Coalition flunkies enter energy “loony fog”

The AFR hasn’t done too bad a job on energy. Ben Potter finally converted to energy transformation in recent years and Angela Macdonald-Smith has, at times, described the great gas gouge. But it sure ain’t coming from the top, via Michael Stutchbury’s note on the weekend:

Coal is Turnbull’s new black. Wages the economic growth risk. Richard Goyder’s AFL finals. Sydney tops BOSS MBA rankings. Australia’s top 500 private companies. Is marriage an outdated institution anyway? afr.com digital news site of 2017.

As Laura Tingle writes this morning in Canberra Observed , Malcolm Turnbull has had a good political week promoting coal – or at least the idea that the government would extend the lives of coal-fired power stations to keep the lights on. Coal is the new black, we suggested in a page one sub-head.

The energy debate was dominated by the report from Audrey Zibelman, the Philadelphian brought in this year to run the Australian Energy Market Operator, one of the shock of electricity grid regulators.

The problem is that Australia’s energy and climate change policy failures have force-fed too much wind and solar power into the east coast grid. That is destabilising the system when the wind doesn’t blow or the sun doesn’t shine, as highlighted by South Australia’s statewide blackout a year ago this month. The instability is getting more intense as base load coal-fired power stations, such as Victoria’s Hazelwood, reach the natural end of their lives.

That’s raising the blackout risks for this summer, particularly in Victoria and SA. It’s prompting Zibelman to build up so-called strategic reserves of energy – such as mothballed gas-fired plants – for emergencies. And it’s prompted Turnbull and energy minister Josh Frydenberg to press big power company AGL to postpone the next big planned coal-fired shutdown – of Liddell in NSW in 2022. That would take 1000 megawatts of baseload off the system, and even Turnbull’s Snowy Hydro or Tesla batteries would not provide enough storage to cover by then.

But AGL chief executive Andy Vesey is making a song and dance about getting out of coal. On Wednesday, the New Yorker tweeted that AGL was committed to closing Liddell by 2022, prompting a phone call from Turnbull. The government was turning Godfather, making AGL offers it could not refuse, suggested our Matthew Stevens. Delta Power owners and coal champions Trevor St Barker and Brian Flannery put up their hands for some of the action. The NSW government might be part of the plan, Phillip Coorey wrote this morning.

What about gas, Michael? Where’s your acknowledgement of the role of the gas price? Where’s your recollection that Santos lied about having enough gas when it built its second LNG train on Curtis Island, the volumes for which just happen to equal the gas shortage? Where’s your assessment of the perverse economics of the gas gouge: that we’re paying nearly triple export net-back and double the price of the same gas in Japan? And that the gas firms lose money on the exports, not to mention that Asian customers don’t want it? Where’s your guidance on the crucial role that gas plays in setting the marginal cost of electricity? Where’s your outrage that gas power plants sit idle while AGL is being bullied into mis-allocating capital towards coal, in a complete violation of power market integrity?  Where’s your statement of the simple truth that it is gas alone that has derailed the decarbonisation plan?

Meanwhile, Judith Sloan sinks to new lows in her campaign to protect the gas cartel:

…the kicker is the fact renewable energy, with its preferential dispatch status and low operating costs, sends ­dispatchable power plants into early retirement and kills off the incentives to build new ones. Note that since 2011 nearly 6000 megawatts of coal-fired plant capacity has been withdrawn from the ­market, or close to 12 per cent of total capacity.

Now the point is often made that we have reached this appalling position — high-cost, unreliable electricity affecting, in particular, the competitiveness of our heavy industries — because of very poor government policy.

But whether the outcome was entirely unintended is not so clear-cut. From the time John Howard introduced the first version of the renewable energy target, it was a one-way street to more subsidised, intermittent renewable energy and an investment strike in dispatchable energy. This was the aim; it could not have been otherwise.

To be sure, there has been plenty of toing and froing in the policy space. The carbon tax, at the ludicrously high figure of $23 a tonne of carbon dioxide-equivalent in 2012-13 (rising to $24.15 the next financial year), was a high water mark of stupidity. Don’t forget this tax, which was nearly three times the EU price, was imposed in combination with a ludicrous RET of 41,000 gigawatt hours.

That the tax was abolished and the RET wound back by the ­Abbott government meant that imminent disaster was averted, but the future possibility was not removed entirely.

…So where does this leave the government? It was a mistake to think AGL is on its side. The company is more than happy to use misleading advertising — we’re getting out of coal and the like — while securing more than 90 per cent of its profits from fossil fuels. Its aim is to milk these assets for all they are worth while pretending to be greener than Kermit.

…The most pressing need of the government is to secure the future of dispatchable electricity generation and to do so at reasonable prices. Everything else is a side-show.

Yes, Janet, as we know, there was a plan. It’s called climate change mitigation. The idea was to use policy of various forms to price the externality of carbon emissions. That is, to make coal and other forms of dirty power pay for what they were getting for free: the corruption of the atmosphere. The only way you can not see this freebie as a gigantic public subsidy is if you don’t believe in the impacts of greenhouse gases.

That’s all that the carbon price did and, lo, when it was done, and coal power no longer got the polluted air for free, renewable energy was suddenly the most competitive.

But the Coalition misrepresented the carbon price as a tax, just like Janet is doing today, and destroyed it. The result was that coal could keep polluting for free, and instead of it paying for its own clean-up, consumers had to pay directly to shut coal power stations via “direct action” and the RET.

The second part of the plan was to use gas-fired power as the “transitional fuel” as coal closed and we waited for energy storage technologies to catch-up. But that plan was destroyed when a gas cartel formed and sold the east coast’s cheap gas to Asia instead. The worst offender at the company level was Santos where, lo, Judith used to be a director.

Sure, Labor might have tried to stop Santos in 2010 but the Coalition had also just destroyed the resource rent tax so it didn’t have the cojonies for another fight. And besides, Santos straight up lied about having enough gas.

Thus, today, “the most pressing need of the government is to secure the future of dispatchable electricity generation and to do so at reasonable prices” but the only way to achieve it is not blow smoke around coal plant closures that are five years away, it is to cut the cost of gas, which has idled capacity across the nation and, when it is used, it is fabulously expensive.

Ironically, Do-nothing Malcolm is on the right territory today:

The Prime Minister targeted Labor leader Bill Shorten’s “incompetence” on energy policy in a speech to the Country Liberals’ annual conference in Darwin this morning.

“Australia is a massive gas province, with huge offshore resources — many still to be developed … and of course, many onshore resources. But we have Labor governments that will not develop them,” Mr Turnbull said.

“You have, in the Labor Party, a party whose energy policies have taken us into an energy crisis. Where energy is too expensive and it’s not reliable.”

Mr Turnbull called for the Northern Territory Labor government to remove its moratorium on development, such as fracking, of the Beetaloo Basin to open up gas opportunities.

“My message to Michael Gunner is to pull the trigger and get on with it,” he said. “The jobs, the investment, the opportunities of opening up the gas you’re sitting on are endless.”

It would be good to see these unconventional gas fields developed but even if they are it will not fully solve the problem. It’ll take time and all of the cheap gas has been sold to Asia. Some of that has to be clawed back via domestic reservation. That is the the only way to lower gas and electricity prices short and long term.

The Deputy PM of New Zealand went on:

Meanwhile, Deputy Prime Minister Barnaby Joyce has warned of a summer of blackouts unless politicians embrace coal power solutions.

Energy policy is front and centre at the Nationals federal conference in Canberra, which Mr Joyce addressed this morning.

“Somewhere between floor 13 and 14 the lift will stop with you in it – an uncomfortable experience if you need to go to the bathroom,” the Nationals leader said.

Fair dinkum, mate, you can’t even fill in an application form for Parliament and you want us to take you seriously on the complexities of energy? There is NO solution via coal that will do anything to prevent summer blackouts. The next plant closure is not until 2022. Again, only a lower gas price can do it for the next five years at least.

Alan Kohler does a great job of summing up the Coaltion stupidity today:

In 2014, Vesey’s predecessor, Michael Fraser, had bought Macquarie Generation and its two coal-fired power stations, Bayswater and Liddell, from the NSW Liberal government for $1.5 billion — a huge windfall for the NSW Liberal government.

But just a year later Vesey gave notice that Liddell would close in 2022. This week I asked a company spokesman what had changed between 2014 and 2015. The answer: it was the company’s “Greenhouse Gas Policy”, issued in April 2015.

It wasn’t that AGL suddenly discovered the plant was old, or that it had knowingly bought something that had eight years’ life left. AGL had decided to support “the Commonwealth government’s commitment to work towards a global agreement…” as its new policy statement said.

Factories, including power stations, don’t have use-by dates. Vesey and the AGL board had decided that “AGL will not extend the operating life of any of its existing coal-fired power stations”, in order to support the Abbott government’s emissions reduction strategy.

As it happens, AGL had already made a similar mistake the other way: it finalised the purchase of the Liddell power station in July 2014, at exactly the same moment as the Coalition was ludicrously celebrating the repeal of the Gillard government’s emissions trading scheme legislation — the so-called “carbon tax”.

But what the Abbott government did not do was repeal the Renewable Energy Target.

…With the Coalition government subsidising solar and wind so it could outbid fossil fuels into the NEM and making statements supporting an agreement in Paris, closing ageing coal-fired power stations seemed an obvious thing for their owners to do. Origin decided to close Eraring in the early 2030s and French-owned Engie decided to close Hazelwood, pretty much straight away.

…everybody knows coal-fired power stations must close if Australia is to meet the 2 degree commitment that everybody agreed to in 2015 — including the Coalition. The task of leadership is to prepare for that, not yearn for coal.

…There won’t be any new coal power stations, and the lives of existing ones won’t be extended unless the government, bizarrely and unnecessarily, pays for it.

If that happened, it would bring about the final divorce of business and the Coalition, and the final retreat by Malcolm Turnbull into the loony fog inhabited by Donald Trump and the coal dancers on the Coalition’s right.

Labor is not blameless for Australia’s energy impasse but the Coalition’s wreckage is everywhere. In a case of deja vu all over again, here it is again bald-faced lying about energy policy to win power. Card-carrying climate change skeptic Graham Richardson is cock-a-whoop:

In Friday’s column I congratulated our Prime Minister for finally working out how to attack Bill Shorten. Over the previous couple of weeks attacks by Malcolm Turnbull, Mathias Cormann and Christopher Pyne on the Opposition Leader as the most left-wing person to have ever led Labor flopped utterly and completely.

The mob will always work you out and they worked out pretty quickly that this was low-grade politics which had no bearing on their lot in life.

It has been obvious for months that Labor’s chronic weakness lay in its total reliance on renewable energy but our PM’s own views on climate change for far too long prevented him from separating the wood from the trees.

Finally, after months of dithering, spurred on by anxious Energy Minister Josh Frydenberg, Turnbull relented.

Last Thursday Labor was the party of blackouts and that was a good start. Within 24 hours that phrase had morphed into the deadly “Blackout Bill”. If the PM can make that stick, then he may well be on the road to a political recovery which seemed so improbable just a couple of weeks ago.

It’s not just loony, it’s malevolent.

Comments

  1. I think you’re confusing one right wing fossil (Janet Albrechtsen) with another of the same ilk (Judith Sloan).

  2. I’m usually interested in hearing other peoples’ point of view, but blatant lies need to be rebutted.

    First, Michael Stutchbury: Michael, why would Liddell’s closure take only 1000MW out of the system when it was originally rated at 2000MW? The answer is “It’s so old it doesn’t bloody work, so 1000MW is the most we might hope to get out of it when we need it, and we might not even get that”. Indeed, on February 10th when NSW was forced to turn off the lights Tomago, Liddell couldn’t even manage 1000MW.

    Stutchbury then specifically references the AEMO’s report into energy security (while highlighting again that she’s American), and then gives his own diagnoses as to “what is wrong” which are completely opposite to what’s in the AEMO’s report! Even worse, he doesn’t state that his diagnoses are his own – it appears as though he is citing his reference (the AEMO’s report), so it’s actually fraudulent journalism – a blatant lie.

    So Stutchbury’s smarter than the AEMO now. You beauty! The reason we needed to bring Zibelman in from the USA is that Australia is full of d**kheads like Stutchbury who just make stuff up.

    Next – Sloan. Who gave this brainless dingbat a microphone? She talks about “dispatchable generators being forced out”, and then she talks about coal – as if coal is dispatchable??? Perhaps its better to ask a question than to explain the obvious: Judy, if coal is so dispatchable, then why would Australia need even a single gas “peaking” plant?

    Finally – Kohler regarding “why would AGL buy Liddell and then close it down?”. There’s a few answers. Firstly they bought it for ZERO – the $1.5 billion for Bayswater and Liddell is the valuation of Bayswater. Secondly, they’re getting 8 years out of it. The LCOE of coal might be high ($100/MWh, excluding its environmental damage), but the MCOE is low ($20-30/MWh). The MCOE applies to Liddell because it’s so old that it’s fully depreciated and AGL got it for free chucked in with Bayswater.

    Even though half of Liddell is broken down most of the time it still manages to squeeze out about 6000GWh pa. It’s been earning a profit margin of about $50/MWh lately – that’s $300 million a year pure profit. Who cares if you only get 8 years out of it?

    • I read all of these articles over the weekend. I think Sloan is suggesting similar to McCrann: 60-70% baseload coal, 20-30% base and dispatchable, 10-15% renewables. This sounds like a sensible mix but Governments’ own renewable policies are distorting markets and as a result, cost, supply and reliability going forward.

      Source all articles and read in their entirety – Sloan’s opening para: If I read another press release about millions of dollars of our money being handed over to the mendicant players in the renewable energy space, I’m going to scream. The latest was $100 million awarded to Macquarie Leasing to subsidise electrical cars. I’m not joking”

      No. the joke is on us.

      • 52 billion litres of liquid petroleum imports per year – let’s call it $1/litre (there’s almost twice as much refined product import than oil refinery feedstock) – that’s $52 billion dollars a year pissing out of Australia’s economy straight to OPEC.

        If a few hundred million dollars of assistance means that some of this money is diverted to buy locally produced electricity rather than being pissed overseas (because our transport network is electrified) even a year earlier than it would otherwise have been, then the money spent would still produce a return of 100 times its outlay.

  3. It’s quite funny that the RWNJs and the government think they can blame the opposition for the current energy crisis. They’ve been in power now for two terms, they are the government. If they really think that the coming blackouts won’t be squarely placed on their shoulders by the voting public, then please pass me whatever it is they are drinking.

    • Mining BoganMEMBER

      It’s Cristal. St Mal likes drinking Cristal. The bottles make a wonderful sound when smashed during his many temper tantrums.

  4. It would be good to see these unconventional gas fields developed

    No it wouldn’t. Especially if you rely on the water, air and land in that area.
    And especially given the huge non zero risks

    Tell ya what, let’s frack all the land around SydMel, and store the polluted water around you, and not pay the affected landowners any/appropriate compo, then we can have this discussion.

    You guys need to let fracking go. Ain’t going to happen on the North Coast without massive unrest.

    There are other solutions that you so effectively highlight (e.g. gas reservation) – stick to that

    • Standing ovation, well said HC
      Unconventional Gas mining is a disaster. Aquifers are connected.CSG is land theft.
      Why in the name of Dog would you encourage unconventional gas mning in a market that is so over supplied ?

  5. What very few people comprehend is that wind energy loses value as its connected capacity increases. For countries with large hydro resources the saturation point is at higher market share than fossil energy initially but falls at a similar rate after the saturation point. The linked paper compares the situation in Sweden and Germany using actual market data to arrive at a so-termed value factor for intermittent generation:
    https://energiforskmedia.blob.core.windows.net/media/19690/the-market-value-of-wind-energy-energiforskrapport-2016-276.pdf

    The correlation for Germany yields:
    Value factor = 1 – Market Share
    At the time of the report the market share was 30% for wind so the Value Factor has reduced to 0.7. Obviously with higher level of market share the value factor reduces.

    This is clearly evident in SA where their 1600MW of wind generation needs to be throttled at times of high wind. Utilisation is further reduced at present due to the lack of inertia in the SA network so gas plant has to be kept running. The Capacity Factor for SA would be lower if it did not have the 600MW link to the Victorian network that it feeds into and out of as a battery with infinite storage. That is forecast to come to a white knuckle end in late November if we start to see some warmer weather.

    If the new CSP can actually produce power that will further erode the utilisation of the wind generators and they will become marginal despite having generous subsidies. That will mark the end of additional wind energy into SA.

    States aiming for 50% renewable energy riding on the back of fossil fuel generators are simply guaranteeing skyrocketing electricity costs. They will find it difficult to encourage investors once the realisation the LCOE is not relevant to assessing merits of intermittent generation.

    • @RickW-MB – what you say is very true. Especially if all the wind generators are located where there would be a similar weather system at the same time.

      In Tassie we’ve got an advantage – we can recycle much of our wind produced at cheap times into dispatchable hydro power for use at more expensive times.

      Similar but different economics also apply to energy storage. The more there is, the less the arbitrage value of each will be, as they will together push up the price of energy when they are “filling up” and together they will depress the price of energy when they are “regenerating” or “releasing”.

      It will be really interesting to see where it all equilibrates.

      • Is it a case of harnessing the “extra” wind and storing it, ie. pumping hydro, wacking it into batteries, or, whatever else?

        Genuine question to understand the options

      • Quote
        “It will be really interesting to see where it all equilibrates.”

        Providing the wind and solar components are made in China the NEM wholesale electricity price will end up at AUD500/MWh at 100% market share for wind and solar. If wind and solar generation are used to make the components then the cost is prohibitive – it cannot happen without massive improvements in wind, solar and storage technology and there is nothing on the horizon. Wind and solar do not produce enough energy as on-demand supply to have enough excess over their electric energy in manufacture to sustain a modern economy. If there is a large amount of storage capacity already existing such as Tasmania then costs could be lower and wind beneficial in reducing the overall energy demand. Although Tasmania has its own lifeline to Victoria that might not be as willing or able to send energy south in times of low rainfall.
        http://festkoerper-kernphysik.de/Weissbach_EROI_preprint.pdf

      • On the other matter of diversity in location, there is no grid with sufficient geographic spread to avoid intermittency. The linked paper discusses the situation across Europe. Wind and solar do not reduce the need for reliable on-demand generating plant. That is never factored into the LCOE.

        https://www.vgb.org/studie_windenergie_deutschland_europa_teil1.html?dfid=84459
        “An intuitively expectable smoothing of this wind fleet output to an amount, which allows a reduction of backup wind power capacity, however, does not occur. In contract a highly intermittent wind fleet power output showing significant peaks and minima is observed not only for a single country, but also for the whole of the 18 European countries. Wind energy therefore requires practically 100% back-up. As the (also combined) capacities of all known storage technologies are (and increasingly will be) insignificant compared to the required demand, backup must be provided by conventional power plants, with their business cases fundamentally being impaired in the absence of capacity markets.”

        There are times in Australia when all the wind generators are actually absorbing power rather than producing it. Same with grid scale solar plants; every night of course.

      • @HadronCollision – Tassie can “store” its wind, up to about 1000MW of installed wind capacity, buy using it in preference to hydro so that they hydro can be used later. Above 1000MW there will be exponentially more waste if it is not actively stored.

        @RickW-MB – I don’t think it will be as high as $500/MW, even at zero emissions (excluding construction emissions). LCOE of wind is around $40/MWh, LCOE for utility scale PV is around $50/MWh. So it all comes down to cost of storage. Batteries are around $250/kWh storage, pumped hydro is probably around $150/kWh storage (depending on the site it might be cheaper.) So it all comes down to how many hours of storage you’d need.

        You could over-build PV by double their total ENERGY requirement (so that at times it is producing 10 times the POWER constraint), waste half of the energy produced, then the LCOE for PV’s ENERGY would be $100/MWh but you’d need heaps less storage – only a night’s worth if the PV is dotted around a bit.

        Dotting generation around the country would also need some pretty major transmission infrastructure though.

      • LCOE is a meaningless measure when it comes to high penetration of renewables. The early signs of that is occurring in SA now with their 1600MW of wind generation throttled at 1200MW when wind would enable higher because they need to have gas running for stability reasons. Also the local demand is typically around 1200MW but they have the facility to send 600MW into Victoria. What it means is the capacity factor for wind is below its potential. As the installed capacity increases to gain more of the market share the capacity factor gets lower.

        The linked paper provides the relationship for what is termed Value Factor from actual experience in Germany and Sweden:
        https://energiforskmedia.blob.core.windows.net/media/19690/the-market-value-of-wind-energy-energiforskrapport-2016-276.pdf
        They determine the correlation for wind generation in Germany as with a consistent trend line over the past 20 years or so:
        Velue Factor = 1 – Market Share
        So the value factor now in Germany is 0.7 with wind providing 30% of the market share. In this case they do not consider capacity factor because the German wind generators are kept running and they pay other countries to take their power. That has happened in SA as well with SA wind paying to send it into Victoria. The economics of that depends on the price of LGCs. As long as the negative price is greater than the price of LGCs the wind generators still make money.

        The linked paper also considers the situation in Sweden that has considerable hydro resources and that holds the Value factor higher for given market share but the drop off is at the same rate after 70% market share.

        With solar the Value Factor trend line is much steeper so it loses substantial value with quite low market share. No doubt due to the low unconstrained CF for solar and its peaky nature.

        I expect the SA wind generators are beginning to feel the financial pain from system constrained capacity factor. If the CSP actually produces it will further erode the capacity factor of the existing wind turbines. Remember the SA government has guaranteed 80% consumption of power produced. SA is quite close to the limit of enticing wind and solar into their market. The economic are eroding. With closure of Hazelwood, the life line to Victoria is more tenuous.

        At 100% wind and solar plus storage the capacity factors are in the range 4 to 5%. With LCOE of USD40/MWh plus subsidies of USD30/MWh the unconstrained LCOE is around USD70/MWh. That is for a CF of 35% so with a constrained CF of 5% the actual cost goes to around USD490/MWh. I expect sense will prevail before that is reached but the NEM will be worthless before that.

        Before you make statements like overbuilding solar by twice you should try to run your household loads off grid. You will then understand what is needed to achieve 100% solar. Your numbers show a lack of understanding. Anywhere in Australia can have well under 1 hour of full sunshine equivalent on any day. So the absolute minimum battery storage is twice the daily consumption. Most suppliers recommend 4 days for off grid storage but that is still based on lead/acid that rapidly loses cycle life if pulled lower than 30% DoD. In winter my LFP battery often gets below 50% DoD and it is showing no loss of capacity – yet.

      • @ RickW-MB:

        A reference being a scientific paper written by “Energiforsk” – formerly the “Swedish Gas Company”, which states one of its roles is “lobbying for members”.

        It must be true then.

  6. For me the big unanswered question wrt our Electricity grid is, Do we want to continue supporting (having) Australian heavy industry?
    If the answer is yes than Renewables are at best wishful thinking, at worst they some sort of dangerous cult religion.
    You see the problem is that Residential, Light Industrial and Commercial power all have options that could enable us to integrate fairly large amounts of renewables IF we can find ways to manage client side demand, especially during crises points, and invent a use for the excess power which high levels of renewables guarantee we’ll often generate. That’s very doable at the Residential levels, is not an impossible ask at the Commercial level, and is at least imaginable at the Light Industrial levels unfortunately it’s just very confused thinking when it comes to meeting the day in day out Electricity requirements for heavy industry.
    Maybe Australia simply doesn’t need heavy industry anymore, but as far as I’m concerned it’s worth considering the wider implications of completely abandoning heavy industry before allowing our the cowardly non-decision to irreversibly shape our Industrial future.

    • Heavy industry is near death. Whyalla, Bell Bay, Risdon, Port Pirie, Townsville Copper, Gibson Island, Port Kembla and Portland (that I can immediately think of) are on life support. If Tomago and BSL lose power and freeze it is unlikely they will restart. Most oil refineries have closed but due more to market size than power prices. Most car manufacturing gone. QNI being considered as potential battery making site to get its share of subsidies. Sun Metals see more money in subsidised solar generation than zinc smelting so shifting focus.

      I do not see any heavy industry in Australia having a long and prosperous future without substantial financial support. That can be through direct subsidies or other forms of assistance like tax concessions.

      Most mining have their own power supply so are not captive to the NEM. It is not far off IC diesel being the lowest cost form of generation in Australia.

      • It does look like we’ve decided to sacrifice all heavy industry that is not self powered. I’m not against this decision but it is some sort of bad joke to congratulate yourself for having reduced your national carbon footprint when all of these improvements result from reduced heavy industry, some might call this offshoring the hard (energy intensive) work.
        Still it’s a bit like burning Aussie coal in China to make PV panels/Batteries and then importing these Low Carbon generators/storage solutions back into Australia. Anyone that believe this results in measurable global net reductions in Carbon is either a fool or a politician.

      • There remains opportunity for businesses with lower power intensity. Tourism is a good one. We also still have economic primary industry. The current wind and solar technology can improve the economics of farming. A small pump fed off a single solar panel costs next to nothing and can keep a herd watered year around from a remote water hole or bore.

        For me it is the electricity price that will drive inflation when there is no need for it. The NEM is near worthless already. I can certainly produce my own power cheaper than I can get it from the grid. I stay connected to get the income from the FIT. I also have the insurance on those periods of low sunshine that I can put load back on the grid if needed. I would need a small generator if I went entirely off grid for insurance.

        Then there are a whole portion of the population who can no longer afford electricity. That just festers civil unrest.

        It would have been preferable to encourage solar and wind where it makes economic sense. That means not connected to the grid on the mainland and maybe some on the grid in Tasmania where it can conserve stored water.

        I do think State governments will hit a wall around 30% wind and solar supply. Will will see power prices across Australia matching SA or a bit higher. By then it will be clear that it is lunacy. SA has 1600MW of wind to supply a 1200MW demand. Australia is about 20 times that so to achieve the 30+% there needs to be around 30GW of wind capacity. That is 7X what exists now. I can see getting that much installed will cause considerable grief. Germany is really feeling the pain now. They are now having to confront the prospect of replacing aged turbines so the impossibility of it all is starting to sink in. All that effort to get to 30% and they now need to start again with existing while trying to increase. It is likely some locations will not get authority to renew due local unease.