With the Coalition changing its mind on a daily basis about the future of renewable energy, Labor Party leader Bill Shorten is sure of two things.
A renewable energy target of 50% of supply of electricity by 2030 under an ALP government is a definite. It ain’t changing. And the blunt policy tool that will get us there is an emissions intensity scheme which penalises polluting generators.
“If you don’t have a plan for climate change you don’t have a plan for energy security,” Labor leader Bill Shorten said on Thursday. “Energy and climate policy must be integrated.”
On Labor’s numbers, swift implementation of its simple policies will free up $48 billion in private sector investment and create tens of thousands of jobs.
Face the problem head-on
It sounds very simple, but politics gets in the way.
“Every day our Prime Minister chooses his own career survival over the science, over the facts, over the future, it is another day wasted,” Shoten said, speaking in the offices of Bloomberg on the 27th storey of a six-star NABERS-rated building with vertiginous views of Sydney Harbour.
“This policy paralysis is stalling investment in our electricity sector … [and] ignoring climate change is a premeditated act of intergenerational theft.”
Electricity generation contributes nearly 40% of Australia’s greenhouse gas pollution, making the sector a target for improvement.
Three-quarters of Australia’s coal- and gas-fired generators are beyond their designed life, and yet they are still relied on for baseload power. “Some are over 50 years old,” Shorten said. “Not many of us drive 50-year-old cars, work with 50-year-old computers … and I’m sure none of you have on your person a 50-year-old phone.”
Planning for replacement of outdated infrastructure starts now, he said. Renewables such as solar and wind are grinning candidates but “the obvious alternative to coal as a baseload power source is gas”, he said. “[And] we’re not writing coal off, we know it will continue to be a major part of Australia’s energy future.”
It’s a scheme, not a tax
In the long term, however, and to meet the Paris targets, the electricity sector must wean itself off polluting resources.
“The first and most important step we can take is to provide certainty; to assist with the transition to renewable energy by establishing an emissions intensity scheme [EIS] in the electricity sector.”
An EIS sets a benchmark on the greenhouse gas emissions sent into the sky per unit of energy produced as measured by megawatt-hour. “This rewards energy generators that produce electricity with greenhouse gas pollution less than the benchmark and it provides a disincentive for energy generators that produce pollution levels higher than the benchmark.”
A Labor EIS would not rely on taxpayer funding or government officials making investment decisions, he said, underlining the ideological irony offered in the Coalition’s support of polluting technology. “They call us socialists, but their approach is Soviet.”
Emissions trading is inevitable, he said, and necessary. “Without certainty and without the right policies in place, there can be no confidence to invest.”
The gas solution
Wind and solar will be obvious benefactors of an EIS … but so will gas, Shorten said.
“Gas produces roughly half the pollution generated by burning coal, so an EIS will inevitably make it a more attractive investment.”
Costs of renewable technologies will continue to fall and more and more batteries will be fitted to new and existing residential solar systems, but “gas will be critical as a cleaner, cheaper, more flexible source of baseload power compared with coal.”
The CSIRO and Energy Networks Australia estimated an EIS would save households an average $216 a year.
Shorten had some other stats to back him up.
Since 2000, solar power has doubled seven times as proportion of global energy generation. Wind power, four times. Since 2009, solar costs have dropped 90% and wind power 50%. In the past decade, the number of Australian households with rooftop solar systems has risen from a few hundred to 1.6 million. “There is not an industry in taking solar panels off roofs; there is an industry in installing them.” The number of homes with storage is expected to triple this year.
The profit motive
There’s no turning back the clock, but Shorten lamented the effects of privatisation on stability and pricing in the National Electricity Market over the past 15 years. Owners of networks can hardly be expected to make decisions about system design which go against the profit motive, but something has to give.
“We need to build an electricity system that manages the fluctuating nature of renewables and smoothly integrates them to the national grid,” he said, recalling Labor’s proposed electricity modernisation review and promising it had not been relegated to the bottom drawer.
“We shouldn’t have to wait until another election to get this underway,” he said, offering hope for any agreement between federal and state governments which prevented unnecessary power losses, increased connectivity to boost efficiency across Australia, improved accountability of regulators and changed the national objective to “reducing pollution as a guiding principle”.
And what about the NEM?
Only genuine competition and transparency, he said, would stop providers tweaking supply when it suited them “to drive up price”.
“Professor Finkel’s energy market review when it is released cannot be allowed to sit on the shelf and gather dust or be shuffled out the door on a two-line press release on a Friday.”
He also committed to ongoing support for research and investments through the Australian Renewable Energy Agency and the Clean Energy Finance Corporation.
As for the Coalition’s latest plan for reliance on clean coal, which the Climate Institute estimates will require government support in the realm of $27 billion to $44 billion, “it would be like building the NBN with copper”, Shorten said.
“Gambling Australia’s energy future on un-built and unproven clean coal is like punting on last year’s Grand Final today … and picking the losing team.”