A Fresh Approach to Energy Policy
Originally published March 13th in Spectator Australia
Current energy policy in Australia is based on the arguments that greenhouse-gas emissions should be sharply reduced and that, as part of this, renewable energy should replace coal and gas for electricity generation.
Both these arguments should be challenged and a fresh approach taken to Australian energy policy.
Scientists agree that greenhouse-gas emissions contribute to global warming, but are they the major driver of warming?
This issue is hotly contested, with natural climate variations an important issue also to be considered.
Natural variations in warming and cooling are clear from the past few thousand years and are almost certainly still with us today. Although not fully understood, they are probably solar in origin.
For example, there were global warming and cooling periods in Roman times (around 250 BC to 400 AD) and in Medieval times (around 950 to 1250 AD).
In Roman and Medieval times, global temperatures increased (before subsequently falling) as much as they have in our time – a little over 1-degree centigrade.
Following 1300 AD, global temperatures declined overall until the 1800s, but with cycles of increases and decreases superimposed on the trend.
Greenhouse-gas emissions, which only started growing after 1850, are unrelated to these past temperature changes.
Today, it is arguable that natural variations in warming and cooling have a much larger impact on global temperatures than emissions.
If so, reducing emissions will make little difference to global temperatures in the 21st century.
The government’s relentless pursuit of lower emissions is inconsistent with these yet-to-be-resolved issues.
Current energy policy (Net Zero emissions by 2050) entails that we eventually rely entirely on renewable energy – notably wind and solar farms – for electricity.
However, this will require battery support that, for the country as a whole or even one state, will be impossibly expensive.
To illustrate, the large Tesla battery installed in South Australia in 2017 at a cost of $100 million would supply electricity for that state for less than half-an-hour.
On this basis, to supply Australia with electricity solely from batteries for, say, a week would require batteries costing over $500 billion.
This is nearly as much as total federal government expenditure last financial year.
And even a week would be less than that required to cover periods of weak or non-existent wind and solar energy.
Furthermore, wind and solar energy are proving expensive, with electricity prices in Australia for consumers having tripled since 2000, moving from among the lowest in the world to among the highest.
Reasons for this include:
- The high transmission costs typically associated with renewables.
- The need to backup renewables with coal or gas plants operating at below capacity and thus with high unit costs.
- The costs required to maintain frequency stability in the grid.
Renewable energy would be a niche industry, but for federal and state government subsidies of $6-8 billion per year. These subsidies will only increase if renewable energy becomes increasingly important.
It is not a good way forward.
Here is a proposed change in direction.
First, phase out all subsidies for renewable energy over (say) three years. Adopt the principle that the energy industry should operate on a competitive basis, with no particular technology favoured by government.
Second, use the resulting savings to establish two new major research organisations in Australia.
One of these will look into new technology for generating reliable, low-cost electricity (The Electricity Forum). This means technology to compete successfully with coal.
Such technology will not only be valuable in itself, but will also meet much better than renewables the concerns of those worried about fossil fuels.
The other organisation will be devoted to furthering our understanding of climate science (The Climate Forum). This means addressing the question: to what extent should we be concerned by greenhouse-gas emissions?
Both organisations have the potential to become world leaders in their field. This is a much more exciting use of $6-8 billion per year than building ever more wind and solar farms.
Third, remove all impediments to new coal and gas developments in Australia (apart from those arising from the normal planning process).
Fourth, open-up discussion of nuclear power in Australia, possibly through a royal commission on the issue. Should sufficient community agreement on nuclear power be achieved, plan for the first commercial nuclear plant to be developed in the 2030s.
Possible location: the Latrobe Valley in Victoria, which has the skilled staff and transmission infrastructure to support an economically-efficient nuclear power plant.
And which is being decimated by the Labor-induced closure and planned closures of four major coal-fired power plants: Hazelwood (2017), Yallourn (2028) and Loy Yang A and Loy Yang B (early 2030s).
Adoption of these proposals will not end the ‘climate wars’, as they will be strongly opposed by some, including the growing number of organisations and individuals with a strong vested interest in renewable energy.
But the proposals offer Australia the long-term possibility of reliable, low-cost electricity and other forms of energy. And the possibility of hosting two world-leading research organisations in the climate and energy fields.
Current policy does not offer these possibilities.
Brian Wawn is a director of Energy Bureau, a non-profit organisation committed to stimulating discussion in Australia of climate and related-energy issues.