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The head of Australia's Clean Energy Council, Kane Thornton, has highlighted the need for the country's politicians to focus on transitioning to a low-carbon, renewable energy future at the lowest possible cost, and building policies which will support the phase-out of coal and the growth of investment in renewable energy generation.

Clean Power

Australian Energy “Political Circus” Could Cost Jobs & Energy Security, According To CEC

The head of Australia’s Clean Energy Council, Kane Thornton, has highlighted the need for the country’s politicians to focus on transitioning to a low-carbon, renewable energy future at the lowest possible cost, and building policies which will support the phase-out of coal and the growth of investment in renewable energy generation.

The head of Australia’s Clean Energy Council, Kane Thornton, has highlighted the need for the country’s politicians to focus on transitioning to a low-carbon, renewable energy future at the lowest possible cost, and building policies which will support the phase-out of coal and the growth of investment in renewable energy generation.

The “political circus” that is the current Australian discussion on the future of the country’s energy security has been an ongoing issue for several years, ever since then-Prime Minister Tony Abbott began his assault on anything not-coal and scrapped the carbon tax back in 2014. Since then investment in Australia’s renewable energy industry has fluctuated like a drunk chicken trying to cross the road.

Of late, current Prime Minister Malcolm Turnbull has been making the case for ultra-supercritical coal plants — supposedly clean coal power plants which are nevertheless still much dirtier and still tremendously more expensive than renewable energy.

Speaking last week, Kane Thornton, the Chief Executive of Australia’s Clean Energy Council, warned that if the “political circus” surrounding the country’s energy future continues, jobs and energy security are going to be put at ever-increasing risk.

“The impending closure of these old coal power plants is a reality, irrespective of our need to reduce emissions and meet our international commitments under the Paris climate agreement,” Mr. Thornton said. “The biggest threat to our energy security is if we can’t deliver new investment in energy generation.”

Hazelwood coal power plant

Mr. Thornton is referring to the fact that Australia’s fleet of coal-power plants are ageing, and by virtue of the simple fact that each plant has a natural lifespan, and many coal plants are now coming to an end of their lifespan. Specifically, the Hazelwood coal plant in the southern state of Victoria is set to close next month.

However, the Prime Minister’s premise — backed, unsurprisingly, by the coal industry itself — that building more coal power plants — be they supercritical or otherwise — is inherently faulty.

“According to Bloomberg New Energy Finance, renewable energy is now the cheapest type of new power generation that it is possible to build today,” continued Mr. Thornton. “This will only continue into the future as the cost of renewable energy continues to fall and new coal-fired power remains expensive, risky and unbankable for investors, and gas generation continues to rise in cost because it is struggling to secure adequate gas supplies at an affordable price.”

Mr. Thornton was referring to a new report published by Bloomberg New Energy Finance earlier this month, which not only showed that renewable energy technologies like solar and wind were the cheapest new sources of electricity available to Australia, but that supercritical coal power plants are absurdly expensive. Specifically, Bloomberg reported that the Levelized Cost of Energy (LCoE) of new ultra-supercritical coal-fired power in Australia sits at AUD$134-$203/MWh. This ranks well above the current LCoE for new build wind (AUD$61-$118/MWh), solar (AUD$78-$140/MWh), and combined-cycle gas (AUD$74-$90/MWh).

The Clean Energy Council itself also reported earlier this month that 2017 is lining up to be a “huge year” for renewable energy technology development, with up to 2,250 megawatts worth of new development in various stages of construction and development. This development is also likely to result in up to $5.1 billion in investments, and 3,000 direct jobs from 2017 construction projects alone.

“Any approach which favours coal or gas over renewable energy will lock in higher overall costs for consumers for decades to come,” Mr Thornton added. “To support the transition and modernisation of our energy system we need policies that both support a sensible phase-out of coal and bring in new renewable energy generation at the lowest possible cost.”

Unfortunately, despite all of this, Australia’s politicians are still caught up in a circus act of trying to prove coal’s ability to remain a part of Australia’s energy mix — according to Scott Morrison, Treasurer, because coal was such a huge part of what has created Australia’s economic bounty, it therefore must be a huge part of the country’s future. Anyone who disagrees with him, he labels “coalophobic” — like the true wordsmith that he is.

Taking a page out of US President Donald Trump’s playbook, Australia’s ruling party politicians have taken to simply ignoring the evidence and opinions of others. As reported by the ABC last week, the chief executive of one of Australia’s largest electricity generators, CS Energy, said that “It would surprise me greatly if there were ever any more coal-fired technology built in Australia.” Further, CEO Martin Moore explained that his company had “no intention” of building new coal plants. Unfortunately, the same report quoted a representative from the Minerals Council of Australia who said that “I think we need to treat some of that commentary with a grain of salt,” adding that “The bottom line is that investment banks like Morgan Stanley have highlighted the benefits of this technology and said it’s cost effective.”

“They’re being built all around Asia … so I think it’s logical provided our policy settings are sensible that this will play a part in the future.”

That last quote is specifically absurd, considering the economic benefits Australia has over their Asian neighbors, and the ability to use a strong economy to bolster investment and development of renewable energy technologies — benefits that are not as readily available in emerging economies such as those throughout Asia who are currently resorting to coal-fired technology.

Wind farm in South Australia

More and more once-traditional energy companies are turning their attention to renewable energy, and making their concerns heard. Catherine Tanna, managing director of Energy Australia, another of Australia’s largest operators of coal-fired power stations, said recently that the solution to incoming high electricity prices is to plan a transition to renewable energy. In an odd twist, however, Tanna incorrectly explained that “As at today, newer forms of energy are more expensive than some of the older forms of energy, but over the next 20 years those older, cheaper forms of energy are going to retire” — so close: newer forms of energy are already comparable, and as shown above, cheaper than older forms of energy — although, she was right to say that “over the next 20 years those older, cheaper forms of energy are going to retire,” because they are, and they are also going to remain the more expensive option. Despite her faulty facts, however, Tanna still advocated moving to renewable energy technologies.

What must happen, then, to change things? Tanna explains:

“The single-biggest barrier to investment is uncertainty around policy settings,” she said. “So when there is a lot of rhetoric about policy settings changing, no matter who it comes from, or a lot of flip-flopping about the fiscal assumptions it makes it very, very difficult for anyone to make a commitment to new projects.”

Strong policies will give firm direction and confidence to investors and developers. Kane Thornton believes that there will need to be some sort of policy support for renewable energy to ensure that it succeeds, and effectively phases out coal — a form of energy which has received billions in subsidies, was developed based on taxpayer funds, and now just runs without stopping.

“A variety of policy options exist that will achieve this effectively, and it is important not to become obsessed with one particular method and lose sight of the end goal. It is disappointing to see political parties rule out some of these policy options without fully considering their merits,” Mr. Thornton said.

“Without clear federal energy and climate policy beyond 2020, the level of new investment in clean energy will likely fall and be reliant on state and territory policies. Our preference has always been for strong and stable national energy policy, but there is a policy void beyond 2020.”

 
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