Carbon Squeeze: Australia’s Dark Future

Australia’s energy policy is rapidly changing from an expensive signal of virtue to a real disaster.

After narrowly winning the federal election with 77 of 151 seats, the government implemented several measures designed to accelerate emissions reductions well beyond existing targets.

In 2016, the Turnbull government ratified the original Paris Agreement with a target of 28% for 2030. The Albanian government has increased this commitment to 43%, but with only half the time remaining to achieve it. Given the financial and environmental costs involved in trying to meet even the 28% target, it will be extremely difficult to accelerate emissions reductions in a shorter time frame.

And difficult means expensive.

Source: ALP Election Campaign Modeling

Nation rewiring is an emissions reduction plan announced early on, including a new $20 billion bureaucracy dedicated to forcing transmission lines through farmer paddocks. For context, the State of the energy market report values ​​the entire east coast transmission network at $21.7 billion. The last $20 billion government project was the NBN, which ended up costing double that (and more).

AEMO’s much-vaunted integrated system plan – supposedly the ‘least regrettable’ solution to achieving impossibly high renewable energy outcomes – is now completely irrelevant, with ISP projects advanced by almost two decades. Instead of three projects completed by 2030, nine ambitious new transmission lines are expected to be completed within the same time frame.

Source: ALP Election Campaign Modeling

Another early promise is an 82% renewable energy target imposed on the crumbling power system – a system fragmenting into small weather-dependent generators that is rapidly shrinking the margin between a stable grid and outages. With the national electricity market already on life support, the outlook for low cost and high reliability is bleak.

Billions of dollars worth of perfectly functioning power plants are being deliberately dilapidated and prematurely shut down. The physics of power generation remains unchanged, so replacing these shuttered generators will require alternatives – synchronous capacitors and grid-scale batteries; demand management and virtual power plants; reduce wind and solar energy; five-minute rule and emergency reserves; and, of course, many more transmission lines.

Following the State of the environment report, the government is signaling new restrictions on farming and logging, while presumably (and hypocritically) relaxing controls on land clearing to accommodate more wind and solar farms. Delivering on promises on electric vehicles will propel societal inequality, benefiting only those willing and wealthy enough to finance an electric vehicle.

You don’t have to look far for an example. Appearing on the RenewEconomy podcast, Energy Minister Chris Bowen praised its free charging in Parliament, while lamenting the lack of charging infrastructure between Sydney (home) and Canberra (work). Apparently Bowen can’t drive to Canberra and then back to Sydney within 24 hours; limitation of their electric vehicle.

Bowen promised to install fast chargers at his workplace and at 150 km intervals on highways, and to replace the federal vehicle fleet (some 10,000 vehicles) with electric ones. Expect the used vehicle market to be flooded with electric vehicles from former governments every three years. The reality is that a subsidy for electric vehicles is a subsidy for the rich. The taxpayer thanks Mr. Bowen for his personal carbon sacrifice.

So where will carbon compression hit? Which industries and businesses will feel the Puritan pinch of our increasingly UN-aligned political elites? Reducing emissions is a mechanism to implement degrowth across the economy.

Source: industry.gov.au

Emission reductions in land use (108 Mt), electricity (32 Mt) and agriculture (12 Mt) have done the heavy lifting to date, but several industrial sectors have increased their emissions over the sixteen years since 2005. Along with the population, the demand for fossil fuels, fertilizers and food is also increasing.

The raw materials needed to power solar panels, wind turbines, batteries, electric vehicles and transmission lines will massively increase mining. This results in huge increases in energy consumption, not only in mining, processing and transportation, but also in converting these materials into their end products. However, none of that seems to matter, with those “necessary” extra shows being compensated for somewhere, somehow. Are they counted in the total reduction plan? Who knows.

The NGER register the top 20 companies in terms of emissions account for more than 200 Mt, almost half of the current total national emissions. These companies are exclusively power generation, resource and energy companies. Aviation is the only other industry to make the top 50. The existing ‘safeguard mechanism’ is reduced to 0.1 Mt, above which a company is required to finance negative emissions (outsourcing abroad, planting trees, adopting renewable energy or green hydrogen, etc.) or simply reducing their carbon footprint by reducing their workforce.

Mines, power generators, gas companies, cattle ranchers, fertilizer makers, aluminum smelters — value-added businesses that keep the country running — are doomed to increased overhead. They suffer from inflation, rising wages and rising interest rates, so why not add an arbitrary carbon tax? The resulting higher prices make it more difficult to compete internationally and add to cost of living pressures.

A feeling of fatality is cultivated by the political class in order to avoid criticism and questions about the feasibility of these policies. Unsurprisingly, no changes to droughts, floods, heat waves, cold waves or sea level rise are promised due to lower emissions. The only reason given for destroying remnants of Australia’s energy security and increasing record national debt is to join a growing global transition.

A transition implies an end state. One day we may be lucky enough to have a clear picture of what it looks like. Meanwhile, between the spiraling cost of living and the subsidization of a mythical transition, taxpayers will pay extra for coal and gas to keep the lights on.

Ben Beattie is an electrical engineer in the electricity and natural gas industry.

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