Power failure proves again that all roads lead to gas

Like a blast from the past, the last-minute intrusion by former UN climate chief Christiana Figueres into Australia’s domestic affairs was a reminder that old habits die hard. Spouting the usual nonsense, without any evidence, that Cyclone Alfred, which struck Brisbane in March, was connected to climate change, Ms Figueres was tone-deaf to the more recent developments that matter. The danger in Ms Figueres’s intervention is the succour it gives to those still seeking to sabotage our industrial capacity and standard of living.

This week’s electricity system failure in Spain and other parts of Europe proves the point. Comments by Alcoa, which owns the Portland aluminium smelter, Victoria’s biggest electricity user, bring the message home. In regard to the Spanish blackout, Alcoa said if power authorities could not quickly understand what had happened and the solution, the company would have to reconsider its operations there. Meanwhile, Alcoa chief executive Bill Oplinger told the Melbourne Mining Club that the much quoted renewables and battery model would not cut it. “I’ve not seen an economic business case that says batteries can be built big enough to back up a smelter,” Mr Oplinger said. Alcoa also has dismissed hydrogen as a viable future energy source.

Alcoa’s hard-headed determination on batteries and hydrogen is significant, not least because the Albanese government has offered aluminium smelters a $2bn producer credit if they make their Australian products in a low greenhouse gas emissions way. According to the Australian Aluminium Council, Australia’s four aluminium smelters consume as much electricity as South Australia and Tasmania combined. The aluminium industry says the single most important thing the government can do is to ensure low-emissions electricity is delivered reliably and at an internationally competitive price. As this week’s Spanish experience shows, this is easier said than done. The failure of the Spanish electricity grid mirrored the collapse of the South Australian grid in 2016 and has brought back to the surface a debate that has been raging in the national electricity market largely out of view from the public. As Centre for Independent Studies energy program director Aidan Morrison wrote on Friday, the mask is slipping for the entire energy transition. “Behind the curtain, the experts are still figuring out what’s required to make this grand experiment work,” he wrote.

Australian Energy Market Operator chief executive Daniel Westerman told a Committee for Economic Development of Australia energy conference on Thursday that in 2024 AEMO had to intervene in the market 1800 times to direct gas, hydro and coal-fired generators to synchronise to the grid to provide critical system stability. This is up from six manual interventions to maintain a secure grid in 2016 and 321 interventions in 2020. These interventions are the only way AEMO’s control room operators can manage periods when large volumes of unused power are flowing into the main grid from rooftop solar systems and other inverter-based resources. As coal-fired plants retire, AEMO says 22 large synchronous machines will be needed to keep the grid stable and secure. Even still, Mr Westerman says, “flexible gas-powered generation will remain the ultimate backstop in a high-renewable power system”. And for gas to play its “critical role” as a backstop for reliability, there must also be enough gas in our domestic networks to meet demand. This is the powerful message that whoever wins the federal election on Saturday must absorb.