Power Prices Will Not Fall Under Green Regime By James Reed
As in the UK, as reported at the blog by our London correspondent, Richard Miller, the Green ideology has made energy much more expensive in Australia, and it seems that it will take years for electricity prices to go down, meaning, they will never go down to pre-pandemic levels, even in energy-rich Australia. Labor, pursuing the same climate change illusion as the Greens, wants to triple the amount of renewable energy flowing into the grid by 2030, but energy leaders have said that Australia will not be able to build enough renewable energy to replace coal. Alinta chief executive Jeff Dimery has said: “Snowy 2.0 is delayed, VNI West is coming in 2031, three years after Yallourn comes out. The whole transition is not lining up. We are so far off track.”
Off track indeed. Moving away from coal, rather than developing technologies to make coal use cleaner, has been a fatal mistake, that will lead to Australia facing the severe energy crisis of Europe, while communist china is free to build two coal power stations a week.
“Electricity prices will take years to return to pre-pandemic levels and Labor’s pledge to triple the amount of renewable energy in the grid by 2030 is at risk as the nation is failing to build enough green power, top business leaders have warned.
As Anthony Albanese promises both a net-zero economy by 2050 and a reduction in power bills by the next election, leading energy companies say the country is not ready for renewable energy droughts and Energy Minister Chris Bowen concedes he is “not satisfied” with the pace of progress on clean energy projects.
Alinta chief executive Jeff Dimery, head of the country’s fourth largest energy retailer, said he could not see a way of building enough renewable energy sources to compensate for the loss of coal, which still generates about two-thirds of Australia’s electricity.
“We’ve had one battery reach a final investment decision in the last quarter – one battery,” Mr Dimery said.
“Snowy 2.0 is delayed, VNI West is coming in 2031, three years after Yallourn comes out. The whole transition is not lining up. We are so far off track.
“This is not a complaint, it’s fact. We’re not looking to apportion blame. Really it’s the opposite. We have to come together on the solutions quickly.”
Industry executives said they expected wholesale prices to remain high over the next few years.
The warning comes as the cost of producing electricity in NSW hit the fifth highest level for May on record, despite a fall in the cost of coal and gas globally.
An increase in wholesale prices during the month will not immediately flow through to customer bills, but they will be a major contributor in calculations about power bill rises in 2024.
And any failure to build enough replacement energy supplies will threaten Labor’s promise to slash $275 from household electricity bills by 2025.
Mr Bowen said large-scale wind and solar farm investment commitments grew by nearly 50 per cent in 2022 but he added he was not satisfied with the pace of progress to hit clean-energy targets by the end of this decade.
“I’m pleased with what we’ve done in the first 12 months, but I am far from satisfied,” the minister said. “There is so much more to do and we are just getting started.”
Paul Broad, who ran Snowy Hydro until resigning shortly after Labor won office last year, said the challenge of the huge pumped hydro expansion under construction could not be overstated, adding that was just a tiny fraction of new green-energy supplies needed.
“We need a Snowy every year, but it’s extremely difficult,” Mr Broad said. “We are being lied to that this is achievable; the transition will take 80 years.”
Australia already faces a new cost-of-living shock, with electricity prices set to soar by up to 29 per cent in a fresh hit for small business. A steep bill hike will land from July 1, despite the government’s efforts to calm markets through a series of emergency interventions.
Transgrid is building $10bn of transmission projects to deliver renewable energy to households and said that, while they remained on track, challenges were mounting for bringing enough new power supply on board in time.
“It feels like we are on track with the building of renewables,” said Brett Redman, Transgrid’s chief executive and the former boss of AGL Energy. “The second part, however, the building of firming – be it batteries or gas – that is more of a challenge.”
Executives said there had been a wave of small-scale projects but to compensate for the loss of coal Australia would have to deliver upon its offshore wind plan.
States, led by Victoria, have placed offshore wind at the heart of plans to make the transition from coal. Offshore wind will be large-scale projects, often comparable to Australia’s largest coal power stations when operating at full capacity.
But renewable energy droughts – when the sun is not shining or the wind is not blowing – will mean Australia will need a significant expansion in storage capacity to smooth the volatility.
NSW in May was forced to delay its timetable for two critical renewable energy zones, the mainstay of its plan to make the transition to renewable energy. Sources said the delay was driven by failures to consult with landowners for permission to develop, and Mr Redman said Australia would need to be mindful of complexities.
“Generally big complex projects can take a little longer than you expect,” he said.
Australia’s coal power plants are ageing and many are approaching the end of their operational lifespans.
Dylan McConnell, a senior research associate at the University of NSW, said he expected wholesale volatility to continue to plague the market.
“We have so many projects that are delayed and will take longer to be delivered to market, and consequently we are going to have plenty of volatility,” Mr McConnell said. “This could be seen particularly in summer when it is likely we have an El Nino.”
El Nino weather patterns will typically bring hotter, drier conditions across the east coast, increasing demand from households for electricity to cool their homes.
Under mounting environmental and social pressure, Australia is shifting away from its dependency on coal, a transition that will determine whether it can meet its carbon emissions reduction targets but will also reshape the country’s $2 trillion economy.
The transition is broadly supported by voters who elected the federal Labor government year ago on a platform to hasten the move to renewables.
The surge in NSW wholesale prices during April was attributed to the closure of AGL Energy’s last unit at its Liddell coal-power station and scheduled maintenance of other generators ahead of the increased winter demand.
The Australian Energy Market Operator said last week it believed the power grid was well placed to cope with winter demand, as it cited recent maintenance of coal power stations that it said should boost the reliability.
Any further rise in power bills would intensify political pressure on the federal government.
Treasurer Jim Chalmers in his second budget last month said the government would offer energy bill relief to some 5 million homes.
The Coalition has intensified pressure on Labor amid signs of voter anger over the cost-of-living crunch.
Labor insists its legislated target of having 82 per cent of the country’s electricity needs met by renewable energy has seen a wave of developments begin.
Work has accelerated on building transmission lines that authorities believe will allow for zero-emissions energy to move across the country.
Australia has also seen a spate of batteries developed but large-scale storage developments have been hit by a spate of delays.”
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