Albo’s renewable energy plan FAR superior to Morrison gas unplan

Via Albo at the AFR:

Our transmission system was built for a time when solar panels ran pocket calculators, not the one in four households which have rooftop solar. The current network takes no account of the rise of renewables as the cheapest new energy source and doesn’t help link these new sources up to the national grid.

A Labor government will tackle this head-on. We would invest in the Rewiring the Nation project, an overhaul of the grid that will create jobs, reduce power prices and facilitate Australia’s potential as a renewable energy superpower.

We need a more efficient grid that can move energy in multiple directions and from far more locations.

Upgrading the grid is technology-neutral. Because renewable energy is the cheapest method of new production it will benefit most and allow the distribution of the cheapest source more efficiently.

…Rewiring the Nation will reduce power prices….AEMO has already produced a detailed blueprint for the work. It’s a plan that has been signed off by all governments, stacks up regardless of the energy mix, and will create up to $40 billion of economic benefits, including in lower prices for consumers.

Bravo. Now that is an energy plan. Both gas and coal energy production will fall away under it given it offers a huge leg up to renewables and storage by ensuring that the geographic spread of energy mitigates intermittency.

Renewable prices are already cheaper than gas:

Australian energy costs compared

And will soon be much cheaper:

Price of solar and batteries over next 5 years
Price of solar and batteries over next 5 years

This would definitely lower power prices as it dislocates the grid from the gas cartel. For that matter, it would do the same for gas prices as consumption fell much faster. We would never need the toxic Narrabri project and may not need LNG imports, either, if Labour offered short term reservation to ensure it.

The plan provides a huge jobs boost both in its construction and in the development of renewable resources plus accelerated decarbonising of the economy with all kinds of potential advantages springing from that, not least for manufacturing as we decouple from China. The timing for such a nation-building policy is obviously perfect.

This is the first rational energy policy argument given any prominence that I have seen since the Coalition came to power. It is so much better than the Morrison Gas Unplan that daylight is second. The Morrison Gas Unplan is little more than a fossil fuel subsidy program for an existing energy cartel that is rogering Australians daily like the Enron of its time. The Albo proposal is cleaner, greener, cheaper and more constructive for industrial development.

All by itself, this policy juxtaposition puts Labor far out in front of the gas lobby captured Morrison Government on energy and the prospects for the Australian economy.

David Llewellyn-Smith
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Comments

  1. PaperRooDogMEMBER

    Noice summary!

    Never going to happen though as
    “This would definitely lower power prices as it dislocated the grid from the gas cartel. For that matter, it would do the same for gas prices as consumption fell much faster. We would never need the toxic Narrabri project and may not need LNG imports, either, if Labour offered short term reservation to ensure it.”
    which would make Australia more efficient & competitive, LNP are only interested in bleeding money from Aussies to feed to their mates, they simply do not care about our long term competitiveness or the short term given it is not immediately apparent as these things take time.

  2. We might a energy version of the anti-mining tax campaign for the next election. I wonder if Mitch Hooke can be coaxed out of retirement once he’s sorted out Sam Burgess.

  3. You do realise that the major cause of increases in electricity costs (far exceeding green/renewables) is the massive rise in Transmission and Distribution costs that has occurred over the last 15 years. Providing further encouragement to overbuild a system with what many already regard as ludicrously conservative loss of supply standards might not be the wisest use of the national’s capital. Moreover, because the population is overwhelmingly located in a long coastal strip on the Eastern Seaboard there is no significant capture of the diversity of peak loads and solar output (save in the case of a super expensive link to WA)

    • Steve1036MEMBER

      You need to separate the transmission and distribution. Distribution was where the overbuild was and that was related to poor forecasting and regulators asleep at the wheel.

      Connecting additional renewables through transmission is significantly cheaper than the status quo. While you pay $3-5/MWh more on transmission you save $30-40/MWh on the generation.

      • This argument ignores the anti-competitive disbenefits of building regulated transmission. For example it might be better to install batteries or peaking generation that must capture market returns rather than wires underwritten by enforced regulation. Now if interconnector advocates were prepared to build an entrepreneurial interconnector (such as Basslink) then there could be little argument however that is not what they are seeking. They want an underwritten bond plus return stretching out to eternity and with it the right to destroy potentially better options. Their self serving claims should be treated cautiously.

        • Steve1036MEMBER

          It would be really interesting if you could refer to a report or analysis that discusses that.

          There’s a lot of points that I could raise but I’ll just raise a couple. First is that the customer will always pay for investment, otherwise the investment was poorly done and the asset would be written down. Under the regulatory model the customer are effectively underwriting a 5-6% IRR which is really cheap. Alternatively investors in merchant batteries are after more like a 12% IRR. The competition benefits of batteries have to then be remarkably more effective, particularly given their current higher cost for them to be cheaper At a system leve. Transmission by its network nature doesn’t tend to work well on a merchant basis. That’s because the main merchant business model is arbitrage which basically you’re not using the line to drive up the price differential in one market compared to the other (eg Tasmania versus Victoria). To reduce the cost of transmission you really want to instead be using it as much as possible.
          The second point is that renewables with good resources are incredibly cheap. In Australia at scale you can be getting to c.$30/MWh for wind and solar at a capacity factor of c.80%. The thing is that those great resources aren’t necessarily where the current transmission network is. Luckily connecting them them up only shouldn’t cost very much. That’s in comparison to renewables with batteries, which while costs are coming down, are still around $150/MWh.

          Keen to hear your thoughts though.

          • Yes the cost of capital is low for regulated assets buts that’s because the risk is borne by the consumer. So, the overbuild of the last 15 years is no longer just a risk faced by consumers but entails real costs. Now if you have faith in planning boffins to correctly anticipate economic, demographic and technology trends stretching out into the never-never then maybe signing up to long term indebtedness is wise but if you’re willing to admit the world is uncertain and it is better to let those prepared to risk their fortune take up this burden then a market solution is the way to go.

        • Steve1036MEMBER

          Just responding to your comment below.

          What’s the answer then? Just wait for the market to magically come up with a solution? The problems of climate change have been known for 50 years and there’s been plenty of opportunities for “the market” to come up with a profitable solution but it hasn’t. Instead it’s been technology largely driven by industrial policy and government incentives developed by those same boffins you decry. When and how is the market going to finally save the day?

          Seems crazy when there’s such a cheap opportunity with barely no risk right in front to turn that down and say “let the market decide”.

      • Jumping jack flash

        “Distribution was where the overbuild was and that was related to poor forecasting and regulators asleep at the wheel.”

        The way I understood it was the government essentially matched them, or paid a significant percentage of the upgrade costs.
        Cue gold plating, overbuilding, etc., pushing all the costs to the consumer, while they pocketed free government money for doing it.

        • Steve1036MEMBER

          Yeah I haven’t heard that but there was definitely lots of dodgy government stuff going on. Part of the reason was media fear fear mongering about electricity reliability in the noughties, despite there not being an issue, so now we pay something crazy like $300 extra a year for an extra 12 minutes of electricity.

          Another issue was that following the GFC the regulator was still allowing DNSPs to charge really high rates despite their cost of capital plummeting. As a result, along with the dodgy demand forecasting there was this huge incentive to gold plate your asset base because you’ve got a guaranteed high return that doesn’t actually reflect your cost of capital.

  4. David WilsonMEMBER

    Albo,s jobs for his union mates is all over this.
    More massive waste on more power lines and distribution via solar all over the place and let’s never forget solar is useless without the massive duplication cost of gas , or coal, or huge battery backup.
    Yep three systems instead of one .. does not stack up financially, needs more people employed meaning more unnecessary costs plus let’s not forget two huge points that the left won’t admit … bet I get a lot of lousy uninformed abuse for these following points
    1. Global warming is a farce as 2016 was the last warm year and every year since has been cooler as confirmed by NOOA including 2020
    2. Solar panels get hot and increase air temperatures around them by 1.5 degrees above ambient temperatures so contributing to so called global warming, they are only at maximum efficiency for 3-4 hours a day , don’t work on cloudy days very well and are useless When the sun don’t shine. Solar panel also are bad for farming and crop production and reduce areas for wildlife to live.
    We need also to mention that increasing CO2 is terrific for increased crop and tree growth which is fantastic.

    • Get a little more informed via info like I provided via the link below – engineers have been, and are, moving on from your positions very quickly. The tech is now, and near.

      Do you mean social left/right or economic left/right? People conflate the two erroneously so often…

      Further, it’s not a political issue – it’s just tech and economics. It’s now. Please take off the partisan glasses.

      • David WilsonMEMBER

        If we wanted to be realistic we would be looking at nuclear energy using the existing coal fired power sites and distribution networks but no , this is not an option because of lousy green labor politics , we mine uranium and send it to other countries that have woken up , countries such us Germany now face a shambolic energy mess due to closing down nuclear generators and embracing renewable energy then let’s have a look at California and South Australia both with massive renewable energy issues.

        • With respect, I disagree; my understanding is that nuclear is, generally, significantly more expensive than renewable generation, even when storage (hydro, hydrogen, ammonia, batteries, compressed air, etc) is taken into account…all of which are proceeding technologically and economically at blistering paces.

          My understanding is that, unless we get fusion, nuclear fission-based energy production is simply old tech, that can’t really compete, with a heck of a waste management problem.

          • Steve1036MEMBER

            +1

            Even the small modular reactor guys aren’t really look to beat renewables but find opportunities where renewable resources are less limited (E.g. Japan) and for firming

    • 1. Global warming is a farce as 2016 was the last warm year and every year since has been cooler as confirmed by NOOA including 2020
      2. Solar panels get hot and increase air temperatures around them by 1.5 degrees above ambient temperatures so contributing to so called global warming, they are only at maximum efficiency for 3-4 hours a day , don’t work on cloudy days very well and are useless When the sun don’t shine. Solar panel also are bad for farming and crop production and reduce areas for wildlife to live.

      That’s not how you science, bro.

    • TheLambKingMEMBER

      1. Global warming is a farce as 2016 was the last warm year and every year since has been cooler as confirmed by NOOA including 2020

      I am always fascinated when people make statements like that!
      – Do you actually believe the world is not warming and use that statement to back it up?
      or
      – You know the facts (while 2016 was the hottest year on record, the hottest 5 years on record are the last 5, and the last decade is almost 0.4C hotter) and are here knowingly spreading lies (Global warming is a farce)?

    • Solar panel also are bad for farming and crop production and reduce areas for wildlife to live.

      This is not true and I have photographic proof.
      I was on the roof of a house and I spotted a scary looking tail sticking out from under a solar panel on the roof. It was a goanna.
      So clearly the addition of the solar panel onto that roof INCREASED the area for wildlife to live.

      • Jumping jack flash

        It kind of makes sense that solar energy falling onto the solar panel and being converted to electricity is no longer available to be used for anything else.

        of course if the parts of the sunlight that arent used for creating electricity can be used by plants then they could be reflected onto some plants. If they were absorbed by the panel then that may be more tricky.

        • RobotSenseiMEMBER

          You mean that tiny slither of energy from the sun every minute? That same slither that would otherwise be absorbed by the material it falls and be reflected or absorbed as heat?

          That’d be like taxing people who take rainwater in tanks as it’s technically no longer in the water cycle. Thimble in the ocean.

  5. FYI:

    Webinar: ‘Using Sunshine to Power the Plant’:

    https://www.youtube.com/watch?v=imIHMINggnY&feature=youtu.be

    Short online lecture, with Q&A feedback, from my former lecturer at UNSW Chemical Engineering – a smart cookie and on the cutting edge of photonics/chemical integration (which is the future).

    Discusses the renewable energy economy, with many different new techs integrated, focusing on hydrogen and chemical production for storage and energy/chemical export. Discusses new techs wrt low-energy pathways. Implied in there is the no-brainer of renewable energy and a renewables-based economy; also, renewables and the new reality coming very quickly – it’s basically already here…

    Worth a look: lecture about 30 mins, with Q&A about 25 mins.

  6. Jumping jack flash

    I’m impressed.

    I’m still going off-grid though, at least for electricity and water. Gas is a tricky one, but not impossible.
    It all takes time though. Time is the most precious thing.

    Everyone could be far more self-sufficient and sustainable if they weren’t all working like slaves, absolutely flat out, to repay the colossal wad of debt they needed to get from the bank to be able to obtain the property to implement their sustainable lifestyle on. Its a bit of a shame really. Certainly a self-defeating ideology, ruined by debt.

  7. The key to rewiring Australias energy systems is to cut-out elites and remove all rorts.

    Take the example of solar panels and all the nonsense of feed-in tariffs.
    Cut out the elites. Make it so I can run some sort of a cable to my fence and connect to my neighbours solar panels and share his electricity easily and fairly and WITHOUT ELITES having a say or charging money.

    Albo trots out “the most worthless concept in economics” – creating jobs.
    If he really wanted to create jobs with a new energy scheme, then rip down all the solar panels and replace them with bicycle generators. That would create many jobs. Of course that is not what any sensible person wants. Creating jobs is the most worthless concept in economics.

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