29 July 2015
by Giles Parkinson

Back of the envelope calculations in Coalition campaign against renewables, climate action

ex Senator Ron Boswell

The Abbott government has resorted to simply making up numbers in its desperate attempts to maintain a scare campaign against proposals to lift Australia’s renewable energy target and take bolder action on climate change.

On Monday, Prime Minister Tony Abbott claimed Labor’s 50 per cent renewable energy target would cost $60 billion – a number an advisor later admitted had been found in The Australian, which in turn had quoted consultants ACIL Allen, who in turn later admitted it was a “back of the envelope” calculation.

And not a very good one at that. For a start, it assumed that the renewable energy target would be made up only of wind turbines, the sort that have traumatised the PM on his cycling holidays, and Treasurer Joe Hockey on his way to Canberra.

And the ACIL Allen number – apart from being a guess at capital costs rather than consumers costs – was based on old assumptions on the cost of wind energy, and ignored the prospects of solar, which will halve in price over the next five years, and more beyond; and ignored the likely cost savings to consumers from energy efficiency and other technologies such as rooftop solar and battery storage.

On ABC’s Q&A on Monday night, the number inventions got a lot worse – almost as bad as Alan Jones’ performance on the same program a week before – when Queensland National Party ex-Senator Ron Boswell made the ridiculous claim that electricity prices would jump 50 per cent because of the 50 per cent renewable energy target.

Of course, Boswell was unable to explain how. The Coalition’s own review of the renewables target suggested the higher the target, the cheaper it gets for electricity consumers – at least up to the 30 per cent target it modelled. And by the time 2030 comes around, when coal-fired generators are retiring and new capacity is needed, wind and solar will offer by far the cheapest option, easily beating coal and gas.

By then it may be that subsidies will not be needed. And right now, the biggest pressure on consumers in Queensland is the rise in wholesale prices caused by the increased cost of gas. Which explains why so many of Boswell’s former voters are embracing solar (it’s renewable and it’s cheaper), and why the state is seen as such a prospective market for battery storage.

Indeed, some analysts predict at least 30,000MW of rooftop solar across the nation’s households and businesses by 2030, accounting for a lot of Labor’s target. And that will R-E-D-U-C-E (like Abbott, we are spelling it out for Alan Jones’ listeners) the costs of electricity. Origin Energy, for instance, is offering to install rooftop solar, fully paid, fully maintained, and sell you the output for 11c/kWh – little more than one third the cost of electricity from the grid.

The problem with the current debate around climate and clean energy is that the Coalition gets away with this sort nonsense all the time. Even on Q&A, stand-in host Virginia Trioli did not just fail to challenge Boswell on those remarks, she actually reinforced the errors.

“Ron Boswell is correct when he talks about the price impost,” Trioli said, after Boswell renewed his attack on the cost of renewables. No, he is not. Trioli then proceeded to get the mechanism of the RET completely back to front, suggesting lower wholesale prices in the short term before rising costs to consumers. The opposite is true, and the overall impact – as the Warburton Review found – was for a dampening of prices.

If the 50 per cent claim from Boswell were true, then the reaction from consumers would be a no-brainer – add more solar and battery storage and possibly even leave the grid. The economics on that are already finely balanced as it is, because so much of everyone’s bill goes to support ageing, superfluous and, in some cases, redundant infrastructure.

(Memo Boswell, Hawaii has prices approaching the level he is predicting for Australia, which is why the legislature just voted a mandatory 100 per cent renewable energy target by 2050. They are going forwards, not backwards)

Why the huge gap in knowledge? The answer is simple. Our politicians are lazy and they don’t even read.

Boswell admitted as much, when he criticised the Pope for intervening in the climate debate.

Had he read any of Pope Francis’ encyclical, he was asked by Brisbane Catholic archbishop Mark Coleridge. No, said Boswell, “I didn’t read it”. Not a single page. He’d only ever seen a snippet of a report on TV. The same could be said of so many of his colleagues, and even their advisors.

And when they do read, they find their information from doubtful sources, often obscure web-sites their advisors find on the internet, or from fossil fuel industry talking points – like Boswell’s suggestion that the Pope’s Encyclical would deprive people in India of electricity – and sometimes in the mainstream media.

Graham Lloyd, The Australian’s environmental editor who has campaigned so heavily against wind energy, was at it again on the weekend, in a lengthy piece criticising European subsidies.

It was full of the usual misconceptions and misrepresentations. Then he came up with this pearler, complaining about the “intermittency” of renewables.

“The proof of intermittency in Australia,” Lloyd wrote, “is the extent to which South Australia draws on brown-coal fired generators in Victoria to secure its electricity supply during times of low wind.”

Well, that’s the point of the grid. When one state is short of something, it imports electricity from elsewhere. On any given day, the stuff is flowing about the National Electricity Market in all sorts of directions – across Bass Strait, from Victoria to South Australia and back, and between NSW and Victoria and NSW and Queensland.

But here’s the interesting bit. South Australia – before it began its remarkable transformation into one of the world’s leading markets in wind and solar – drew much more heavily from Victorian brown coal generators when it had virtually no wind and solar than it does now with 40 per cent wind and solar.

These graphs illustrate this. In 2006, when the wind industry started to grow, imports from Victoria (the red line) averaged more than twice what they did in the next five years, when the wind industry grew to nearly 30 per cent of demand.

This graph (still above) from Hugh Saddler of Pitt & Sherry shows it is only since the closure of South Australia’s Playford B brown coal generator, and the ramping down of the Northern brown coal generator, that the imports have started to rise again from their historic lows. But they are still below their levels in 2006, and do not come even close to offsetting the loss of output from the local generators.

Now gas generation is also falling, which is good news for South Australia, given the soaring cost of that commodity, the reason that South Australia’s wholesale prices were usually higher than other states. The decline in gas is more likely to have been affected by the huge influence of rooftop solar, which is removing much of the peaks.

Here’s another graph (below), from NEM-Watch’s Paul McArdle. Its shows, in more detail, the pattern of imports (purple line) from the creation of the NEM, back in 1999.

South Australia at that time was hugely reliant on brown coal – about half of it from its own generation and half from imports from Victoria. The total share of coal generation (local and imported) has nearly halved since then. That is the share eaten up by the 40 per cent contribution of wind and rooftop solar.

Once local storage facilities are introduced, a measure that is being pursued by the grid operator at utility-scale, and by homes and businesses behind the meter (as is eagerly encouraged by the South Australian government and the City of Adelaide), then imports from Victoria will be needed even less. (By the way, those imports from Victoria could just as easily be from the wind farms in the west of the state as the coal generators in the east).

Lloyd’s claims don’t even pass the most basic fact check. And neither do many of the other claims in The Australian.

On Tuesday, The Australian rolled out Gary Johns, the former ALP politician whose opinions makes Abbott look like a centrist, to repeat another collection of myths about wind energy.

One of them, circulating in other right-wing newspapers such as the UK’s Daily Mail, focused on how wind energy used “electricity” – gasp – for some of the functions of the turbine. This, said Johns, was proof that they were unsustainable without fossil fuels.

Ketan Joshi, an analyst with Infigen Energy, debunked this particular myth in January, producing this graph, to the right, which shows how much electricity is produced, and how much is consumed, by a typical wind turbine over a year. (This one from Lake Bonney in 2014).

Further information, including a month-by-month breakdown, and data showing how much more electricity is consumed as a percentage of output by fossil fuel generators (up to 20 times more) can be found in his explainer here.

Johns went on: “That most modern of new economy inventions, the computing cloud, requires massive amounts of electricity.

Yep, and how are the global corporate giants – Google, Apple and Hewlett Packard – powering their energy-hungry data centres that power these computing clouds? With not just 50 per cent renewables, but with 100 per cent renewables. Yes, 100 per cent renewables. Why? Because it is C-H-E-A-P-E-R.

But as we saw with Boswell, peddling myths is easily done and easily repeated, reinforcing misinformation and prejudice against technologies that threaten the business models of some energy incumbents.

How does this happen? Well, Boswell belled the cat himself. You just don’t do any research, and you rely on old prejudices, and taking points from vested interests. What we would want from the ABC – and the media in general – is someone with the presence of mind to challenge those prejudices, not reinforce them.