In early 2017 there were concerns that the impending closure of the Hazelwood coal fired power station would leave our electricity system facing blackouts. Urgent meetings were arranged with the energy regulator, the Australian Energy Market Operator (or AEMO). AEMO assured us that things were fine and put out a media release to that effect.
Six months later AEMO put out another release admitting that they had to buy diesel generators to keep the lights on in Victoria. In the meantime power prices had more than doubled and, apart from a small respite due to COVID, power prices have stayed high ever since.
In a few months time we face the closure of another large power station. By the end of April, the Liddell coal fired power station will shut. Last year it provided 9 per cent of NSW’s power. We could be in for a rough ride.
This time AEMO is covering their backsides. This week AEMO put out an update on the reliability of our electricity supplies. Their conclusion is that “there remains an urgent need for additional commitments to occur, including in dispatchable projects such as long duration storage.”
The translation into plain English is, we are facing blackouts and that means your power prices are not coming down anytime soon, or at least until we learn to invest in reliable power. Over the next decade, AEMO estimates that we will be short a whopping 8330MW of reliable power. How much is that? It is more than 4 Liddell coal fired power stations.
One reason we are in this mess is because the new Labor Government has mucked around with plans to start a new gas fired power station near Newcastle. This power station was already under construction when Labor came to Government. But the new Minister demanded that the power station be powered with hydro. The then CEO of the gas plant, Paul Broad, pointed out that it is not possible to deliver hydrogen to Newcastle. He has now been replaced.
After all of these shenanigans, the gas plant is at least a year late. This delay has contributed to AEMO having to rush out its warning. Given their dire predictions we need to stop mucking around with the gas plant and get it built.
Last year, AGL applied to the Federal Environment Minister to blow up the Liddell coal fired power station after it shuts. She should reject that application and instead keep Liddell mothballed in case we need to bring it back into service. That is what the Germans do when their coal fired power stations close. They have been able to bring 24 coal fired power stations back online since the Ukraine war and that has avoided energy catastrophe in Europe over their winter.
But these options would still not fill the 8000MW gap. That gap does not arise for a decade. This is more than enough time to build new coal fired power stations that can keep the lights on and bring down power bills.
It is also enough time to legalise nuclear energy and to begin building a nuclear power station here. We have the world’s largest uranium reserves but remain the only settled continent without a nuclear power station.
If we do not build new reliable power stations like coal, gas and nuclear, power bills will keep going up making us all poorer.
We still have the time to avoid catastrophe. But if we instead continue to sleepwalk to the green fantasy that renewables are the cheapest form of energy we won’t remain the lucky country for much longer.
