Coal-ition in delusional denial on electricity

by Crispin Hull on February 17, 2017

IN THE past fortnight I have been reminded of Comical Ali, Iraq’s former information minister Mohammad Saeed al-Sahhaf , whose broadcasts and media conferences denied the presence of US troops and tanks in Baghdad even as they could be seen behind him. The delusional in denial. What reminded me of him, of course, were all the climate change deniers spouting their nonsense while high-temperature records were broken and bushfires raged across the country.

The US tanks are in Baghdad. The climate has already changed.

But still they want to open new coal mines and build new coal-fired power stations.

How do you explain it? Perhaps we are looking at these people the wrong way. We assume that they do not think climate change is happening, therefore it is fine to continue to mine and burn coal. But it seems to me that it is the other way around. They first want to continue to make money by mining and burning coal (or receive donations from those who do) and therefore they must deny that climate change is happening, even in the face of overwhelming evidence and the appalling economic and health costs.

We have seen it before. People wanting to make money by selling tobacco have to deny that it causes lung cancer, even in the face of overwhelming evidence.

Unfortunately, therefore, it does not matter if, climate change aside, there are other reasons for stopping the mining and burning of coal. Those too, will be ignored.

This is what we have seen recently. There are solid reasons based on economics and energy technology for stopping the mining and burning of coal for electricity generation. But this government is ignoring the obvious.

Let’s look at technology. We have an existing technology that seems to work quite well. Let’s call it coal, or taxis, or hotels, or vinyl records, or CDs or books. Then something comes along which delivers to consumers what they want more efficiently and cheaper.

Usually governments play a role. They have regulatory regimes, taxes and other mechanisms which usually help the status quo against the newcomer, at least for a while. But invariably the new technology wins. Horse and buggy gives way to car. CDs, tapes and vinyl give way to MP3. Coal power stations give way to solar, wind and batteries.

So it is going to happen, and these things have a history of happening very rapidly. Battery technology will become cheaper and more effective. And governments need to deal with it.

But the Coalition (let’s call it the Coal-ition) has gone backwards, starting in late 2016 when it ruled out a carbon-intensity trading scheme for electricity generation, against the advice of the Chief Scientist, just because then Coal-ition Senator Cory Bernardi said it was “economic suicide”. In fact, not implementing it would be economic suicide.

Cow-towing to Bernardi has proven to be futile, now he has left the Coal-ition.

Compare this to the good sense put out by then Environment Minister Greg Hunt in 2015 when he said, “Australia has the highest rate of household solar in the world. This makes Australia an ideal place to develop storage and battery technology.”

In fact, Australia has 1.6 million Australian households with rooftop solar already installed and most of them say they intend to install battery storage.

They are saying this for several reasons. Electricity is very expensive in Australia and looks like it is going to get more expensive. Many have a moral conviction that we should reduce carbon emissions. Further, like all humans they like getting something for free.

Once the capital equipment is installed, the sun and wind are free. So it is quite galling to see the paltry amounts electricity generators pay for household-generated surplus electricity, at least outside the ACT.

How much better to store that excess and use it later, perhaps even to charge the electric car and cut fuel bills.

The market and technology are all pointing one direction and it is not down a publicly subsidised railway line to coal mine or to a coal-fired power station.

But if you start from a position “I want coal” (or to use a US analogy “I want a gun”) no rational economic or health-and-safety argument has a chance.

And that is where we are with electricity generation in Australia at present – as mad and irrational as Americans with their guns.

This Government is allowing Australia to fall behind on technology and exposing us to trade sanctions if we do not meet our Paris targets.

There is a further point about the Government not embracing and encouraging battery technology. People will go it alone if necessary as the financial case for household batteries gets inevitably stronger. If that happens government will lose what should become a very important grid-security mechanism.

With government regulation and incentives you can ensure that household battery systems are open to the grid, not just the excess off the roof after the batteries are fully charged, but a full-scale system of households selling some or all of the power in their batteries at times of peak demand.

In the long run that is going to be a far cheaper and easier way of easing the strain on the grid than using coal.

Ultimately, real energy security can only come through renewables. Financiers and business realise this. This week they joined environmentalists in crying out for sensible energy policies. Even without those policies, financiers are not going to put long-term money into a technology that will be priced out of the market.

So the question for our politicians is not, childlike, to go vermillion in the face (Barnaby Joyce) or, stuntlike, to bring a lump of coal into the parliamentary chamber (Scott Morrison). But to deal with the market. Coalition Governments are supposed to be masters of the market. But on renewable energy they are dunces.

Footnote: Our rooftop solar system is now four years old and has generated 25,000 kilowatt hours of electricity worth about $7000. The system cost $9000. We thought it would take nine years to pay for itself, allowing for forgone interest and lower prices for power sent back to the grid. But with the rising cost of electricity it now looks like it will be less than six years.
CRISPIN HULL
This column first appeared in The Canberra Times and Fairfax Media on 18 February 2017.

{ 6 comments… read them below or add one }

Kevin Rattigan 02.18.17 at 9:14 am

Excellent piece, Crispin.

peter 02.18.17 at 2:18 pm

Coal, Sugar etc are both bad, but government turns a blind eye, perhaps a Federal ICAC could shed some light……

But both climate change and sugar are too important to be left to governments. Like Crispin I have a solar setup + $3,500 of lithium battery. I am not connected to grid. Everyone who can afford solar should do it, do not wait on government. The same for sugar. Stop buying it, tell others to stop drinking it.

If you can’t afford solar, then pay a bit extra by using green energy and turn off stuff to reduce your bill.

Spaceship earth is dying.

Steve Flora 02.18.17 at 2:25 pm

Crispin ….
Good column on renewables and the LNP in CT this morning … oh, and above. Big thumbs up.

One comment: I think a lot of the angst involved with the interlacing of renewables and the grid could be dealt with IF the tariff given for Home produced kWh’s was no less than 1:1 …. that would stop people going to battery route to a great extent I believe.

tony magrathea 02.19.17 at 9:11 am

no twitter? trogodyte

The problem is the word has dropped a syllable
No longer:

co
a
lish
un

its just:

coal
ish
un

Peter Lynch 02.19.17 at 3:21 pm

George Christensen is pondering whether to stay within the tent or leave. But if he thinks about it, he will opt to stay. If he stays, he is in a safe seat with a 7.6 percent margin and has considerable say in government decision-making. No-one from One Nation or anywhere else is likely to unseat him even if his government loses the next election. If he leaves, he risks this security. He also loses the power to influence Coalition policy and also loses the financial and other support of a big party machine. Consequently, even if the Coalition did a back-flip and decided to support an emissions intensity trading scheme, Turnbull would not need to worry too much about Christensen defecting. It is true that if he does join Bernardi or One Nation, the Coalition would lose its majority and could risk defeat. But Christensen must know that the alternative government, Labor, requiring the support of the Greens, would certainly also back an EI scheme and a lot of other policies that George hates even more. Now that Bernardi is gone, Turnbull could call Christensen’s bluff. Why doesn’t he? He may be worried that his party’s right wing will vote to replace him as leader. But there is no obvious replacement that the they could accept or that could gain the electorate’s support. Returning to Abbott would be a disaster for the party and Morrison would be worse. I think the real reason Turnbull has failed to address the clean energy challenge is because he really doesn’t care about the danger of climate change at all. From his perspective, it is perfectly rational and makes eminently good sense to avoid any costly action on climate change. The world has never before faced an existential crisis requiring costly, coordinated action by every nation like the climate change threat we now face. There is a very good chance the world will fail this test and runaway global warming will ensue. When it does, with temperatures on the 50s and no power, only the rich in their enclaves will be able to keep the air-conditioning running powered by generators or alternatively to retreat to any remaining safe places on the globe. Rich people like Turnbull are better off concentrating on preserving their wealth than taking actions which will require heavy taxes on the wealthy with no guarantee that the problem can be solved anyway. The two world wars of the 20th Century destroyed much of the wealth of the world’s richest people. A war on climate change would do the same. With a catastrophe looming, the sensible thing for a rich man to do is to protect your wealth and amass even more wealth if he can.

Lauchlan McIntosh 02.22.17 at 7:02 pm

Another wonderful rant Crispin.
What was the total and ongoing subsidy for your so called renewable system. Do you expect me to pick up the capital for replacement of the inverters and panels in time? I don’t doubt we need to have a mix of energy resources, but it’s time for a sensible debate from everyone.
Coal, gas, hydro, nuclear, solar, wind ( not just from you) and storage are all useful, as is a national distribution approach for individuals and manufacturing . Let’s hope your panels are contributing to keeping the wheels of industry turning.
Cheers
Cheers

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