August 11th 2018


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Articles from this issue:

COVER STORY Doctor-patient privilege dies with My Health Record

EDITORIAL By-elections reflect disenchantment with major parties

CANBERRA OBSERVED Longman result may force PM to rethink policies

INTERNATIONAL AFFAIRS No question about it: the Don is in charge

ENERGY Lower electricity price a fantasy

EUTHANASIA Vulnerable will be victims of Leyonhjelm's deadly bill

LITERARY STUFF Atlas Mugged

PHILOSOPHY On human nature

CULTURE AND SOCIETY The shadow of that hyddeous strength

FICTION A Scent of Musk

MUSIC Globalised Music

CINEMA The Equalizer 2

BOOK REVIEW ADF as modern peacekeepers

BOOK REVIEW The men who built up a great tradition

LETTERS

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ENERGY
Lower electricity price a fantasy


by Peter Westmore

News Weekly, August 11, 2018

The meeting of state and federal energy ministers convened to sign off on the National Energy Guarantee (NEG) has been given a briefing paper from the Council of Australian Governments’ Energy Security Board claiming that with the National Energy Guarantee in place, there would be a reduction of $550 a year on consumers’ electricity bills.

Yokohama, one of Japan's 45 new

HELE coal-fired power plants.

The National Energy Guarantee (NEG) is designed to end the uncertainty over future energy policy, by encouraging investment in energy projects which will drive down costs, while meeting the government’s Paris Climate Change target.

However, the leaked briefing paper has no plan to replace the closed SA and Victorian brown coal-fired power stations with new baseload power, and has no estimate on the impact of the closure of the 2000 MW Liddell Power Station in NSW, due to take effect in 2022.

Instead, it relies on more of the same: expansion of wind and solar energy, backed up by expensive gas-fired power stations and more inter-connectors between states, to deliver cheaper power in the future.

In light of the fact that these policies are the cause of the present surge in power prices, it would be recklessly naive to believe that they are also the solution.

The briefing paper says, “The continued connection of additional renewable generation projects to the NEM (national energy market) in coming years is projected to see prices fall from today’s elevated levels.”

The briefing paper predicts that  retail prices will fall because of “policy stability, reduced risk for new investments, increased contracting, deeper contract markets and an increased voluntary demand response.”

Increased voluntary demand response is an Orwellian term meaning that large industrial users will simply shut down when electricity prices are high, meaning that the plan envisages a reduction in Australia’s already low manufacturing output.

It is interesting to compare the response of other comparable countries to the challenge of higher energy prices.

Japan faced this problem after the Fukushima tsunami in 2011, the subsequent meltdown of the Fukushima reactor and the closure of all the country’s 54 nuclear power stations.

Power prices soared, and industrial production slumped. All other energy sources, including coal, renewables and gas-fired power stations, expanded to meet the power shortfall.

In 2012, a renewable feed-in tariff, similar to that which has pushed up prices in Australia, was introduced.

It required electricity companies to purchase electricity generated from renewable energy sources on a fixed-period contract at a fixed price. Cost for purchasing is paid by electricity users in the form of a nationwide surcharge (www.iea.org). Not surprisingly, prices rose further.

In response, Japanese power companies have announced plans to rapidly expand the number of new high efficiency low-emissions coal-fired power stations, as well as the phased re-opening of nuclear power plants, after they passed higher safety tests.

According to Science magazine, Japan has opened “at least eight new coal power plants in the past two years and has plans for an additional 36 over the next decade—the biggest planned coal power expansion in any developed nation” (11 May, 2018).

Another advanced Asian country, South Korea, is also a major user of coal-fired power, despite claims by the country’s President, Moon Jae-in, that he plans to reduce the country’s dependence on coal and nuclear power stations, and increase renewable energy.

In 2017, three new coal-fired power stations came on-line, with a combined generating capacity of over 5 GW.

Statistics released in late February by state-run Korea Electric Power Corp. (KEPCO) said South Korea’s coal-fired generation supplied 43.2% of the country’s electricity, up 3.6 percentage points from 2016 ).

Nuclear power supplied 27.5% of the country’s generation, followed by liquefied natural gas (LNG) at 20.8%.

The combined total from coal, nuclear and natural gas was therefore over 90 per cent of the country’s generated electricity.

Israel

We rarely hear much about electricity generation in Israel, a country which has great potential for renewable energy, particularly solar power. Israel has around 300 days of full sunlight every year.

For many years, Israel has mandated solar hot water heaters, so they are seen everywhere throughout the country.

Because of its acute water shortage, Israel has pioneered the establishment of water desalination plants which now provide most of the country’s fresh water. However, they are large users of electricity.

Despite its solar potential, in electricity generation, around 95 per cent of Israel’s electricity is generated from natural gas and imported coal and diesel fuel.

The country’s two largest power stations, at Hadera and Ashkelon, run on imported coal, and generate about 30 per cent of the country’s electricity.

Contrary to the repeated assertions in the media and from politicians that coal-fired power has no future, it is clear that coal is an integral component of a balanced electricity system.

 




























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