Instead of Tilting at Windmills, Federal Energy Minister, Chris Bowen needs to have a serious rethink about his renewable energy strategy to guarantee a continuous supply of clean, green electricity.

31 July 2024

ALAN HAYES

 

IN the April to June quarter the wind share fell to 12 percent, the lowest share in the mix since 2021. So, what filled the void left by the continuing wind drought? It was gas – up 70 per cent in usage from the previous quarter. Little wonder the Australian gas Industry has been running television advertisements since March this year, extolling the benefits of expensive fossil fuel to fill the gap when the sun doesn’t shine and the wind doesn’t blow.

 

But while Chris Bowen talks up renewables, and how the Albanese Government wants a complete shift from fossil fuel to meet Australia’s net zero target, it seems that all the grandiose plans are just ‘pie-in-the-sky’ pipe dreams, unless there is a serious rethink in their renewable energy strategy.

 

There can be little argument that in the twenty-first century we have to move away from nineteenth-century fossil fuel electricity generation. Our elected leaders have to realise that for clean energy future, a green and non-polluting baseload power plant is the only sustainable choice. This simple and already known premise, Concentrated Solar Thermal Power (CSP), seems to have escaped not only their thinking patterns, but the energy industry as well. Instead, they’ve boarded the ‘one-way train’ to nowhere – leaving struggling families to struggle even further to keep the lights on.

 

Power bill shock is becoming the new pandemic!

 

It comes as no surprise that NSW, which plays host to the biggest grid and the largest fleet of coal fired power generators, has experienced a three-fold increase in the number of “baseload” plant failures. A problem that reached epidemic proportions in May of this year, when network constraints and bidding behaviour by big utilities, cashing in on the tight market, resulted in prices going to the market cap on repeated occasions. This type of bidding behaviour and market manipulation resulted in the market in NSW being suspended for the first time since 2022.

 

Not surprisingly, two of Australia’s biggest utilities and retailers have been accused by the energy market regulator of seeking to “maximise profits” over the past two months as they sought to cash in on these tight market conditions, caused by the failure of ageing coal assets.

 

But the worsened situation of reduced power from Eraring and major network constraints that followed, which limited supplies coming on line, left the ‘energy-price-gougers’ rubbing their hands with ‘glee’ - the big players were left in control of the market and – despite their repeated protestations that consumers are really important and the heart of their business – the sound of the cash registers were ringing loudly in their ears.

 

Welcome to energy price gouging reality – profits above consumer needs

 

Let’s be realistic, the energy market players don’t give a ‘fig leaf’ about sending households into penury, as long the piles grow higher in their ‘counting houses’.

 

Although the recently witnessed type of bidding strategy is not illegal, it still, it seems, had the Australian Energy Regulator (AER) question whether the behaviour was in the best interests of consumers. Although there was concern by the Australian Energy Market Operator (AEMO) and the AER, their concern wasn’t sufficient to put on the brakes. They were clearly content to let this type of market behaviour slide.

 

Ironically though, according to AEMO data, had it not been for the coal plant failures and the bidding behaviour on numerous days by the country’s three biggest energy generators and retailers, the average price in NSW might have actually fallen in the June quarter – but if it ever does, don’t hold your breath for a cheaper electricity bill.

 

And the behaviour of the ‘energy giants’ (AGL, Energy Australia and Origin Energy) to keep on gouging and bleeding households for ‘every cent that they can get’, won’t get any better! They will continue to get away with their unconscionable activities while ever the regulators remain ‘toothless’ and our ‘fossil-fuel driven economy’, which largely fabricated the 2022 energy crisis, is allowed to manipulate the energy market.

 

Riding on the back of all this energy ‘hoopla’, electricity wholesaler, Ausgrid, claim that too much electricity is now being fed into the grid from home solar, despite ongoing power generation failures at Eraring. They claim the only way to solve the issue is to tax the home feed-in tariff 1.2 cents KWH during the hours of 9am to 3pm. But how does a feed-in tax on home solar solve the alleged problem? – any excuse to ‘price-gouge’ consumers.

 

Ongoing problems

 

In NSW, the privatisation of the power stations and the power poles and wires by the previous Liberal Government has also added exponentially to electricity supply problems and the high supply prices that consumers now face.

 

Major delays to the expansion of the outdated east-coast power grid, and a reluctance by the network owners to invest in upgrading the system, limiting the capacity to connect more renewable energy into the system, is threatening to increase prices by hundreds of dollars a year in some parts of the country. This problem is further exacerbated by the same reluctance of the power station owners to invest in maintaining plant and equipment – resulting in generation failure.

 

An avid reader of the Grapevine said that her husband worked at Vales Point: “It’s extremely dangerous to work there,” she said, “because of the lack of maintenance.”

 

“Employees are scared to speak up and are told that if they do they’ll lose their jobs,” she said.

 

And the NSW and Federal Government?

 

It’s common to hear people complaining about the rising cost of electricity and ask, “what is the NSW State Government doing to lessen the cost of power”? A valid question that still hasn’t received a valid answer!

 

Despite the ‘renewable energy cry' – “we are moving to power sustainability” – the NSW State Government has chosen to deepen its dependence on coal generation, and the bidding patterns of the big utilities reflect this, when the State government agreed to pay Origin Energy up to $450 million to keep the Eraring power plant (an unfair impost on State taxpayers) running until 2027 - which lost two units in the May feeding frenzy and is the reason why the market was suspended.

 

Elsewhere in the market, the hitherto wind drought, despite hundreds-of-millions-of-dollars being spent on wind generation over the past year, and a 16 per cent fall in hydro output, led to a big increase in more costly gas generation. Yet federal and state government continue to pin their hopes on windfarms, solar PV and battery storage as the future energy supply to solve the ongoing energy crisis. In the short-term, however, they say that gas will be the magic ingredient, when green energy and coal fail, to keep the electrons flowing. But this strategy could quickly fall over – the Greens have thrown a ‘spanner-in-the-works’, saying that the current gas industry should be shut down and intend to partition against Federal Labor over the gas industry in the coming election.

 

One of the latest developments in the energy crisis, however, is the growing influence of battery storage. While still at relatively low levels, it is hoped that it will more than double the average generation in the morning and evening demand peaks. This expectation is playing an increasingly prominent role in the setting of electricity prices - Origin Energy has approved the second stage of its large-scale battery project at Eraring Power Station.

 

Origin Energy’s $450 million extension will add a 240 megawatt four-hour duration grid-forming battery to the 460 megawatt two-hour duration first stage already under construction. But when the project is completed, it will only provide enough power for six hours to help keep the grid stable and support increased demand on the system - it’s a ‘band-aid’ solution at best.

 

Battery life is between eight to fourteen years, depending on the recharge and discharge patterns – a huge investment for a short lifespan. So, why didn’t Origin Energy consider a small CSP plant instead?

 

CSP Plants are less expensive to build than coal, gas and nuclear and, for the total of the Eraring investment, which Origin would not confirm with the Grapevine, a comparable CSP plant, with a 50-year plus lifespan, providing power to the grid 24/7, could have been built.

 

Backing the right horse

 

Of course, all of the associated problems in keeping the lights burning has the Federal coalition placing their bets on a one-horse race to the finish line at the upcoming Federal election - keep coal fired power stations open longer, slow down or stop the rollout of wind, solar and battery storage, and use gas to fill in the missing bulk energy link while they wait for nuclear plants to be built.

 

But coal, gas and nuclear, no matter how hard you may try and rig the race, is not a winner – now or for future generations, who will have to deal with the consequences of bad decision making.

 

Yet the Albanese government sees itself as winning the election because it believes that Australia's potential to produce abundant renewable energy gives it a comparative advantage to continue to invest in renewables and to make the country a renewable energy superpower.

 

Just like all dreams however, they are not based in reality – the one powerful source of guaranteed 24/7 renewable, clean and inexpensive energy (CSP) is not even 'a blip' on the federal government’s radar. One hundred CSP plants worldwide is a potent reason for Australia to become the clever county – once again.

 

Instead, Chris Bowen’s desire to turn Australia into a renewable superpower within the next six years is crumbling beneath his feet.

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