Australia’s great power failure
WHERE power policies fail, governments follow, writes Warren Mundine. It’s time politicians stopped lying about what is possible, and embraced what’s achievable.
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AUSTRALIA’S electricity system is in crisis after years of political mismanagement.
And our political system has followed suit.
This week marks the second time Malcolm Turnbull’s leadership has crumbled because of his approach to emissions policy. It also brought down Kevin Rudd and was at the heart of Labor’s downfall.
It doesn’t matter who is prime minister next week or next year, Labor and the Coalition have never been so unpopular. In the Longman by-election, 31 per cent of voters didn’t vote for Labor or the Coalition in primary voting.
Why? Because for years, Australia’s political leaders have been lying to the people and lacking the courage and determination to implement policies and reforms they know are required: on welfare, the pension, debt, tax and certainly on energy.
Political leaders have been telling voters Australia can reduce CO2 emissions without increasing power prices; that we can have 25 per cent, even 50 per cent, intermittent electricity without our standard of living or economy suffering. That’s a lie.
Humans have never had better quality, healthier or longer lives because of cheap, abundant energy. Global primary energy consumption increased 2500 per cent in the past two centuries. Globally, more than 80 per cent of primary energy consumption is from fossil fuels, with less than 1 per cent from wind and solar. Fossil fuels produce CO2, and scientific models say that will adversely change the climate.
There are two options.
One is to apply the wealth and innovation of modern economies to adapt to the change; but suggest that and you’re howled down as a monster and a denier.
The other is moving to non-emitting energy that can still meet the needs of 8 billion people in the modern world. That is what our political leaders pretend to adopt.
Actually, they’ve taken a third course: telling us we can switch to substantial intermittent power while maintaining industry and technology and not paying prohibitive prices.
There is no stand-alone electricity market in the world the size of Australia’s generating more than 20 per cent of electricity from intermittent power. The handful of countries with substantial intermittent capacity have much smaller electricity markets or are in the European electricity market, with ready access to despatchable power.
Activists argue wind and solar are the cheapest per MWh. So they should be: there’s no guarantee when they’ll generate power.
An intermittent power source can provide a guaranteed supply only in combination with despatchable power like a gas plant.
The battery hype isn’t matched by reality. I can’t find any example of a stand-alone intermittent-plus-battery power source that can reliably power a heavy user, like a factory or data centre, let alone a national system. There’s also no robust Levelised Cost of Energy estimate for such a power source and ballpark estimates vary wildly.
So intermittent power is thrown into the mix with other sources and it’s all supposed to work in the aggregate. When it doesn’t, we’re told we need new delivery and transmission mechanisms. Some markets now have excess capacity, reducing profits for individual generators and/or excess generation at times and not enough at others.
Such factors add costs. With few exceptions, every market that’s increased intermittent power has seen increased prices.
Australia’s Paris commitment means higher power prices and scaling down industry. One enables the other because higher prices drive industry away. We’ll also have to scale down agriculture: culling herds, reducing exports and importing more food. But industry and agriculture won’t stop, just move elsewhere. Australia won’t reduce emissions but export them.
Reducing electricity usage and reliability and increasing prices has severe economic cost; and political cost as the past decade shows. Countries won’t decarbonise energy if this means de-industrialising and de-technologising. With current technology and engineering, the only way to rapidly achieve zero emissions and meet growing global energy demands is nuclear power. But few political leaders embrace it and Australia has banned it.
Australia’s efforts have no effect on global climate. And because global emissions will increase, Australia will face climate change adversity anyway. To address that, we’ll need a strong economy. Instead, we’re weakening it. We should get out of Paris, repeal intermittent subsidies and lift bans on nuclear power and gas extraction.
You can only lie for so long before the truth catches up with you. Regular people have figured it out. The revolving door of governments will continue until our political leaders do the same.
Nyunggai Warren Mundine, AO, is author of best-selling book Warren Mundine — In Black and White and host of Mundine Means Business on Sky News and WIN