Leading article Australia

Latter-day Luddites

23 July 2022

9:00 AM

23 July 2022

9:00 AM

Victorian Energy Minister Lily D’Ambrosio certainly has chutzpah. This week she demanded the Australian Energy Market Operator be given stronger powers to make sure that there’s enough gas in Victoria to keep the lights on. Queensland LNG exporters are being forced to bail out Victoria, but the state’s pain is all self-inflicted.

Nobody bears more responsibility than Ms D’Ambrosio for the farcical reality that Victoria is sitting on top of massive onshore reserves of natural gas in the Gippsland and Otway basins, while power prices skyrocket, industries shut down, and the poor shiver in unheated homes.

But there’s plenty of blame to share around. For more than a decade Victorians have voted in governments of the right and left that have banned the fracking of unconventional gas and then enshrined the ban in the constitution to make it harder to undo. They even put a moratorium on conventional gas exploration and when it ran out, government incentives all subsidised the development of renewable energy.

Australia has built four to five times more solar and wind energy than Europe, the US, Japan or China but now hapless Victorians are discovering that to get through a ‘renewable drought’ which analysts forecast could cause a one-terawatt shortage between now and September, the state would need about 7500 batteries like the one Elon Musk built for the South Australian government, after it cheerfully blew up a coal-fired power plant. The cost? A cool $700 billion.


The energy shortfalls come because our giant energy producers across the National Electricity Market – stretching from South Australia and Tasmania through Victoria and NSW to Queensland – are accelerating the closure of coal-fired power plants.

Liddell in NSW shut a 400MW unit in April. It will shut another 1200MW next April and in 2025, Eraring, the largest plant in Australia will close, seven years earlier than expected, taking out 2922MW, around 20 per cent of NSW’s power. By 2030, two-thirds of our coal-fired power will have been blown up by our latter-day Luddites.

You can hardly blame the providers. Ever since the introduction of the federal renewable energy target by the Howard government in 2001, followed by state targets, governments have ensured power companies receive hefty subsidies for unreliable renewables and crushing penalties for reliable fossil fuels. Why wouldn’t they shut down coal and not build gas when there was an 85 per cent increase in power prices after the accelerated closure of Victoria’s Hazelwood power station?

Victorian Premier Dan Andrews sneered when former federal energy minister Angus Taylor tried to get the states and territories to see sense and sign up to an energy security mechanism that would prevent power companies closing coal-fired power plants until they were replaced with dispatchable energy. One of its biggest critics was none other than Ms D’Ambrosio who sniffed that the Andrews government wouldn’t support a scheme which delayed the clean energy transition or locked in ‘outdated’ technology. Mr Andrews dubbed the scheme ‘Coalkeeper’ because for green zealots coal is a four-letter word. Victoria was hardly alone. Others, including NSW Liberal Treasurer and Energy Minister Matt Kean, were equally dismissive.

The Russian invasion of Ukraine has provided a brutal wake-up call to Europe, the UK, and the US. Faced with soaring energy prices enriching Mr Putin and funding his war, Germany, Italy, The Netherlands, and Austria opted to fire up their coal-fuelled power generators. Indeed, 345 new coal-fired power stations are being built around the world and China and India are expanding their coal mining operations by 700 million tonnes a year, almost twice Australia’s annual production.

Yet Australian politicians seem oblivious to this reality, still in the grips of carbon dioxide-driven delusions, with Prime Minister Albanese fighting to legislate his economy-killing emissions reduction target of 43 per cent by 2030 while the Greens push for a target of 75 per cent.

‘Democracy’, said H.L. Mencken, ‘is the theory that the common people know what they want and deserve to get it good and hard.’ Today, Australians are getting good and hard the policies for which they voted. Let’s hope next time Australians vote for a party that will keep the lights on.

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