Malcolm Turnbull specialises in scapegoating and threatening, while Josh Frydenberg sits there looking vacant, as well he might, until it’s his turn.
Danny Price in an article well worth reading, says Politicians have destroyed the trust needed to make the NEG work.
Kane Thornton CEO of the Clean Energy Council says NEG car is worth buying, even if tyres need pumping up, the flat tyre to him being the 26% emissions reduction target, which will be met by work under way before the NEG starts. If you want to use that analogy, the NEG is like a car without an engine, because it does no work.
David Leitch has two compelling articles – Energy (In)security Board and its modelling spreadsheet and Know your NEM: The ESB is becoming a laughing stock. If, however, you want to read just one article, read Simon Holmes à Court’s NEG promises death of wind and solar, and even battery storage.
Statistician George Box is famous for the aphorism “all models are wrong, but some are useful”.
Nobody expects the modelling to play out exactly, he says, but we would expect the modelling to make a clear case for the NEG.
It doesn’t. In fact I get the impression that the modelling had a different purpose – pretending that a NEG that does no work will lower household electricity bills by $550 pa. Others, including the above-mentioned plus Salim Mazouz, Frank Jotzo, Hugh Saddler, and earlier Bruce Mountain, can’t see how it will. Turnbull is saying that the states will be to blame if they reject the NEG and power bills stay high, and will be punished by angry consumers.
According to Holmes à Court here’s what the Energy Security Board modeller Acil-Allen says will happen as a result of the NEG:
We need to understand that AEMO has a very different view of what will happen with out the NEG. Follow the blue line on this graph from Mazouz, Jotzo, and Saddler:
This is how the ESB see our electricity system ‘transitioning’ to renewable energy over the next decade:
Mazouz, Jotzo, and Saddler derive an instructive graph from ESB modelling:
By contrast this is how Bloomberg saw it late last year:
Holmes à Court:
The most surprising outcome is the predicted death of the large-scale renewable industry — the modelling forecasts only 14MW of large scale wind and solar over 9 years. (For context, Australia is installing about that much every week of both wind and solar… ).
You need a magnifying glass to see it. 14MW is equivalent to four current model wind turbines.
This is how all this astonishing inactivity leaves emissions reduction:
Note the bar on the right of economy-wide reductions left unaddressed.
Somehow, magically, power bills will plummet. Remember that electricity generation represents only about a quarter of the bill. Several experienced commentators have come up with the same answer – the cost of power generation would need to fall by around 74%:
Mazouz, Jotzo, and Saddler struggle to find explanations, including the cost of money. Policy uncertainty is thought to evoke a premium of around 3% in the interest charged. However, they say uncertainty will not go away with this version of the NEG, Essentially it is too ridiculous to be stable.
I would ask, why do you need to borrow money when you are not doing anything? ESB even sees storage as essentially not happening apart from Snowy 2.0:
Holmes à Court:
- Surprisingly the modelling assumes that there is currently no storage in Australia. In this alternate universe, Australia’s three pumped hydro plants don’t exist — Tumut 3 (600MW), Shoalhaven (240MW and Wivenhoe (480MW).
There are no new mega-batteries, of the likes of Hornsdale (100MW) or Dalrympe (30MW).
The plethora of planned pumped hydro projects aren’t going to happen — Kidston, Goat Hill, Cultana, Shoalhaven Stage 2, Tasmania’s Battery of a nation — except for the 2GW Snowy 2.0 project. Apparently household batteries won’t materialise, despite thousands already in use and tens of thousands planned in South Australia’s Virtual Power Plant alone.
The only answer could be that renewables built under the RET between now and 2020 must be doing the work, if the power bill reduction is believable, which it isn’t.
Danny Price is right:
The government now says the introduction of the NEG will restore investor confidence in the NEM. Unfortunately, the truth will be very different. The introduction of the NEG is a necessary but not sufficient condition for the restoration of investor confidence. The government points to modelling to demonstrate the likely success of the NEG. Unfortunately, the model assumes all the preconditions for the NEG’s success [already] exist.
Seems bodgie modelling has made a mockery of the whole process. You also have to wonder who is calling the shots on the ESB and whether they actually understand which way is up. Price says the whole area is very complex (remember Bruce Mountain said the same). Price says you can count the people who understand the NEG, which he says is deliberately opaque, on the fingers of one hand. That leave room for perhaps one of the ESB members, but no more.
Michelle Grattan says that Frydenberg, along with Peter Dutton, is struggling with the currents in shark-infested waters. AFR cartoonist sees it a little differently:
While all this has been going on a group of scientists have worked out that if the temperature gets to 2°C there is a strong chance that tipping points will take us to 5°C no matter whether we have zero emissions by then or not. Michael Mann said back in 2014 that we are looking at 2°C by 2036.
Time to get on our bike. Zero net emissions by 2030 looks like cutting things a bit fine. The Coalsheviks should be arraigned for crimes against humanity.
I should have added what Holmes à Court said about reliability, or energy security, especially since Frydenberg was tonight warning Victoria that if they didn’t sign up to the NEG pronto the lights will go out:
- The modelling provides absolutely zero information on reliability, not surprising given that AEMO predicts the network will exceed the 99.998% reliability standard in every region over the next 10 years. The Reliability Guarantee only kicks in if the standard is expected to be breached. The modelling has not even bothered to make the case that the NEG improves reliability.