A pre-pandemic energy policy

The government has released a report on energy policy it commissioned from former Origin Energy boss Grant King. I prepared a brief response for the Australian media science centre

The government’s thinking remains five to ten years behind the times.  Although the idea of new coal-fired power stations seems finally to have been abandoned, the report focuses heavily on technology options that seemed promising in the past but have now been abandoned everywhere in the developed world, such as nuclear power and carbon capture and sequestration. More important is the failure to recognise that gas-fired electricity generation is increasingly being supplanted by the combination of renewables and battery storage. The policy remains fixated on extractible resources such as coal and gas, ignoring our massive endowment of solar and wind resources.

The more fundamental problem is that the approach to climate policy that underlies all of this is the same as the denialist approach to the pandemic, exemplified by Trump – since dealing with impending disaster will be inconvenient, let’s just keep ignoring it. After all, it might never happen.

8 thoughts on “A pre-pandemic energy policy

  1. Any plan including nuclear power has obviously thrown cost considerations out of the window. Just how much does the Morrison government propose to stiff Australian consumers and taxpayers?

    No mention of pumped hydro. Admittedly the Snowy 2 megaproject is looking increasingly like a white elephant. The way you get savings is through multiple smaller projects and standardisation.

    On batteries, there’s a credible rumour that Tesla will announce a late conversion to V2G at its Battery Day in June. I say credible because it’s an obvious move that costs next to nothing. In use, V2G will also cost next to nothing. However, it’s not fully despatchable in the early evening ramp, so it’s only a cheap part of the storage solution.

  2. But – but – I keep reading how the pandemic gives the government a chance to reset its policy settings in general and even put an end to a decade of climate inaction

    Next you’ll be telling us that (a) the Coalition will revert to type and slash Newstart back to normal as soon as they think it’s politically feasible, and (b) Coalition governments across the country will use the excuse of business-led recovery to cut ‘green tape’ (sic) because what bushfires they never happened what are you even talking about (or, as Morrison might put it, ‘I reject the premise of the question/that just sounds like Labor attack lines/I’ve already answered that question’)

  3. No point in buying a Tesla 3 if another car can provide me with a couple thousand dollars a year for selling electricity to the grid during critical peaks and providing grid stability services. (21 kW 3 phase charger sell when price is over $10 per kilowatt-hour. If there are 40 hours a year wholesale spot prices are that high and the car is plugged in for half of them… yep, it back of the envelopes.) The Tesla 3 is apparently capable of it according to someone who pulled one apart.

    If one in ten homes have a V2G EV plugged into a 3 phase charger that represents 2 kW in or out as required per home. That is a lot. It’s could provide power about equal to our current coal fleet.

  4. How much of Australia’s mining exports actually benefit Australia and Australians? I can’t find any figures on this. Frydenberg claims energy and resources exports will bring in $278bn this financial year. Is this the amount added to the Australian budget or is it the total earnings of the sector? As we all know, I am sure, much of the earnings of our energy and resources exports go to overseas owners, many of whom then cost-shift and profit-hide to avoid taxes in the country of origin. How much of Australia’s supposed bonanza in this sector actually benefits Australians, as royalties, excises, taxes and local wages and earnings etc. and how much simply disappears overseas?

    I’d be interested if anyone could point me to the facts on this. For example, I believe from what I have read that Chevron takes overseas most of the profits from our gas exports and Australia and Australians get very little benefit from our international gas trade. It seem to me the authorities are deliberately opaque on these issues. I guess it’s part of the “game of mates”. Give all our gas to China for a song and Chevron takes the song royalties. Is it much the same for all our energy and resources exports? Who really benefits? If Australia gets minimal benefits we might as well leave it in the ground. But I am hoping to be enlightened by anyone who can point me to the real figures.

    My default position is to be highly cynical about the benefits of this trade to ordinary Australians and to suspect that most of the benefit goes to (a) the recipients of the real resources and (b) the transnational corporations which make the trades. Am I being too cynical?

  5. To add to my above questions:

    “Mining does, indeed, generate a mountain of money, around $136 billion in (private?) revenues each year, but it only employs 100,000 people.

    Worse, Australia’s largest mines are 86 per cent foreign-owned. Apart from state-levied royalties, Australia gets almost nothing from mining, with most of the profits and dividends flowing overseas. Even BHP is 76 per cent foreign owned.

    It’s not likely that BHP and Rio Tinto are going to close up shop while they have access to some of the richest ore deposits on the planet, but what does Australia get out of it? We don’t even add value to the raw materials and export steel.

    By relying so heavily on imported capital Australia has placed itself in a vulnerable situation. It neither reaps most of the benefits from foreign-funded operations, nor does it have any control over the deployment of capital when a downturn happens, as evidenced by the Holden closure.

    In the absence of any cogent industry policy, designed to create and sustain jobs in the cities where the unemployment and underemployment is found, Australia is in danger of becoming a mendicant state unable to implement long-term plans designed for the benefit of its own population.

    At the moment, this country appears to be a haven for foreign capital, a free-for-all where overseas money men make our decisions for us.” – “Holden’s problem was not the taxpayer subsidies” – SMH, Ian Porter – February 18, 2020.

    Not saying I agree or disagree with Porter about Holden, but I do agree about Australian mining in its current form. The real benefits to Australia seem debatable to say the least. Most of the benefits seem to accrue to the resource importers and to the transnational corporations.

  6. Ikonoclast I am not your numbers man but I too have been fascinated why our political masters are so keen to give away our natural resources to overseas companies for so little. Like zero taxes, resource royalty holidays, tax subsidies on diesel fuel and on and on. In 2018 we became the world’s greatest exporter of LNG along with Qatar, except Qatar’s nationally owned gas companies earn them $60 billion a year while I believe we earn an estimated $600 million a year in taxes from our o/S owned companies. Why do we so easily accept this situation? The Whitlam government tried to develop a national gas industry via Rex Connors national gas pipeline but both he and Whitlam were destroyed. Next we saw Rudd’s mining tax and we know what happened there, we had a low taxed mining boom that led to a high dollar that all but destroyed our manufacturing industries such as Holden and Ford that employed thousands of people. Mining employs relatively few people so why do our pollies keep pushing this?

  7. Well to answer my own question, it’s about political donations, hopes of post political jobs for ex ministers.

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