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Policy foundations for affordable, reliable, lower-emissions power, absent NE'G' nonsense

By Geoff Carmody - posted Monday, 24 September 2018

The National Energy 'Guarantee' (NE'G') is officially dead – for now anyway. Good riddance. However, Labor hints it might exhume bits of the corpse should it win the next Federal Election.

Can we restore the affordable, reliable power we once had in a NE'G'-free world? What's the best way to reduce anthropogenic global emissions, if these are a problem?

Affordability and reliability


We want neither cheap, unreliable power, nor expensive, reliable power. We need the cheapest possible power that's 'on tap' when required. Technology drives the best options, not policy ideology.

Optimising affordability and reliability means giving technology its voice. Today, policy gags technology:

  • It bans some power sources here (eg, nuclear power, some gas extraction).
  • It squeezes out or shuts down existing base-load and back-up fossil fuel power sources.
  • It protects and heavily subsidises renewable energy (solar, wind, manufactured batteries).

Why can't unprotected, unsubsidised, renewables (solar, wind) provide cheap, reliable power? Because their power supply is intermittent, seasonal, uncertain, and low energy-density. It's not 'on tap' 24/7.

Consider just one intermittency example.

Official figures for SA for 2016-17 show solar power generated just under 15% of installed capacity as power supplied. The corresponding wind 'efficiency' figure was 29%.


If 100 units of generation capacity deliver only 15 (solar) or 29 (wind) units of actual power, what generation capacity do we need to deliver 100 units of power? And how much storage capacity to time-shift power from when generated to when needed do we need on top of that? For solar, we need generation capacity of (100 divided by 15), plus battery storage capacity of (85 divided by 15) for a total of (185 divided by 15), or 12.33 times base-load capacity. For wind, we need (100 divided by 29) generation capacity plus (71 divided by 29) battery storage capacity for a total of (171 divided by 29) or 5.90 times base-load capacity.

So we need between 6 and 12 times base-load capacity to deliver the same power supply.

This is just for average annual intermittency. It's worse after allowing for solar and wind seasonality, uncertainty and low energy density.

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This is a policy summary of a longer article by Geoff Carmody on 17 August 2018 reviewing the many deficiencies of renewable energy policies, titled "Does renewable energy sustain Australian agriculture, or drive it offshore?". The longer paper can be downloaded by clicking here.

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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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