Alan Kohler: Move to renewables bundles false hope, bad policy and slow progress into giant mess

Solar panels are contributing an ever greater share of daytime electricity needs.

Solar panels are contributing an ever greater share of daytime electricity needs. Photo: TND/Getty

The Albanese government’s climate change policies are in danger of falling apart – they’re both inadequate and improbable.

One way to rescue them would be to switch solar photo-voltaic (PV) subsidies to batteries, as the Greens suggest.

Superficially, the renewable electricity target of 82 per cent by 2030 looks in good shape. At 12.30pm on September 21, the Australian national electricity market (NEM) hit a record 70 per cent renewable, because rooftop solar was at 39 per cent.

People’s roofs are consistently contributing two-fifths of Australia’s electricity during the day, which is crushing NEM demand for several hours every day and lifting the overall renewable share to two-thirds. Last Saturday in South Australia, rooftop solar ate all the electricity demand for a while, so there was none coming from utilities.

But most of the power is not being stored, so coal goes back to 60 per cent of the market about 6pm, with hydro and wind the only renewable energy after dark.

The rolling 12-month renewables share, including all four seasons, was 37.7 per cent, still a record high. Coal contributed 60 per cent.

Renewables shortfall

This is a very long way from the Albanese government’s target, less than seven years away. In fact, it looks pretty much unachievable.

Energy advisory firm Nexa and global analyst Rystad Energy both say Australia’s renewable energy share is likely to be barely 60 per cent by then at the current rate of progress.

The target isn’t high anyway; nor are the ones to cut Australia’s emissions by 43 per cent by 2030 and reach net zero by 2050. They’re just as improbable as the renewable target, mainly because they’re just targets, not actions designed to achieve anything.

Last week the Climate Council issued a new report, titled Mission Zero, in which it said the emissions reduction target needs to be upped from the current 43 per cent by 2030 to 75 per cent by 2030 – what the Greens have been pushing for – including 100 per cent renewables and overall net zero by 2035.

Meanwhile coal-fired generation is being crushed, which would be fine, except we will still need some of it for a while to keep the grid operating and the lights on, especially if Nexa and Rystad are right and the renewable share falls short.

(By the way, the Coalition’s call for nuclear power – which is its only climate change policy – is a distraction, both too expensive and too late.)

The coal share of the NEM hit a record low of 28.5 per cent at 11.45am on Wednesday, and is consistently doing less than 30 per cent during the day.

Coal rules the night

Coal generation is being kept alive by the fact that it’s still supplying more than 50 per cent of electricity when the sun goes down, and that’s only happening because there aren’t many big batteries operating yet, shifting power from day to night.

There are 10 utility-sized batteries currently operating and 13 under construction. Another 30 have been announced and 47 are proposed. If they all get built, that’s 100 utility batteries, on top of the Snowy 2.0 storage project, if that ever gets built. But it’s nowhere near enough.

Households are starting to install their own batteries, but they’re far too expensive. A Tesla Powerwall, for example, costs between $15,000 and $17,000.

The Greens recently called for government subsidies to be switched from rooftop solar to household batteries, which is exactly what should happen.

The federal government is still issuing small-scale certificates for rooftop solar, and each state has its own subsidy scheme. These are no longer needed because the cost of solar PV has now come down enough to it make it worth doing without subsidy. The next step needs to be batteries to start lighting, heating and cooling during the night when the power is most needed.

A better option than either utility scale or household batteries might be community batteries. These could be run as relatively small businesses and manage the power needs of a few hundred, or a few thousand, homes and businesses, and having local batteries to manage the flow of electricity would encourage more households to install solar PV on their roofs.

Even without a mass rollout of utility and local storage, coal power generation looks to be in a lot of trouble – well before the green grid is ready. After all, the government’s ambition for renewables is 82 per cent by 2030 still requires 18 per cent to be supplied by coal and gas, but that target probably won’t be met, so more coal than that will be needed. Yet even with 40 per cent renewables now, coal is becoming unviable; at 82 per cent it will be a basket case.

Taxpayers stoke the boilers

The NSW government is trying to get Origin Energy to delay the closure of Eraring, which is due to shut down in August 2025, but so far, no dice. And last week, NSW Treasurer Daniel Mookhey said that the sale of Eraring was the “worst decision” by a government in decades, and that NSW had “lost control” of its energy future.

So it looks like coal-fired power stations will have to be re-nationalised before 2030 because their private owners can’t make any money and will want to do something else. Taxpayers will have to keep them going.

The emissions reduction targets of 43 per cent by 2030 and net zero by 2050 are inadequate and unlikely at the same time, not a good combination.

The Paris target of 1.5 degrees, which will still make life difficult, can only be achieved if the world, and Australia, cut carbon dioxide and methane emissions by 75 per cent by 2035, yet emissions are still rising and the annual Conference of the Parties (COP) never gets anywhere because of the futility of trying for political consensus, lobbying by fossil fuel companies and opposition by the Murdoch media companies.

In Australia, the renewable energy target of 82 per cent looks impossible without a lot of storage being built quickly, and the safeguard mechanism reductions of 4.9 per cent a year by big emitters are only possible if they buy offsets to do most of the work, and a lot of those are dodgy and won’t count.

So once the Voice referendum is out of the way and the Prime Minister turns his attention to what’s going on with climate change, he will find that it’s in a mess.

Alan Kohler writes twice a week for The New Daily. He is finance presenter on ABC News and founder of Eureka Report.

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