Bowen betting our economic future on renewable delusion


You don’t have to be a climate sceptic to conclude that the government’s energy policy is bonkers.

You just have to listen to the Energy Minister’s words. Last week, Chris Bowen outlined the challenge of meeting Labor’s 2030 emissions reduction target to a conference in Sydney. Reducing emissions by 43 per cent will require the installation of 40 seven-megawatt wind turbines every month from now until 2030, each one as tall as the Sydney Harbour Bridge. It will require more than 22,000 500-watt solar panels to be installed every day for the next eight years, 2.4 for every man, woman and child in total. New solar farms would cover an area dozens of times larger than the Melbourne CBD.

All this supposes we can buy the things in the first place. Polysilicon wafers are in short supply and 95 per cent come from China.

Let’s not even get started on the pink batts question. The rooftop solar installation business is plagued with the same shonky operators that turn up like wasps to a barbecue when subsidised, government mega-projects are announced.

Last month, the Clean Energy Regulator started investigations against a Perth company accused of fraudulently claiming $1.5m in solar panel installation rebates.

NSW Fire and Rescue attended 151 solar panel fires in 2020-21, up from 56 in the previous year, faulty isolation switches being the main cause.

Jeff Dimery, the head of Alinta who has had somewhat more experience in the energy game than Bowen, says we’re on course for an energy transition “train wreck”.

“I personally don’t believe we can achieve the transition based on what we’re seeing to date,”

Dimery told the AFR last week. “I think we’re headed for failure.”

Anthony Albanese was elected on a promise to cut household energy bills by $275 in his first term. A survey by Compass Polling last month found 70 per cent of Australians don’t believe him.

Last week Australian Competition and Consumer Commission chair Gina Cass-Gottlieb told a parliamentary committee household energy bills had risen by $300 since April.

Dimery predicts energy costs will rise by at least 35 per cent in 2023. Jim Chalmers says energy is the most “problematic aspect of our inflation problem over the course of the next six or nine months”.

Yet Bowen stood as steady as the legless Black Knight in a Monty Python movie last week, refusing to budge. He told the conference that “getting more renewables in the system will mean lower power prices”. He added: “I don’t think that should be such a controversial statement in Australia in 2022.”

Bowen is betting the future of the economy on his counterintuitive assumption that a transition from hydrocarbons to solar, wind and batteries will bring the cost of energy down. In every country that has gone down this path, the very opposite has occurred. Even before Russia’s invasion of Ukraine, energy prices had risen between 60 per cent and 100 per cent in Britain and Germany since renewable investment began at the start of the century.

In Australia, energy prices fell for 60 years until the start of the renewable era. Now they’re rising.

Bowen hasn’t said when the correlation between rising investment in weather-dependent zerocarbon energy and rising prices will start to reverse. He does, however, stand by the modelling he commissioned in opposition, which predicts that the average household energy bill will fall by $385 once we reach the magic 82 per cent renewables share in the energy grid in eight years’ time.

Rising electricity prices aren’t all bad news, according to Guardian Australia, which reported last week that sales of household solar arrays were through the roof. To illustrate what good news this supposedly is, the Guardian claimed rooftop solar supplied almost three-quarters of WA’s total energy demand on the weekend before last. Confirmation-biased reporting like this demands a little fact checking.

The Australian Energy Market Operator’s records show rooftop solar supplied 71 per cent of demand in WA at 12.30pm on Saturday, October 8. Between 6pm Saturday and 6am on Sunday, however, rooftop solar was supplying 0 per cent. During that period three-quarters of the power was supplied by coal and gas.

The answer to this little hiccup, as every Guardian Australia reader knows, is to install batteries, which, as every Guardian reader also knows, are getting cheaper by the minute.

The cost is falling so fast that electric cars and vans will be cheaper to buy than petrol or diesel vehicles by 2027, the newspaper reported in May last year.

In February this year, however, economic reality reared its ugly head. “Gone ballistic” read the Guardian’s headline. “Lithium price rockets nearly 500% in a year amid electric vehicle rush.”

The cost of installing a Tesla Powerwall, a domestic energy storage unit the size of a fridge, has risen from less than $10,000 in 2017 to about $19,000 today.

None of this should surprise.

Improved technology and manufacturing efficiency gains were only going to push battery prices downwards for so long. The International Energy Agency has analysed the cost of moving from a fuel-intensive energy system to a material-intensive one. Far from eliminating hydrocarbons, the IEA forecasts, the demand for minerals such as lithium, graphite, nickel, copper and rare earths will rise by 4200 per cent, 2500 per cent, 1900 per cent and 700 per cent respectively by 2040.

If nothing else destroys the delusion that renewable energy offers nothing but healing kindness to a desiccated planet, the rapacious hunger for minerals surely must. In an influential recent paper for the Manhattan Institute, Mark P. Mills predicts that meeting the world’s transition goals will require dozens of new mines for each of a dozen classes of minerals, each at the scale of some of the biggest mines in the world today and each requiring tens of billions of dollars of investment.

“The lessons of the recent decade make it clear that SWB (solar, wind, batteries) technologies cannot be surged in times of need, are neither inherently ‘clean’ nor even independent of hydrocarbons, and are not cheap,” Mills writes.

Having set Australia’s 2030 and 2050 emissions targets in stone, it falls on Bowen and Anthony Albanese to produce plan B. Assuming, of course, they have one.

Nick Cater is executive director of the Menzies Research Centre.

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