How the Far Right has hijacked energy policy

By Giles Parkinson, www.reneweconomy.com.au

If you ever wondered just how comprehensively the Far Right has hijacked the Coalition’s energy policy, it’s worth reading the speech by NSW energy minister Don Harwin we reported on last week.

It’s a speech that might once have been made by prime minister Malcolm Turnbull – and in fact large parts of it, particularly the focus on energy efficiency and demand management, are exactly the sort of things Turnbull did talk about.

That was, however, before he was prime minister and became master of all he surveyed, apart from his own climate and energy policies.

The thrust of Harwin’s speech was this: the era of baseload coal is coming to an end, fossil fuel plants are not a guarantee of reliability, wind and solar offer the cheapest forms of new generation, we need to look at storage, and we must not lose sight of the long-term climate targets.

Turnbull is not allowed to say any of these things, for fear of upsetting the Far Right. The sight of the craven apology offered by front bencher and government whip Christopher Pyne last weekend for daring to suggest that the moderates had some influence over policy matters was testimony to that.

And so too have been the efforts of federal energy minister Josh Frydenberg to placate the Far Right by suggesting that each individual new wind and solar farm should carry an equal amount of storage for its rated capacity – megawatt-hour per megawatt – effectively trying to turn the new technology into the same monoliths that exist now in the current energy market model which is clearly past its use by date.

Frydenberg said this to the party room and then repeated it when addressing an energy conference in Melbourne a week later. He made clear it was not about energy security, but ‘levelling the playing field’ between lower cost renewable and expensive and polluting coal.

It’s a classic case of overkill – of politics over policy, and of ideology over technology.

It is true that the Far Right in Australia have not had the same powers as their colleagues now have in the US, where climate science, environmental protections, renewable policies, and emission controls are being systematically trashed and dismantled by the Trump administration.

But they have given it a good shot. While in power, the Abbott government abolished the carbon price, slashed the renewable energy target and other institutions. Since losing power, they have still succeeded in freezing their policy, or politics, in time.

The whole debate around the potentially ground-breaking Finkel Review boiled down to whether it was good for coal generators or not.

The climate science was discarded, and then the fossil fuel industry and the conservatives began to question the very idea that wind and solar were cheaper than new coal. Fake news made front page headlines in the Murdoch media as the incumbents fought back.

Harwin’s speech puts a nonsense to this, and highlights the fact that to be a member of a conservative government does not necessarily equate to the need to deny basic facts.

It is worth repeating Harwin’s major themes, because like the $565 million investment in Nectar Farms, the creation of 1,300 jobs and the shift of one of Australia’s biggest vegetable growing operations to 100 per cent renewables, it did not get a single mention in the mainstream media.

It seems there are some things MsM doesn’t want you to know. (Although we should belatedly note that the Guardian did finally write a story on the Harwin speech on Tuesday, nearly a week after it was delivered).

The major themes of the speech were in direct opposition to the positions and beliefs held by the Far Right.

The era of baseload power is coming to an end: This is not a new concept – the head of the UK National Grid, the head of China State grid, even Australia’s AGL and the BNEF and goodness knows how many others have acknowledged it. ‘Our old paradigm was based upon a notion of a baseload of energy demand being supplied by large thermal generators, and then a peak. Over the coming decades, this will change.’

Wind and solar are cheaper than coal. Full stop. Harwin says wind and solar are even cheaper than modelled by the Finkel Review, and noted the history of underestimating cost reductions, particularly from the IEA. Not only are wind and solar cheaper than new coal, Harwin suggests they will soon be cheaper than existing coal plants. ’We could see a situation in the 2030’s where existing coal plants struggle to compete during the day because new solar is cheaper.’ This is in direct contrast to the Coalition view that somehow new coal is cheaper, an argument vigorously promoted by the Minerals Council of Australia and the Murdoch media.

Coal and gas plants do not equate to reliability: Harwin was appointed just a week before the heatwave in NSW, and describes the ‘white knuckle ride’ as authorities tried to keep the lights on as coal and gas-fired power plants tripped across the state. In NSW, the grid lost more than 2GW of capacity as coal plants succumbed to the heat and gas generators failed. Renewables, and in particular solar, performed as expected and kept the lights on. ’Clean energy performed as forecast. Thermal generation did not,’ Harwin said.

Energy storage will fill in the gaps between renewables: Harwin came out in support of one of the few positives to have emerged from the federal Coalition government, when glimpses of the ‘old Malcolm’ were briefly visible: Snowy Hydro 2.0, and the need for flexible rather than baseload generation, this time through pumped hydro. It is not yet clear if this is a go-er financially, but the implications are important if it is. Harwin says it will be a ‘game-changer’ and support 5GW of new wind and solar in the state – which makes a nonsense of the Frydenberg push for each new wind and solar plant to match each megawatt of rated capacity with a megawatt-hour of storage.

New rules are needed: Harwin supported new rules and mechanisms to level the playing field for new technologies. It is not enough that wind, solar and storage offer cheaper alternatives to coal and gas if the rules are fixed in favour of the incumbents. The most important of these is the 30-minute settlement, which most people agree allows the big generators to manipulate prices, and does not encourage battery storage. ’It (the 30-minute settlement) is a classic example of a rule made to suit existing technologies. I have supported change so we can benefit from new technologies such as batteries.’ Without reform, Harwin noted, ‘the National Electricity Market could start to resemble Voltaire’s view on the Holy Roman Empire – which he quipped was neither Holy, nor Roman, nor an Empire.’

We have to take climate change seriously. ‘We must end the self-indulgent climate culture war,’ Harwin says. The Paris climate deal has to be taken into its main target, not the initial down-payment made by Abbott. NSW has a goal of net zero emissions by 2050, and first off the rank will be electricity. The Finkel Review, prepared to mollify the Far Right, had a net zero emissions electricity sector target of 2070. ‘Investors know that emissions are expected to go down in the future’ Harwin said. ‘And it’s not ideological. Whatever your view on the science, carbon is risk, that’s how investors see it, and this is an exercise of risk management.’

We have to be ambitious with renewables: Harwin spoke of a vision of having two renewable energy spines running across the state: the first running from west to east – South Australia to Snowy – unlocking Riverina solar and Western Division solar and wind, along with a huge balancing battery in Snowy. The second would run from the Hunter to Queensland, tapping wind in the tablelands and solar from the Central West, and use the Hunter’s existing infrastructure for a balancing battery and bioenergy hub.

Such vision is anathema to the Far Right, who are still pushing for new coal generators in Queensland and Victoria, with the loud support and editorials from conservative commentators, and the Murdoch media.

Harwin is not the only one to lament the influence of the far Right. Labor’s energy spokesman Mark Butler makes mention of it in his book Climate Wars, describing in detail how the Far Right has skewered climate policies and politics over the last decade.

Butler described the campaign against the ‘carbon tax’ by media commentator Alan Jones, who was ‘joined by other right-wing commentators and News Limited papers in a campaign of vitriol, the likes of which none of us had ever seen in Australia.’ But which continues to this day.

Ross Garnaut, the economist whose work was central to much of the policy designs, including the carbon price that was in place for two years, and the associated institutions that remain (such as the CEFC), said in a speech this week that it was only a small minority.

‘(Some people) have ideological objections to modern atmospheric physics, or ideological or vested interests in old ways of supplying energy,’ Garnaut said in a speech to the Melbourne Energy Institute this week.

‘There is no way of building a bridge across to the ideological and vested interests. But people of such mind represent a small proportion of the Australian community, and it must be possible to establish effective policy stability without them.’

And Ian Hunter, the climate change minister in the South Australian Labor government, had this to say in a speech late last month in response to Finkel and the reaction to it from the federal Coalition:

Following the release of the Finkel review, the federal Liberals spent the whole week debating climate change science rather than seriously looking at the challenges facing our country in terms of energy policy.

‘We are still struggling with federal Liberals like Tony Abbott, the former Liberal leader, who said that climate change was crap, who led his troops into battle once again in the party room, discrediting and debating the merits of climate science all over again.

‘The science is very clear. To achieve the ambitious targets set out in the Paris Agreement of limiting global warming to 2o or less means decarbonising the economy and it means more clean renewable energy. It is clear from across the country that there is a set of ageing energy infrastructure which has to be replaced.’

To be sure, the ideological interests are not just the province of the federal Coalition.

At state level, we saw an unbelievable push-back against renewable energy by the Northern Territory government; the former WA LNP government vigorously opposed any new wind and solar development; the state opposition in Queensland promised to put the wagons in motion for a new coal generator within 100 days of winning election; and the Victoria and South Australia Coalition parties remained implacably opposed to their state government’s ambitious renewable energy and climate targets.

Several senior Coalition operators who might have guided the party to more science-based and economically realistic policies have lamented their impossible position.

‘You have no idea what we have to deal with (in the party room),’ is a common refrain.

Oh, but we can imagine. At least now we know what might be said, assuming they had the courage of their convictions, as Harwin seems to do. And, the ideologues should note this point that Harwin made: ‘The coal sector should accept the Finkel framework as potentially the best deal that coal will get.’