Energy highwire act

Government intervention that has effectively forced gas out of the energy market leaves the grid at the mercy of the weather without the safety net of a dispatchable source of power. BY NIck Cater

Adam Bandt was right. Last week’s extraordinary intervention in the energy market spelled the beginning of the end for domestic gas, just as the Greens leader boasted. Price caps, the exclusion of gas from the capacity market and Greens-inspired incentives to electrify homes will force gas out of the energy market at a critical time. Gas will not be available to protect the grid from the mercy of the weather.

From now on, our primary energy sources are wind, solar, hydro or nothing. Nuclear, we’re told, is too expensive and hydrogen is still a pipe dream.

“Some people say the sun doesn’t always shine and the wind doesn’t always blow,” the Energy Minister told reporters on Saturday. “And that’s true. But we can store renewable energy for when we need it.”

Chris Bowen called a press conference outside the Transgrid battery in western Sydney to announce the government would be chipping in $176m towards the construction of eight grid-scale batteries.

The press release boasted that the combined storage capacity of the batteries would be enough to power Tasmania, Australia’s least populous state, for approximately three hours. In other words, they will be capable of powering the entire nation for a little over three minutes.

The batteries will serve a useful purpose, but not the one Bowen implied. Their job is not to store baseload energy, but to jump-start the grid. They will be equipped with advanced grid-forming inverters that reproduce the voltage waveform currently provided by synchronous generation by coal and gas. While abandoning hydrocarbons increases the risk of the grid shutting down, we will at least be able to restart it.

It is misleading, however, to suggest that lithium-ion bricks will protect us against the fickleness of the weather or a climate we are told is increasingly prone to dangerous extremes. Wind and solar droughts, or dunkelflautes as the Germans call them, last for days, weeks and sometimes months. As technology stands, batteries can provide partial relief for a few hours at most.

Batteries provide precious little dispatchable power, however, as Californians discovered in September’s heatwave, when grid-scale batteries received their first serious test. California has more batteries than any other jurisdiction on the planet. The state’s total battery storage capacity of 64GW is some 30 times larger than the projects the Australian Renewable Energy Agency announced on Saturday.

The Green-leaning LA Times claimed with typical disregard for overstatement that California stared down the “most extreme September heat event in history” thanks to batteries. “After this round, California has a clear lesson for the world: Battery storage is a powerful tool for grids facing new strains from heat, cold, fire, flood or ageing networks,” claimed writer Mike Ferry.

The reality was somewhat different. The crunch came on September 6 when the output from renewables fell from 14GW to 4GW between 4pm and 6pm. California’s independent systems operator squeezed every drop it could out of the batteries, which for a brief period were providing more power than the state’s sole remaining nuclear generator.

Yet even at their peak at 6.40pm, batteries delivered just 6 per cent of the electricity in the California grid. Just under 5 per cent came from nuclear, 19 per cent from hydro and renewables and 16 per cent was imported from other states.

The remaining 54 per cent came from natural gas, an energy source Australia has in abundance, but is now being denied to the domestic market by Bowen. No primary energy source has made a greater contribution to the reduction of carbon emissions in the developed world than gas. The transition from coal to natural gas in northern Europe in the 1970s was one of the main reasons total emissions fell in the largest European economies. The technological innovation that enabled the extraction of gas from shale explains why US carbon emissions fell by 13 per cent between 2005 and 2018.

Yet Bowen has decided that Australia should skip this practical step in the transition to a low-carbon economy and go for broke. He has forced his own hand in part by setting an ambitious 43 per cent emissions reduction target for 2030, rather than adopting the previous government’s more modest interim target, in the realistic expectation that better technology will emerge in time.

His hand is also being forced by the Greens, who turned the demonisation of gas into their bargaining card in negotiating the passage of energy legislation through the Senate. These factors are compounded by Bowen’s all-or-nothing approach to politics and the poor advice he is clearly receiving. The policy he has adopted was devised by climate scientists, not engineers. Bowen boasts that he is listening to the science when he should be listening to experts in energy technology and markets.

He would, however, be aware the biggest concern is not climate science purity but cost outside a limited number of inner-metropolitan seats. Nuclear energy, he insists, is too expensive. The question he hasn’t addressed is: expensive compared with what? Installing 22,000 solar panels a day and 40 wind turbines a month for the next eight years, as Bowen’s timetable dictates, doesn’t sound cheap. Nor will 10,000km of extra transmission lines. The $2.7bn total bill for the battery project announced on Saturday will eventually be paid by us either as consumers or taxpayers, and let’s not get started on the blowouts to Snowy Hydro. The truth is we don’t have the foggiest idea what Bowen’s plan will cost

“Renewable energy is the cheapest form of energy, the more renewable energy we have in the system, the cheaper bills will be,” he told reporters on Saturday.

Perhaps he might explain why the retail cost of electricity in California, the state that has invested most heavily in renewables, is 66 per cent higher than the national average, according to the US Energy Information Administration. Californians pay almost twice as much per unit of electricity than gas-guzzling Texans.

Let us remind ourselves that Australia is attempting an energy highwire act hitherto unachieved by transitioning to 82 per cent wind, solar and storage by 2030. Now we know we’ll be doing it without the supporting harness that could be provided by gas.