This Opinion piece originally featured in the Daily Telegraph.
Candles, torches and backflips. This is the increasingly grim outlook facing families and businesses as they struggle to keep the lights on, while the energy policy promises of many so-called 'experts' and politicians unravel in the face of reality.
We’ve been promised so much by so many. Cheaper prices, more generation, and lower emissions. Yet as deadlines approach and emissions targets loom, it’s becoming more and more likely that only one of these three promises is likely to be met. We may get lower emissions, and only if we are prepared to accept less electricity, and pay higher prices for it.
Latest industry estimates are for energy prices next year to rise by a whopping 35 percent or more, or an average of around $600 per household. This would make most families around $900 worse off than the $275 price cut promised at the last federal election. This will put pressure on many household budgets. As a result, many may take a far more cynical view of future political price cut promises, and experience suggests they probably should.
Our coal fired power plants are all on a fast track to closure. Forced out of the market. That’s great for reducing emissions, but the clock is ticking more loudly every day on deadlines for construction of reliable replacement generation.
Despite its obvious advantages, we are told nuclear power is unsuitable and uneconomic, including from many of the people who have supported decades of subsidies for wind and solar in an effort to make them so.
Hydrogen is touted as the latest promised energy saviour, yet still has significant engineering and cost challenges that must be met before it can be deployed at scale. And while great strides have been made in battery technology, none are big enough or can store enough energy to ensure reliability alongside renewables.
The much vaunted Snowy Hydro project is over budget, and it’s promised time frame. While some big wind and solar projects are completed or underway, many other promised or potential projects remain in limbo.
Some await planning approval. Others await financing, despite their much touted financial viability. Some face community opposition from locals concerned about their environmental or land use impacts. It remains unclear how many will actually proceed. It’s highly likely not enough of any of it will be ready in time to replace the energy soon to be lost from power plant closures.
It’s a similar story for the large-scale transmission lines so desperately needed to link the energy generated by remote wind and solar projects to the homes and businesses that need it. Some rural landowners are unhappy that massive transmission infrastructure is proposed for their properties. Billions in investment are needed to build these links, assuming they can get planning approval. Regardless, the astronomical costs of construction will need to be paid for by taxpayers or customers. It all means even higher prices in the future.
I represent the NSW mining sector, so critics may dismiss my warnings as simply promoting coal and talking down renewables. This is not the case. The coal miners I represent almost all export their high quality coal to willing customers in over 20 countries around the world. Only a small amount of NSW coal is actually used here. The few miners that supply coal to local power stations in NSW could currently earn around four times as much selling it on the global market.
And the gold, copper, zinc and other metals miners I represent see massive opportunities in providing the minerals needed for solar panels, batteries, electric vehicles and other technologies now and into the future.
But enough is enough. We’ve had years of so-called experts who seem to spend more time at energy policy conferences talking about the problems than doing something about them. We’ve had too many repeated promises of an energy utopia from politicians seeking votes, without any regard to who pays, or what happens next.
There’s no doubt some of these promises are well intentioned. Others seem willfully ignorant. If you have faith in the experts and the promises of the politicians, ignore this column. I hope I am wrong. We need a smooth transition, and promises met on reliable, affordable energy, and lower emissions. But if I’m right, look for the backflips.
We’ve recently seen a few. Here in NSW, Origin Energy has recently announced it is reconsidering its plans to bring forward the closure of the Eraring Power Station by seven years from 2032 to 2025. In Europe, Greta Thunberg has dropped her opposition to nuclear power. The reality we face in the years ahead may require many more olympic quality backflips from our decision makers to save us.
Otherwise, buy torches. Stock up on batteries. And make sure you’ve got lots of candles.
Stephen Galilee
CEO, NSW Minerals Council