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Why won't politicians stop lying about 'reliable renewables'?

By Geoff Carmody - posted Thursday, 27 April 2017


Grids like the NEM need electricity demand and supply to be in balance at all times (and at a set frequency). This was complex when supply was from fossil fuels. Renewable energy makes it worse.

Well, d'oh! Reliability demands renewables capacity be matched by back-up capacity that – unlike the weather – we control. This includes batteries, gas, coal, interconnectors – especially whatever is cheapest.

The policy message is clear.

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Don't invest in renewables at all without investing in the back-up capacity needed for reliability.

This raises big questions. What's the cost of back-up capacity? Who pays?

Could new back-up capacity double the cost of (subsidised/forced) renewables investment? How much would, say, expansion of 'pumped hydro' cost? How long will back-up capacity take to bring on?

Who pays? Should investors in renewables be required to pay for matching back-up ensuring grid reliability? Should governments supporting renewable investment pay? What will their taxpayers think of that?

So 'reliable renewables' cost a lot more than renewables without adequate back-up. Either costs: the first in dollars, the second in blackouts.

And whoever pays for back-up capacity up-front, the cost will be passed on mainly to Australian consumers. Reliability means bigger electricity bills. Sound familiar? It should.

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Want some evidence?

South Australia is good place for wind farms. It's windy. Sometimes, SA generates so much wind power it exports it to Victoria. At other times, with no wind, it imports power from Victoria via the Heywood interconnector.

On low-wind days, SA is keeping its lights on by burning high-emissions Victorian brown coal via the Heywood interconnector. On very windy days, it exports wind power to Victoria, which surely should get the low emissions credit for using it, although SA claims this for itself.

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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