Coalition energy policy collapses into chaos

From The Australian:

…the Australian Energy Market Operator warns of an immediate shortage of power this summer and a longer-term threat from 2022 if Liddell shuts down as planned. The alarming conclusions, to be released today, say South Australia has up to a 33 per cent chance of failures this summer while Victoria has a risk of up to 43 per cent, raising the prospect of “load shedding” that cuts power to households and businesses.

AEMO is scrambling to find spare energy capacity before ­December to fill the gap, in a windfall for companies with diesel generators that can feed power into the east coast electricity grid at premium prices.

AEMO warns that NSW has up to a 46 per cent likelihood of “significant” unmet demand after Liddell closes, including outages lasting from two to six hours, unless the strategic reserve is set up to build new generators.

The new recommendations are separate from the dispute over whether to endorse a clean energy target to encourage renewable power at the expense of fossil fuels. The government is aiming to address the immediate problems with capacity and reliability before the debate on the target.

Energy Minister Josh Frydenberg said the new report on ­“dispatchable capacity” re­inforced measures already underway including mandating that renewable generators provide battery storage to improve ­reliability and all providers give at least three years’ notice before they close, in a bid to repeat the hit to prices and supply when the ­Hazelwood generator closed.

AEMO counters the push within the Coalition partyroom for a government subsidy to build new “high-efficiency” power plants, in a clear finding that could reshape the internal debate ahead of the decision on a clean energy target.

AEMO tells the government to avoid “unnecessary investment in new power plants with uncertain long-term business ­viability” and echoes similar warnings from the nation’s Chief Scientist, Alan Finkel.

The regulator’s new report calls instead for the “possible ­extension of the capability of some existing resources” such as expanding the coal-fired power stations already operating.

And the response at the AFR:

The Turnbull government has secured an in-principle agreement from AGL to sell its Liddell coal-fired power station in NSW to another operator who would be willing to keep it operating for at least five years beyond its scheduled closure in 2022.

Prime Minister Malcolm Turnbull has begun negotiating with AGL CEO Andy Vesey after the energy market regulator warned there was neither the time nor market incentive to build new coal-fired power stations to combat problems with reliability and price caused by a rush towards renewable energy and a lack of national energy policy.

Mr Vesey made it clear on Tuesday AGL would not extend the life of the power plant, saying the company was “getting out of coal” and was “committed to the closure of the Liddell power station in 2022, the end of its operating life”.

After Mr Vesey made these points on Twitter, Mr Turnbull rang him directly seeking clarification because it was at odds with what Mr Vesey had told him in a conversation earlier in the day.

Mr Vesey reassured Mr Turnbull, who is determined to avoid a repeat of the sudden closure of the Hazelwood power station, that AGL would be prepared to sell the power station to “a responsible party” who would continue to run the plant for profit alone.

This is plain chaos. Even the process was botched as various headlines contradicted one another through the evening. We’ve got the usual mix of a vacillating PM, ideological and party division, policy on the run, back flips, front flips and and cobbled responses to policy challenges with implications lasting decades, not to mention ad hoc intervention in markets with no consensus-building.

Who is going to buy this power plant under government fiat? What guarantees are they going to get for doing so? What promises will be made about the RET, gas policy, the CET, NEM so on and so forth? Surely it will be the tax-payer.

The idiot Coalition now finds itself champion of a renewable energy target specifically designed to close coal-fired power stations, and the buyer of last resort for said coal-fired power stations.

All so we can not fix a gas shortage which simply needs a little domestic reservation.

I mean, seriously, there is no brain at work here at all.

Comments

  1. We just need a bigger crisis first, then the gas thing will be solved.

    A bigger crisis is a power shortage or energy spike beyond the level that can be managed with one or two marginal coal plants closing/not closing. And this needs to happen in Melbourne or Sydney.

    Then there will be enough votes in fixing gas.

    • ResearchtimeMEMBER

      IMHO, you have completely missed the point of some of these previous discussions. Gas is not the answer… it never has been; why? Not enough of it, we are running out of it in places, and the resources are very expensive, much, totally uneconomic at any realistic price forecast… good for peak, but should never be rated on base-load.

      So if gas is not the answer – what do we have left?

      • ResearchtimeMEMBER

        Not at all… why have I been agitating countless times for LNG terminals in Victoria and NSW!

        Selective memory?

        For your part, (and I could be wrong on this) you don’t seem to understand the perilous reality of these supposed gas resources at stake, and the economics of their extraction!

      • Or we could do what every other sane country in the world does : gas reservation. The company extracting the gas doesn’t won the gas : Australia owns it.

      • Gosh that got you riled up, didn’t it? If there are rolling blackouts across Sydney and Melbourne, all bets are off. You can tell your superiors this. If there are heatwave induced blackouts in the two metropolises whichever party is in power will be doing everything short of publicly flaying the heads of the gas companies. There will no longer be the mealy mouthed nonsense you keep spouting. Running out of gas! We’ve just about to become the worlds largest exporter!

      • RT, are you a Santos shareholder?

        Australia, one of the largest exporters of LNG in the world, has a gas shortage/extraction cost problem? What the actual fuck are you talking about…Next you’ll be telling me we can’t afford to feed our populace because we have a shortage of farmland.

      • Or we have shortage of land to build houses, or shortage of meat to sell reasonable priced beef, God forbid 🙂

      • ResearchtimeMEMBER

        Brenton, it would be ignorant to read what I have written, and come to that conclusion??? Where is the logic in that??? – IMHO you would be mad to own any shares in any LNG producer… this over supply picture will only steadily get worse in years to come… but cheap LNG for importers!!!

      • Gas is not the answer… it never has been; why? Not enough of it, we are running out of it in places

        Are you crazy? We don’t have enough gas?
        We have about 144 tcf (Trillion Cubic Feet) of KNOWN reserves. Australia uses about 1.8 tcf a year So only about 80 years without finding any more or fracking.

  2. ResearchtimeMEMBER

    No amount of solar will replace that lost base-load… I am a fan of solar and wind. But lets be honest here, this is not a pragmatic discussion, but pure ideological bent.

    Unconventional geothermal is the long-term answer, a big bit of hydro, and massive wave power. A single decent kilometre of multiple wave banks (approaching the roaring 40’s), is equal to tens of kilometres square of solar power – which would largely be useless a lot of the time. Yes there would be peaks far greater, but in general, use is negligible.

    And lets be brutally honest, the above discussion, and others like it – are never about power… if it was, the answer(s) would be bleeding obvious.

    Have a look at South Australia, as much as some commentators like to specialise in mendacity and prevarication, coal has to be centre of Australia’s base-load. Some may not like it, but there it is… that is not to say that baseload as a total percentage of total power needed is a falling percentage; but it is needed.

    I have seen some comments below H&H’s articles, and they are entirely dishonest. Can I say, Truth by definition, is exclusive! Its not a relativist thingy…

    • God provided us with that coal, isn’t that right RT! What I can’t figure out is why God gave all the oil to the Muslims?

      • ResearchtimeMEMBER

        Totally agree… as for Ishmael, I have heard you: Behold, I have blessed him, and will make him fruitful, and will multiply him exceedingly; twelve princes shall he beget, and I will make him a great nation…

    • South Australia has to go all renewable because.. the private company operating their only coal-powered power plant decided to closed it down!!

      • Didn’t the South Australian government once hold a Golden Share in Santos? I know Golden Shares are out of favour with neo-liberal governments these days but boy, wouldn’t the SA government be happy to have one in Santos today. It could order the redirection of the Moomba gas flow back into its domestic pipeline where its supposed to be it would been able to implement gas reservation by lunchtime.

        Turnbull and his government are morphing into Steptoe and Sons. One minute paying over the odds to Telstra for defunct copper in old asbestos-ridden pits, the next day paying out AGL to get out of Liddell when it was leaving anyway in 2022. It would be cheaper to buy out Santos and split it up reserving the gas back for the domestic market..

        I would laugh if it didn’t hurt so much when I open my power bill. Last account up from $750 a quarter in 2016 to over $900 and we are in a bad location for solar so no escape.

    • “Baseload”: A fancy word that generators have given themselves when they haven’t worked out how to turn themselves on and off yet.

      “Baseload” generation is just as useless as variable generation – you still need dispatchable generation (which the “baseload” generators have named “peaking” because the word “peaking” doesn’t draw as much attention to how useless “baseload” generators are at responding to demand as the word “dispatchable” does) to fill the gaps.

      • ResearchtimeMEMBER

        Mate – that is absolute rubbish, and you know it… baseload is real. If you see any generation demand graph, would wouldn’t spout such nonsense!

    • Tassie TomMEMBER

      While you were ultra-intelligently reading the “generation demand graph”, did you ever notice what happened to the demand line?

      Bugger me! It goes up and down. It doesn’t stay flat after all.

      And what happens to “baseload” generation when demand goes up?

      Nothing. SFA! Dispatchable – oh sorry – “peaking” generation kicks in to fill the gap, because the “baseload” generators can’t do a thing about variable demand.

      Fair dinkum!

      • ResearchtimeMEMBER

        If you actually read what I wrote TT, I acknowledge that base-load demand (as a percentage) is declining… but base-load is real. And yes I know it well. Meeting peak demand requires different strategies, of which gas generation is probably among the best (second only to hydro).

        Despite your mendacity, its far easier to meet peak when you have sustainable base-load. In fact, using Denmark as an example, a decade ago (when I looked at it closely – how time flies) – when they reached 18-19% of renewables the electrical system when down due to generation surges (wind mills don’t produce linear output, get far more efficient as speed up). Now I believe that has been extended to around 22%. But the fact remains that approximately half of their power is imported baseload, half of which is from nuclear generation (probably the best base-load, at a unit cost we have – ignoring capex which is now bonkers).

        Your ignorance of basic net flows is evidenced from above statements. H&H has a point, gas can be used as base-load, but only if supply is sufficient. Which, in the case of S. Australia, it is not for a variety of reasons. In the absence of that – renewables are not the answer! Your additional ignorance of the S. Australian situation is also on evidence here. When do these power shortages in S. Australia occur? Typically after 4p,m, when photo generation falls substantially…

        Base-load is real. If you had sufficient coverage, say 40-50% of demand, with solar covering peak air-conditioning mid day – gas could take over in the evening. There is no fast and hard rule, changes from region to region, climate zone, industrial use, etc.

        But gas is currently used for base-load now! So when peak demand arrives at 4-6pm due to hot evenings, there is nothing left in the pipeline (so to speak).

        Baseload is real – underlying demand. Stop this BS!

      • Tassie TomMEMBER

        “But the fact remains that approximately half of their power is imported baseload”

        RT, You don’t even know the difference between “power” and “energy”. Who do you think you are criticising people like a big smarty-pants in a conversation about electricity?

      • ResearchtimeMEMBER

        Its all about demand buddy… baseload is a convenient term just to describe what the minimum will be be – and yes you will over shoot… it is desirable to do so.

        But how about this, given you and others harp on about battery power so much, what is the harm of harvesting that “baseload”power that would otherwise go to waste! Rather than bust the system in its entirety!!! Surely that is a far preferable pragmatic outcome, which would assuage you green credentials a bit?

      • Tassie TomMEMBER

        Given that you’re now admitting that “baseload” is just as useless as variable generation at supplying power at all times that it’s needed, and that storage is needed to soak up either surplus “baseload” or surplus variable energy for later release when required, the all we need is energy at the cheapest price, don’t we?

        https://robertscribbler.files.wordpress.com/2017/03/us-unsubsidized-levelized-cost-of-energy.png?w=639

        Bugger me – wind and solar win hands down. (Solar has fallen since this study, and CCGT has risen).

        So coal can’t supply dispatchable power, and coal can’t supply cheap energy. So what can it do?

        Absolutely nothing!

      • ResearchtimeMEMBER

        Oh please, you are trying to trap me with semantics!! I am not against solar or wind – I think they have their place, and are good options in certain circumstances.

        Re-read what I am actually saying… BTW – solar and wind are not as beneficial as many make out, and real costs are not falling. In winds case, maintenance and end-off life tear down costs never included and are substantial. In solars case, current generation are from stolen German technology (hence no decent research monies now contributed to the sector) and sold at below cost. And every major un-protected player (mainly American due to dumping laws) now out of business except the Chinese.

        The truth is, a tonne of coal produces a lot of energy. And its cheap as chips! Coal good for base-load, gas for peak.

      • Tassie TomMEMBER

        There’s that word “peak” again, which of course doesn’t mean “peak”, but rather “any power required to cover any variability in demand because coal has absolutely no dispatchability”.

        By the way, “LCOE” stands for “Levelised cost of energy”. Coal is not as cheap as chips. Wind and PV crap all over it.

  3. Public ownership. It ain’t perfect but much of the current idiotic debacle would just go away under those circumstances. A government who is responsable for the basic infrastructure that holds a modern civilization together – yes, a bizzare concept nowdays I know – will be held accountable by the electorate. There’s the incentive to deliver reliable electricity/water etc supply. Right now, no one particular mob are responsable for or can realistically be held accountable for the reliable delivery of something the whole country cannot do without – the stupidity of this just beggars belief. No point getting angry at shareholders on the other side of the planet if my country collapses into third-world chaos, they never have been and never will be responsable for the well-being of the 25 million odd people who live here, just because they happen to own the very lifeblood of our nation.

    But hey, government being responsable for the well-being of the people who elected them is just a thing for outmoded, old-school commies. Apparently.

    • +1. A key question is why was essential infrastructure sold in the first place? Ideology, stupidity or corruption?

      • Clarke and Dawe said it best:

        Dawe: “Why were they privatised?”
        Clarke: “Because they would be so much more efficient – they’re extremely inefficient in public hands.”
        Dawe: “Who said that?”
        Clarke: “The people we sold them to”

    • Agree.Public Utilities ,by its name , implies serving the public interests ,historically owned by the public and funded by the public.Privitisation ,probably via game of mates promising , we can do it more efficiently and make politician(s) of the day look good.Does the new owners represent the public or share holder?I am sure AGL would not sell to govt.if the coal power plant was run in the public interest (non profit) and thus become competition

      • If private companies can provide a service which is cheaper over the long term than a publicly owned one then the government can simply allow them to compete for a share. However a monopoly is a monopoly so government should keep public services public even in the face of predatory pricing.

  4. Just another classic example of a Government more concerned with its own political survival and the profitability of its mates in the private sector, rather than the public interest.

    • Malcolm will be fine with his 14KW array and 14KW battery. The rest of you scum can swelter when the power goes out…

    • Mining BoganMEMBER

      Yep, you could dig up Billy McMahon and prop him up in the corner with a broom handle and get better than what we’ve been getting.

      Shambles.

  5. If there are rolling blackouts across the east coast this summer all bets are off. People are primed, and they will blaming this government. We have had a very mild winter, so Turnbull has gotten lucky. This summer won’t be mild, far from if the long range forecasting is to be believed. The panic will probably set in in November, but by then it will be too late.

      • In Australia, you are running out of land to build homes, running out of meat to provide it with reasonable price, why you want us providing gas cheaply to our nation when you are the richest country in the world with gas and resources.

        it appears that the richness of resources in any country is the most scarce commodity in its markets when you have corrupt politicians promoting neoliberalism at any cost.

        Australia , the land of cheap humans(wages) and expensive everything else.

  6. I wonder how much AGL are laughing at being paid top dollar for the oldest plant in the country. I can’t tell if Turnstyle is the world’s worst negotiator or (more likely) it’s the game of mates at play.

  7. Coal is currently the predominant baseload source and should remain so. Gas and then renewables, in that order. I’m thinking incentives need to be redirected to ensuring coal baseload is maintained and enhanced.

    As I said yesterday, we sell vast amounts of coal to other countries so they can have cheap and reliable energy yet deliberately undermine our own economic and energy position by our crazy obsession with renewables. We are nuts.

    Coal. Gas. Renewables. Something for everyone. Power for all.

  8. The Electricity Grid death spiral has started, nothing short of draconian legislation will stop it running it’s full course.
    Not sure that anyone really benefits from this outcome, it’s just what happens when Technology delivers alternate solutions to extreme monopolistic rent seeking.
    These personal “solutions” make absolutely no sense from a holistic national electricity grid plan perspective but make perfect sense to each and every impacted individual. Everyone is simply taking care of business yet as a collective we’re actively F’ing up something that wasn’t broken to start with.
    Isn’t it strangely similar to what is happening with Sydney Housing, Our housing supply shortages are of our own making, collectively we’re beginning to suffer from this failure to build sufficient housing while simultaneously every house owner and IP owner (over 65% of the adult population)cheers on the next round of Sydney price increases. Collective stupidity or Individual brilliance?
    We’re in much the same corner with Electricity, Collectively we’ve pushed the Grid into an impossible operations corner while Individually we profit from this stupidity. The only clear path forward for electrical power certainty is for the individual/business to take back control of their Electrical Power needs. Fortunately Technology is providing a clear path forward for the concerned individuals but it comes at a cost to us collectively…it’s housing insanity all over again which is what makes the outcome guaranteed….it’s a death spiral.

    • I’ve tried to talk my baby boomer parents in Victoria into installing solar panels. Showed the data on payback period, costs being at an all time low etc. Their response: ‘we are retiring soon, we don’t know if we’ll still be living here in 5 years time’.

      Strange, they had $50,000 to renovate their bathrooms and laundry…

  9. St JacquesMEMBER

    It will be solved but first lots of people need to die. Then those gangsters we call politicians will have the gun pointed at their heads or there will be a revolution and their heads will roll, literally. Same as it has always been. Forgetting to reserve some of that gas for Australian use like happens in other major gas exporting countries was about helping out their mates at the big end of town under bullshit freemarket ideology espoused by academic geeks and mercenaries. And all the major parties were in on it: the LNP because it helped corporate interests, the ALP because it helped the CFMEU’s desire to create the maximum number of high wage construction jobs for their members.

  10. I’m just astonished (Edit: Ok That’s not the right word – it involves an element of surprise) at the ‘Blame it all on the Libs/Malcolm’ This crisis was precipitated back in about 2007!!!! Successive State and Federal governments of both political persuasions are responsible for it but rationally, for anyone who has the slightest clue as to how this has morphed and grown, Labor and the Greens should wear most of the blame. Whether they will or not is moot but I’m thinking people might do other than blame only the present lot for it.
    The whole renewable approach was never thought out nor planned for. It still isn’t!!!! We just took a high-minded ideological approach to it and didn’t worry AT ALL about the practical difficulties. Don’t get me wrong! The people voted for it – mind I’m not sure they were given any FACTS to vote on.

    • Exactly Flawse, consecutive Governments, Liberal and Labor, State and Federal – all contributed to this mess – and all in the name of ideology.

      Won’t be helped now by Turnbull (who crossed the floor to vote with Labor on the emissions trading scheme) because Turnbull is latte sipping left lite on energy – need someone with balls to sort this out.

      • What drugs are you on besides the ones where it’s all h00kers and blow paid for by your masters and overlords.

        His actions indicate he’s a right wing idealogue. Adani support, flogging the energy companies with a pink feather duster before shooing them into one of your parties, etc etc

    • The belief that renewables are renewable has not been seriously challenged by anyone in the two major parties. It is an illusion that the public need to understand. Wind and solar only make economic sense when not attached to the grid. Any generation connected to the grid needs to be dispatchable.

      The problem now is that the businesses involved in the power supply industry realise it is a mind boggling windfall for them; beyond their wildest expectations. The dollar signs are outweighing the technical realities and any moral responsibility. Look at SA just throwing money at the illusion. SA already has the most expensive electricity of any developed state globally and that cost is being subsidised through LGCs from consumers in other states and government bailouts that flow from general taxes. Only to get 40% of the power from the unrenewable renewables. Extrapolate it to 100% renewable and costs are mine numbing. No wonder AGL have ads promoting uptake of renewables and closure of coal fired power stations. Their revenue is skyrocketing in parallel with electricity prices; 4-fold in the last decade. A great incentive for any energy based business to fully embrace unrenewable renewables.

      • With current wind or solar technology the ratio of Energy Out to Energy In for a buffered (meaning on-demand) electricity supply system from wind or solar is 2.1. That means almost 50% of all the electricity produced would go back into maintaining the system if the only source of power was from buffered wind and solar.

        If you want to power your home with solar energy your average unsubsidised cost for energy over the life of the system will be between 50 to 60c/kWh. That is almost economic when compared with current retail prices; is economic with purchase subsidies that the poorer consumers are forced to donate to you. However the components you use for that system are predominantly produced in China using coal generated electricity. If they were being produced from electric energy sourced from wind and solar generation they would be prohibitively expensive. So renewables based on wind and solar only have an illusion of being renewable. They are, in fact, unrenewable.

        Wind and solar has no economy of scale and any sighting advantages are eroded by the cost of transmission. That means grid scale systems can provide unsubsidised buffered power at no less than you could with a unsubsidised system installed in your home. Hence the real wholesale price is $500/MWh. Now remember that price is based on using components manufactured in China using coal fuelled generation.

        We are in the early stages of committing all economic output into simply sustaining our electricity supply network. If you can get off the grid then do it. All individuals and business should have plans to get off the grid because the subsidised uptake of wind and solar being forced onto the grid will destroy the grid. The economic merit of wind and solar is the ubiquitous nature of the energy source. The grid no longer makes economic sense while non-dispatchable generation is permitted to connect. The grid is not a battery with infinite ability to source or sink intermittent generation. The worst possible conditions have to be catered for in a reliable system and there are certainly many days when the sun does not shine over large portion of Australia’s densely populated areas:
        http://www.bom.gov.au/web03/ncc/www/awap/solar/solarave/daily/colour/history/nat/2017033020170330.gif
        Buffering conditions like this require massive system storage. Such circumstances defines the size of the battery a household needs to instal if they are off grid.

  11. Blackouts in summer would be a nightmare for them…no sitting period to rush any knee-jerk legislation through. So people will just stew in their outrage.

    • Where are you Brad and care to share any more details? I’m interested and I’m sure many others are but the details re costs, etc seem thin on the ground where I am.
      Do you already have solar, are you staying connected and planning to recharge overnight/off peak and are you a high electricity user, etc?
      Thanks heaps

      • check out Brighte.com.au – made some enquiries about Powerwall+lifting our PV capacity + new inverter.

        (point of interest: they’ll fund this for us excluding asbestos/Hardiplank removal – backfilling of walls with insulation + recladding with Bluescope custom orb, am also asking about extra rain water tank capacity)

    • If you remain grid connected make certain your Powerwall will work in island mode otherwise you will be disappointed when the grid goes dark.

      • This – there are plenty of whitepapers on how they’re set up
        I’d be shocked if Brad hadn’t already thought about this

        Power a light circuit, fridge, powerpoints, modems, TV with battery in case of grid outage and water pump if RARA
        Have gas bottle on standby (if not on gas)
        No elements