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Coal has a role yet in keeping economies as healthy as possible

By Gary Johns - posted Friday, 24 February 2017


There is a war over energy policy in Australia. A Pyrrhic victory is in sight, whoever wins. The Coali­tion, slowly waking from its torpor, has vowed to stop renewable energy at 23.5 per cent and open the way to keep coal as a source of baseload energy. Labor backs 50 per cent renewable energy and wants to exclude coal.

As aluminium smelters close and coal and some gas generators close, as we slide to a post-industrial economy, we may well ask: What was it for?

The abatement strategy - carbon dioxide emission pricing and, by proxy, renewable targets - has helped destroy our cheap energy. We cannot get it back. Once coal was demonised, and we began ­exporting gas as LNG (the alternative fuel for electricity generation) and locking up new sources of gas, our energy costs were sure to rise.

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Martin Moore, chief executive of Queensland CS Energy, has volunteered that his company had "no intention of building any coal-fired power plants" and, moreover, "it would surprise me greatly if there was any more coal-fired technology built in Australia" (ABC's 7.30, February 16).

He could not say otherwise: a Queensland Labor government committed to a 50 per cent renewable target owns CS Energy. The political risk of federal Labor's 50 per cent scheme (and Victoria's) has undermined fossil fuel generator investment in the ­National Electricity Market.

Making a late stand for coal will cost, but it may be the price of security. Nor can we exult in renewables. They are causing real damage to the economy.

"We know for a fact that reliance on renewable energy is not what's causing these blackouts." This was Charlie Pickering's invitation to Kitty Flanagan to make fun of 90,000 houses blacked out in South Australia (ABC's The Weekly, February 15).

Pickering and Flanagan selected the first report of the Australian Energy Market Operator (October 5, 2016), which blamed the outage on the destruction of power lines. The pair did not disclose the later report (October 19), which showed nine of the 13 wind farms did "not ride through the six voltage disturbances".

Sorry, Charlie, we know for a fact that renewable energy is a cause of the blackouts.

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The delicious irony is that the renewable policies will destroy the value of existing renewables. Victoria's state-based renewable ­energy target, for example, will force a significant amount of ­additional renewables into the market in a short period, which will suppress wholesale prices on windy and sunny days.

The same winds blow across Victoria and South Australia, so existing wind farms in Victoria tend to generate at the same time. Not good for business.

Having buggered the energy market, the Coalition and Labor will return to their corners to fight over the carcass.

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This article was first published in The Australian.



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About the Author

Gary Johns is a fellow of the Australian Institute for Progress and an adjunct professor at QUT.

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