FIX GAS YOU IDIOTS

Via The Australian:

The government has been warned of a looming gap in the national electricity supply as coal-fired power stations shut down, highlighting the need for urgent decisions to build new generators that operate around the clock.

…The government is shifting its focus to the reliability of new ­energy generators, as well as the push for a clean energy target, amid a fundamental Coalition divide over whether to offer more incentives to wind and solar farms. The new advice from the Australian Energy Market Operator to Energy Minister Josh ­Frydenberg emphasises the need to fix the shortage of baseload power by using coal or gas generators alongside more renewable generators.

The Australian was told the ­report warns of a shortfall that will worsen over the next decade as old coal-fired power stations are closed and the east coast grid loses huge amounts of “dispatch­able” electricity that has been supplied for decades regardless of weather conditions or the time of day.

The government is determined to fix the “dispatchability” issue as well as the “clean energy” demands that come with its stated commitment to meet internat­ional targets to reduce greenhouse gas emissions. Driving the agenda is advice to government on the planned closure of the Liddell power station in NSW in 2022 and Vales Point in NSW in 2028. Those closures would take 3200 megawatt hours out of the east coast grid, double the capacity lost when Victoria’s Hazelwood power station shut down in April.

The advice to the government from several reports, including modelling prepared for the ­energy review by Chief Scientist Alan Finkel, shows the next wave of dispatchable power can come from coal as well as a combination of sources including renewables.

…A new coal-power station would take seven to eight years to build and could face fierce competition from wind and solar by the time it starts generating, given the steady fall in the cost of ­producing renewable energy. The ­expansion of an existing coal-fired power station is seen as a more ­viable option to add baseload power as quickly as possible.

…The government is also alive to the potential of new solar farms, given advice that a new facility with a capacity of 800 megawatt hours could be rolled out in less than a year. The latest solar photovoltaic panels can produce 50 per cent more electricity at the same cost as earlier technology, while being combined with battery storage to guarantee reliability.

The government believes the Snowy Hydro scheme expansion can increase its capacity by 50 per cent to 3500 megawatt hours or more, turning a huge amount of solar or other renewable power into baseload electricity to be switched on as needed. While this could take up to six years, the project would add capacity quicker than a new coal-power station.

Ahem, nice report, the problem is the price hikes are already here with gas and power costs already prohibitive. That adds a little more urgency, no? Snowy to take six years? Lol. Make it ten. New coal power stations? Try civil war and constant delays. And again, renewable/battery costs see them both cheaper than coal within five years at current efficiency gains even without accounting for rising coal costs:

ice_screenshot_20170314-141553

Note as well – as I have done ad nauseum – that base load closures is only one of the price rise drivers and not the largest of the them. The main problem remains the price of gas because gas peaking plants set the marginal cost of electricity in the National Electricity Market (NEM). This will continue regardless of more coal because it cannot switch on and off quickly (no it’s not always “dispatchable” either). So, if you want to solve that problem you’ll also need to have enough coal power to sit there running on idle to displace gas entirely, as well as require new rules for the NEM with consumers paying for capacity to remain operational that isn’t even used.

Does that sound like it’ll be raining cheap power to you? No. And major gas users and pensioners will still be going out of business as well.

Ironically, it is Judith Sloan who identifies the truth today:

There is no doubt the really big challenge in the system is to secure new investment in reliable baseload supply as soon as possible. Not more wind turbines, not more solar panels, not more solar thermal plants that may not work, but affordable, synchronous power in which supply can meet demand all day, every day.

If we think about the history of the National Electricity Market, we should note that when it first came about in 1998, there was excess capacity of baseload power, mainly coal-fired plants. This was the result of years of over-investment by state governments that were always keen to ensure reliability, giving the engineers a free rein when it came to decision-making.

As a result of this overcapacity, when the rules and regulation of the NEM were devised, little attention was given to providing investment signals for the construction of new synchronous electricity plants. But the reality always was that the existing plants would reach the end of their physical lives at some stage.

…By subsidising intermittent energy, the RET has effectively driven the early retirement of a number of baseload plants and/or destroyed the incentives of the owners to maintain them in order to prolong their lives.

…As noted above, the solution to our electricity crisis must involve investment in new synchronous plants. Now we often mention high-efficiency, low-emissions coal-fired plants, and they are certainly an option. But we should be agnostic on this: gas-fired plants are quicker to build and probably cheaper.

Of course, there is the problem of sourcing the gas and that is where importing liquefied natural gas is a definite possibility. I’m not talking here about AGL investing in a receiving terminal, but new entrants entering the game.

Ideally, of course, we should be able to source the gas from eastern Australia but the actions of state governments are preventing this. And while it should be possible to bring gas into eastern Australia from the North-West Shelf in Western Australia, shipping costs could prove prohibitive.

Another option is to source LNG on the spot market from Indonesia or Qatar; the quantities are relatively small.

We are talking several hundred million dollars for a receiving terminal but the time lines are not too long. Ideally, the terminal would connect with existing pipeline infrastructure.

Yes, the ONLY ANSWER for lower energy costs is cheaper gas. Thank you, Judith.

However, Judith’s import terminal solution will only deliver LNG to Australia from Qatar, Indonesia or the US on an oil-linked contract currently around $9Gj (assuming it doesn’t rise further). Once you’ve regasify and tack on a margin plus stick it through the monopoly pipelines it’ll be more like $12-13Gj. Sure, it’s better than the $17.50Gj currently on offer but it won’t solve the problem. Even if you ignore the destructive impact of the gas price itself, as the above table shows, for gas to be useful for power it needs to be a lot cheaper than that.

As we know, Judith is a former executive at Santos, the key player in the east coast gas gouge, the one most caught short of gas reserves for its two LNG trains and most responsible for ripping third party reserves away from the local market, so her views on where the cheap gas should come from are questionable.

The answer is so maddeningly obvious that I can only yell it, once again, from my isolated rooftop. Don’t export the gas in the first place.

That’s it. It’s that simple. The gas market has failed. We’re only having this conversation about an energy crisis because we’re paying double the price for our own gas that Japan pays for it:

If it wants to see quickly falling electricity and gas prices before the next election then the government’s gas reservation facility, the ADGSM, must be radically boosted. It is too slow and weak to bring down prices enough as it stands. If it is done right, Credit Suisse has estimated that it will cost Santos a grand total of $400m. Santos lied about having enough gas. Yet we’re putting ourselves through all of this torture to save that one lying firm a few lousy pennies.

Longer term, the government will need to reshape the gas market too. It will need to nationalise somewhere along the supply chain. Buying Santos and shutting one LNG train is one option. Buying (or expropriating) and force developing reserves in a national gas company with mandated rates of return is another. Either of these options would benchmark east coast prices. The simplest and quickest solution is plain old price controls. The east coast gas market has collapsed and requires radical restructure any way you look at it.

Can we really be so lost, so captured, so broken, so dumb, that this affront to all sense, all reason, all economics, all markets, all national interest and adults with an IQ above 50, that this simple truth can be ignored?

FIX GAS YOU IDIOTS.

Comments

  1. Sadly the energy sector is not the only one that exports for a higher price, whilst condemning Australians to both higher prices and lower standard consumables.

    disheveled…. enjoy the toxic shrimp on the barbie… exporting wealth for Bernays burnishing products….

    • Isn’t it even worse as far as gas is concerned, I thought they exported for a lower price than they receive in Australia.

      I wonder why the govt is so scared of the gas cartel? It’s not like they can take their business elsewhere.

      • ErmingtonPlumbingMEMBER

        Remember the campaign that hammered Gillard over the mining tax.
        Our politicians live in fear of organised, well funded lobbying from the Plutocrat sector.

  2. Tassie TomMEMBER

    I’m afraid that HMAS Cheap Gas has sailed, and we need to look for another solution.

    Domestic reservation? Sounds awfully similar to compulsory acquisition.

    We do not tell our fleet of fishermen that 50% of their lobster catch is reserved for the domestic market at $4/lobster to protect our Christmas lunches. Or our iron ore miners that 25% of their output is reserved for the domestic market at $20/tonne to protect our steel mills.

    We’re just figuring out that methane (I’m not sure what’s so “natural” about “natural gas” – petrol is just as natural) is a non-renewable, finite, fossil-fuel resource that we’re going to run out of one day.

    It’s a shame that so many homes & businesses are addicted to something we’re running out of – it’s going to be a difficult addiction to break.

    PS – Well done for pulling up The Australian for claiming that coal is “dispatchable”. We wouldn’t need “peaking plants” at all if it was.

    • ErmingtonPlumbingMEMBER

      If Australia’s Gas was reserved for Australia only, we would have over 100 years of Gas, even of generating ALL of our electricity!
      We could have the cheapest Electricity in the World, offsetting the competative advantage held by our low wage “trading partners”,…if only Australia’s gouging Coporate Plutocracy could be shoved the fuck out of the way.

      I want to see the full seizure and Nationalisation of Australian Electricity generation AND OUR Gas reserves, put to a Plebasite and Referendum!
      Let the Australian People decide.

      Who do ya reckon would win that one?

      • ErmingtonPlumbingMEMBER

        We’ll never make the cheapest steel in the world, we are a high wage, high standard of living country, so if we make all our own, we’ll be paying more for it,…so fucking what?
        Getting your Android or Apple smartphone for the absolute cheapest price possible is not a “Moral right” nor is free Market Consumerism the basis of a functional Democratic Nation State, Culture or Comunity.

    • We don’t need lobsters to supply the country with an essential service. Also it’s called natural gas as a leftover from the old days. Gas used to be produced from coal (town gas). It used to be toxic too, hence the old “stick your head in an oven” way of commiting suicide. Then we switched to so called natural gas. Just a name from a by-gone era.

    • We’re just figuring out that methane (I’m not sure what’s so “natural” about “natural gas” – petrol is just as natural) is a non-renewable, finite, fossil-fuel resource that we’re going to run out of one day.

      Methane is an absolutely renewable resource. Can of beans and I say so. Or enormous cow herds that are warming the climate.

      Now capture of such a resource is another thing.

    • China and India put export taxes on stuff they do not want shipped out of the nation. AUS should put an export tax on iron ore and LNG – that would raise revenue and give a leg up to local steel mills and glass factories.

      EU puts a 10% import tax on cars. AUS is the crazy nation that puts foreigners first.

  3. This wilful blindness to the obvious solution suggests to me that what has happened is that Santos has persuaded (ie paid off) the people that matter.

    As a result, only non-solutions remain on the table.

  4. “If we think about the history of the National Electricity Market, we should note that when it first came about in 1998, there was excess capacity of baseload power, mainly coal-fired plants. This was the result of years of over-investment by state governments that were always keen to ensure reliability, giving the engineers a free rein when it came to decision-making.”

    Thank God we switched to a privately-owned hodge podge of a system where returns to shareholders on the other side of the planet are more important than the forementioned reliability of something so basic and crucial as baseload electricity supply. Fuck me dead, mocking reliability of supply in something we cannot do without! Return the electricity grid to public ownership, including nationalizing however much of the gas cartel is necessary.

    “Can we really be so lost, so captured, so broken, so dumb, that this affront to all sense, all reason, all economics, all markets, all national interest and adults with an IQ above 50, that this simple truth can be ignored?”

    This is the age of neo-liberalism – concepts like the national interest and advancing the common purpose and common good have gone the way of the dinosaur. We’re all self-maximising individuals now so what happens to everybody else around us doesn’t matter.

    • It is surreal to watch people who will, on the one hand, whinge about how cheap and nasty imports from China are creating a wasteful and disposal society where nobody appreciates quality any more, then turn around without so much as a blink and complain about “gold plating” infrastructure like the power grid and NBN is a waste of money.

      Completely and utterly captured by politics.

      • A lot of that so called “gold plating” was actually replacing so seriously old leaky gear, not to mention bringing up to digital standards, hardening for extreme heat et al, and condition supply for the new electronics.

        disheveled…. crap used to live not far away from the local sub station and blew incandescent bulbs every other fortnight, see how everyone goes when their expensive electronics carks it from repetitive spikes…..

      • Yes, my wife is an electrical engineer in the power industry and struggles not to descend into fits of laughter every time someone uses the phrase “gold plated” in reference to the power grid.

      • Ahhh…

        Yes an acquaintance of mine was an EE that worked on it, read the entire scope of works, and discussed the realities of the job project. On another point it has not taken some long to forget the bush fires started by bad line maintenance or the consequences of extreme weather events and long down time to critical infrastructure.

        Disheveled…. tell your wife I feel both her pain and laughter… see the same with my wife and medical science.

        PS. If you change politics to ideology I would agree with you.

    • Now THAT is very interesting.

      I shall keep them in mind for when we want a Powerwall + an extra 3kW PV + smart inverter.
      I wonder if they fund something like pulling all your hardiplank off, backfilling with insulation and recladding with iron.
      Or replacing all your sun-facing 4mm glazing with thicker smart glass.

  5. If we cut immigration, we would have fewer electricity and gas consumers, and with the construction resources freed up from building new dog boxes, we could retrofit out existing homes to be more energy efficient.

  6. Look, this is all about the benevolence of Australia’s foreign policy. It is only through this lens that you can view decisions made regarding energy policy.

    Australia desperately wants to reduce its foreign aid bill, but doesn’t want to absolve itself entirely of its responsibilities as a world citizen. We do can only do what we can, and what we’ve decided is within our capabilities is to use our natural resource wealth to lift the rest of the world out of energy poverty, whether it be shipping coal to India, or permitting energy companies to borrow from themselves @9% for debt that only costs around 2% in order to let them ship gas to first world countries like South Korea and Japan for a fraction of the amount people here pay for it.

    If our citizens suffer poverty due to their energy costs as a result of our desire to save the rest of the world from energy poverty, then that is merely a marker for the self-sacrifice of the globally conscious citizens of this fine land. When an Aussie looks at their power bill being 2 or 3 times more than it was a couple of years ago, they should feel satisfied that they’re doing some good in the world.

    • I would go one further : the aim of our government is to impoverish Australians to the point where we will receive foreign aid, rather than giving it.

      • Does foreign aid count as imports? Perhaps the foreign aid can be funnelled through the banks, who will lend it to Aussie mums and dads that will try to get ahead by investing in property, renting them out to people who will need more aid in order to keep the lights on.

  7. ResearchtimeMEMBER

    It doesn’t take seven oil eight years too build a coal fired power-station… the person who wrote that is a clown and has no idea what they are saying! 12-18 months for an off-the-shelf German plant with modern scrubbers and all…

    Moreover, when people start talking probabilities, of solar being cheaper than coal in seven or eight years, dependent on batteries, etc., etc…. its no wonder power grid is shot. Costs typically follow a sigmoidal pattern, with rapid take-off which slows then becomes a plateau. Given the Chinese have put every solar maker out of business, using German technology, selling at below cost, the mere fact people are expecting prices to fall further are utterly deluding themselves. As for batteries, the technology does not yet exist. one day it will…

    Don’t complain when there is no power in years to come. Ideology trumps pragmatism. And good riddance to all – remember you bought it upon yourselves.

    Clearly those who watch SA don’t get it yet! Victoria is next.

      • The real cost of on-demand or despatchable power from a solar system in Australia is $500/MWh. That is buying the components from China manufactured used coal and nuclear generated power.

        If the components were made using energy from existing solar and wind plants they would be unaffordable. Renewables are unrenewable using the energy they produce. They are an economic DEAD END. To get 100% renewable with existing technology would consume 50% of GDP on an ongoing basis. The power industry will gobble up the entire economic output. Power companies will dwarf the banks. They can see this and are riding high on the gravy train that will wreck the economy.

        This correlation is no accident. It is what it really costs:
        https://gailtheactuary.files.wordpress.com/2016/08/euan-mearns-europe-electric-price.png
        To supply the existing NEM demand with solar requires 100000W/capita – extrapolate that.

        Today SA wind farms again capped at 1200MW to avoid instability and the state producing 700MW from high cost gas. The gas has to run to ensure stability.

        The only economic use for wind and solar is off-grid where the advantages of the ready availability of the energy source avoids all the costs associated with transmission, distribution and retailing. Connecting intermittent non-dispatchable generation to an on-demand grid is destroying its value. Heavy industry is already struggling and the penetration of wind and solar is only a tiny portion of the overall supply.

        Abandon the RET and subsidies and encourage only proven and economic sources of supply on the network. Let wind and solar compete on equal footing. Existing generation has to offer dispatchable power that can be guaranteed to deliver on demand not treat the grid like a big battery that they can pump into or not as they please.

    • There’s an old Dusty Springfield song comes to mind
      Wishin’ and hopin’ and thinkin’ and prayin’
      Plannin’ and dreamin’
      Only trouble is the thinkin’ and plannin’ bit has been and is in very short supply.
      So…how can gas fired power stations pay if they can only ever run when there is no renewable energy available while at the same time paying a substantial and rapidly increasing tax to subsidise renewables on every Mwh?

      The assumptions are extraordinary.

  8. Love you bro but honestly you have the weirdest ideas about how markets extract value from systems during periods of forced change.
    Like it or not our Electricity system is changing, it’s morphing before our eyes and most importantly demand is bifurcating.
    The 20 year plan is to transform our electricity grid from a stogy relic of the last millennium into a complex demand driven system which efficiently allocates available (generated) power. It’s the polar opposite of the system we’ve grown to love where that little wall socket could deliver all the power I ever wanted at a fixed price whenever I wanted power. New systems will price power making supply the known quantity and demand will be the adjusted variable.
    There is no modern grid imaginable where this transformation will not be necessary, Demand simply must become the variable that adjusts to Available supply.
    Dynamic demand raises two important issues
    1) what types of industry can continue to exist and remain profitable when the quantity of electricity they’ll receive is unknown / unknowable and the price is variable?
    2) how will people adjust their lives around this new reality?
    Both questions can probably be summarized as: How do we implement change?
    For me Change is a bit like ripping off a Bandaid, it’s best done quickly. however others do seem to savior the process, wincing as each hair gets ripped out of the skin and that’s just what makes Choice such a valuable quantity during periods of rapid change.
    I’ve got a feeling that you’ll get your wish when it comes to Gas Reservation but it wont come free of charge. The main cost for this will be met by those individuals that would otherwise take control of their own electricity provisioning…the off-griders will pay.
    Isn’t our society weird, we force additional costs onto those individuals that would accept the costs and reap the benefits of rapid change so that we can all move a little more slowly towards the inevitable. the slow bandaid crowd wins every time.

    • The answer to 1) is probably ‘The FIRE industries and any business that has a captive customer base onto whom price rises can be pushed.’ Actual manufacturers and exporters struggle to be viable without a reliable and price-predictable energy supply. I can’t find the link, but The Economist had a story awhile ago about how Germany’ s increasingly unreliable electricity supply was hurting it’s manufacturers.
      For 2), huh, poor people will adjust by watching their lives get suckier when they can’t afford to heat or cool their shittily designed shacks. Wealthy people will grumble and pay up, or else find a way around any restrictions.
      As for the rip-it-off quick approach? Great way to remove band-aids, not so good way to deal with huge societal change. Look at the increasing crapification of Australia over the last 30 years or so – it’s been a slow turning of the screws, and because of that, the public has compliantly accepted things getting worse. Huge changes provoke huge resistance, that’s human nature, for good or ill….

      • Thanks DE, well worth viewing even if you have trouble understanding some of the more technical details of what Jenny’s saying.
        I’m far more demand side focused than Jenny but that aside there’s not a lot of differences between what we are both saying. As Jenny says Rate of Change of Frequency (RoCoF) is probably the most important metric in understanding 21st century power systems. In the space of just 10 years this has changed from an unimportant parameter (only really understood by Grid fault protection service providers) to what is arguable the most important management parameter in any modern grid.

      • BTW if you’re interested in why I’m so demand side focused look at the slide that Jenny Presents about 5:30 into the presentation. To have a 100% renewable grid we need a grid capable of generating peaks of many many times our current demand levels. Jenny suggesting that this generation capacity can be actively managed to match a static Demand. Thats a solution but in one where we simply waste or idle zero opex cost generation. I find it more interesting to ponder how can this excess capacity be absorbed by the grid dynamically. How do we change the nature of our grid loads so that this power is usable, I think this is a critical question for Modern heavy industry / modern manufacturing to answer the emergence of things like Powerwalls and thermal energy sinks makes this an equally important question for Residential Electricity.

      • That video is mostly wishful thinking. AEMO has not planned anything. They allowed generators into the SA system that could crash it through control system software. They allow power lines to be constructed that can get blown over in 10yr ARI winds. They have allowed 1600MW of installed wind capacity that is capped at lower than the available demand in order to run gas turbines for system stability. They allowed Hazelwood to shutdown putting Victoria and SA in peril of ongoing outages through summer 2017/18. These are very expensive lessons that consumers are paying for and will be paying for much more dearly as the madness proceeds..

        The slide that shows wind and solar capacity only 3 to 4 times the minimum demand is hopeful nonsense. Probably drawing on the same data the Jacobs Group used in their fairy land where the sun shines for 11 hours every day at full intensity in winter.

        The line that “wind does not always blow and the sun does not always shine is no longer relevant” is fanciful. The sun does not shine for 14 hours every day in some parts of Australia. Wind generators can produce nothing in 24 hours and less than 10% of rating for 4 or more days in sequence. There is one night every 24 hours. I can guarantee that the sun does not all day every day. A reliable system needs to focus on the worst case not the average. Look at the insolation on the populated areas of east coast of Australia on this particular day:
        http://www.bom.gov.au/web03/ncc/www/awap/solar/solarave/daily/colour/history/nat/2017033020170330.gif
        Less than 1 hour of full sunshine in March. The whole east coast, including two large aluminium smelters, would need to be supplied entirely from storage for at lest 40 hours. Those plants freeze with power disruption beyond 4 hours. There would be no point restarting them because the power costs are making them uneconomic already. Look at Portland; it is on government life support following the outage last year.

        Wind and solar as renewables is an illusion. The existing component costs are based on using low cost coal generation in their manufacture. It can never get to the stage where wind and solar at present technology can be used to replicate the components. They do not reduce CO2 because they are so capital intensive that the materials going into their manufacture and ongoing maintenance require more CO2 than they can possibly save from burning coal. If they continue to be deployed all economic output will go into the power system. There is nothing left to do for society other than make components the produce free electricity from sunshine and wind.

        If the unrenewable wind and solar generators made economic sense they would not need subsidies; priority despatch and the RET to guarantee on-going priority.

      • Thanks Rick, as usual words worth hearing if you really care about Electricity grid functionality and stability.
        I have the benefit of not needing to manage a real grid with all the shite that comes with real people and real problems.
        But that said someone does need to ponder the what-ifs of new systems / evolving systems because it’s certainly not the Grid operators job to understand how all these generation resources could in theory be more efficiently utilized.
        I’m kind of of the opinion that Efficient utilization of all available resources will define our modern economies and in a way define/redefine competitive advantage.

  9. ErmingtonPlumbingMEMBER

    “The gas market has failed. We’re only having this conversation about an energy crisis because we’re paying double the price for our own gas that Japan pays for it:”

    The perfect reason why we should Seize and Nationalise ALL of our Gas reserves and turn on the printing press to build the pipelines needed to get it to the east coast (Australian contractors only).
    Go total Gas fired Electricity, Cut our carbon emissions AND have the cheapest Electricity in the world.

    Sovereign Risk you say?,…bring it on! Getting the dollar down to 50c, would be a great out come for our exporters (along with sll that cheap Electricity)
    A propper “Jobs and Growth” Policy.

    Let’s put it to the people in a Referendum.

    • Good god, significant fiscal stimulus like that would no doubt lead to the realization of their much vaunted wage spike. 2 birds with 1 stone!

      Why won’t they do it?! Oh…
      Fuck the liberals!

  10. It’s astonishing that our Mr Tumble can imagine turning off the oil tap to North Korea but can’t seem to conceptualise turning off the gas tap to North Queensland..

  11. Frankly, I think Australia is nuts. We have so much coal, this should be our primary source. Why are we deliberately messing with reliable baseload generation. Makes no sense to me.

    “When these huge amounts of power are required all the time, there really is only one source for those amounts of power, and here in Australia, that is coal fired power.

    Take that coal fired power away, and Australia will just grind to a halt ….. very quickly.”

    https://papundits.wordpress.com/2017/08/12/australian-base-load-electrical-power-week-ending-12th-august-2017/

    This also is of interest, comments too:
    http://euanmearns.com/an-initial-look-at-the-australian-electricity-grid-data/#more-19400

    If we stuck to coal as primary, gas as secondary and renewables as minority I think we’d be doing far better than the direction we are heading.

    • Frankly, your disbelief is understandable when viewed through the warped lens of Anthropogenic Climate Change denial.

      When you begin to believe that we cannot continue to pump CO2 into the atmosphere ad infinitum, then it becomes a lot more clear why we can’t keep digging the shit up and burning it.

      • Maybe …or not depending on who you read and/or believe.
        That aside. I’d agree that we cannot continue to destroy the world. However current policy across Europe and the US (the urban elite part) and Aus (including this Blog and most who comment in it) is to do exactly that. The drive for negative RAT interest rates in order to have consumption and over-exploitation of the planet rising at an exponential rate, forever, is astounding. YET!!!! Here we are prepared to risk everything to limit CO2 emissions. Why? What’s the point in a world gone totally mad.
        This is all hypocrisy writ large and credibility gets shot to pieces with it.
        Nuts!!!!

      • To be sure, propaganda runs thick and fast, but at this point, there is very little doubt that AGW is real; at least from the point of view of established scientific consensus. Still, I have little faith that our grandchildren will inherit much more than urban jungles and environmental wastelands.

        If our opportunistic and parasitic political class find themselves trapped in a cleft stick, it can only be attributed to the marked development of an environmental conscience among a growing majority of Australians. I doubt that it is a moral imperative that prevents the Coalition from opening coal stations left, right and centre, but merely the fact that such a move would represent political suicide.

      • We are happy for all our coal to go other countries to ensure they have cheap energy, why not continue to utilise it ourselves. It makes makes massive sense.

        Time and time again we hear that any emissions reductions undertaken here in Australia will make zero difference to global emissions reductions due to population growth and particularly use of emissions intensive energy sources. The Atlantic recently published an article claiming that if the US converted to eating beans rather than meat, US CO2 emission targets for future years would be met. Global warming is not even a first order issue when viewed in the context of famine, pollution, deforestation, war and global migration.

        Most States in Australia rely on 80%+ coal generation (ex Tas and SA, enough said), instead of shutting it down we should be guaranteeing this baseload for future generations. I am really concerned about Victoria which I think will experience serious energy deficiencies if proposed energy mix favoured by Daniel Andrews Government goes ahead.

      • We are not happy. Have you missed the Adani farce play-out? Even in Queensland, arguably the most pro coal state in the country, it is a political hotbed issue.

        “We are a relatively small polluter” doesn’t wash with me. Time and again it is rightly lampooned by the fact that we are an independent, forward thinking (traditionally) nation that does not resort to “they are doing it, why can’t we” childishness.

        Despite your rhetoric, we are not alone. China, one the biggest polluters on the planet, is actively diversifying away from coal dependence purely because they have first hand experience of the environmental impact coal generates. The sheer fact that the Paris Agreement exists indicates how significant this issue is becoming for the world. Just because we have a fucking deadset dickhead in charge of America (at present), it is not a reflection of the growing push for CO2 limits across the globe.

      • Brenton, if you believe that you believe in fairies at the bottom of the garden.

        The Paris Accord is a non-binding agreement that in fact allows countries like China and most developing and mid tier countries to expand CO2 emissions through to 2035 (I think). So don’t you fret, China is going to continue to use a lot of coal. India too, if it can get its act together. So why not Australia.

      • As for solving Asutralia’s problems, Hnh and Ermo, have already provided the solution: nationalise the east coast gas industry and re-nationalise the energy sector.

      • Fuck off Simone. It is you believing in fairies, or rather, is it just run of the mill God’s gift to man mentality? Only a nutcase or a blind ideologue believes that we can plunder unchecked without consequence. Science and reality don’t give a toss about your selfish reasoning.

        Irrespective of the legal premise surrounding the agreement, China is moving away from thermal coal.
        https://www.bloomberg.com/news/articles/2017-01-10/smog-choked-china-swapping-energy-independence-for-cleaner-air
        Nevermind that it is reflected in the data.

      • Gas and renewables is the wrong composition? Pray tell, what does coal offer that gas doesn’t, other than a shit tonne more CO2 emissions and a greater expense over the long term?

      • We’ve established that Australia’s emissions are a non-issue in the global context. Renationalisation of private energy providers across multiple States is of dubious merit. States own the gas that is derived within State boundaries, not the Commonwealth which further complicates the matter. What would renationalisation cost, who pays, how does this guarantee cheaper energy, would loss of exports harm our trade. Add to that the dominant role coal plays as baseload provider, eliminate it at peril.

      • @Simone…

        Australia’s emission are relevant, firstly the whole ratio argument is a categorical error. Everything that is emitted contributes and increases to the global back ground, not to mention set a precedent [cough resource curse]. This also compounds the economic’ group think demand thingy wrt missing the boat whilst others take first mover advantage, but hay, banana republics have an awesome track record [for a few].

        But hay ideologue…. I under stand you and yours self interest thingy [biopolitics] but cant square the your dead bit, others have to live. I mean your offspring regardless of your environmental biases and foaming the run way for their lives will not experience the same dream time you experienced.

        Disheveled… I think the mirror is pointed in the wrong direction mate…

    • I also don’t see why Australians don’t just stick with asbestos, lead paint and CFCs. They were all more than adequate in the past. And fat people, just smoke more. That’ll knock a few kilos off.
      There we go, many problems solved without causing any other problems at all.
      /Sarc off.

  12. I dunno jack about this, so honest question – why is it ‘prohibitively expensive’ to get gas from WA but not from Indonesia, Qatar, or Japan (re-import) ?

    Is it because of those domestic waters fees for ships? ie cheaper to come in from outside than to move along the coastline?

    • It’s not. Note the author’s former position as a Santos executive (aka member of the east coast gas cartel)

  13. This battery pricing fairy tale is total rubbish, it’s based on Tesla Powerwall 10 year warranty with assumption that after 10 years batter will still have 70% capacity.
    That is just a sales trick because total lifetime capacity is limited to 37MWh for 13.2kWh unit priced around $12k to $15k (installed). this makes cost to store 1kWh between $0.30 and $0.40. Adding around $0.10 to generate 1kWh from solar and price goes up significantly. Price of batteries is not going to go down more than 30% from now due to technological limitations.
    Not to mention that Tesla’s daughter company in Netherlands that is providing warranty is likely not to be there in 10 years

    This said, I have to say that despite no future in battery storage, solar energy is ultimately going to be the only energy source in Australia. What is needed for that to happen is utility scale solar farms with sea water pump storage near the coast. Single smallish lake 4km by 4km 50m deep on cliffs near the coast would be able to store over 400GWh of electric energy enough to power the country over night. Few of these distributed near the coast would be allow country to be powered by 100% solar

    Cost of each of such pumped storage facility would be around $10b in Australia ($5b in the rest of western world) but the equivalent storage using Li batteries would be around $60b

    • Your numbers are on the right track but off the mark.

      To reliably supply 1kWh of electric energy in any part of mainland Australia requires 1kW of installed solar and 2kWh of installed battery. This is getting close to being economic without subsidies in parts of Australia for domestic users. In fact the cost is between 50 and 60c/kWh with cheap finance and low installation cost; a bit better if you get subsidies. So you are not far off but a bit low.

      The problem is that nothing at grid scale can be done any cheaper so the wholesale cost of on-demand supply into the grid with solar or wind is around $500/MWh. If power at that price was used to make the panels they would be 1 to 2 orders of magnitude higher in cost. Australia sends its coal to China so it can be used to manufacture the components needed for the solar systems being installed. Solar and wind renewables are, in fact, unrenewable because they can reliably produce just over twice the amount of electric energy they consume in their manufacture. That is not sustainable. The present situation is a one off on the basis that China continues to use coal or nuclear power to manufacture what Australia needs to build the illusion. It can only be maintained if coal and nuclear sources are continued to be used for the components supplied from other countries. The electricity cost will be so high in Australia that there will not be any heavy industry.

      Any storage system must have a minimum of 48 hours otherwise the collection capacity needs to be extraordinarily high. There are days in any part of Australia when the sun does not shine more than 1 hour. There are days when most of southern Australia has less than 2 hours sunshine. The cost of transmission lines to move around lots of power is high in terms of capital and losses.

      • Words all these wishful thinkers need to understand.
        When PV systems only generate 2 times the power used for their construction over their operational life times than any suboptimal installation (west facing panels) can easily halve their output OR seen the other way around guarantee that the panels produce less power over their lives than was used in their manufacture.
        If you now suggest that these PV panels will be “managed” to provide dynamic supply control than guess what those panels will never pay for themselves from a Energy-In vs Energy Out perspective. But wait the holy grail of sustainability is PV + Battery, oK so West facing PV has half the yield of North facing and we’ll couple this with Batteries to extend the usage period from 4pm to 8pm fantastic stuff but from an energy analysis perspective it’s totally wack-city-here-I-come stuff….and they have the gall to call this Sustainable !!

      • The energy out / energy in is for a so-called buffered system based on LFP battery storage. The ratio is just over 2 for installations on mainland Australia. When the energy in is supplied from coal or nuclear there are certainly applications that are now economic due to the high cost of electricity in Australia. But if the panels and battery have to be manufactured with energy from wind and solar the factor of 2 is too low to sustain the process. Humans would only exist to maintain their power system. Food production for example would grind to nothing. Society as we know it would collapse.

        To put some numbers here, a 1kW solar array can reliably produce 365kWh per year when buffered with a 2kWh LFP battery to ensure power on demand. For average Victorian household consuming 15kWh of power daily they would need a 15kW solar array and a 30kWh LFP battery to give 99.9% system availability – say 1 day down in 3 years. The defining period in Victoria is mid June to mid July. Requirements for Brisbane and Sydney are defined by lingering summer storms; rain depressions as was the case when Debbie moved south this year.

        A solar array of 1kW consumes 3000kWh in its manufacture and should last 25 years so replacement requires 120kWh each year. A 2kWh battery requires 700kWh of electricity to manufacture it. It should last 5000 cycles or 13 years. So it requires 54kWh every year to manufacture its replacement. So just considering these major components, their replacement requires 174kWh of the 365kWh produced each year from the solar system giving EO/EI of 2.1.

        The insolation data I have looked at suggest that Adelaide may get away with less than a 1kW array to get 365kWh per year. Hobart will require larger. All the other capitals have similar requirements. Even central Australia has days when there is less than 1 hour full sunshine equivalent.

        Almost all modelling on solar systems assumes that all the energy arriving can be put to some useful purpose. However the only thing that matters is that you can take the required power on a daily basis to meet your needs. It is the lowest sunshine day or sequence of days in conjunction with the system storage that defines the size of the installation not the average. A 1kW array in Victoria has potential to produce 1200kWh each year so taking the panel in isolation it could be replicated from its own energy in 2.5years giving Eo/EI of 10. But that would require a process that only works when the sun shines. The process would halt with every passing cloud. Winter production would be very low. There would be no production at night. No industrial process could tolerate that variation.