not to turn on the dishwasher. Federal Energy Minister Chris Bowen blamed a lack of investment in renewables, but he somehow forgets that literally billions have been spent in market-distorting renewable energy schemes by both federal and state governments, Labor and Liberal alike, over the last two decades.
These green schemes have done a wonderful job destroying one of the world’s most efficient energy markets, set up in 1998, under the then name of NEMMCO (now known as AEMO).
Bowen, many in the media, and some Liberals too, miss a fundamental point.
Renewables have, at the moment, virtually no storage capacity. They are not a source of baseload power. As the new Federal Opposition Leader told the ABC, ‘I would love to tell you that there is a battery that can replace a coalmine tomorrow or that we can bring on hydro that can support the rest of the country, but the technology is just not there.’
Someone needs to remind the global warming zealots that if the sun doesn’t shine or if the wind doesn’t blow, these forms of power are practically useless.
Between 60-70 per cent of Australia’s energy is generated by coal. Yet Federal Labor’s reckless plan is to reduce emissions by 43 per cent by 2030, with 82 per cent of Australia’s energy due to be generated from renewables. This is demonstrably absurd.
Equally, the irresponsible ‘Teal Independent Party’ advocated for a 60 per cent emission reduction by 2030 meanwhile the Liberals at the last federal election jumped on the hook and went for Net Zero by 2050; that was an overwhelming political success wasn’t it!
Over the next decade at least six coal-fired power stations are scheduled to close, which will take a further 20 per cent of energy generation capacity out of Australia’s energy market.
As Daniel Wild from the IPA observed, ‘The energy crisis real Australians are experiencing today is only set to intensify over the short to medium term with the imminent closures of coal-fired power stations such as Liddel, Eraring, and Yallourn W.’
This leads us to the disastrous tale of Victoria, which has already lost 25 per cent of its previous generation capacity with the closure of Hazelwood in 2017, after Daniel Andrews tripled the royalties payable on brown coal. Hazelwood was a 1,600-megawatt-capacity power station and is being replaced by 150 megawatt battery, lucky us! Yallourn W is now due for early closure in 2028, that’s a further 22 per cent of Victoria’s energy supply or 1,450 megawatts.
So the not unreasonable question families and businesses are asking both major parties in the lead-up to the 2022 state election; with what are you proposing to replace over 40 per cent of lost baseload power generation between 2017 and 2028?
Could the state or federal government subsidise Energy Australia so Yallourn’s life could be extended well into the 2030s as was originally planned because of the public interest in guaranteeing the reliability of supply? Better yet, incentivise the construction of a new high efficiency low emissions coal-fired power station?
Could a new gas-fired power station be built in Victoria that could be utilised at periods of peak demand to offset the huge loss of Hazelwood and Yallourn?
Here we get to the absolute stupidity which has plagued both sides of politics in Victoria for the last decade, and is now having a dramatic effect on the lives and livelihoods of Victorians.
In 2012, the Coalition led by ‘Red’ Ted Baillieu imposed a moratorium on unconventional gas exploration – fracking – which was a decision that was profoundly anti-business, anti-investment and is now enshrined in the Victorian Constitution after Labor legislated this draconian and bizarre amendment to the state’s constitution in 2021 which the state Coalition, I am ashamed to say, voted for. A Matthew Guy led opposition supported this nonsense in 2017.
This comes on top of former Premier Denis Napthine, agricultural in both words and deeds, placing a moratorium in 2014 on conventional onshore gas exploration, that Labor extended in 2016 until 2020 which at the time even the Australian Workers Union was opposed to.
AWU Secretary Ben Davis said, ‘If new exploration and extraction is not allowed, there will be an exodus of investment and jobs from Victoria.’ This moratorium on conventional on-shore gas exploration was lifted in mid-2021, but the damage has been done.
AEMO predicts, ‘Overall, annual existing and committed Victorian (gas) production is forecast to decline by 43 per cent, from 360 petajoules per year (PJ/y) in 2021 to 205 PJ/y in 2025… The declining Victorian production capacity during the outlook period is also expected to reduce system resilience. Peak day supply capacity currently exceeds peak day demand, providing sufficient margin for the operational management of equipment trips, unplanned maintenance, and demand forecast errors…’
With a reduction in supply by 2025, ‘This tightening supply-demand balance will result in an increased probability that operational issues are unable to be operationally managed, leading to an increased likelihood of threats to system security or curtailment events.’
Put simply, Victoria is running out of gas, and it’s entirely self-inflicted by politicians and cardigan-wearing public servants who genuinely believe that in a relatively cool state such as Victoria, wind, and solar can solve every ill.
Household energy prices are soaring because we are short on baseload power at periods of peak demand. Even Federal Labor’s Resources Minister Madeleine King said, ‘That Victoria’s ban on fracking and coal seam gas extraction represented a significant barrier to solving the energy crisis.’
In the late 1960s the Liberal government of Sir Henry Bolte had an important decision to make, commission a new coal-fired power station in the La Trobe Valley, or build Australia’s first nuclear power station on French Island in Western Port Bay, to become operational at the latest by 1980.
Unfortunately, four hundred years of cheap brown coal won the day, but political courage whether it be for new gas or coal-fired power stations or hopefully one day, nuclear, is needed from the Liberals; otherwise the left will continue to dominate the energy debate, and Australia really will become a third world country for baseload power supply.