Fear and loathing in the Hunter Valley

The panicked debate about keeping Liddell power station open past its 2022 retirement date has been fuelled by deliberate misinformation about Australia’s energy supply coming straight from the Turnbull Government.

The moment the independent energy market regular, AEMO, released its energy outlook in early September, Prime Minister Turnbull and Energy & Environment Minister Frydenberg used it to stimulate fear in support of their pro-coal agenda.

Turnbull and Frydenberg said AEMO’s report backed their claims that renewables were a huge risk to our energy supply. That the coming summer would be marred by blackouts. That Victoria and SA were most at risk because of their support of renewables. And that the only solution was to keep open the old and highly polluting Liddell power station in the Hunter Valley.

Those are pretty bold claims. And they bear little resemblance to what AEMO actually said.

Reading the report reveals a very different story. According to AEMO, the biggest risk to energy security over the next 10 years is not enough investment in… renewables.

It does say there is an increased risk of supply not meeting demand over the next 10 years – for a few hours during a summer heatwave. It does not say this will happen, but there is a risk of it happening. This is because governments have not adequately planned for the transition and, in particular, did not prepare well for the closure of the Hazelwood power station in Victoria’s Latrobe Valley.

Under normal demand scenarios, there will be enough electricity to supply the grid and meet AEMO’s reliability requirements. And the risk drops to low levels in South Australia after this summer because of SA’s energy plan, which includes battery storage for renewable energy, and in Victoria because of that state’s investment in renewables. The risk in Victoria and NSW goes up again slightly from 2022 when Liddell closes, but it remains within AEMO’s acceptable range.

AEMO does not say Liddell should be kept open.

AEMO says a range of things can be done to reduce the chance of blackouts. One of those is to include more generation (including renewables) in the grid. Other things that can be done are to reduce demand by helping consumers use energy more efficiently, ask people to reduce power use at peak times, encourage battery storage and increase individual renewable energy uptake.

AEMO says increased renewable generation will make Australia’s energy system more secure, post-2022. The risk of blackouts drops with increased renewable investment, but the risk increases if renewable energy investment is impeded. In fact, AEMO specifically states that delays in investing in renewables will extend the risk of blackouts for longer over the next 10 years.

The report also clearly shows why those who are financially attached to coal have much to gain by distorting the truth. AEMO says the forecast growth in renewables, plus flat demand from greater energy efficiency and increased uptake of rooftop solar, will result in reduced use of coal plants over the next 10 years.

In fact, coal will become so non-competitive against renewables, that some power stations operators are likely to close their plants earlier than the end of their technical life. Why then would a government that is wedded to coal want to encourage renewables, or energy efficiency?

AEMO’s previous report from June this year also contained some interesting information that you might not hear much about from the PM and the Energy/Environment Minister.

Rooftop solar is at an all time high and it is expected to continue to grow – from 5000MW (currently) to 20,000 in the next 20 years. Uncertainty from changing environment policies increases the risk to industry. And this gem – Australia’s energy demand from the grid is not increasing despite population growth, because more people are installing rooftop solar and using energy more efficiently. The big exception is the Queensland CSG sector, which has been the key driver of increased electricity consumption! (And here I was thinking CSG was aimed at increasing our energy supply…)

In the face of this, AGL has stood its ground and pointed out again and again and again what a hunk of junk Liddell is, and how the company remains committed to closing it in 2022. Because keeping it open makes no financial sense whatsoever – AGL is a commercial entity after all.

The company has about 80 days left to tell the Prime Minister what it plans to replace the old coal-fired power station with. Let’s hope AGL’s much-promoted commitment to renewables comes through in that plan.

Read EJA’s Toxic and terminal report on Australia’s major east coast power stations

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