How Abbott is creating a Mad Max energy future

There has been fierce debate in the Senate this week over the revised Renewable Energy Act – the legislation that will cut the Rudd-era Renewable Energy Target (RET) by around 20 per cent.

Where other nations might have boasted about beating such a target, in Australia that success has been cast as a negative.

The Coalition and Labor have agreed on the 20 per cent cut, from 41 thousand gigawatt hours to 33 thousand gigawatt hours of renewable capacity by 2020.

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But is that what voters want? The most recent polling of voters by Essential Media found that 71 per cent of Australians want to “put more emphasis on producing domestic energy” from solar, and 62 per cent want the same from wind farming.

While the RET change flies in the face of national sentiment, it only needs to make sense in key marginal electorates … oh, and to powerful lobbyists protecting the fossil-fuel-linked interests.

What the government cannot do, however, is resist the economic forces being unleashed by technological change.

Nor can they hold back a global agreement on emissions reduction being pushed by the world’s two economic superpowers, the US and China.

Mad Max

Has anyone seen a reliable source of energy?

To fully understand this picture I recently sat down the Professor Peter Newman of Curtin University’s Sustainability Policy Institute, who for more than three decades has argued the case for more energy efficient cities, and for a pragmatic approach to shifting to energy sources that do not harm, or risk harming, future generations.

His pragmatism on this issue is most clearly seen when, as he explained, he spends time arguing with local councils who come to him with plans to go “off grid” – that is, to set up local mini-grids fed by renewable energy sources and local storage capacity.

The cost of off-grid technology is making such moves feasible. Individual solar off-grid solutions, for instance, are already available to consumers for between $20,000 and $30,000.

That might sound a lot, but financed at prevailing mortgage rates, the interest bill on those sums would be $1100 and $1650 per annum respectively. Even allowing for depreciation on the technology used, the market is close to the point at which such systems will appeal to householders irrespective of state or federal schemes that offer to buy power back from them.

Put another way, households frustrated with the acrimonious politics surrounding clean-energy reform can just leave the grid behind for less than they might spend on a car.

One level up from there, and with greater economies of scale, Australia is beginning to develop community renewables projects – researchers Nicky Ison and Ed Langham from the Institute for Sustainable Futures at the University of Technology Sydney report that 19 such projects are already up and running.

With a dramatic fall in the price of solar panels, wind turbines and even storage capacity such as the wall-mounted batteries being developed by Tesla Motors boss Elon Musk, community-level grids are well on their way to ripping up the business-case for large-scale coal and gas-fired electricity production.

So why, oh why, would Peter Newman be talking local councils out of going off-grid?


The Australian government currently frowns upon wind energy. Photo: Shutterstock

Newman argues that if communities that can afford off-grid solutions abandon the grid, the price of power will increase for less well-off communities that stay on it.

In his words, Australia would divide into “eco communities, with Mad Max suburbs in between”. So the grid, he says, must stay.

However, if utility companies are to stop customers abandoning the grid and bringing on this Mad Max future, they must deliver what those 62 or 71 per cent of Australians want – peace of mind that the economy’s power sources will comply with the global shift towards directly or indirectly pricing carbon emissions.

Australian domestic politics will not slow the efforts of the world’s two economic super-powers, China and the US, who have already shaken hands on the principle of pricing greenhouse gas emissions – a deal they intend to formalise at the COP21 conference in Paris between 30 November and December 11 this year.

This, says Newman, is why even oil giants Shell and BP have jointly called for a binding global system of carbon pricing.

Against this backdrop, it is absurd for Australia to be cutting subsidies that aim to bring forward the development of low-carbon energy before international trading partners start demanding it.

So the RET change is wrong in two ways: it’s the opposite of what’s needed to get the large-scale grid power ready for a post-Paris world, and it’s just another reason why consumers and communities will increasingly seek to abandon the grid.

Newman falls somewhere between the off-grid enthusiasts and the blinkered coal and gas traditionalists – calling instead for smart grids that store power as well as transmit it, and in which decentralised renewable generation, over time, becomes more important that 20th-century-style coal and gas plants.

He is aligning himself with economic forces that will cut a swathe through the self-interested propaganda from Canberra that frustrates, rather than delivers, what so many Australians want.

See all of Rob Burgess’s columns here

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