Elon Musk’s Tesla battery ‘must be part of energy mix’: Shorten

Bill Shorten has defended the South Australian Labor government’s deal with Tesla’s Elon Musk.

Minister for the Environment and Energy, Josh Frydenberg. Picture: Kym Smith

Bill Shorten has defended the South Australian Labor government’s deal with Tesla’s Elon Musk to build the world’s biggest lithium ion battery after Energy Minister Josh Frydenberg dismissed the fanfare surrounding it.

Mr Frydenberg said today that the facility would only provide 129 megawatt hours of storage, compared with 350,000 megawatt hours from the Turnbull government’s Snowy Hydro 2.0 project.

Visiting Gawler, north of Adelaide, the Opposition Leader said battery storage would be part of the energy mix for the future.

“I think the rapid expansion of battery storage for renewable energy helps cure some of the concerns people have about the intermittent nature of renewable energy. It is policy headed in the right direction,” Mr Shorten said.

“I have no doubt that the SA government, as they conclude contracts and negotiations, will provide more detail to people. It has to be part of our energy mix.”

Mr Shorten said Australians wanted action from politicians, taking the opportunity to have a swipe at Malcolm Turnbull over his London speech about the Menzies legacy.

“What is driving people to distraction is when politicians talk about themselves and don’t talk about the people,” he said.

“This outbreak of disunity within the Liberal Party all the way from London, it is time for the Liberal Party to stop talking about themselves, start talking about the people of Australia and so far the Liberal Party don’t seem to have woken up to themselves.”

Asked whether he agreed with the Weatherill government’s use of diesel generators to shore up the state’s power supply, Mr Shorten said he would leave the running of the state to the state government.

But he called for federal funding for the northern Adelaide irrigation scheme, and the electrification of the Gawler rail line.

“What I am here today doing is saying where the State Government has a proposition around funding the northern Adelaide irrigation scheme, it is appropriate for the Federal Government to support this project,” Mr Shorten said.

“This is a ripper of a project. If we can provide the extra resources to upgrade the infrastructure of the waste water treatment plant, that provides 12 gigalitres extra of water.

“That will allow upwards of 300 hectares to become available for intensive horticulture, 3700 jobs in construction and the operation of the new irrigated land. This is a great project.

“If Mr Turnbull hasn’t got on board by the time of the next election, if we are elected, we will do this project. What I am inviting Mr Turnbull to do is to take our idea and do it now.”

Musk’s Tesla battery ‘no silver bullet’

Mr Frydenberg will meet with state and federal energy ministers on Friday to debate Chief Scientist Alan Finkel’s Review of Australia’s energy supply and its recommendations.

Ahead of the COAG meeting, Australian Energy Market Operator CEO Audrey Zibelman has urged the ministers to “get on with it” and endorse the Finkel Review, saying the biggest challenge for the energy market at the moment is indecision.

Mr Frydenberg took a swipe at the Weatherill Labor government, saying the South Australian battery announcement needed to be seen in perspective.

“I absolutely welcome any investment in storage, and I’ve repeated that up hill and down dale, but the reality is the public shouldn’t be tricked into thinking that this is a silver bullet,” he told ABC radio.

“This is 129 megawatt hours of storage. You know that compares to 350,000 megawatt hours of storage in Snowy Hydro 2.0.

“On any one day in South Australia, there is 13,000 megawatt hours of wind storage. This will save less than one per cent of that, so as long as the Weatherill government is upfront about the limitations of its own announcement, then we’re fine.”

Tesla CEO Elon Musk and South Australian Premier Jay Weatherill at the battery announcement.

In her speech calling for action from energy ministers, Ms Zibelmann said the test of success would be an endorsement of the Finkel review.

Mr Frydenberg said Dr Finkel conducted eight months of consultations, both here and abroad, and had come up with 50 recommendations. “The Turnbull government has quickly, in record time, endorsed 49 of those recommendations and they are very important ones, including bringing more stability and security to the system, around storage capacity, particularly for wind and solar farms, also getting large-scale generators to provide greater notice periods before they close and so forth,” he said.

“The one issue that we haven’t resolved at the federal level is the clean energy target and we’re still going through our internal processes on that one, but there is a lot to talk about at this meeting, particularly also how we can get more gas into the system because increasingly gas is setting the price of electricity.”

Mr Frydenberg said he was sure the states would like to discuss the clean energy target and he was happy to entertain that.

“But the point of the government’s position on the clean energy target is that we haven’t finalised internal discussions,” he said.

“There are a number of issues that have been raised around modelling assumptions and the like and we’re continuing to consult with key stakeholders, so this is a very big decision to move down the path of a new mechanism. It’s one that Dr Finkel himself said should be in place by 2020 so we don’t have to rush it, but what we do need to do is get it right.”

RepuTex report “mischievous”

Mr Frydenberg dismissed a report earlier this week by energy consultants RepuTex, which found wholesale prices would keep rising unless we get a new climate policy, such as a clean energy target.

The report found the clean energy target would bring prices down from more than $100 per megawatt hour to around $60 per megawatt hour, even if wind and solar projects were forced to have storage attached, as recommended in the Finkel Review.

“What is very mischievous about that RepuTex study that you have just quoted is that they only tell half the story,” Mr Frydenberg said.

“Of course more generation into the system reduces the wholesale price, but what they haven’t said in their public disclosure is actually what the certificate price is because as a clean energy target is established, you are required to buy certificates or the retailers are required to buy certificates from those companies that are building the renewable energys source and those certificates are passed onto the consumer in the form of higher prices.

“So they’ve only said what happens to the wholesale price, meaning what happens when there’s more generation in the system, they haven’t said what happens actually to the retail price as a result of certificates being passed onto the consumers.”

‘Technology-neutral’ on coal

Liberal MP Craig Laundy told Sky News yesterday that the government was “not considering new coal-fired power stations”.

“There is existing coal-fired power stations out there that if investment in them happened you could potentially, new technology, lower emissions, expand their life,” Mr Laundy said.

Asked if Mr Laundy was correct, Mr Frydenberg said the government was technology-neutral on coal.

“I have said again repeatedly publicly that if new coal is built and the market supports that, then we will support that,” he said.

“We don’t have any plan on the table to build a new coal-fired power station, because today we’re getting more than 60 per cent of our electricity from that source, but what I have recently done is written to the Australian Energy Market Operator and expressed our concern about what will be the needs of the national electricity market when two major coal-fired power stations close in the 2020s in New South Wales, one being Liddell and the other being Vales Point, and we need to ensure that we have sufficient despatchable power, because not all electrons are created equal.

“Something that is generated from solar and wind is not the same as that which is generated from coal, gas and hydro, so we’ve asked the Australian Energy Market Operator to tell us how much despatchable power is needed if a reverse auction is one means to ensure that power is into the system, and if that’s coal or if that’s gas or if that’s renewables and storage or a combination of the above then we will be prepared to support it.”