With Judith Sloan making perfect sense and no sense at all:
By the time I was driving home, a series of rolling brownouts (a cute term for electricity being cut off in whole suburbs) was under way.
The chief executive of the Australian Energy Market Operator, Audrey Zibelman, was cheerfully informing us that cutting back 100 megawatts involved about 30,000 households losing power. She didn’t seem particularly concerned because there was a possibility that a cold front might hit Melbourne a bit earlier than forecast.
Mind you, it was not just households that lost power. All those small businesses without power were effectively forced to close. And many food outlets simply had to throw out rapidly spoiling foodstuff. Presumably, some staff members lost pay.
…The bottom line is that the objective of affordable and reliable electricity is now further away than ever. The addition of subsidised renewable energy, even in the context of some battery backup, can’t produce reliable power but is likely to drive more dispatchable power sources out of the market before their effective expiry dates are reached. It’s why the federal government’s tender process to underwrite more dispatchable power entering the system is so important.
There is absolutely no surprise in any of this. Intermittent renewables sometimes can’t deliver, hence “intermittent”. Often when it is really hot there is no wind and solar efficiency crashes.
The answer is indeed more “dispatchable” power to kick in at such times of peak demand and constrained supply. The problem is that coal is not dispatchable. It takes days to warm up the boiler.
What we need, what we always planned to need, what every one else uses, and what has allowed the US to shutter massive coal capacity no problem at all, is more gas energy production.
The only reason we don’t have it is we allowed a monstrous cartel to overtake east coast gas reserves. This economic abomination limits gas supply into the local economy and holds prices at uneconomic levels for gas “peakers”, those “dispatchable” power plants that switch on and off in seconds when power price spikes make them money.
So we can’t use them. The Asian price of gas today is roughly $9.50Gj on contract. The export net back price ought to be $7.50Gj but it’s still costing bulk consumers more like $10Gj if they can secure a long term deal at all. Traditional prices were $3-4Gj which is roughly what it still costs in WA thanks to domestic gas reservation. LNG imports by definition can’t fix it given they come in at Asian prices plus a margin.
Judith Sloan is a former director of gas cartel founding member Santos so she doesn’t like to talk about the obvious solution which is gas reservation on the east coast that fixes the price at $5-6Gj. Politicians prefer to fight over the false binary of coal versus renewables as well. The press is a blathering idiot that has seemingly never heard of gas.
Yet the simple truth remains. All we need is a little east coast gas reservation and every Australian energy problem – cost, carbon and capacity – will be resolved instantly at the stroke of a pen.
That we can’t see or do this is some form of deep national insanity.
