Day 116: 'Unaddressed and therefore unresolved'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 116.
Today in summary: Snowy Hydro’s board approves Snowy 2.0, now it’s down to the politicians; the Morrison government will announce its planned energy underwriting, possibly including fossil fuels; and household power bills rose as much as 22% in the past year, as more customers go onto hardship plans.
— Sophie
Today’s policy spin level: 💨💨💨💨
Please don’t keep Australian Energy Daily to yourself. Forward this email to your colleagues and encourage them to sign up for free here.
Snowy Hydro’s board has approved its proposed 2.0 pumped hydro expansion, subject to approval from its sole shareholder - the federal government. The upgrade will add 2000 megawatts (MW) of generation to its existing 4,100 megawatts and the system will act as a battery, pumping water uphill when renewable power is cheap and releasing that energy when needed. Snowy says the project can provide enough power for three million homes for a week.
In emailed statements to multiple media outlets, energy minister Angus Taylor said:
“The government will consider this project on its merits — I’m not going to pre-empt that process. As we’ve always said, the Snowy 2.0 needs to stack up. We will take whatever time is required to do the necessary due diligence and go through our usual processes to ensure we make the right decision.”
The Morrison government is pushing forward with its plan to underwrite power generation, and won’t rule out supporting existing coal and gas plants. Energy minister Angus Taylor is to launch the scheme in Tasmania today, and power producers will have until January 23rd to register their interest. The SMH reports the cost of the scheme will be uncapped, while the AFR reports both the cost and the generation capacity will be capped but the limits won’t be made public for competition reasons.
The Australian reports that household electricity bills rose as much as 22% in the past year and more customers went into hardship programs. That’s based on the Australian Energy Regulator’s annual retail energy market report, which is not yet publicly available. The Australian says that in 2018, customers in SA, NSW and the ACT had standard offer price increases of 21.1% to 22.1%, while prices for the more common market offers increased as much as 22.6% in the ACT and 11.5% in NSW.
The Commentariat
The AFR’s Matthew Stevens writes that the government - and particularly Angus Taylor - has had a tough week, following the AER’s report on the electricity market - which found policy instability is preventing effective competition and large generators haven’t driven prices up.
“If Taylor, who really is an energy economist of some note, had more of a free hand to take a strategic approach to our trilemma then I am pretty sure we would see a more comfortable, productive Energy Minister.
To be clear here, everyone but everyone says Taylor knows what he is talking about. They know, too, that the nation needs a cogent strategy that, at once, embraces the aligned challenges of renewable energy and climate, encourages and embeds new competition, and recovers and fosters system security.
In the end, the government waves big sticks to solve problems that don't exist while the real issues of the moment stand unaddressed and therefore unresolved.”
Three more things
The Clean Energy Finance Corporation has invested A$100 million in Infrastructure Capital Group’s renewable energy fund. The fund is focused on proven large-scale wind and solar power, waste-to-energy, large-scale battery storage and pumped hydro. The CEFC says institutional investors are increasingly keen on environmentally-responsible opportunities as greater scrutiny is being placed on climate risks in their portfolios.
Large mining companies are stepping up a push for subsidies to support carbon capture and storage (CCS) technology. Lobby group the Global CCS Institute wants the experimental industry to gain scale quickly, arguing CCS should be seen as “necessary and doable”. The International Energy Agency estimates only 30 million tonnes of carbon are currently being captured, compared with the 33 billion tonnes the world is emitting. Former Vice President and climate activist Al Gore told Axios getting scale made CCS an “extremely improbable solution right now” in the absence of a major breakthrough.
The US is unprepared for a “catastrophic” power outage, according to a new report from the President’s National Infrastructure Advisory Council. The report considered readiness for an outage that lasted weeks to months or years, affecting large swathes of the country. It found existing national plans would not be sufficient to deal with such a scenario, and “significant action” was required to prepare for it. Among its recommendations was conducting a series of regional catastrophic power outage exercises to identify second and third-order cascading failures of an outage over time.