'Reliable' renewables roulette

If the National Energy 'Guarantee' (NE'G') includes AEMO's advice on new capacity investment, it may simply guarantee conversion of the Government's 'trilemma' into a trifecta. More expensive and less reliable power is likely to follow. We won't make a jot of difference to global emissions, either.

Hitherto we've ruled out any alternatives to renewables.

What alternatives are there? This is worth an opinion piece in its own right. A smorgasbord follows:

• Retain fossil fuel base-load, at least until technology makes equally-reliable alternatives cheaper.
• Duplicate market penetration of 'new' renewables with base-load power (less costly reliability?).Move to nuclear power: small modular reactors ASAP, and larger-scale versions later.
• Look at natural hydro: probably works best only in Tasmania (barring drought there).
• In selected regions, look at geothermal power? Learn lessons from other countries where it works.
• To make any of these investment-attractive, eliminate all renewables subsidies (technology-neutrality).

When trying to mix renewables with reliability, politicians face biased incentives. The consequences of not supplying enough capacity for a given reliability standard emerge after the event. They get mixed up with (and are blamed on) all sorts of other influences. The fall-out can be very bad (eg, SA and Olympic Dam in 2016). We all end up paying, but don't know precisely why. The costs of insuring, up-front, against breaches of any given reliability standard are reasonably clear, can be very expensive for 'new' renewables, and, especially before the events occur, aren't welcomed by those required to pay the insurance 'premiums'.

Politicians, focussed on cutting power costs right now, might gamble on under-insuring for reliability targets.

The 'reliable' renewables roulette wheel is spinning as its share of power generation increases. Keep an eye out for an effective downgrading of the current NEM reliability standard if any NE'G' gets the COAG nod. Don't hold your breath for significant or sustained affordability improvements, either.