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

By Geoff Carmody - posted Thursday, 27 April 2017

Government policies forcing increased reliance on renewable energy were a response to political concerns about global warming. Renewable Energy Targets (RETs) and their ilk were intended to cut greenhouse gas emissions by cutting fossil fuel sources of energy.

What's the problem? We have one policy objective (cutting emissions) and a few policy levers to do that.

Wrong. While suppressed for a time, politically, delivering lower emissions was always subject to constraints and trade-offs. These included cheap and reliable energy – both central to our industry competitiveness and consumer benefits. (Reliability is reflected in the NEM reliability 'standard' of only 0.002% outages on average across the grid – which, however, excludes a bunch of 'excuses', which qualify its effective significance to the punter. This objective was set in 1998 and is retained today.)


Nasty trade-off chickens have come home to roost. Today, cheap and reliable energy are in the limelight – because we haven't got them. This is just where many politicians and their urgers don't want them to be. Energy market transparency, beloved of reformers and punters, is uncomfortable for those with a more exclusive focus on emissions ends regardless of means, and no interest at all in the notion of scarcity.

Today, we have a raging debate about whether renewable energy causes electricity grid volatility, higher prices and blackouts. Labor and the Greens deny it. They have faith in renewables. The Coalition isn't blameless: it also has a (less ambitious) RET policy, 'tho its 'broad church' is internally divided on this.

At all levels, most all politicians are accomplices before, during, and after the facts (blackouts and soaring energy prices). Unreliability and cost mud sticks more or less to all of them. (Let's not talk about gas supply in this article: it's embarrassing and worth another piece in its own right.)

Why do we have a problem?

Blame physics – and politicians' Canute-like attempts to deny it.

Alone, renewables wreck reliability.


Install as many wind-farms or solar panels as you like. Technology determines the maximum potential electricity supply capacity. Actual supply depends on the weather (and transmission losses). Too windy, or not windy enough, and wind farms deliver nothing. At night, or on dark days, ditto for solar panels.

Renewables electricity supply is volatile, from pretty much zero to some technical maximum. Some estimates suggest SA wind farms average about one-third of their rated maximum capacity over a year.

Electricity demand is much less volatile: high on hot or cold days, but with sizeable base-load demand.

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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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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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