Relying on vagaries of the wind risks power penury

Australia has far to go in its renewables energy journey towards 2030 and 2050, but the shortcomings of the process are becoming intolerable for many, hurting businesses, households and the economy. If the damage is to be minimised pragmatic policy is essential, including expediting new gas fields. Voters expect constructive action, which is one reason the Crisafulli Liberal National Party government in Queensland, which has the nation’s most pragmatic energy policy, scored a stunning triumph in Saturday’s Hinchinbrook by-election. It defied the trend towards minor parties in the regions and the fact incumbent governments rarely win new seats in by-elections, wresting back the seat from the Katter’s Australian Party. It reaffirmed the importance, after a year in office, of the LNP focusing on voters’ main concerns, including energy and living costs.

On Saturday, The Australian revealed a fundamental flaw in the east coast’s energy transition, casting doubt on whether a weather-dependent grid could keep the lights on. The Australian Energy Market Operator’s grid road map, Chris Uhlmann reported, is being built on a model that assumes wind power will never fall below 14 per cent of its generation capacity for several days. But an expert study of last year’s autumn wind drought, produced by a group of leading ­energy experts, shows wind collapsing to about half that level during three separate week-long slumps – raising serious questions about the reliability of renewables dependent on the weather to power the network. The generation gap was pinpointed by Queensland-based Global Power Energy, a specialist consultancy, whose 15 leaders have more than 400 years of combined ­technical, regulatory and commercial experience across generators, networks and the market operator.

Further doubt about the security of power supplies emerged on Monday, with data from the Clean Energy Regulator showing Australia faces its worst year of investment in solar and wind supplies for a decade, heightening concern the nation will fall short of its 2030 target of 82 per cent renewables. But the costs are proving crippling. Last week’s inflation rise, driven by a 37 per cent hike in power bills across the year, killed off expectations of another interest rate cut in the foreseeable future.

On Monday The Australian reports on how rising power prices are affecting businesses. At Echuca on the Murray River in Victoria, Cameron Kenley’s Cadell Food Service, which employs 200 people and supplies food to hospitals, prisons, pubs, cafes and bakeries, is paying an additional $200,000 for electricity on top of the $500,000 the company was paying in 2023. Off-peak energy prices had jumped by 15 per cent, even with solar panels installed on the roof of Mr Kenley’s warehouse. On Sydney’s north shore, hairdresser Cathy King paid $1800 a quarter for electricity for her Mosman salon in 2023. That jumped to between $2300 and $2500 a quarter last year, and she now pays $2800 a quarter. Despite spending $500,000 on solar panels, Sam Lentini, owner of Eastcoast Beverages at Kulnura, north of Gosford on the NSW Central Coast, is grappling with power price hikes of more than 50 per cent. He has had to lift prices, prompting customers to look for cheaper alternatives. Perth food distributor Damon Venoutsos of New West Foods is paying more than $20,000 a month for energy, up from $7500 a month in 2023 and $10,000 to $12,000 last year. Smart device retailer Happytel Retail Group at Auburn in Sydney’s west spent $100,000 on power this year, up from $88,000 last year.

The ability of governments in an energy-rich nation to manage power costs will be one of their sternest tests. Band-Aid measures such as indefinite subsidies funded by taxpayers are not a viable or sensible option. The Queensland government, which owns and operates power infrastructure through corporatised entities, is taking a sensible, pragmatic route. Its plan, driven by Premier David Crisafulli and Treasurer and Energy Minister David Janetzki, is to keep coal-fired power stations operating longer and work with the private sector to deliver an additional 400 megawatts of gas-fired electricity in central Queensland, in addition to renewables. It also has dropped pie-in-the-sky hydro-electric and hydrogen projects that were never properly costed or tested by Labor. A less practical, ideological policy would have seen a different result in Hinchinbrook. Opposition Leader Steven Miles’s whinge to the ALP state conference that the LNP had “gagged the parliament from talking about abortion, refused medical care for young trans people and banned pill testing” shows he does not grasp voters’ priorities. Power supply and price are also the reason Australia cannot afford a part-time Energy Minister, with Chris Bowen focused on emissions reductions at COP31.