Open season for our notion-building pollies – Architecture and Design

Since the Finkel review was announced it has been open season for notion building in the energy space. While Malcolm has been pumping Snowy 2.zero, Craig has been promising death by renewables, quite literally. Josh seems to be for just about everything, besides Labor state governments of course, and reckons we are on track to meet Paris commitments. Barnaby, true to form, is backing coal, reckoning Paris can take care of itself, while Electricity Bill is keeping mum, knowing it wont but banking it will.

The one I like the best, but really hasnt been nailed quite the way I thought it should, is Tonys call for nuclear subs. Imagine, our first truly dispatchable power system, capable of delivering a few hundred megawatts just about anywhere you need it. Defending the grid with RANpower float and plug technology, just what we need to shore up our fragile energy system. A tour of dispatch last year including Tasmania from January through June, South Australia June through November, and then on to Queensland for the summer would have been a nice little money spinner for the Navy, worth around quarter of a billion dollars on the energy markets. And that doesnt include offsets, such as the purported $44 million Tasmanian government spent on diesel gensets. Could it be our best notion yet for meeting Paris?

It goes without saying that our political masters dont need much provocation to indulge in a bit of notion building. After all, it is what they do best.

But, in case you are wondering why this sudden release of energy, it might be useful to reflect on some recent analyses that paint a truly disturbing picture for our energy sector.

The first comes from the European Commissions latest electricity market update providing the comparison of wholesale electricity prices shown below.

International wholesale prices as adapted from Figure 33 in the European Commissions Quarterly report on European electricity markets Q1 2017. Average prices for the 4th quarter of 2014, 3rd quarter 2015, and the first quarter of 2017, are referenced as a percentage of Australian prices. Image: Figure 33, Quarterly report on European electricity markets Q1 2017, https://ec.europa.eu/energy/sites/ener/files/documents/quarterly_report_on_european_electricity_markets_q1_2017.pdf

As recently as three years ago our electricity wholesale prices were low by any measure. In fact according to the ECs analysis our market prices then briefly dipped below those in the US. Then, ours were just 20% of the Japanese price.

How times have changed.

According to the ECs latest analysis our prices tracked pretty closely with the US until the second half of 2015. It seems things to start going awry just about when Josh received the poison chalice as Minister for Energy and Resources.

Six quarters later and the EC now estimates that for Quarter 1 this year our prices were a staggering 400% higher than in the US.

This last quarter we even managed to top Japan, which is some achievement considering that across the quarter we exported some20 million tonnes of our thermal coal and over half a million tonnes of LNG to help them sure up a power system still reverberating from the shock waves of Fukushima. Thats about half as much thermal coal as used to power our system.

The second comes from BPs latest Statistical Review of World Energy released in June, which provides national figures for all things related to energy production and consumption, including sector wide emissions.

According to BPs latest figures our energy sector produced about 409 million tonnes of CO2 in 2016. That amounts to 16.7 tonnes for every Australian. On a per capita basis, that puts our energy sector a touch above the next most emissions intensive economy in the developed world - the US at 16.5 tonnes. Even Canada, which has a resource based economy more comparable to our own, gets away with only 14.6 tonnes per person.

Trends in per capita emissions for select countries (in tonnes per person), plotted as a function of GDP (in $US purchasing power parity terms). Emission data from BPs Statistical review of World Energy. GDP and population data from IMF. Time series start in 1981 (on left) and continue to 2016 (on right). Dots show 2009, in the wake of the GFC

Worryingly, relative to 2005 levels our energy sector emissions are up about 10%, which stands in stark contrast to most other advanced economies, and especially the US, down 12% over the same interval.

National energy sector emissions for select advanced economies, relative to 2005 levels, using data from BPs latest Statistical Review of World Energy released in June. Australias Paris commitment is to reduce national emissions to 26-28 per cent on 2005 levels by 2030. Note that for Australia energy sector emissions (including transport and power) account for about 2/3 the total emissions

So the notion that we are on track to meet Paris is, at best, notional.

To achieve such extraordinary wholesale price outcomes, one might imagine something remarkable had happened to our energy system since 2014. Our Coal-cons such as Craig Kelly would believe it is because our power system is groaning under the weight of renewable production.

But maybe its the absence of renewables. Or maybe it is both, peskily masked in a cloak of invisibility. Check out the figure below, which shows our electricity production by key fuel group (coal, gas and renewables) over the period since our power prices have risen from the lowest to highest on the international pecking order.

Weekly average production of electricity by three main fuel group types (in gigawatts), dispatched on the National Electricity Market over the last five years. Data sourced from AEMO, using Dylan McConnells openNEM. RE (renewables) includes hydro, wind and large scale solar and biomass, but not rooftop PV which is not dispatched onto the market

Can you determine a trend that could account for anything? Im damned if I can.

And that in itself is sure to be worry enough to keep it open season on notion building for a long time to come.

For those interested, some more detailed discussion of the crisis besetting the National Electricity Market (NEM) in eastern Australia can be found in my Anatomy of an Energy Crisis series, Part 1, Part 2 & Part 3.

In response to some of the discussion I show below the equivalent of the last diagram above, split out into the various regional markets that makeup the mainland portion of the NEM.

Weekly average production of electricity by three main fuel group types (in gigawatts), for each of the four mainland regional markets on the National Electricity Market over the last five years. Data sourced from AEMO, using Dylan McConnells openNEM. RE (renewables) includes hydro, wind and large scale solar and biomass, but not rooftop PV which is not dispatched onto the market

Mike Sandiford, Chair of Geology & Redmond Barry Distinguished Professor, University of Melbourne

This article was originally published on The Conversation. Read the original article.

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Open season for our notion-building pollies - Architecture and Design