In other words, the mine is a “stranded asset.” This is the future of Australia if it continues to depend on carbon fuels. The country itself would become a stranded asset, a dead end, a political pariah.
The other was the decision of one of the world’s seven largest oil companies, BP, formerly known as British Petroleum, to take the lead in building a huge green hydrogen plant in the Pilbara region. ‘Western Australia. BP announced that it had bought 40 percent of the planned project, the Asian Renewable Energy Hub. It has the potential to be one of the largest renewable energy companies in the world. The price was not disclosed. But the estimated cost of building the complex is $ 36 billion ($ 51 billion).
Queensland Prime Minister Annastacia Palaszczuk, NSW Prime Minister Dominic Perrottet, Anthony Albanese Prime Minister Victorian Prime Minister Daniel Andrews and Washington Prime Minister Mark McGowan after the first national cabinet meeting . Credit: Rhett Wyman
The plan is to install 1,700 wind turbines and 25 million solar panels to produce 1.6 million tons of green hydrogen a year from water. Hydrogen would be sold in Australia and exported.
The investment “reflects our belief that Australia has the potential to be a power in the global energy transition,” said Anja-Isabel Dotzenrath, BP’s director of low-carbon energy.
This is the future of Australia as it joins the world’s largest investment boom. Australia can become a superpower in the new energy world of renewables. But it can also become a global economic superpower by using its super cheap renewables to boost manufacturing. This was the vision set out in Ross Garnaut’s 2019 book Superpower: Australia’s Low Carbon Opportunity.
Loading
The Coalition under Tony Abbott sold in Australia the fiction that renewables were dangerous. Since it functioned politically in 2010 and 2013, the Coalition was never able to get rid of the fairy tale that coal was the future.
Even when I tried. Remember when then-Energy Minister Josh Frydenberg meticulously negotiated the National Energy Guarantee under Turnbull’s administration? He managed to gain the support of the Liberal Party Chamber for politics.
Schott says Australia would not have suffered its energy crisis this week if this policy had been put in place. But this common sense policy was immediately vandalized by the deniers and fabulists of the Liberal and National parties. By destroying the NEG, they destroyed the Prime Minister of Turnbull.
Malcolm Turnbull says the shocking failure of modernizing Australia was not the result of partisan politics. “It was actually the result of struggles within the Coalition,” he says. “The problem with energy at the federal level was essentially a consequence of right-wing liberals and nationals, backed by the Murdoch media and the fossil fuel lobby, who were relentlessly opposed to any action to reduce emissions. “.
The arrival of the Albanian government is an opportunity for Australia to step out of the museum of stranded assets and move into the value-added world of a prosperous renewable future.
Kerry Schott is an authority on the energy industry. Credit: Oscar Colman
But Albanese has nothing to lose. He and his Minister for Climate Change and Energy, Chris Bowen, blame the Coalition for the chaos and cost of the energy crisis. And fair enough, too. But if the power outage persists, Peter Dutton’s opposition will blame Albanese and his renewable energy plan.
The Coalition is already threatening to oppose the government’s updated emissions target – a 43% reduction from 2005 levels to 2030 – in parliament. And Albanese has just formally committed Australia to that goal this week. The government says it can implement it independently, through regulation. But climate wars continue and the Coalition will seize every opportunity to discredit renewables.
What to do?
Loading
The first is for Bowen to fix the crisis in the short term. It must capitalize on the current drama to create the impetus – the “burning platform” – for change.
It started well. It brought together all the ministers of state and jointly agreed on several useful initiatives. Such as a national plan for a transition to a grid based on renewable energy. This sounds so basic, and it is, but the Coalition has never succeeded. They plan to draw up a specific plan when they meet next month.
And the ministers ordered the AEMO and the Energy Security Board “to proceed at the pace of developing a capacity mechanism”. A capacity mechanism?
“Think of it as an insurance policy” to provide immediate security supplies, Schott says. “It pays to have the ability to claim to be on hold.” It can be gas, battery or hydraulically pumped. It is paid to the vendor to keep the capacity ready. Thus, when there is a power shortage, additional capacity can be added to the system immediately to keep the lights on.
Loading
The Coalition also suggested such a mechanism, but “it was not approved under the last government because much of the industry and a couple of states – NSW and the ACT – suspected that the feds would use it to keep coal in the system unnecessarily, “Schott explains. “Angus Taylor was aware of the need for this, but was unable to get the cooperation of fellow ministers and industry.”
Now, however, the state and federal governments have agreed to create a capacity mechanism that does not include coal. Bowen said that “it should support new technologies and by that I mean I support storage and renewables as a particular focus of a capacity mechanism.”
Another outcome of the meeting of state and federal energy ministers was to order the AEMO to start storing gas for emergency use. Useful perhaps, but very limited.
There is another important option in the short term: the trigger. The federal energy minister has an existing activator to demand more gas from the market. If Bowen uses this “supply trigger,” he can order gas producers to divert export gas to the domestic market. But the process to do so takes six months.
Loading
Bowen has no intention of using it. Instead, he is quietly exploring the creation of a slightly different trigger, a “price trigger.” If a price ceiling is breached, you could press the shutter button to order gas from the market. I could design it to work quickly. Once he had the power, he might not even need to use it. The threat could only have the effect of motivating gas companies to keep domestic supply loose.
There have been voices calling for a “gas reserve”, a rule that forces gas producers to reserve a fixed share of their production for the local market. In Western Australia, a 15% gas reserve has worked well. The trick here is that Bowen could create one, but he could not apply it to existing gas supplies, only new ones. And that would be a slow, uncertain process with no effect for a long time. Rather, the “price trigger” of gas is “where the stock is,” as one informed source said.
At the same time, Bowen must implement the long-term solutions contained in Labor’s electoral policy. The plan to “reconfigure the nation” and the policy of “feeding Australia”.
In the next few days and weeks, Schott says “there is no need to panic because many of the coal generators will be back online after they have been repaired, and that will take a week or so.”
But Bowen and his state counterparts should not be comforted. Australia, despite its rapidly growing renewable energy fleet, is still stuck in transition, unable to extract stranded assets from the museum. And the Coalition will be happy to keep it. The giant needs help. With urgency.
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.