Australia's real energy problem

12th September 2014

You would think that the Federal Government would take any opportunity to expand (for employment, environmental and health reasons) the percentage of renewables rather than to try to scale it back but as Giles Parkinson writes in Renew Economy (9/8/14) there's an absurdity:

"To read mainstream media and listen to the political rhetoric, you’d think Australia’s energy problems could be summed up like this: the country is about to install unnecessary and costly renewables in an already oversupplied market. So, it should stop doing so. At least, that’s how the fossil fuel industry and the federal government have been spinning the story.

"But the problem is actually the other way around: Australia has too many dirty coal-fired power stations that have operated way beyond their working life, and their owners are refusing to shut them down. That is the assessment, not of environmental groups (although they would no doubt agree), but of the largest privately-owned power generation company in the country, AGL Energy. '(About) 75 per cent of the existing thermal plant has passed its useful life', AGL Energy economistssay in a new research paper. But they note that the generator owners do not want to shut them down because it is too expensive to do so. “At present, there is around 7 GW of surplus capacity in the NEM. The system is relying upon ageing baseload coal-fired generation'. ...

"The maths are simple: It doesn’t cost the coal plant owner much to put the coal-fired power station into mothballs, but it does cost a lot to close it down permanently – somewhere in the region of $100 million to $300 million. ...

"Greens leader Christine Milne said: 'Minister Macfarlane has said that there is a surplus of 9000 megawatts in the system and that’s why he needs to reduce renewable energy. He wants to make existing coal more viable. Wrong, Minister. This is the best opportunity we have to phase down coal fired power, without running any risk to energy security. The polluting fossil fuel sector just isn’t viable in the age of cheap, sustainable renewables, but the Abbott government is doing everything it can to protect the profits of the old industry, at the expense of new jobs in solar and wind. The Renewable Energy Target needs to stay as it is. There was a cross-party agreement not to touch it until 2020 so the sector could have investor confidence'."

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