Davis declared a state of emergency in January 2001 and had to find a way to pay more for power, leaving the state with larger deficits and debts. With the California constitution allowing for the “revocation” of an incumbent governor, Republicans gathered 1.4 million signatures (more than they needed) to force an election on whether to stay or leave. He lost. Schwarzenegger ruled the state for the next seven years.
Australia is not California. Albanese is not Davis. Still, history shows that blaming the previous government will only work for a long time. Four weeks after the May 21 elections, Albanese talks at length about how the energy grid got into this mess. The next step is to explain what you can do about it.
This crisis is not just a price shock because there is still an underlying energy shortage on the east coast of Australia. Credit: MICK TSIKAS
The unfortunate truth is that there are few options to fix the immediate crisis. This week’s unprecedented action, a free market suspension by the Australian energy market operator for the first time in its history, has put an end to the games played by electricity generators and has contributed to create some certainty about supply. But this crisis is not just a price shock because there is still an underlying energy shortage.
Industry executives say there is a “drive” in the market. The solution will depend on the time it takes to fix broken coal-fired power generators and the feasibility of asking customers to voluntarily cut their demand. A major energy user, Tomago Aluminum Casting in NSW, has reduced its energy use several times this week. The industry says no other smelter has had to do the same.
When asked on Thursday to ensure there would be no blackouts, Albanese would not. That was an honest answer. The good news was Energy Minister Chris Bowen’s reassuring message about the success so far in avoiding any shutdown or “discharge,” that is, the shutdown of supply imposed by California.
“We’re confident we can prevent blackouts. We’ll work hard to prevent the load from falling off,” Bowen said. While NSW customers are being asked to turn off non-essential items from 6pm to 8pm, Bowen said that was only a small part of the answer. The most important factor remains interruptions in coal-fired power plants.
Kerry Schott, who chaired the Energy Security Board for four years through October, also expressed confidence that supplies will return. “There will be capacity to come back,” he told me. There are indications that the AGL-owned Bayswater generator could increase power in a few weeks. Unfortunately, problems at the Loy Yang A power plant in Victoria could last until September.
The argument over other solutions, ranging from a gas reserve policy to the Snowy 2.0 project and the upgrade of the transportation network, will make no difference this winter. The immediate measure being prepared by the Minister of Resources, Madeleine King, is to use the threat of tougher regulation to force gas exporters to increase local supply and help electricity generators. Thanks to the failures of the last decade, the short-term solution depends on fossil fuels.
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A lasting solution requires an end to climate warfare, but that does not look promising. Schott believes gas should be part of the transition to a cleaner energy grid because it will support renewables while we wait for hydrogen to be viable. King says the same thing, but was attacked by the Greens this week as soon as he suggested Australia would need more gas for a while.
Albanese is in a strong position in the new parliament. With the Liberals shrinking and the independent candidates taking over the blue seats, the Prime Minister has a very good chance of turning three years into six.
“I’ll be back,” the Terminator said. Albanese can say the same thing. First, however, he must fix a crisis he did not create.
Cut to the chase of federal politics with Jacqueline Maley’s news, opinion, and expert analysis. Subscribers can subscribe to our weekly Inside Politics newsletter here.