The tortuously slow path to decarbonization
Climate change and regional adjustment
No matter what any Australian government does, over the next 28 years to 2050 there will be less demand for Australian coal, with demand for thermal coal falling faster than demand for metallurgical coal.
In a major research project, the Centre for Policy Development has examined the regional implications for the Australian economy as this demand falls, and has published its findings in a report: Who’s buying? The impact of global decarbonisation on Australia’s regions.
It has examined three scenarios – the present commitments to decarbonization, likely more ambitious targets, and an even stronger scenario if the world is to achieve net zero by 2050. Depending on which path the world follows, in Australia between 100 000 and 300 000 jobs will be exposed to decarbonization, and they will be regionally concentrated – in Queensland’s Bowen Basin, the Hunter in New South Wales, and the Pilbara in Western Australia. Most heavily affected will be jobs for machine and plant operations and other engineering trades, but there will also be regional multiplier effects, with an impact on all occupations.
The CPD researchers suggest that all three regions are ripe for transformation to become renewable energy industrial precincts. Such precincts can be not only the sources of renewable energy (all three regions are suitable) but also the location of energy-intensive industries.
Electricity prices – what has kept them down?
The Australian Competition and Consumer Commission has released its Inquiry into the electricity market, revealing trends in the components of electricity charges – wholesale (generation), network (transmission and distribution), environmental, and retail (the markup competing firms get for doing for what state-owned utilities used to do much more cheaply). It finds that consumer electricity prices are the lowest in eight years, mainly because network costs have been reduced because of more effective regulation of the network companies.
The Australian Energy Council draws attention to the ACCC findings, noting that household electricity prices in Australia are among the lowest in the OECD, and that competition from wind and solar has been influential in driving down wholesale prices.
Energy Minister Angus Taylor is not so sure about the benefits of renewable sources, however, claiming that the carbon price, in operation from July 2012 until 2014, destroyed one in eight manufacturing jobs – a claim resting on deceptively fallacious argument (post hoc ergo propter hoc) and backed by no credible evidence.
Taylor holds the seat of Hume, an electorate that takes in the far southwestern suburbs of Sydney and that stretches westward to Goulburn and Boorowa. In 2019 Taylor held it with 63 percent of the vote after preferences (53 percent primary vote) against a fragmented field of contenders. Labor, for example, won only 27 percent of first preference votes.
In the coming election it will be contested by Voices of Hume candidate Penny Ackery. You can hear her interviewed by Margot Kingston on The Transit Zone, and give her campaign some money if you want to see her join the ranks of strong independents in Parliament. (22 minutes)
Labor still cannot wean itself off fossil fuels
In a politically timid step, Labor has promised to back the Coalition’s plan for a taxpayer-funded gas-fired power station in the Hunter Valley, which happens to contain two seats Labor is hoping to retain – Hunter (3 percent margin) and Paterson (11 percent margin). By the numbers, when the national polls are favouring Labor, these seats should be safe, but the member for Hunter, Joel Fitzgibbon, who has been a strong voice in the Labor caucus for the fossil fuel industry, is retiring, and in both seats in 2019 there was a strong showing for One Nation.
Labor would impose some not-very-harsh conditions on the project, requiring it to convert to clean hydrogen fuel at the earliest opportunity.
Writing in Renew Economy – Labor backflips on Kurri Kurri gas plant, but experts say it still doesn’t stack up – Michael Mazengarb is highly critical of the whole project. As a gas-fired peaking station the project has a poor business case (that’s probably why the market won’t fund it). Labor’s plan improves its business case, and would ameliorate (but not eliminate) its contribution to greenhouse gases. It would still be a dud project, however, and the decision seems to have been made purely on the basis of electoral politics.
Bruce Mountain, writing in The Conversation, is even more critical of Labor’s work-around, pointing out that conversion of the plant to operate on 100 percent gas would require a very expensive re-design, and that it is becoming more economic to use wind and solar power to charge batteries, rather than generating and burning gas to power turbines: Labor’s plan to green the Kurri Kurri gas power plant makes no sense.