WA won’t escape higher energy costs as the political plays grind on.
LET’S not beat around the bush.
The introduction of renewable energy into the power grids across Australia has been bungled from the start.
It’s the great untold story.
The reason why you have not heard much about it is that neither side of politics can afford to criticise the other.
Both are equally culpable.
And they are reluctant to speak up about the current shambles because of the pressure being exerted by the Greens – all care, no responsibility – and the prospect of being savaged in social media.
The days of rational debate, unfortunately, are long gone.
One of the features of the current debate – or lack of it – has been the demonisation of natural gas, which is a significant factor in Western
Australia’s energy mix and a transition fuel from coal to renewables.
But not on the eastern seaboard, and particularly in Labor-governed Victoria, easily Australia’s most radical state, where exploitation of abundant gas reserves has been blocked by a ban on fracking.
Combined with that state’s antipathy towards baseload coal-fired power stations – they are rapidly being phased out – and the inability of solar and wind power to pick up the slack when required, it’s no surprise energy prices are tipped to jump.
The war in Ukraine has been blamed for the increases, but it’s really a simple case of supply and demand. Limit the supply and price shoots up. Economics 101.
It’s much the same in NSW where a coalition government has lacked the ticker to push ahead with new gas ventures to ease the supply challenge there.
How absurd is it no government in the east is prepared to emulate the 2006 decision of former WA Labor premier Alan Carpenter, which ensures 15 per cent of all locally produced gas is reserved for domestic consumption?
Hence, WA prices will be contained.
Instead, the attention-seeking NSW Treasurer, Matt Kean, wants WA to be forced to feed locally produced gas into a national market – a concept Victorian Premier Dan Andrews now supports.
How foolish. As Premier Mark McGowan has noted, there is no trans-continental gas pipeline – as advocated by former Liberal premier Colin Barnett – or gas receival facilities at east coast ports.
WA’s record is better, but power supply issues could surface within weeks.
One of the problems is also, in a sense, a triumph.
The uptake of roof top solar panels has exceeded all expectations, thanks to an over generous introductory offer by the Barnett government.
Liberal treasurer Troy Buswell tried to rein in the concessions in his 2013 WA budget, but was howled down and had to raise the white flag.
Synergy’s revenue has taken a hit, and the massive amount of solar power flowing into the grid on sunny days has upset the equilibrium provided by coal-fired power stations required to generate 24/7.
This prompted the recent warning by WA Energy Minister Bill Johnston for householders to be economical with power use, or “power supply interruptions” – they used to be called “blackouts” – could occur.
And bad luck for Collie when the town’s government-owned power stations close in 2030.
But, remember Prime Minister Anthony Albanese trumpeted claims during the election campaign that Labor’s policies on renewables would drop annual household power bills by $275 and create 604,000 jobs – that’s right, 604,000 – throughout Australia.
Prediction: neither will happen.
Western Australians should not feel too smug about our good fortune regarding power prices.
The predicted increases of up to 56 per cent in the east over the next two years will be reflected in the price of the billions of dollars worth of manufactured goods from interstate.
And make sense of this, if you can: as coal-fired power stations are closed, coal exports from NSW and Queensland proceed at breakneck speed.
As one senior minister in the Albanese government told me: “If they (foreign customers) want to buy our coal, we’ll sell it to them.”
Go figure.
