Daily Telegraph - Coal Hard Facts on Energy

August 26, 2016



Politicians disagree on many things, but they all share a desire to be popular. It’s an inbuilt survival instinct. This can mean decisions that are popular in the short term, but not in the long term. But the best politicians earn respect by making the right decisions, even if unpopular at the time.  

This is particularly true in relation energy policy. Such issues can seem academic and boring, but paying higher electricity bills affects everyone. And when lights won’t switch on or hot water systems fail, energy issues soon catch the public interest.
 
The right energy policy decisions deliver a stable power grid and reliable supply at lowest cost and with the lowest emissions over the long term. The wrong decisions can mean higher power prices, an unstable grid and even rolling blackouts. At the core of our State’s energy policy must be an energy power mix that best serves the people of NSW, not what appears to be the most popular at the time.
 
NSW has been well-served for decades by our relatively cheap and very reliable coal-fired power generators. On any given day, coal-fired power supplies up to 90% of our state’s electricity. And while our power plants are ageing, new technology can deliver the same cheap and reliable baseload electricity from coal, with lower emissions.
 
Across Asia, countries are deploying these new technology power plants to meet their energy needs, while producing up to 40 per cent lower emissions than older plants. There’s no reason why we can’t do the same here.  It might not be popular to some, but it does provide major advantages over other options, including access to an abundance of high quality NSW coal to provide decades of supply.
 
The alternative is to embrace energy solutions that are popular in the short term, but could have severe impacts on prices and reliability.
 
Many European countries are dealing with poor energy policy decisions made in the last decade.  Decisions to move rapidly to renewable energy, while popular at the time, are now being reversed due to higher prices, intermittent supply, and massive taxpayer subsidies. And in past months, South Australia has also experienced fluctuations in power prices, including severe spikes in the wholesale spot price of electricity.  This can happen when ‘popular’ energy solutions are rolled out without  adequate infrastructure and backup.
 
The Australian Energy Market Operator (AEMO), operator of Australia’s largest gas and electricity markets and power systems, recently stated that removing 1,360 megawatts of coal fired electricity from the National Electricity Market would have major ramifications, despite any uptake of renewables. This is approximately equivalent to removing just one coal-fired generator from the national grid. Impacts could include blackouts over the next decade in Victoria and South Australia, as well as in NSW.
 
Renewable energy is making progress, but it is only part of the solution, and a small supplier of energy. Much of this supply is also variable, requiring backup to ensure reliability, and to keep prices down.
 
The NSW Government is currently developing an ‘Advanced Energy Strategy’. This strategy must protect the affordability and reliability of our state’s electricity generation. Achieving this requires the full range of technology and options to be considered, regardless of their perceived popularity.
 
A range of power generation sources are needed to meet our future energy needs. However, sacrificing affordability and stability of supply to every home, in every suburb and every town across the State for what is ‘popular’ at the time could have disastrous long term consequences for NSW.
 
Stephen Galilee
CEO, NSW Minerals Council

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