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