April 21st 2018


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Articles from this issue:

COVER STORY The deeper causes of Australia's social malaise

GENDER POLITICS Queensland proposes transgender birth certificates

CANBERRA OBSERVED Malcolm at 30 (polls): the cloud on Turnbull's horizon

NATIONAL AFFAIRS Cardinal Pell firmly denies sex abuse allegations

NATIONAL AFFAIRS Sydney Archdiocese aims to eliminate slavery in supply chain

RURAL DEVELOPMENT Irrigation along Fitzroy River proposed and opposed

LIFE ISSUES Abortion Rethink Summit: the case for care

VERBATIM WA food, drink producers face shortage of carbon dioxide

HOUSING AFFORDABILITY Land costs: economist Henry George's solution

ELECTRICITY Will Turnbull lose three out of three?

ECONOMICS Trade wars: tariffs unlikely to be fired in anger

SEX AND TEENS How about support for the abstaining majority?

VISUAL ARTS Layers of meaning in Botticelli's La Primavera and The Birth of Venus

MUSIC Is it good?: Or, do we just like the sound it makes?

CINEMA The Death of Stalin: Black comedy of a dark time

BOOK REVIEW Cool head on topic that generates heat

BOOK REVIEW Life's not so bad: from the outside

POETRY

LETTERS

OPINION What a republic would really mean for Australia

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ELECTRICITY
Will Turnbull lose three out of three?


by Peter Westmore

News Weekly, April 21, 2018

After sitting on his hands while Alinta Energy closed South Australia’s Northern Power Station in 2016 and Engie closed the Hazelwood Power Station in Victoria in 2017, Prime Minister Malcolm Turnbull faces a third test of his leadership over plans by energy monopoly AGL to close the Liddell Power Station (pictured) in New South Wales.

Liddell Power Station

Liddell Power Station, built by the NSW government in the 1970s, prod­uces 2,000 megawatts of base-load power from steaming coal in the NSW Hunter Valley. The NSW government sold it to AGL for a song in 2013, when privatising the state’s electricity assets. At the time, Australia had a surplus of generating capacity, and the government was pleased to offload Liddell, which was considered old and unnecessary. The only cost to AGL was for restoration of the site after the power station closed down.

Since being acquired by AGL – which has long boasted that it intends to exit coal and get all its power from renewable sources – Liddell has been a major contributor to AGL’s highly profitable bottom line.

The closure of Liddell will remove one of the largest base-load power stations in the country, inevitably push the national electricity grid towards higher prices for energy and increase the probability of blackouts in four states, NSW, Victoria, South Australia and Tasmania.

Enlightenment

Malcolm Turnbull, long an advocate of alternative energy and the IPCC climate change agenda, suddenly realised the consequences of the removal of coal-fired power stations from the national grid after South Australia suffered blackouts in 2017.

Previously the Turnbull Government had been offered the Northern Power Station in South Australia, but refused to commit to keeping it open, so it closed.

When the 1600 MW Hazelwood Power Station closed in 2017, with the connivance of the Victorian Labor Government, Turnbull again had the opportunity to keep it open, but again did nothing.

However, the blackouts in South Australia and the soaring price of electricity served as a wake-up call to the Federal Government, presenting a major policy challenge for the Prime Minister.

Mr Turnbull had supported the anti-coal agenda of the environmental movement, the Kyoto Protocol, which promised major cuts in carbon-dioxide emissions by developed countries, and the agenda of the Intergovernmental Panel on Climate Change (IPCC).

In order to square the circle, he promised both to fulfil the Government’s commitment to the IPCC to cut Australia’s emissions by 28 per cent by 2030, and at the same time, to ensure Australians “affordable and reliable” power.

The central element of his policy was the National Energy Guarantee (NEG). The NEG is an energy policy proposed by the Turnbull Government in late 2017 to deal with rising energy prices, insecurity of supply and lack of clarity for energy companies to invest in energy infrastructure.

This is supposedly managed by a free-market mechanism, run by the Australian Energy Market Operator.

The problem with the NEG, however, is that despite the rhetoric, it contains nothing which will ensure affordable, reliable power despite the existence of various regulatory bodies which are supposed to ensure it.

The problem with current energy policy was seen during a mid-summer heatwave. Because of insufficient base-load power and an excessive reliance on high-priced renewable energy, on Sunday January 28, 2018, power prices soared across the south-eastern states.

The price of electricity in Victoria, South Australia and Tasmania soared to around $270-$290 per megawatt/hour, compared with a price in Queensland of $113.71 per MW/h, and $128.32 in New South Wales. Blackouts also occurred.

Liddell closure

After AGL announced that the Liddell Power Station would close in 2022, Mr Turnbull called on the company to ensure that there was equivalent base-load power (2,000 MW) from either a replacement station or alternatives, or keep the power station open.

AGL later rejected Mr Turnbull’s request, and confirmed that it intended to close Liddell on schedule, saying it would replace it with gas, renewables and battery storage.

However, the Australian Energy Market Operator (AEMO) has examined AGL’s plan, and found it radically failed to replace Liddell’s base-load power. Alinta Energy has said that it may buy Liddell, and a price of $1 billion has been mentioned. AGL, though, has shown no willingness to contemplate a sale which would potentially cut future profits.

Mr Turnbull has said repeatedly that he would not allow the loss of Liddell’s generating capacity from the national grid. Senior Liberal and National MPs are so concerned with the developing crisis that they have formed the Monash Forum to push for the maintenance of coal-fired base-load power in Australia, using new high-efficiency low-emissions technology.

The acid is now on Mr Turnbull to deliver on his promise to provide reliable and affordable power, and to prevent the closure of Liddell.




























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