Speaker 1: The Coalition and parts of the media have seized on
Speaker 1: a report that says Australia could be set for widespread blackouts.
Speaker 2: Eastern Australia faces a heightened risk of blackouts from twenty
Speaker 2: twenty seven, amid fresh warnings from the Energy Market Operator
Speaker 2: that the grid is underprepared to manage the plan closure
Speaker 2: of the Iraring Power station in New South Wales and
Speaker 2: the surge and rooftop SOL.
Speaker 3: It shouldn't come as a surprise to anybody the renewables
Speaker 3: roll out. That ideological approach that Chris Bowen and the
Speaker 3: Labor Party have taken. We've been saying for some time,
Speaker 3: isn't just pushing prices up, it's also risking the stability
Speaker 3: of the grid.
Speaker 4: About the fossil fuels, So how could they have been
Speaker 4: so effective in driving out the fossil fuels yet they
Speaker 4: haven't replaced it with anything else that can provide that inertia?
Speaker 1: They say, it's proof that the government is putting an
Speaker 1: obsession with renewables over reliability and cost. So what needs
Speaker 1: to change to keep the lights on you? I'm Ruby
Speaker 1: Jones and you're listening to seven AM today. Energy and
Speaker 1: Climate Change program director at the Gratton Institute, Alison Reeve
Speaker 1: and what will happen as coal comes offline and why
Speaker 1: our power bills are really going up. It's Friday, December five,
Speaker 1: so there's been a lot made of the Energy Market
Speaker 1: Operator a warning that Australia could face a spike of
Speaker 1: blackouts as coal fired stations come to the end of
Speaker 1: their life. So tell me what they've said exactly.
Speaker 5: Yeah, the report pointed to an emerging gap because of
Speaker 5: the plan closure of a Ring power station in New
Speaker 5: South Wales, which is scheduled twenty twenty seven. There's enough
Speaker 5: new generation, so enough new solar farms and enough new
Speaker 5: wing farms in the development pipeline to replace the electricity.
Speaker 5: But the other thing that auraring does is it provides
Speaker 5: some of this services that we need that help keep
Speaker 5: the grid stable. Now, AEMO has been actually drawing attention
Speaker 5: to this for about the last five years, and Transgrid,
Speaker 5: who operate the New South Wales grid, have actually been
Speaker 5: a bit slow to act on it. The current solution
Speaker 5: was for them to procure what are called synchronous condensers.
Speaker 5: So these are things that help provide stability into the system.
Speaker 5: The thing is that they can't get those in place
Speaker 5: until twenty twenty eight, and araing is slated to close
Speaker 5: twenty twenty seven. If we want the system to stay secure,
Speaker 5: then the market operator will probably need to intervene more
Speaker 5: directly in order to do that. So they could, for example,
Speaker 5: direct some of the gas or the hydro power stations
Speaker 5: to run more, and that would have a cost associated
Speaker 5: with it. And you know, I think it depends on
Speaker 5: how long it takes for the transmission company to get
Speaker 5: this procurement process done. It's sort of taking them about
Speaker 5: three to five years to do these procurements. The thing
Speaker 5: is that when a coal plant wants to close, it
Speaker 5: only needs to tell the operator three and a half
Speaker 5: years ahead of time. So there's a little bit of
Speaker 5: a mis match there between the amount of notice you
Speaker 5: have to give and how quickly people can put things
Speaker 5: in place to replace the system services.
Speaker 1: Okay, and the coalition has seized on this and they
Speaker 1: say that it proves that the transition to renewables is failing.
Speaker 1: So tell me about the way that they are framing
Speaker 1: what a EMA was said.
Speaker 5: I think the framing that they've chosen to use is
Speaker 5: to say, oh, look, we actually need the coll to
Speaker 5: be there.
Speaker 6: We're starting to see is all the warnings that have
Speaker 6: been issued around Chris Baron's ideologically driven renewables only perhatch
Speaker 6: that approach are all coming home to roost and he
Speaker 6: has nothing.
Speaker 5: And that's actually not correct. What we need are system
Speaker 5: services that can provide stability the grid, and we've got
Speaker 5: lots of options for those. We can use gas, we
Speaker 5: can use hydro, we can use the synchronous condensers, you
Speaker 5: can do a little bit with batteries and clever electronics
Speaker 5: as well. The thing that's actually failing here is that
Speaker 5: the processes that were set up in the late nineties
Speaker 5: to manage the electricity market aren't fit for purpose anymore.
Speaker 5: We designed those for a very steady state market where
Speaker 5: we weren't going to build very much, and we weren't
Speaker 5: going to build very quickly, and that's not where we
Speaker 5: are today. We're in a place where there's been this
Speaker 5: really rapid change in technology, and we've got a rapid
Speaker 5: and a really large building task to do, and regulation
Speaker 5: hasn't kept up with it. The way I kind of
Speaker 5: think of this is that if climate change went away tomorrow,
Speaker 5: we would still have this problem because a ring would
Speaker 5: still close because it's not making enough money to stay open,
Speaker 5: and we'd still be wanting to replace it with the
Speaker 5: cheapest possible combination of technology, and that would be solar
Speaker 5: and wind and storage and a bit of gas for backup,
Speaker 5: and then something that helps to provide the system strength.
Speaker 5: So this isn't really a problem with the transition to
Speaker 5: renewables per se. It's a problem with the way that
Speaker 5: we've set this system up.
Speaker 1: Okay, can we talk a bit more about the transition.
Speaker 1: What is the data on how that is going, How
Speaker 1: much power are we getting from renewables at this moment
Speaker 1: in time, and what is that doing to electricity prices
Speaker 1: into the security of the energy grind.
Speaker 5: Sure, so, renewals are about forty percent of electricity at
Speaker 5: the moment. In September and October of this year, they
Speaker 5: were the largest source of electricity in our big one
Speaker 5: which is called the National Energy Market, that's the East
Speaker 5: Coast market. That's the first time we've had more renewals
Speaker 5: than coal, So that's a really big milestone. Renewables are
Speaker 5: not pushing up prices. So the three things that have
Speaker 5: pushed prices up since twenty twenty two have been the
Speaker 5: war between Russia and Ukraine, the weather and the age
Speaker 5: of the coalfid powerstations. So the war between Russia and
Speaker 5: Ukraine pushed up the price of gas and coal, and
Speaker 5: because most of our electricity over that period of time
Speaker 5: came from those sources, this pushed up electricity prices. At
Speaker 5: the same time, we also had lots of floods, and
Speaker 5: so that flooded some coal mines, which meant we couldn't
Speaker 5: get coal. It flooded railway lines, which meant we couldn't
Speaker 5: get the coal to the colfoid powerstations. And then the
Speaker 5: other thing is that those colfoid power stations are getting
Speaker 5: old and they're less reliable, and that means that they
Speaker 5: just fail more often. And because those failures are sudden,
Speaker 5: that often means that we get gas coming in to
Speaker 5: fill the gap if we need to. And because gas
Speaker 5: is a very expensive form of generation, that means you
Speaker 5: end up with higher prices. The thing that's been happening
Speaker 5: with security. Having more renewables in the grid means that
Speaker 5: we have a grid where things like voltage and frequency
Speaker 5: and so on, which are sort of the physics of
Speaker 5: the grid, they fluctuate a lot more and so you
Speaker 5: need other sources of either generational load that can handle
Speaker 5: that fluctuation and can sort of come on and off
Speaker 5: very quickly in order to keep the grid stable. So
Speaker 5: that is why people talk about the need for using
Speaker 5: gas for backup and also hydro, because both of those
Speaker 5: can come on and off very quickly. Coal can't come
Speaker 5: on and off very quickly, and so that is one
Speaker 5: of the reasons why coal is kind of getting left
Speaker 5: behind in this whole process because coal doesn't play well
Speaker 5: with the grid that's got lots of renewables in it.
Speaker 5: It also really frankly finds that it can't make a
Speaker 5: lot of money.
Speaker 1: Okay, there have been delays and costs blowouts though, right,
Speaker 1: So what would you put that down to? Where is
Speaker 1: the transition genuinely struggling?
Speaker 5: Yeah, a lot of this is because we're trying to
Speaker 5: build a lot of stuff really quickly, and we are
Speaker 5: also doing that in a period of time where we
Speaker 5: were coming out of COVID as well. That means there's
Speaker 5: been quite a queue for projects to get their planning approvals.
Speaker 5: And the thing is that when there's a delay in
Speaker 5: your planning approvals, there's more time in which your costs
Speaker 5: can blow out. You know, the people that you want
Speaker 5: to buy from will revise their costs and those will
Speaker 5: tend to go upwards. Costs have also gone up because
Speaker 5: inflation's gone up, so the cost of everything's gone up.
Speaker 5: That's been a bit of a worldwide phenomena as well.
Speaker 5: And the rest of the world is trying to build
Speaker 5: a lot of renewables very quickly as well, so we're
Speaker 5: kind of in competition with a lot of other countries,
Speaker 5: particularly for equipment, wind turbines and that sort of thing.
Speaker 5: So those are the kind of things that have been
Speaker 5: the problem here. They're not really engineering problems, they're logistics problems.
Speaker 1: Coming up with Australia set to badly miss our twenty
Speaker 1: thirty five emissions targets, what would it take to get
Speaker 1: back on track? So, Alison, if the Coalition wins the
Speaker 1: next selection, it has said that it would dump Australia's
Speaker 1: twenty fifty zero target, and it's also said it would
Speaker 1: rewrite the rules around the energy market. So tell me
Speaker 1: what they're actually proposing to change.
Speaker 5: Yeah, So the two things they want to change in
Speaker 5: the energy market rules are to scrap the reference in
Speaker 5: the rules to meeting emissions reduction targets, and then they've
Speaker 5: also said that they want to establish a thing called
Speaker 5: a capacity market, and a capacity market essentially is a
Speaker 5: way of paying electricity generators for being available, rather than
Speaker 5: just the electricity they produce, and it's a really tricky
Speaker 5: thing to implement. The places that have done it have
Speaker 5: often found that you end up with higher prices for
Speaker 5: consumers because it's hard to work out how much sort
Speaker 5: of basically, how much of an insurance policy do you
Speaker 5: want and how much do you want to pay for
Speaker 5: that insurance policy. Australia tried to establish a capacity market
Speaker 5: in twenty probably twenty twenty through to twenty twenty two,
Speaker 5: and the big problem that we ran into was there
Speaker 5: was no clarity around what sort of generators we're going
Speaker 5: to be allowed to participate, especially was cold going to
Speaker 5: be paid to hang around? And people didn't really like
Speaker 5: that idea. The thing is here that the two reforms
Speaker 5: the Coalition are proposing or in conflict. If you want
Speaker 5: a capacity market, you need clarity about who's in and
Speaker 5: who's out, and the easiest way to do that is
Speaker 5: to have a clear emission subjective. But they've said that
Speaker 5: they want to take the emissions objective away, So taking
Speaker 5: that emissions objective away is actually going to make it
Speaker 5: harder for them to establish a capacity market, which is
Speaker 5: one of the things that they want to do in
Speaker 5: order to supply system security.
Speaker 1: Okay. And would it work for that goal though, Would
Speaker 1: having a capacity market provide security to the energy grid.
Speaker 5: Yeah, it would, It's just a question of what you
Speaker 5: want to pay for it. And I think there is
Speaker 5: a real question about whether you let coal into it
Speaker 5: or not, because you can pay the coal to stay open,
Speaker 5: but it doesn't fix its reliability problem because it doesn't
Speaker 5: change how old it is. I think if it as
Speaker 5: being a little bit like having an old car. Right,
Speaker 5: you can pay for a new gearbox, you can pay
Speaker 5: for a new clutch, you can put a new carburettor
Speaker 5: in it, and you'll still be able to drive around.
Speaker 5: But it's going to get more and more expensive, and
Speaker 5: the car is still not going to be as reliable
Speaker 5: as a new one. So you will be paying if
Speaker 5: we keep the coal online for longer.
Speaker 1: Okay. And the coalition also talks about delivering more gas
Speaker 1: and cheaper gas, and the Labor government also says we
Speaker 1: need gas to bridge the transition to renewables, So what
Speaker 1: can be done to lower gas prices?
Speaker 5: Yeah, so there's two things that drive the cost of gas.
Speaker 5: One is the cost of what it takes to extract it,
Speaker 5: and the other one is what our overseas customers want
Speaker 5: to pay for it. The thing is that gas is
Speaker 5: not a renewal resource. Once you've extracted it and burnt it,
Speaker 5: it's gone. And the gas industry started with the cheapest
Speaker 5: and the easiest to extract gas. But the thing is
Speaker 5: we've used that all up now. So the gas that
Speaker 5: we are getting now is more expensive because where we're
Speaker 5: getting it from is harder to access and further from
Speaker 5: where the users are. So we aren't going to ever
Speaker 5: see a return to the sort of prices we had
Speaker 5: in the past because the cheap gas is no longer there.
Speaker 5: On the international price side, that happens because most of
Speaker 5: the gas that we extract goes overseas, and those customers
Speaker 5: are willing to pay more for it than Australians are,
Speaker 5: and that pushes the price up. I actually think rather
Speaker 5: than talking about gas lower gas prices, what we should
Speaker 5: be talking about is lower gas costs if we reduce
Speaker 5: how much we depend on gas, If we're using less
Speaker 5: of it, we can actually we afford to pay a
Speaker 5: little bit more for it. So the thing that we
Speaker 5: really should be thinking about is where are the parts
Speaker 5: of the economy where we genuinely do need to use
Speaker 5: gas and where are the things where actually we'd be
Speaker 5: better off if we didn't use it at all. And
Speaker 5: if we lean hard into that, then I think where
Speaker 5: we end up with is affordable gas, which is not
Speaker 5: necessarily cheap, but it is having the amount available that
Speaker 5: people want at a price that they're willing to pay for.
Speaker 1: And Chris Bowen recently revealed that Australia is not expected
Speaker 1: to meet our climate target by twenty thirty and to
Speaker 1: miss our twenty thirty five target as well without significant changes.
Speaker 7: It's normal for there to be a gap between projected
Speaker 7: emissions and a target ten years into the future. That's
Speaker 7: why you said a target, and as new policies are
Speaker 7: developed and implemented, the emission's outlook improves. That's what a
Speaker 7: target is for.
Speaker 1: So what changes would we need to see us back
Speaker 1: on track?
Speaker 5: Yeah, I am not super worried about the twenty thirty target.
Speaker 5: If the government's right, then we'll get a forty two
Speaker 5: percent reduction in emissions on two thousand and five levels.
Speaker 5: The target is forty three percent, and that's only seven
Speaker 5: million tons difference, right, that's kind of margin of ero territory.
Speaker 5: That's the sort of thing that will get wiped out
Speaker 5: by I don't know, another line need a year, or
Speaker 5: another drought or a currency fluctuation or something like that.
Speaker 5: The twenty thirty five ones a bit more of a concern.
Speaker 5: We're going to need extra policy if we want to
Speaker 5: hit that target. We've squeezed most of what we can
Speaker 5: out of the electricity sector. The sectors we now have
Speaker 5: to put attension on our industry and mining and transport
Speaker 5: because those have all been growing. Industry mining together are
Speaker 5: now larger than the electricity sector is a source of emissions,
Speaker 5: and transport is rapidly getting up there as well. So
Speaker 5: those are the two things where we need to be
Speaker 5: seeing policy changes to basically get heavy industry off gas
Speaker 5: and off coal, and to get our transport fleet off petrol.
Speaker 5: And a lot of that story for all of those
Speaker 5: is going to be about electrification, and that's why it's
Speaker 5: actually important to have a clean and reliable electricity supply.
Speaker 1: Well, Allison, thank you so much for your time, That's okay.
Speaker 1: Also in the news, the federal and state governments are
Speaker 1: now carrying more than a trillion dollars in public debt,
Speaker 1: according to new figures from the Parliamentary Budget Office. The
Speaker 1: report shows governments will spend more than fifty billion dollars
Speaker 1: a year just servicing their loans, almost as much as
Speaker 1: the entire annual NDIS budget, as health and infrastructure costs
Speaker 1: continue to rise. Tasmania's credit rating has been downgraded over
Speaker 1: concerns about its growing debt, while Queensland and South Australia
Speaker 1: are forecast to record the fastest increases in borrowing and
Speaker 1: a South African neo Nazi who took part in a
Speaker 1: protest outside the New South Wales Parliament has left the
Speaker 1: country after his visa was revoked by the Home Affairs Minister.
Speaker 1: Matthew Gruder was photographed at the National Socialist Network rally
Speaker 1: calling to abolish the Jewish Lobby, where protesters also chanted
Speaker 1: blood and honor, a phrase link to the Hitler youth.
Speaker 1: He was taken into immigration detention last month and left
Speaker 1: the country with his wife and child on Thursday. The
Speaker 1: protest has prompted the New South Wales government to titan
Speaker 1: state laws introducing new offenses for displaying or promoting Nazi
Speaker 1: ideology at public demonstrations. I'm Ruby Jones. This is seven am.
Speaker 1: Thanks so much for listening.