Malcolm Turnbull’s switch on power sources
It is an unusual double standard by which Malcolm Turnbull lives.
The common complaint against politicians is that they do not practise what they preach, that their private behaviour is of a lower standard than what they publicly advocate. But in Prime Minister Turnbull’s case it’s the opposite. He practises what he dares not preach.
On his Point Piper mansion, his office confirmed this week, Turnbull has an array of solar panels capable of generating 14.5kW of electricity.
That is a pretty big system. The current average capacity of new domestic solar systems in New South Wales is about 6kW, but people can get by with less, provided they are not profligate with their power.
The leader of the Greens, for example, Senator Richard Di Natale, runs a household of four people on 3kW of solar-generating capacity with attached storage, and lives completely off-grid. Occasionally, during the bleakest months of the Victorian winter, he tells us, he augments this with generator power.
Those who install solar systems say a 5kW array of solar panels can power a large home of four people, including 20 plus lights, multiple televisions, all the usual household appliances, large or multiple airconditioners, and a swimming pool pump.
Considering that Turnbull has a solar setup almost five times the size of Di Natale’s, producing about three times as much electricity as is consumed by an average home, his house is likely energy self-sufficient, so long as the sun is shining.
For those times when le gai soleil – “the happy sun”, in French, which was the name of the mansion before Turnbull bought it – is not shining, Turnbull also has installed 14kWh of battery storage, which the experts say is actually on the small side, given the size of his house and his solar array. Such a system would be enough to allow a well-insulated, energy-efficient average-sized house to go off-grid, but not one like his.
We can’t know for sure, because his office did not respond to our request for further detail, but it’s a fair bet that Turnbull is more than 50 per cent energy independent in his home life. Or at least he could be, assuming a not-too-extravagant lifestyle, which is admittedly a brave assumption.
Private citizen v PM
Good for him. Malcolm Turnbull, private citizen, realises the need for action to combat climate change. He has met a pretty ambitious personal renewable energy target. He has moved away from reliance on dirty, fossil fuel-generated electricity and embraced the future of clean-energy generation and storage. He has also saved himself money over the long term – or maybe the not so long term, considering the rate at which prices for grid power are escalating.
Malcolm Turnbull, prime minister, however, has made quite a different calculation – one based apparently on political rather than environmental goals.
Prime Minister Turnbull disparages ambitious renewable energy and greenhouse gas reduction targets. He embraces nostrums such as “clean coal”. He rejects the notion of a market-based emissions reduction scheme and indulges a campaign of disinformation about the cost and reliability of alternative energy sources.
It is not only public and private Turnbull that are in contradiction, though. Even more glaringly, the public Turnbull of today is in contradiction with the public Turnbull of seven years ago.
That Turnbull featured on the ABC’s Four Corners program of November 9, 2009, when he was leader of the opposition, and was advocating that the Liberal and National parties support the Rudd government’s plan to introduce an emissions trading scheme (ETS).
“I will not lead a party that is not as committed to effective action on climate change as I am,” he famously declared.
The same program also interviewed the former numbers man and godfather of the Liberal Party right wing, Senator Nick Minchin, who confidently told the reporter, Sarah Ferguson, that a majority of members of the Liberal Party did not even accept that human activity was causing climate change, let alone the idea that they should support Labor in doing something to address it.
A few tumultuous weeks after the show aired, a leadership spill proved both Minchin and Turnbull right. The climate denialist Tony Abbott became the new opposition leader.
A couple of months after that, when Labor brought its ETS legislation into the parliament in February 2010, newly minted backbencher Turnbull crossed the floor to vote against his party. First, however, he gave a very stirring speech. It is worth referring to at some length, just to see how far Turnbull has since regressed.
Human-induced climate change, he said back then, was the “ultimate long-term problem” for Australia and the world. Inaction would have “catastrophic” consequences.
“We have to make decisions today, bear costs today,” he said, “so that adverse consequences are avoided, dangerous consequences, many decades into the future.”
He did not resile from the fact that the major cost would be a substantial increase in the price of electricity.
Australia could not wait for the world to act, he said. It had to lead.
“How,” he asked, “can we credibly expect China, with per capita emissions less than a quarter of ours, or India with per capita emissions less than one-tenth of ours, to take our call for global action seriously if we, a wealthy, developed, nation, are not prepared to take action ourselves?”
And the best mechanism for combating climate change, Turnbull said forcefully, was a market-based emissions trading scheme such as Labor was proposing.
He explained: “An ETS works by setting a limit, a cap, on the amount of CO2 which the total covered industry sectors can emit. These industries are required to acquire permits to emit CO2 within the overall cap.
“Note: the government does not set the price of carbon; it sets the cap on emissions and the rules of the scheme, and then it is up to the market, the laws of supply and demand, to set the price.”
Turnbull dismissed an alternative proposal – having the government pay polluters to reduce their emissions – as “a slippery slope which can only result in higher taxes and more costly and less effective abatement of emissions”.
He referred specifically to Australia’s ageing, coal-fired electricity power stations, noting that “tens of billions of dollars” would have to be invested in new-generation infrastructure in the coming decades. Only a carbon price could drive “major change” to cleaner power, he said.
“Given that the cheapest fuels are generally the dirtiest, in the absence of a clear carbon price signal, new capacity is likely to be coal rather than gas, rather than renewables.”
Earlier, he referred to “the farce that the Coalition’s policy, or lack of policy, on climate change has descended into”.
Of the policy he now advocates, he said: “Any suggestion that you can dramatically cut emissions without any cost is, to use a favourite term of Mr Abbott, ‘bullshit’. Moreover he knows it.”
And finally, forebodingly: “Now politics is about conviction and a commitment to carry out those convictions. The Liberal Party is currently led by people whose conviction on climate change is that it is ‘crap’ and you don’t need to do anything about it. Any policy that is announced will simply be a con, an environmental fig leaf to cover a determination to do nothing.”
Abbott scare campaign
Fast forward through subsequent developments. The initial scheme proposed by the Rudd government did not get up. Under Julia Gillard, a less satisfactory – though still effective – carbon tax did pass. Then the Abbott opposition ran a ferocious scare campaign against it, won the 2013 election, and abolished it in July 2014. As Abbott’s former chief of staff, Peta Credlin, admitted this week: “It wasn’t a carbon tax, as you know. It was many other things in nomenclature terms, but we made it a carbon tax. We made it a fight about the hip pocket and not about the environment. That was brutal retail politics and it took Abbott about six months to cut through and, when he cut through, Gillard was gone.”
Instead of a market-based scheme, as originally proposed by Labor and endorsed by Turnbull, the Abbott government introduced the Emissions Reduction Fund, which has paid polluters some $2.5 billion for abatement. It is exactly the kind of policy Turnbull condemned in his 2010 speech as “a recipe for fiscal recklessness on a grand scale”.
And since the Emissions Reduction Fund has been in operation, Australia’s greenhouse emissions, which declined while Labor’s carbon tax was in place, have been rising.
The weight of expert opinion now holds that unless the policy changes, there is no way Australia will meet even the modest greenhouse gas reduction commitments it made at the global climate summit in Paris at the end of 2015.
Late last year, though, it briefly appeared that the Turnbull government was finally going to make that policy change. Environment and Energy Minister Josh Frydenberg announced the terms of reference for a review of climate and energy policy, including “the role and operation of the Emissions Reduction Fund and its safeguard mechanism”.
The existing safeguard mechanism set “baselines” or limits for big polluters, which they were supposed not to exceed. But as they have operated to date, they amount to no more than window dressing. They are set so high as to be ineffective.
The mechanism could, however, convert into a type of emissions trading scheme. The baselines could progressively be lowered, forcing dirty industries to buy pollution permits.
This idea has been badged as an “emissions intensity” or “baseline and credit” scheme, but it is essentially just a variant of the market-based system Turnbull advocated so strongly in 2010.
Frydenberg made it clear to the media that he was open to the change.
“We know that there’s been a large number of bodies that have recommended an emissions intensity scheme, which is effectively a baseline and credit scheme,” he said. “We’ll look at that.”
This simple statement brought an immediate storm of opposition from the climate change denying right wing of the government. Senator Cory Bernardi said the consideration of any form of carbon pricing was “the dumbest thing I’ve ever heard”. Tony Abbott also condemned the idea.
That was on Monday, December 5. On Tuesday, cabinet met and after that Frydenberg went on radio to rule out any change.
The day after that, Turnbull himself fronted the media and specifically ruled out an emissions intensity scheme.
“This is about cost of living. Energy prices are high enough already and we should not be doing anything that increases them in the future,” he said.
“We will not be imposing a carbon tax or an emissions trading scheme, whatever it is called.”
Writing about it at the time, the veteran political commentator Michelle Grattan said, in her usual understated way, that the move was a clear “demonstration of the power of the conservative forces in the Coalition”.
But it was something else, too, as Richard Di Natale told The Saturday Paper this week.
“It’s sad, actually,” he said. “It’s sad to see someone who was once prepared to stake his leadership on addressing climate change now betray all that he once stood for.”
Di Natale’s assessment is hard to argue with, on the evidence. Turnbull has now abandoned the policy he once advocated, and has committed himself to sticking with a policy he once condemned.
Of course, changing circumstances sometimes justify policymakers changing their minds. As the oft-used quote has it, commonly but not definitively attributed to economist John Maynard Keynes: “When my information changes, I alter my conclusions. What do you do, sir?”
But in the case of climate change, the data over the past seven years has only accentuated the need for action.
In his 2010 speech, Turnbull cited rising global temperature and sea levels, more frequent and intense heatwaves and fires in Australia, and “especially a hotter and drier climate in southern Australia”.
Since then, global temperatures and sea levels have risen faster. The scientific evidence has piled up: glaciers and ice caps melting, coral reefs bleaching and dying, mass extinctions of species, the spread of tropical diseases.
The 2016 State of the Climate report released last October by the CSIRO and Bureau of Meteorology notes that 2015 was the hottest year globally in recorded history and “the last 15 years are among the 16 warmest years on record”.
Indeed, the report is already out of date: newer data shows the world was even hotter in 2016, by a considerable margin. In Australia, the report says, the frequency, intensity and duration of heatwaves is growing. Rainfall patterns are shifting. Large areas of arable land are drying out. Bushfires are becoming more frequent and intense.
Checking the science
It’s hardly necessary to read the scientific reports, though. One need only go outside. Last Friday, New South Wales experienced a new record hottest February day. Never before had the state’s average maximum gone above 42 degrees, but on Friday it was 42.4 degrees. And that record was broken again a day later. The average maximum across the state was 44.02 degrees.
One should add the usual scientific caveat: a single weather event does not prove climate change. But there are few parts of the country that have not experienced exceptional heat this summer. And the State of the Climate report shows there is no part – no part – of Australia that is not getting hotter. The whole country, and the ocean that surrounds it, have warmed by around one degree on average over the past century.
The accretion of evidence, here and around the world, is undeniable. Climate change is a scientific reality, not a matter of opinion or ideology. Only the utterly uninformed, the crazily conspiratorial could believe otherwise.
The necessary response to the problem is conceptually simple: stop pumping out the gases, principally carbon dioxide, that are causing it, and switch to non-polluting energy sources. The practical difficulties are undeniably great but, as Turnbull said in the 2010 incarnation of himself, the need for such action is urgent.
The attitude of 2017 Turnbull, however, was summed up by The Sydney Morning Herald’s economics editor, Ross Gittins, thus: “… let’s say we’ve got a policy to deal with it, go to international conferences and make pledges to act, then come home and not do much about it”.
In fact, it’s even more cynical than that. The Turnbull government has clearly decided there is political mileage to be made by opportunistically campaigning against alternative energy.
One big opportunity for a major assault presented itself a little more than four months ago. For once the circumstances justified the journalistic cliché “a perfect storm”.
On September 28 a once-in-50-year storm struck South Australia, with gale-force winds, an estimated 80,000 lightning strikes and several tornadoes. The storm took out 23 pylons supporting major transmission lines. About 3.50pm, a cascading failure of the grid blacked out most of the state.
South Australia has the highest penetration of renewable energy in the country, and also a Labor government. Conservatives rushed to lay the blame for the blackouts on both. Deputy Prime Minister Barnaby Joyce, Australia’s most politically senior climate change denier, led the charge with multiple interviews the following morning.
He should have known better. The relevant agency, the Australian Energy Market Operator, had already briefed the government that the cause of the blackout was an “unprecedented” natural event as a result of which “transmission lines fell over”.
It is certainly true that there are technical problems with integrating renewables into Australia’s electricity supply network, but there also are much bigger problems the government – and its media surrogates – chose not to highlight, because they are complex, and it is much easier to blame renewables.
Take the issue of cost. The reliably pro-government anti-renewable energy newspaper The Australian published analysis this week that found average electricity prices across the country had increased 106 per cent since 2007.
The story offered no possible explanation for the outrageous price hikes, except the growth of renewables. The state-by-state breakdown of the price rises, however, put the lie to that explanation. It showed Queensland was the worst-performing state, having had a 135 per cent price jump, followed by Victoria at 117 per cent, and NSW at 108 per cent.
Yet those three states have the lowest penetration of renewables. All three get 90 per cent or more of their electricity from coal-fired generators. Conversely, the states with the greatest proportion of renewables, South Australia and Tasmania, had the smallest increases over the decade – albeit from higher bases.
Other factors at work
Clearly other factors are at work, and in a very persuasive piece in The Conversation this week, Bruce Mountain, director of carbon and energy markets at Victoria University, detailed some of them.
Until 1999, he noted, Australian electricity was some of the cheapest in the world. Then the market was deregulated. The various state electricity commissions were privatised and joined in a poorly regulated National Electricity Market. The neoliberal economic ideologues of the Industry Commission – now the Productivity Commission – said competition would drive prices down and productivity up. Instead, billions of dollars were spent on unnecessary network infrastructure – so-called gold-plating. Productivity fell and prices zoomed. Australia’s electricity is now among the most expensive in the world.
Prices also are incredibly volatile. Sudden spikes in the wholesale price – often to more than 100 times the average – are becoming increasingly regular across the country. When they happen in South Australia, they become a political weapon for conservative politicians to bash renewables for their intermittency.
But they actually occur most often in fossil fuel-dependent Queensland. The average wholesale price there in January was $198 a megawatt hour, compared with South Australia’s $84.
Why do we not hear the prime minister sounding off in parliament about this? Perhaps because it does not fit with the simplistic narrative that renewable energy is the problem, and that the “ideological” commitments made by state Labor governments to ambitious renewables targets are driving up the cost of living.
What is driving up power costs in Queensland is fossil fuel. The state’s burgeoning coal seam gas industry uses huge amounts of energy for the extraction and compression of the gas, which is then exported. The Australian energy regulator is investigating whether the enormous electricity price hikes amount to gouging.
Whatever the outcome of that investigation, the fact is the Australian electricity system is an expensive mess. We have an antiquated, dirty fleet of coal-fired power stations. We have incredibly expensive gas generators, widely suspected of gaming the system to force up prices. And, yes, we have problems integrating wind and solar power into the mix.
What to do?
Turnbull 2017 offered his answer in an address to the National Press Club on February 1.
“Storage has a very big role to play, that’s true,” he said. “But we will need more synchronous baseload power and as the world’s largest coal exporter, we have a vested interest in showing that we can provide both lower emissions and reliable baseload power with state-of-the-art clean coal-fired technology.”
Richard Di Natale was still incredulous two weeks after he heard it. “Now he’s spruiking clean coal. Really? We have entered the Trump universe of alternative facts. Clean coal. Really?”
Treasurer Scott Morrison, Industry Minister Arthur Sinodinos and Josh Frydenberg have subsequently suggested the government might subsidise the construction of new coal-fired generation.
Matthew Warren, chief executive of the peak body representing power generators, the Australian Energy Council, was taken by surprise by the government’s sudden enthusiasm for new coal generation. No one had discussed it with him or his members.
New coal plants, he said, were “uninvestable”, even with a subsidy.
The chief executive of the Australian Industry (Ai) Group, Innes Willox, a former chief of staff to Alexander Downer, delivered the same message a little less bluntly. “Right now, ‘clean coal’ doesn’t look like it’s got a place in the Australian energy mix.”
A more detailed analysis by the Ai Group’s principal adviser, Tennant Reed, formerly of the Department of Prime Minister and Cabinet and an energy specialist, explained in greater detail why it would never happen.
First, clean coal is not actually very clean. Even the best available technology was incompatible with meeting Australia’s current greenhouse gas reduction target of 26-28 per cent by 2030, he wrote. Second, it would be very expensive, at $80-$100 a megawatt hour, even without a carbon price. And it was odds-on that a carbon price would be introduced at some point in the 30- to 50-year life of such a plant.
‘The future is in storage’
There is simply no way “clean coal” can compete with solar or wind, on either economic or environmental grounds, says Owen Kelp, a principal at ACIL Allen Consulting, who last year reported to the Australian Energy Market Operator on the future of the electricity market.
“We’re seeing massive cost reductions in renewables over recent times. The most recent one [AGL’s 200-megawatt wind farm] built at Silverton in NSW was done at $65 a megawatt hour. We are now seeing utility-scale solar getting done at $70-$90. The way costs are coming down, you’d be a very brave investor to build a new coal-fired generator,” says Kelp.
“The future is in storage, probably mostly behind the meter.”
Malcolm Turnbull, private citizen, understands that is true, which is why his mansion has battery storage. But Malcolm Turnbull, politician, prefers to obscure that truth in the hope of wedging his opponents. Just about everything the government is saying to that end is selective, misleading or straightout false.
It is false to say their greenhouse reduction target is ambitious. It is not, given that Australia’s per capita emissions are twice the average of developed countries and four times those of the world as a whole.
It is false to say Labor’s target of a 50 per cent reduction in greenhouse emissions by 2030 is “ideological”.
Insincere and half-baked, yes. But not ideological. Shadow Treasurer Chris Bowen now admits the target is an “aspiration” not a policy, and Labor apparently has no clue about what it would cost. But it’s exactly in the middle of the 40-60 per cent reduction the government’s own Climate Change Authority advocated last year.
A postscript: During last week’s heatwave, the NSW energy grid came perilously close to disaster. Two of four units at the 45-year-old Liddell coal power station had broken down – again. Then two big gas-fired generators went off. There was not much help coming from the interconnector with Queensland, which had its own heatwave to worry about. Nor much from the Victorian interconnector.
Wind, solar and particularly pumped hydroelectric power saved the day. But don’t expect to hear too much about it from the government.
This article was first published in the print edition of The Saturday Paper on Feb 18, 2017 as "Power switch". Subscribe here.