Day 26: Garnaut's reliability idea
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 26.
Today in summary: Economist Ross Garnaut has an idea for breaking through the energy policy impasse on reliability; AEMO is a step closer to getting a handle on the volume of battery storage in Australia with a new register of distributed energy resources; and the ACT has used the Global Climate Action Summit in San Francisco to announce it will sign onto the Powering Past Coal Alliance.
— Charis
Current policy spin level: 💨💨
Economist Ross Garnaut, who was never a fan of the NEG, has set out an alternative option for governments to consider. Garnaut told last night’s Energy Futures Seminar that while the regulators AEMO and the AEMC were getting on top of energy security, reliability was likely to be more of a challenge as increased heatwaves drove more spikes in electricity demand. And, he said, old coal-based generators were least reliable in very hot weather.
“My suggestion is that the national energy guarantee should be the Commonwealth providing a big hunk of pumped hydro to make sure that at a specified price, declared transparently, say $300 a mwh, enough energy is put into the system to balance supply and demand.”
Garnaut said Snowy 2.0 was in a good position to do this, but of course couldn’t if it was run as a profit-focused market enterprise.
“You could simply split the existing Snowy Hydro into two separate corporations, one of them has the job of delivering reliability, it gets its guidance from AEMO on how much capacity is required.”
AEMO plans to have a register of small scale battery storage systems and rooftop solar in place by the end of next year, after the AEMC ruled it should do so. The register was recommended by the Finkel review and comes as Victoria and South Australia drive more battery installs with subsidies. The data will come from network businesses through existing processes, along with information from the Clean Energy Regulator or state safety regulators. AEMO will publish the first information guidelines for the register by June 1, 2019.
The ACT has become the first Australian jurisdiction to sign onto the UN-backed Powering Past Coal Alliance. Member countries of the Alliance, which include the UK, Canada, France and Mexico, have agreed to phase out existing traditional coal power and place a moratorium on any new traditional coal power stations without operational carbon capture and storage. The ACT has a goal of 100% renewable electricity and reaching net-zero emissions by 2045.
Geopolitics
The US has warned it could impose sanctions on a planned Russia-Germany gas pipeline, after US Secretary of Energy Rick Perry met with Russian Deputy Prime Minister Anton Siluanov. The US is opposed to the Nord Stream 2 pipeline due to concerns it will increase Europe’s energy dependence on Russia. Russia expressed a desire to restart the dormant U.S.-Russia Energy Working Group, but in a statement, Secretary Perry said while this would be a positive step forward,
“the future of our relationship with Russia is predicated on successfully addressing our broader disagreements”.
The US Department of Energy has agreed to a nuclear action plan with the UK. The action plan will see cooperation in R&D in a range of areas, including radioisotopes for use in space technologies, nuclear reactor technologies, and advanced fuels.
The Commentariat
Environmental lobby group the Sierra Club is opposing some of the most successful steps taken to lower CO2 emissions, writes US energy investment adviser Simon Lack. He says by opposing new natural gas infrastructure, the Sierra Club is standing in the way of the shift from coal to lower-emitting natural gas.
“Southern Australia uses solar and wind for almost 40% of its electricity. Because they can’t use it all when it’s produced, customers pay up to 79 cents per kilowatt-hour to store their excess solar-electricity in batteries, and then again when it’s discharged. This is ten times or more than the wholesale cost of US electricity.”
Three more things
Australia will not be able to meet gas demand from 2028, according to new analysis from global energy consultancy Wood Mackenzie. The crunch is expected to drive up gas prices as imports becoming the country’s only option to meet domestic demand while at the same time honouring its export commitments.
The Australian
The US has surpassed Russia and Saudi Arabia to become the top producer of crude oil, according to the US Energy Information Administration.
A group of civil rights advocates is suing the US state of California’s Air Resources Board, arguing the state’s climate policies are unfairly harming its poorest residents, including Latinos and African Americans.
Forbes
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