Climate of Confusion

By Keith Orchison

By coincidence I have come across the new “Climate of the Nation” report from the strongly green-leaning Climate Institute on the same day I have been reading the latest Essential Report polling and just after looking at a pre-dawn snapshot of east coast market capacity on a pretty standard winter’s day.

Taking the latter first, at 6.30am today 97.6 per cent of the New South Wales load was being met by black coal generation as the State’s population was getting up and its substantial factory sector was gearing up. If you take NSW, Victoria and Queensland together – they represent 90 per cent of the east coast market – at this point 88.9 per cent of the three-State load was being met by brown and black coal generation with wind power providing 0.4 per cent and solar (naturally as the sun wasn’t yet up) 0.04 per cent.

(Eight hours later, I see, at 2.30pm, black coal generation is still bearing 89.7 per cent of NSW load and coal is accounting for almost 82 per cent of required capacity in the three largest States of the market – with hydro power providing 7.5 per cent and wind/solar 4.3 per cent.)

The question that comes to my mind when I look at data like this is what would be required to replace even half this coal power (let alone all of it) with mostly wind power and solar PVs? What would the total system cost be in a set-up where supply is assured and how would this translate in to retail bills?

Despite all the stuff being thrown around in the public arena at present, this is still a substantially unanswered question. Lots of people have opinions, assertions abound but we still lack an independent, widely-accepted-as-credible modeling effort communicated in language the Averages can understand – and this despite the South Australia nuclear royal commission report telling us 13 months ago that “identifying whether a particular generation portfolio will deliver electricity at the lowest possible cost requires an analysis of the future cost of the system as a whole.”

Indeed, one can read the Finkel report just released and see in it validation of the earlier royal commission declaration that “for those planning a future electricity system (and the market in which it will operate), the relevant issue is total systems cost, accounting for the cost of generation, connection, inter- and intra-regional expansion of transmission and distribution networks, and grid support costs.”

But, without this being available in straightforward terms, how can the community at large and the body politic in particular (especially the CoAG Energy Council and the Turnbull cabinet’s energy committee) come to a landing on a policy that will take us at least to 2030?

Modelling done for the Finkel task force, which inevitably is being challenged from left and right, tells us that its preferred approach (via a clean energy target, a topic already of furious political debate) would see a 2030 NEM generation mix that was 53 per cent coal-fired, five per cent reliant on gas, eight per cent on hydro power and 33 per cent on variable renewable generation (the other one per cent green power would be biomass).

Would this outcome satisfy the community as represented in the latest Essential Report poll (and which, of course, includes West Australian respondents and not just those living on the east coast, still less just those in the above-mentioned trio of States that are home to most consumers, household and residential and where most of the impact will fall)?

The Essential poll, taken 11 days after release of the Finkel report, sees 64 per cent of respondents supporting a preference for “more investment in renewable sources” (meaning what exactly?) – and, I can’t resist pointing out, 18 per cent saying “don’t know,” the same number “preferring coal-fired power.”

This poll also returns a preference, responding to the notion of a CET, by 41 per cent of respondents for a measure in which end-user price rises are limited to five per cent, falling to 21 per cent if the rise is 10 per cent and just eight per cent if it is 20 per cent.

Bear in mind in this context that the Finkel report doesn’t suggest prices will drop under what it recommends but that they will be lower than they are likely to be if we continuing muddling along.

Now the “Climate of the Nation” report runs to 48 pages and you really need to read it all to get a picture of what it conveys – you can find it at www.climateinstitute.org.au.

Of course, the interesting (to me) information is well-padded with pejorative promotion of acceptance of climate change but this is only to be expected – green advocates are permanently in a fret that, as is acknowledged in the report, the climate issue is not top of mind for a community plagued by “hip pocket” problems. This bent shouldn’t detract from the value of learning what views about today’s policy game flow from such polling and from focus groups because this is the sort of feedback through their own party research that is influencing our political leaders.

What the Climate Institute asserts is that 96 per cent of Australians “want our primary source of energy” – they are talking about electric power and that’s just 35 per cent of energy used in this country – to come from renewables. What this actually means, we are then told, is that 58 per cent of respondents want their power based on renewables supported by storage and 38 per cent want renewables “supported by fossil fuels.”

The soundbite the institute wants to sell us is that “the public almost universally endorses transitioning our energy system to renewables.” Why do peas and thimbles spring to my mind when I see stuff presented in this way?

The institute goes on to explain in the report text: concern that (an energy system dominated by renewables) “should be properly managed to minimize disruption” lies behind the 38 per cent believing fossil fuels should have a role “in the meantime.”

Which makes me wonder how the respondents and the broad community would react to explanations in plain language from a credible source about the realistic power supply options the east coast has for the foreseeable period from now to around 2030?

By the way, I am interested to see buried in this report that nine per cent of those canvassed think nuclear energy should be Australia’s main source of power. The boosters of nukes among my friends and acquaintances believe this number is higher and would be much more if the legal anathema of the technology was removed and it could be discussed on its merits.

Be that as it may, what remains lacking as the Turnbull government, then CoAG leaders and, sooner or later, the federal parliament grapple with next steps in energy and climate policy – I see the Grattan Institute’s Tony Wood reminding us in an op-ed today that secure and reliable power at affordable prices can’t happen without a credible, national climate change approach – is a community understanding of realistic electricity supply options presented in a form they can actually comprehend.

Until this happens, community perceptions will remain shrouded in a fog of confusion. There is no prospect I can see, under present circumstances, of it lifting any time soon.

Source: http://www.coolibahconsulting.com.au/TiP/2017/06/27/climate-of-confusion/