Energy policy and climate policy are an inseparable mix, perfect partners, like Red Bull and vodka, gin and tonic, malt whiskey and, um, more malt whiskey.
Our local ex-MP, Malcolm Bligh Turnbull, unfortunately twice found that imbibing this policy cocktail comes with a nasty hang- over: awaking to discover you’ve been shafted by the Climo Skeps gang, lads who never mix, never worry. They opt only for an old-fashioned moonshine, 50 proof pure ideology, distilled in a small wooden shack hidden deep in the Brindabella Ranges, high above Canberra.
This gang wreak havoc on debate, and their polar opposite (though of a similarly uncompromising ilk, pulling party cones of their organic and hydroponically grown harvest) haven’t helped either.
Despite the 10-year absence of a national energy policy framework, and little hope of future consensus no matter who is in charge of Asylum Canberra, private companies in the business of supplying energy have continued to do what businesses always have done: provide a service with the aim of turning a profit. I’m not suggesting all of them are oozing altruism and have your best interests front of mind – some of them are royally screwing us – but by and large we get a pretty good deal relative to the amount we pay.
The electricity business is something state governments have wanted out of for years now. All have tried; some have succeeded.
Sure, those state-owned corporate monopolies generated quite a bit of cash and could be loaded up with massive debt, keeping it off the government’s balance sheet. And the assets themselves are worth a pretty penny. But the downside is the sector’s uncertainty, and its cost to the taxpayer should governments get it wrong.
We have reached the point where renewable energy will soon be the most commercially sound proposition and will be adopted as the most viable means to meet our energy demands.
That’s why the private sector has resoundingly rejected any suggestion by some MPs that they should invest in new coal-fired power stations, and for good reason. The exponential take-up of small scale solar (a new panel is installed every 17 seconds on Australian homes), the eye watering advances in battery technology, the myriad sites available for pumped hydro and the flexibility of gas-fired turbine generators make building new coal-fired plants as attractive an investment as Sony Betamax.
Existing coal-fired power stations produce inexpensive energy because their original construction costs have long been written-off. So, in 2017, the marginal cost of generating power from an existing coal-fired power station is around $40 per megawatt hour, while wind power is $60-70 per megawatt hour.
However, all NSW coal-fired power stations are nearing the end of their design capability, so their operating and maintenance costs are rising and any replacements will come with an enormous price tag.
With more competition in the retail energy market, and consumer contracts now easy to break, sup- pliers have to respond not to what consumers say, but what they actually do with their money.
NSW’s renewable energy has almost doubled since 2011. The first concentrated solar thermal plant, eight new wind farms and nine new solar farms, including Australia’s first major solar farms at Nyngan and Broken Hill, came online in 2016, and this year new solar farms at Griffith, Parkes, Goulburn and Coleambally mean NSW has more solar farms than any other state.
Another 90 renewable energy projects have been approved or are progressing through the planning system, and if every one of them is built, this $26 billion investment will add an extra 18.5 gigawatts to the grid – enough energy to power every household in NSW.
Network operator TransGrid currently has enquiries from pro- posed solar, wind and hydro projects to connect an extra 40 gigawatts to the grid.
NSW customers are increasingly taking control of their own energy supply, with 410,000 households and small businesses accessing the benefits of rooftop solar, or one in six households, with many more expected to follow as system costs continue to fall.
Canberra should be providing the leadership but has proven itself incapable for 10 years now.
Thankfully energy company directors value their shareholders’ money more than parliament’s coal advocates value sound economic and environmental policy.
The NSW Government’s investment in renewable energy is the sensible thing to do to address climate change. But it’s also the commercially sensible thing to do. It never ends well when ideology trumps economic reality. Our future is a renewable energy one.
Bruce Notley-Smith is the State Member for Coogee. The views expressed here are his own, although we generally agree with them as well.