Despite the successes of Australia’s renewable energy sector, the federal government is stalling on further development of this industry, instead maintaining its dogged commitment to coal-fired power. By Mike Seccombe.
The transition to renewable energy
The image of Scott Morrison brandishing a lump of coal in the house of representatives has become emblematic of his government’s hostility to renewable energy.
Most people with even a passing interest in the climate crisis will recall the pictures of the then treasurer grinning and passing around the black rock, supplied by the Minerals Council of Australia and lacquered to avoid MPs getting their hands dirty. Some may also recall his mocking words, addressed to the other side of the parliament: “This is coal. Don’t be afraid. Don’t be scared.”
The broader context also is worth remembering. Morrison’s stunt was part of a concerted effort by the federal government to persuade Australians that renewable energy sources were both more expensive and less reliable than coal-fired power plants.
In the preceding months, South Australia had endured a series of dramatic blackouts. Expert analysis showed they had little to do with that state’s reliance on renewables; rather, they were the result of extreme weather events – two huge storms that knocked over transmission lines and one exceptional heatwave. But that was not the way Morrison and others spun the crisis.
As Guardian Australia’s political editor, Katharine Murphy, described it at the time: “Whatever the question was in the parliament on Thursday, the answer was: ‘South Australia has just had a blackout and, if Bill Shorten becomes the prime minister, all the lights will go off around the country.’ ”
Two-and-a-half years down the track, the lights are on in South Australia, and its power network is more reliable than those in New South Wales and Victoria, where old coal-fired generators regularly break down. Wind and solar routinely meet two-thirds of South Australia’s power needs and regularly generate more than 100 per cent, allowing the state to export power.
What’s more, it now has the cheapest wholesale electricity of any state in the National Electricity Market – keeping in mind that the NEM is not truly national, for it excludes Western Australia and the Northern Territory. Figures from the Australian Energy Market Operator (AEMO) show that in October the spot price for wholesale power in South Australia was $67.34 – almost $7 less than in Queensland, while the average across the rest of the NEM was more than $100.
Yet we haven’t heard Scott Morrison – whose stunt with the lump of coal no doubt helped him win favour with the climate-change-denialist right wing of his party ahead of the coup against Malcolm Turnbull – celebrating these wins. There also hasn’t been any acknowledgement of South Australia’s disproportionate contribution in helping Australia reach a significant milestone: on Tuesday last week, for a couple of hours in the middle of the day, renewables provided more than half the needs of the NEM.
A week before that, on November 6, renewables had exceeded 50 per cent for a few minutes, but it was more protracted this time. According to the calculations of Dr Hugh Saddler, honorary associate professor and energy market expert at the Australian National University’s Crawford School of Public Policy: “Total generation through renewables, including rooftop solar and hydro power, exceeded what’s called ‘demand on a sent-out basis’ – including what consumers actually use plus all the transmission and distribution losses.
“On that basis, it got to more than 50 per cent sometime after 11.30am (AEDT) on November 12, and it stayed above 50 per cent until some time after 1pm.
“Furthermore, that day saw the highest peak in renewable generation, and the whole day was the biggest ever in terms of total generation.”
South Australia deserves credit for its role, says Saddler, but that credit must be shared with the ever-growing number of households and businesses across the country that have rooftop solar, and in particular with the developers of large-scale renewable energy projects.
“Just since last summer, 12 new solar farms have come online, increasing total capacity by more than 50 per cent,” says Saddler.
He has no doubt that this summer, and into the future, we will see such days, when renewables account for the majority of demand, occurring more frequently. But little of this has been driven by the current government.
As noted by Kane Thornton, chief executive of the Clean Energy Council, the growth of investment in renewables was substantially driven by a policy the Coalition inherited from Labor: the clean energy target.
The target was originally to see enough renewables installed by 2020 to generate 41,000 gigawatt hours of electricity a year. Under the prime ministership of Tony Abbott, this was cut to 33,000 gigawatt hours – less than a quarter of Australia’s electricity demand. But it could have been worse: Abbott also wanted to abolish two agencies set up to help fund the transition, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, but he failed.
The clean energy target has now been met.
“In just the last two years, we’ve seen $25 billion committed to wind and solar farms,” says Thornton. “That’s projects either completed or under construction – not things that might happen in the future, but things that are real, now.”
The bad news, he says, “is that now that 2020 target has been fully met, there is no policy beyond that”.
Furthermore, it is increasingly difficult for renewables generators to get their power to consumers, he says, because investment has slowed.
“The macro issue here is that of building enough transmission infrastructure to support a different set of energy systems in the future,” says Thornton. “Over the past decade, as we’ve built more renewables, we haven’t been building and investing in the transmission.
“I’d put to you that the regulatory regime is not fit for purpose. We’ve seen close to no new investment in transmission over the last decade.”
To be fair, it’s a difficult problem. Fifty years ago, when much of our transmission infrastructure was built, it was tasked to take power from a small number of centralised coal plants out to customers. That’s no longer the case.
The issue has been made worse by another policy dear to conservative governments: privatisation.
Before most states sold off their transmission businesses, says Thornton, “if they needed to invest in new transmission, they basically just went and built it. The reality is that at the moment, we’ve got more of a market model [and in most states a monopoly market] approach to transmission, which complicates things a lot.”
The bottom line, says Saddler, is that “there’s now a relatively large number of new solar and wind farms, particularly in Victoria and to a lesser extent in Queensland, South Australia and New South Wales, which are ready to go, but haven’t got authorisation to connect because of grid problems”.
AEMO has sought to address this by formulating what is called an integrated system plan. But the states and renewables advocates complain that Energy Minister Angus Taylor is delaying reform – seeking to cut deals with politically “friendly” states such as NSW, while snubbing Labor in Victoria – rather than taking the holistic approach that is needed.
As evidence of this, Tim Baxter, senior researcher with the Climate Council, points out that Taylor had not met with his state counterparts at the Council of Australian Governments Energy Council for almost a year until yesterday.
“The COAG Energy Council is supposed to meet at least twice a year, and in the past met four to seven times a year,” says Baxter.
“The last time it met, last December, Don Harwin, the [Liberal] New South Wales Energy minister at the time, criticised the federal Coalition for dumping Malcolm Turnbull’s planned national energy guarantee shortly after the rolling of Turnbull. Angus Taylor brought the gavel down on that discussion.”
Baxter says Taylor remains focused on propping up existing aged coal-fired generators.
“Meanwhile, what they call the trilemma – price, reliability and emissions – persists,” he says. “Power prices have gone up, reliability has gone marginally down and emissions are not going down fast enough.
“There’s really no explanation for the government’s position except blind ideology and vested interests. It’s captured by the fossil fuel industry.”
Yet conservative governments elsewhere in the world – Britain being a prime example – have moved decisively against fossil fuel power generation in favour of renewables.
Which brings us back to South Australia.
During 16 years of Labor government, the state went from having zero large-scale renewables to generating 2675 megawatts of renewable energy, which places it second only to Denmark in the proportion of its electricity derived from wind and solar. There are, however, other places with a higher share of renewables, through such means as hydroelectricity or geothermal generation.
This growth was a testament to remarkable faith in the post-carbon future.
The interesting thing is that the Liberal opposition was largely supportive. Since winning government last year, the South Australian Liberals have continued to build on Labor’s legacy, even keeping largely intact the team of people who worked on Labor’s transition plan.
As the former Labor premier Jay Weatherill notes, the state opposition, unlike its federal Liberal counterparts, never took cheap shots.
“It’s a most satisfying thing that even in an era of hyper-partisanship, we’ve got what is for all intents and purposes bipartisanship in South Australia on energy policy,” he says.
Even after the blackouts, Weatherill says, Labor’s policy on renewables “worked as a positive for us. And the opposition didn’t campaign in a negative way on our policy, and instead matched it, with minor differences of detail.”
He exaggerates only slightly. The state Liberals were critical of Labor for not focusing enough on measures that would stabilise the state grid. And in mid-2017, when Labor contracted Tesla to build the world’s biggest battery – officially known as the Hornsdale Power Reserve – to provide that stabilisation by helping to regulate voltage and frequency, the Liberals were not just supportive, they claimed vindication.
Not so the federal government.
“By all means have the world’s biggest battery, have the world’s biggest banana, have the world’s biggest prawn like we have on the roadside around the country. But that’s not solving the problem,” Morrison mocked.
But it did solve the problem, or at least went a long way to solving it, as the current South Australian Energy minister, Dan van Holst Pellekaan, reminded listeners on the ABC’s Radio National this week. It had been so successful in fact, that he was announcing that the big battery was to be made almost 50 per cent bigger.
Whether Morrison was simply ignorant or deliberately dishonest, he was spectacularly wrong.
“The reality is the big battery’s played an incredible role in supporting energy security, improving the reliability of the system and lowering prices,” says Kane Thornton.
“We’ve now got a whole range of other big batteries that are actually now in operation across Australia, and more being developed. South Australia is rapidly becoming the envy of other states because they’re getting through the other side of the transition.”
South Australia is well on track to meet its target of net 100 per cent renewable power by 2030. Australia’s most progressive jurisdiction, the Australian Capital Territory, with its Labor–Greens government, effectively gets all its power from renewable sources already.
But these are bright spots in an otherwise dark picture.
The Morrison government argues, correctly, that Australia’s domestic greenhouse gas emissions amount to only 1.3 per cent of the global total. But that ignores a number of relevant facts.
For one, our population is just 0.3 per cent of the world’s, making our per capita emissions the highest in the OECD and the highest of any country with a population of more than 10 million – including Saudi Arabia’s.
Second, when our fossil fuel exports are included, we are the source of almost 5 per cent (excluding land-use changes in forestry and agriculture) of global emissions. According to analysis by The Australia Institute, that places us fifth in the world. Even excluding exports, Australia ranks 14th for emissions, when we are the 55th-largest country by population.
The corollary to the argument that we are just 1.3 per cent of the problem is that we should wait for other countries to act. Channel Seven’s chief political reporter, Mark Riley, trotted this one out last Sunday, boldly asserting on ABC’s Insiders that “no government’s doing anything”.
This is untrue. While few governments are doing enough to achieve the emissions reductions targets that the science tells us we must meet, most are doing more than Australia.
In direct response to the claim, The Australia Institute collated the official OECD data between 2005 – the base year for Australia’s climate pledge to cut emissions by 26-28 per cent – and 2017. It showed that 27 of 32 OECD countries had reduced emissions by an average of more than 14 per cent. Australia’s emissions were up about 5 per cent.
Perhaps it’s time to pay more attention to the governments – such as South Australia’s – that are intent on meeting the challenge of climate change, rather than regurgitating the excuses of a government that is dragging its heels.
This article was first published in the print edition of The Saturday Paper on Nov 23, 2019 as "Raking over old coal".
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