Familiar Territory: Chief Minister Busted Lying About Staggering Cost of Renewable Energy Roadmap
Shamelessly promoting unreliable renewable energy is one thing, but barefaced lying about its cost, is quite another.
Wherever wind and solar make up any significant proportion of a power supply, retail power prices soon rocket.
Rising power prices are the guaranteed consequence of duplicating capital costs; additional system costs – including the greater need for frequency control services; running conventional generators inefficiently and switching to highly inefficient fast start gas and diesel generators to compensate for the total and totally unpredictable collapses in wind and solar output. [Note to Ed: you should correct that to point out that sunset is fairly predictable].
Tacked on top of the wholesale price is the cost of the subsidies, tax credits, mandated wind and solar targets and guaranteed over the market contract prices. All ultimately born by taxpayers and/or power consumers.
There is not a single case in the world where the increased penetration wind and solar has resulted in lower retail power prices.
Which makes the promises and claims made by the Northern Territory’s Labor government in the run-up to the August 2020 last election look all the more courageous.
When pitching his – all solar – renewable energy roadmap Labor leader, Michael Gunner went all in – asserting that his plan was guaranteed to reduce retail power prices.
As Amos Aikman details below, at the same time as Gunner was making his pitch to voters, he was sitting on a detailed report which concluded that Gunner’s plan would not only leave Territorians out of pocket, but was likely to leave them sweltering in the dark after sunset or during cloudy weather.
Energy report reveals Labor knew about renewables cost
10 December 2020
Consumers will have to pay higher electricity bills and taxpayers will have to fork out at least $1bn extra if the Northern Territory is to meet Labor’s ambitious green energy target, according to modelling that contradicts politicians’ claims the target will cost nothing.
The modelling was produced by the public utility Territory Generation and warns that reaching 50 per cent renewable power by 2030 will likely push up system costs by 20 to 30 per cent and leave about $1.9bn worth of prepurchased gas “stranded”.
“Reaching the 50 per cent renewable target by 2030 will require a total investment of $1.1bn to $1.3bn — $600 to $700m in new generation, $300m to $350m to augment the network … and $200m to $250m in battery storage, even assuming technology costs decline over time,” a summary of the modelling says.
“Capital costs will replace fuel costs as the key driver for electricity prices … if real retail electricity prices are maintained at the current level, the value of this investment … would be borne by the government through incremental CSO (subsidy) payments.”
The summary was produced in June 2017, shortly before Chief Minister Michael Gunner released his government’s Roadmap Renewables report. It raises questions about whether he misled voters by claiming the 50 per cent target would be cost-neutral.
“We see this very much as about substitution rather than additional costs … the cost of renewables is coming down, and so this provides a much smarter, better way of providing reliable and affordable electricity for Territorians,” Mr Gunner said that November when asked to guarantee that the policy would not cost a dollar more.
“The advice we’re getting from the renewables committee is that an investment in renewables will actually put downward pressure on household prices.”
The Securing the NT’s Energy Future report The Australian has obtained represents the first public airing of the government’s internal cost estimates.
The material is understood to have been circulated to ministers, and the government is believed to have several other reports also showing transitioning to 50 per cent green power will not be free.
Labor has fought hard to hide the true costs of its climate change mitigation plans.
The Territory Generation document endorses the government’s green energy push but warns it will inevitably be expensive and could also cause blackouts if mismanaged.
“Depending on the approach that the NT government takes, a poorly co-ordinated transition to renewables might not reach the renewables target, or in the worst case could lead to significantly higher costs and system security issues,” it says.
The government’s solar tsar, Alan Langworthy, warned in March that lousy preparation was already putting the electricity network at risk. After an outage last month, he said the system was “running on luck”.
The Territory has only one source of renewable power, solar. Increasing its penetration means duplicating generation capacity to cope with cloudy days and night-time.
“Under the business-as-usual approach, uncoordinated small investments in solar generation will continue to contribute to overcapacity, negatively impact reliability and security … and put upward pressure on overall system costs,” the report says.
“The current supply contracts between TGEN and retailers have led to distorted incentives for retailers to underwrite renewables investment that will actually increase total energy cost, strand TGEN assets and blur the traditional boundaries between generation and retail.”
Territory Generation did not respond to requests for comment on Thursday.