Print the Legend

Peter Smith16 Aug, 2023 4 Min Read
But don't believe a word they say about cheap "renewables."

Something called The Commonwealth Scientific and Industrial Research Organisation (CSIRO) has been instrumental in many scientific and technological developments, particularly in the field of Australian agriculture. Sadly, it has succumbed to “climate change” cultism. All government institutions right across the Western world have succumbed to one extent or another. However, scientists, being more narrowly focused than most, are particularly susceptible to blinkering up and slotting into the paradigm du jour. And they come with the gravitas of being scientists; experts, who must be believed.

Each year in partnership with the Australian Energy Market Operator , the CSIRO produces a so-called “GenCost” study of electricity costs by source. And, no prizes for guessing. In the latest study, issued in July, the "levelised cost of electricity" -- LCOE, in industry jargon -- meant to put different sources of generation onto a common basis, comes out least for wind and solar. Hence, climate change minister Chris Bowen is steeled in his oft-repeated claim that “renewables are the cheapest form of new energy.” For Bowen and his ilk in the Western world, when there is a conflict between facts on the ground and a stylised pro-renewables study telling you what you want to hear, pick the study every time; facts be damned.

The latest GenCost study has come under scrutiny. Has this thrown light onto its innards? Not much. Those compiling these studies bring opaqueness to an art form. A multiplicity of climate-related government bodies regularly issue reports based on unintelligible black-box modelling wrapped in pages of dense text, charts and appendices. Pick your country. They’re all doing it.

Fooled 'em again!

I reckon that these lengthy complex reports, all pointing to the attainability of a wonderful green future, are deliberately designed to snow potential skeptics. There I go with a conspiracy theory. Nevertheless, let’s remind ourselves, that doesn’t mean it isn’t true.

I’ll focus on the GenCost calculation for various forms of power. These are calculated for the year 2030 onwards. A bit unusual, but from there it gets curiouser and curiouser. Prospective costs up to 2030 are treated as sunk. Not only that but the next seven years up to 2030 are assumed to go without a hitch; that is, if renewable energy is your passion. It is assumed that Renewal Energy Zones will be up and running, that transmission lines to connect them will have been built, that the pumped-hydro white elephant Snowy 2.0 will be operating, as will two planned “gas-fired peaking plants at Kurri Kurri and Illawarra,” and throw in an additional “2GW of at least 8 hours duration storage in New South Wales,” and so on into assumption land, where everything seemingly runs smoothly to plan.

Never mind that no plan, no matter how comforting on paper, ever survives first contact with reality.

Paul Graham is chief energy economist at CSIRO and one of the authors of the GenCost report. This is part of a comment of his in response to an op-ed article questioning the report. Notice the seamless transition from 50 to 90 percent share of renewables in electricity generation. Not to mention the starting point of 50 percent in 2030, requiring an approximate doubling of wind and solar power in the next seven years.

The report provides... calculations of levelised cost of electricity data for new build generation capacity... This analysis calculates the cost of moving from the expected 50 per cent variable renewable share in 2030 to 60 per cent, 70 per cent, 80 per cent and 90 per cent. All existing generation, storage and transmission capacity up to 2030 is treated as sunk costs since they are not relevant to new-build costs in that year. When making these calculations, the LCOE of moving to the variable renewable shares of between 60 and 90 per cent is lower than the LCOE of any other technology.

Consider, every dollar spent up to 2030, positioning the electricity system to handle renewables, is regarded as a bygone and, to boot, all practical difficulties in the way are miraculously overcome. Hence a clean and facilitating slate awaits wind turbines and solar panels in the year of our Lord 2030. And, on that basis, the GenCost study finds that wind and solar are cheaper than the alternatives. Even then, the analysis is seriously wayward, but that’s for another day.

In their ivory towers, “experts” come up with theoretical models bearing no relationship to the real world. They are akin to the black and white inhabitants of the 1998 film, Pleasantville. If they simply recognised that government projects seldom come in remotely on schedule or on budget, they might start glimpsing things as they really are.

Take one example. Building 10,000 thousand of kilometres of high voltage transmission lines to connect wind and solar assemblages in disparate Renewable Energy Zones is not nearly going to plan. Scarcity of skilled manpower and rising costs, and opposition from landowners and environmentalists, means that very little has been built. And the answer to that, apparently, is to plug its timely completion into the computer model. Viola! While we are at it, says the theoreticians, assume that 50 percent of electricity will be delivered by renewables in 2030, as Paul Graham above “expects.” But it won’t.

The more renewable-dependent the system, the more it must be backed up by peaking plants. Fifty percent? Is that the average? Assume so. Well, bank on close to zero percent of wind and sun for lengthy periods. How does that compute? It may not be pleasant, but it's the truth.

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.


See All

One comment on “Print the Legend”

  1. All that good Farmland and Wildlife Corridors covered with ugly Wind Turbines and Solar Panels Thanks for Nothing Eco-Freaks

Leave a Reply

Your email address will not be published. Required fields are marked *