Even the energy minister has admitted he is scared for the future security and stability of our grid because of the rapid influx of renewables. Climate activists continue to falsely claim that wind and solar is the cheapest form of energy.
It’s a lie. When you take away the billions of dollars in subsidies coal is still the cheapest form of energy.
Transcript
[Senator Fawcett] Senator Roberts.
[Senator Roberts] Thank you, Chair. Thank you all for attending today. I’d like to ask questions on three topics. Firstly, prices, reliability and stability of the electricity network and supply. Secondly, hydrogen. And thirdly carbon dioxide storage. So firstly on prices, reliability, and stability. In your recent report on 14 large scale wind and solar projects in which ARENA and the Clean Energy Finance Corporation invested, it says that you “Played an important role in accelerating the early development of the large scale solar industry in Australia and the integration of utility scale renewable energy generation in the national electricity market.” Could you please confirm or correct these specific findings amongst others? Firstly, negative pricing impacts increased significantly in 2020, particularly for Queensland projects.
Senator, I’m not paying attention to the energy markets closely enough to answer that question.
[Senator Roberts] Okay. Secondly, initial project forecasts consistently underestimated curtailment and residual losses, while capacity factors were generally overestimated.
Again, Senator, that’s a report I’d have to go back and have a look at to answer that question.
[Senator Roberts] Third one, incorrectly assumed adequate transmission. And fourthly, the regulator says power cannot be fed into the grid because of instability.
Sorry, what’s the question there?
[Senator Roberts] The regulator, could you confirm or correct whether the regulator says that power cannot be fed into the grid because of instability problems in the grid?
Senator, what’s the context for that?
[Senator Roberts] Well, these are the reports. This is a report in which ARENA and Clean Energy Finance produced on 14 large scale wind and solar projects.
I would need to refresh myself in the report to answer the question.
[Senator Roberts] I’ll just make the statements and maybe you could comment. The fifth point: Frequency Control Ancillary Services costs were both a significant expense and a major operational challenge for several projects. Although this reduced from 2019 to 2020, as Frequency Control Ancillary Services prices have fallen and several projects implemented sales forecasting. And the last point: the failure of critical equipment, especially failure of inverted power stack and the lack of market readily available spares were a major operational challenge for asset managers. Have these, and similar projects, contributed to the instability of electricity market over recent years?
Senator, I don’t believe so.
[Senator Roberts] Snowy Hydro seems to agree. They’re warning us that the transition from a stable base load power from coal is a fact and it’s going to be fraught with risk.
Well, Senator, as the penetration of renewables increases, those issues need to be addressed. The storage and the reliability of the system. You’re asking about the past, have they in the past, and I’m not sure that those projects have caused any instability, as you suggest.
[Senator Roberts] The estimated costs of Frequency Control Ancillary Services, lot of acronyms here isn’t there, for unreliables was initially estimated, about 20 years ago, at just 1% of the cost of electricity. This is before we got onto this transition. It’s not significant cost in coal gas, nuclear and hydro, yet with the unreliables, the wind and solar, it’s now around 8 to 9%. Is that a factor in your plans?
Senator, what’s unreliable?
[Senator Roberts] Wind and solar.
Variable renewables?
[Senator Roberts] Yes.
Right.
[Senator Roberts] So the cost Frequency Control Ancillary Services is now around 8 to 9%.
Senator, I’d have to go and check the market for you and get back to you. I’m not close to those numbers on a daily basis.
[Senator Roberts] Okay, so if you could take it on notice then, the cost of Frequency Control Ancillary Services in aggregate, across electricity sector, and also for wind and for solar, typically, are you aware that the Minister for Energy himself recently admitted, quite publicly and strongly, his fears about future prices, his fears about unreliability, and his fears about grid instability?
Yes.
[Senator Roberts] Aren’t these inherent flaws in unreliable wind and solar, that are not present, or are negligible, in coal, gas, hydro, and nuclear?
Senator, it’s very possible, technically and economically, to build a system with renewable energy that is reliable, safe, secure, low emissions, and low cost.
[Senator Roberts] But not base load power.
Ultimately, all of that combined gives you base load power because if you balance your wind and solar effectively, with pumped hydro, with batteries, gas generators, as the case may be, you can create base load power.
[Senator Roberts] Has anyone done it anywhere in the world, as a nation?
Senator, we’re well on our way to doing it in Australia.
[Senator Roberts] Okay. Coal, gas, hydro, nuclear in other countries, and formerly in our country, were they reliable base load power sources because they provided stability, reliability, and high energy density. Now, as I see it, and from what I’ve read, unreliables like wind and solar have very low energy density. That’s what makes them inefficient. That’s fundamental basic physics. They’re inherently high cost of making solar panels and wind turbines because of the high resource consumption. It takes for a kilowatt hour of coal, it takes about 35 tonnes of steel. For the same in wind, it takes about 543 tonnes of steel. So inherently higher cost, higher energy used in making them, and much more land needed for solar, and higher energy intensity in manufacturing. So to me, it just seems that the basics are not sound. I’d like your views
Senator, I’ll take solar for example. The technology I know a little bit better than wind. ARENA hasn’t funded any wind technology in our history. Solar has an energy payback of between 12 and 18 months, and the panels last for 20 to 30 years in the field. And the International Energy Agency has come out and said that solar PV is the cheapest form of energy ever, in the history of the world. So those themes from the International Energy Agency, and the things that we’re seeing, are aligned. We think that wind and solar combined with those other technologies to balance the system will give us a very cheap, stable, low emissions energy system, contrary to your perspective.
[Senator Roberts] So if for a given amount of energy needed from a solar panel, we need about three of them to take care of feeding a battery for taking us through the night, and also for days of poor weather. So is that factored in, or just the single solar panel? Because they’re the figures I’ve seen.
It’s the whole system, Senator.
[Senator Roberts] Yeah, I’d like, could you give me a breakdown of those, please? Because I don’t believe them. The breakdown of those costs.
Of what costs?
[Senator Roberts] Solar.
What would you like to know?
[Senator Roberts] I’d like you to compare a solar to a coal-fired power station, base load power. Battery, the number of cells you need.
Well, I’ll take it one question at a time. A solar farm built today can cost in the range of $40 to $50 a megawatt hour as its output. A coal station that you would build today would be at least double that, if it was a HELE coal station. And you’ve seen the prices for gas. We know that gas generators need at least $100 a megawatt hour, and an open cycle, and open cycle gas station to produce profit. So, solar at 40 to 50, and wind at about the same range, is cheaper than other forms of electricity generation today.
[Senator Roberts] So why is it that everywhere in the world, as the as the proportion of solar and wind increases, the cost of electricity in that nation increases dramatically.
Senator, I haven’t seen the figures that you’re talking about. You say every country in the world that’s done it, I’ve not heard-
[Senator Roberts] I’ve seen several graphs from independent sources showing, looking at it from your view, the more solar and wind increase, the higher the cost of electricity.
You’re welcome to share that with me. I can have a look at it.
[Senator Roberts] So One Nation commissioned Dr. Alan Moran, who was a First Assistant Secretary of the Industry Department, a First Assistant Commissioner of the Productivity Commission, and Deputy Secretary of Energy in the Victorian government, to report on the cost of climate and unreliables. Apparently, those figures used to be consolidated once but they’re no longer consolidated. Excluding the costs of transmission, expenditures on Snowy 2.0, and cost of market operator interventions, Dr. Moran has estimated the annual cost in 2018-19 over renewable energy subsidies and support at $6.9 billion. This estimate was made from publicly available information in state and federal budget papers and from regulatory authorities. So all from the governments. It comprises Commonwealth expenditures, the cost of Commonwealth subsidy schemes, and state expenditures and subsidy schemes. Do you agree with Alan Moran’s estimate of 6.9 billion?
Senator, I’m not aware of his work.
[Senator Roberts] Do you have any idea of the extra cost of solar and wind on top of the additional, on top of ordinary electricity costs?
Senator, those figures are readily available. And I think one of the things that gets missed when looking at that figure, for example, the subsidy figure, as you call it, is the benefit that the renewables have provided the system in terms of lower costs, as you’ve pointed out, you know, it has been pointed out that the effect of having wind and solar in the market is to suppress prices. And I think we can see that in today’s market. So I think you have to be fair and look at the benefits or the impact of renewables on a holistic basis, rather than just looking at the subsidies, which were necessary to get solar and wind, for example, to the point where they are the cheapest form of energy generation. And I think we’re seeing the benefit of that in today’s electricity prices, which are at record low levels, I think.
[Senator Roberts] Are you aware of the study in Spain that says for every so-called green job created there are 2.2 jobs that could have been created had they stayed with coal-fired power station?
Senator, I’m not aware of that study.
[Senator Fawcett] Senator Roberts, you’ve had a pretty good run. How much more do you have?
[Senator Roberts] I’ll ask one more question on this topic, and perhaps we can come back if there’s, if I’ve got time afterwards.
[Senator Fawcett] We’re already well over, in terms of our schedule. I’m keen to move on to Clean Energy Finance Corporation.
[Senator Roberts] What is the effect of these unreliables, wind and solar, compared with the Prime Minister Gillard’s Labor carbon dioxide tax? Do you have any idea?
Sorry Senator, I’m not quite clear how to even answer that question.
[Senator Roberts] Well, I’ve been told that an estimate is that the cost of the Gillard carbon dioxide tax is about half the cost of these extra wind and solar costs on our energy sector.
Senator, I’m just not sure. I can’t answer that question as you’ve put it.
[Senator Roberts] I’ll put the questions on hydrogen and carbon dioxide sequestration on notice.
Thank you.
[Senator Roberts] Thank you, Chair.
