Dirty, Sooty, Black, and Indispensable

Peter Smith01 Oct, 2021 4 Min Read
Still down there Down Under.

Australia like other countries individually, and collectively on the international stage, has seen a proliferation of government and non-government organisations dedicated to saving us from climate Armageddon. To name some under the auspices of just the federal government: the Clean Energy Regulator, the Clean Energy Financial Corporation, the Climate Change Authority, the Australian Energy Regulator, the Australian Energy Market Commission, the Australian Energy Market Operator and the Energy Security Board. What these organisations and many others do is hard for me to say. I do read their blurbs but for the most part their roles soon slip from my mind. My brain is not set up to manage the verbiage – to which I will return.

Mind you, a plethora of organisations provides opportunities for those who might otherwise struggle to find gainful employment. Easily alarmed? Please apply here. Being suffused with emotion when interviewed is probably favoured. Looking at clips of Greta Thunberg beforehand might be advisable.

I’m too cynical. As from a stopped clock, sometimes a glimmer of sense emerges. And, when you think about it, having the moniker of Energy Security Board (ESB) suggests that it is the most likely of climate organisations to employ one or two fifth columnists; i.e., people interested in keeping the lights on. And, as you would expect, any such treachery earns the ire of true believers.

How many Australians does it take to screw up an electric lightbulb?

The ESB is charged with telling a council of federal and state energy minsters (total nine) how to move to renewables while keeping the power affordable and flowing. Of course, it is an impossible task which is the reason its reports are so prolix and vague. How to wrestle with the irresolvable?

Answer, write many thousands of meaningless words, gobbledegook, complex convoluted sentences. Here are two at random from many hundreds. “Reforms are underway to refine frequency control arrangements, addressing the need for enhanced arrangements for primary frequency control and a new market for fast frequency response. [And] The ESB recommends the detailed design for a capacity mechanism that ‘unbundles’ the value for capacity from energy be developed over the next 12-18 months.”

I counted 664 pages of ESB reports since March 2019, including the three-part “final” report provided to the council of energy ministers in August this year. Alas, by the way, describing the three-part report as final is a wind-up. Much more to come. And a difficulty for the ESB is that it might have to get precise.

The ESB is chaired by Kerry Schott. It must be difficult for her, armed as she is with a doctorate from Oxford in pure mathematics. Some intellectual airhead would have been better suited to the job. He or she could have more easily glossed over the need for coal. Not Schott. She knows that coal power has to ramp up when the wind lulls and the sun dims; and that this is a problem for the economics of running coal-power stations. Her solution: coal-power stations might have to be paid for their capacity to deliver power not just for power they deliver. Otherwise, no coal power and inevitable blackouts; at least until the dawning of la-la land, when renewables come of age.

Imagine the angst this solution - so-called “coalkeeper” subsidies – has caused true believers. See, for example, here, here and here. Subsidising coal! Heresy afoot. But real, not imaginary, life gave Schott no option. Coal is being driven out of business by the economics of providing power at a profitable rate only when the heavily subsidised wind turbines stop turning. And stop turning they often do.

My friend Rafe Champion, who keeps watch on these things, reported another failure at breakfast time on Sunday September 5 in the states of South Australia (SA) and Victoria (Vic). Wind was delivering only 25 percent of its capacity in SA and 30 percent in Vic. I mention this instance because wind delivers much less power than this at times, and demand on Sunday mornings is relatively subdued. Yet, both SA and Vic needed to import power from other states – sourced from hydro and coal. What about when coal is gone?

Don't worry, bro, it happens to everybody.

Reports from the U.K. and Europe in the first half of September tell the same tale. “Energy prices have spiked to a record high in Britain after calm weather shut down the country’s wind turbines… Wholesale power costs surged to more than four times their normal level, forcing officials to fire up coal-based plants to handle demand.” [And] “Energy prices in Europe hit records as the wind stops blowing.”

Those in the ESB and in like organisations in every western country know that wind won’t work. What to do? Ms Schott and her ilk can’t say it can’t be done or let’s go nuclear. They’d lose their gigs and be replaced with others of more compliant dispositions. So, in addition to being wordy, they separate the future into the short and longer term. In the short term; thank goodness for coal. In the longer term, technology turns up Micawberesque to save the day. To wit:

A successful transition would see the right mix of resources, on the demand side and supply side, incentivised into the energy market which maintains reliability while minimising consumer costs. That mix will likely include new and evolved technologies which may require refinements to market arrangements.

In the meantime, coal power is being driven out of any future, and our enjoyment of a ready and affordable supply of electricity, the indispensable staff of modern life, is being thrown to the tender mercies of the fickle forces of nature.

After a career in economics, banking and payment-systems management, Peter Smith now blogs on the topics of the day. He writes for Quadrant, Australia’s leading conservative online site and magazine. He has written Bad Economics, of which, he notes, there is much.

MORE ARTICLES

See All

Leave a Reply

Your email address will not be published.

twitterfacebook-official