We should be wary of simple declarations about the increasingly rapid transformation of the electricity grid.
The government has been given a sharp reminder of this after leaning too heavily on pre-election modelling that suggested its policies to boost renewable energy could lead to a $275 cut in bills by 2025. You never know when a Vladimir Putin-shaped villain might disrupt international fossil fuel markets, wreck your assumptions and leave you accused of breaking an election pledge.
Peter Dutton doesn’t have this excuse. The most generous thing that can be said about his foray into the debate over electricity last week is that he might want to get a broader range of advice.
Giving his budget reply speech, the opposition leader said the Coalition wanted more renewable energy, but it just wasn’t possible yet, and it was a mistake for the government to allow ageing and expensive fossil fuel power to be phased out now.
More specifically: “The technology doesn’t yet exist at the scale that is needed to store renewable energy for electricity to be reliable at night, or during peak periods. That is just the scientific reality.”
To put it mildly, this is not the consensus opinion of experts in the field.
David Osmond, a Canberra-based engineer with the global energy developer Windlab, is among those with a markedly different, evidence-based take. For more than a year, he has been posting weekly results from a live simulation tracking what would happen in Australia’s main electricity grid if it relied primarily on renewable energy.
Using a live stream of electricity data from Opennem, he adjusted inputs to see what would happen if there was enough wind and solar energy to supply 60% and 45% of demand respectively. He added enough short-term storage, likely to be in the form of batteries, to supply average demand for five hours.
The results are encouraging. They suggest close to 100% of demand – 98.9% over a 61-week period – could be delivered by solar and wind backed by existing hydro power and the five hours of storage. Nearly 90% of demand was met directly by renewable energy and 10% had to pass through storage. Achieving it would require a major expansion of transmission, as proposed by Labor under its Rewiring the Nation policy.
The 1.1% shortfall mostly came when it was less sunny in late autumn and winter. Other technology would be needed to fill that hole. Osmond believes for now that would probably be fast-starting gas-fired power plants that are already connected to the grid, don’t run most of the time and can be called on quickly. There was nothing to suggest new ones were needed.
It means a small amount of fossil fuel generation remaining in the grid, but less gas would be burned than now and, crucially, no coal power would be required. In the longer term, the backup could possibly come from cleaner sources – probably pumped hydro, maybe hydrogen or biofuels. None of these necessarily make economic sense the way solar and wind do – it is hard to justify a plant that would hardly ever be used – but could be needed in the context of the grid. An alternative would be to over-build solar and wind so there was always enough capacity online.
By Osmond’s admission, this is a simplified model that assumes, for example, that electricity transmission links between regions can be delivered efficiently. No one should assume that the transition will be straightforward. The point is the technology already exists, and is comparatively cheap. From there it is a matter of design, engineering and, importantly, cost management.
The last bit necessary to ensure the lights stay on is likely to make up a disproportionate amount of the overall cost. But the evidence says a renewable energy-dominated system is comfortably the cheapest form of generation if done right.
Plenty of other studies have reached similar conclusions. The big one is the Australian Energy Market Operator’s integrated system plan, a roadmap for the optimal future grid that was released in June. It backed an accelerated build of available technology to reach 83% of renewable generation by 2030, 96% by 2040 and 98% by 2050 as the best, most likely option.
Presented with this evidence, Dutton and the Coalition continue to opt for none of the above.
They appear to have joined a small band, including many in the usual right-wing media echo chambers, convinced that the evidence presented is wrong. Dutton was mostly dismissive of batteries in his budget reply, and implied small modular nuclear reactors (SMRs) – a commercially unproven technology that has been repeatedly delayed and more expensive than promised – could be the answer that ensures cheap energy.
No evidence has been presented to suggest SMRs are needed to meet demand in Australia, given the country’s wealth of renewable options. Never mind that no independent evidence has been offered to suggest it could compete on price.
If SMRs prove economically viable and safe elsewhere there is nothing to stop Australia considering their use, perhaps at remote off-grid industrial sites. It will be a good thing if they are viable, given not every country has ample alternatives to fossil fuels. But they are not designed to do the job needed here – to turn on occasionally and fill gaps in a system running on cheaper, renewable energy.
Rather than an endlessly reheated debate about nuclear – the Coalition is holding another review, so expect plenty more of this – Australians would be better served if its politicians had a close look at a major report last week by the International Energy Agency.
For the first time, the IEA forecast that fossil fuel use across the globe would peak in the next few years as Russia’s invasion of Ukraine accelerated a shift to clean fuels. It found existing policies would soon lead to coal use falling and demand for gas would plateau by the end of the decade. The declines will be much faster if, as expected, climate action continues to ramp up.
Australia has one of the world’s largest fossil fuel export industries. It is supporting massive developments expected to last until late into the century as though nothing much is going to change.
The significant climate impact of these developments is still routinely overlooked by the major parties on the grounds the gas and coal are burned overseas, and therefore somehow not Australia’s problem. But what about the economic and social impact of their potentially rapid decline?
Now there’s an issue truly worthy of more parliamentary debate and action.
