Tuesday, 04 October 2016
MRC Executive Director Nick Cater writes in The Australian:
The climax last week of Labor’s 14-year campaign to de-industrialise the state of South Australia was less than triumphant.
Premier Jay Weatherill’s oversized media machine was turning out cheerful press releases early last Wednesday boasting of the government’s preparation for the coming “weather event”, as we are obliged to call it.
Baptist Care would be opening its doors in Adelaide to ensure that homeless people would be warm and fed, we were assured.
There was silence, however, on the government’s crowning achievement: the mother of all Earth Hours that, for an uncomfortable evening, reduced carbon emissions to close to zero. This time, perhaps even Weatherill realised that his hokey, greenish socialism had gone too far.
It is barely two months since Weatherill demanded $100 million from Canberra to keep Arrium Steel working. Yet it was the blackout, a consequence of Labor’s renewables policy, that finally shut the Whyalla plant down. Enforced idleness is costing Arrium about $4m a day.
Nyrstar’s Port Pirie lead smelter will be out of action for another fortnight. BHP Billiton is unable to say when it will restart mining copper at Olympic Dam.
Where is the old industrial Left when it’s needed? The communists merely wanted to take over the factories. The greenish Left wants to close them down.
When Labor was elected in South Australia in 2002, manufacturing provided more than 15 per cent of gross state product; now it’s less than 10 per cent and falling. The state government employs more staff than the manufacturing sector.
If Weatherill had the slightest comprehension of the damage Labor’s B-grade managerialism has caused he would struggle to crawl out of bed in the morning, let alone stand for re-election.
Economic growth is less than 1.5 per cent, half the national average; unemployment is the highest in Australia; investment has fallen by 0.5 per cent a year since 2011.
Which raises the question: why would anybody invest in South Australia, except out of sympathy? The state’s extraordinary economic growth in the 1950s and 60s that produced jobs, built homes and bought cars was driven by cheap, reliable energy. Who would risk entrepreneurial capital in Weatherill’s energy-deficient jurisdiction? Even basketweavers need a reliable source of light.
South Australian Labor has been boasting for years that its policies are making the state more “sustainable”. Yet if a measure of sustainability is keeping the freezer running, the unfashionably brown coal deposits from Leigh Creek were working better than subsidised windmills. A sobering report from Deloitte’s last year noted the irony: “Renewable generation is already challenging the sustainability of the South Australian system.” Adding more renewable capacity, it said, would destabilise the system further.
The speed of South Australia’s transition from coal to wind and solar is breathtaking. The state’s renewable generation capacity has more than doubled in the past six years. Other regions that have made transitions on this scale, such as Denmark and Iowa, already had strong network connections with neighbouring producers, making it easy to buy in baseload power when the blades stopped turning. By contrast, as we saw last week, South Australia’s energy link to the outside world seems held together with sticky tape and string.
The state’s capacity to produce its own baseload power from fossil fuels has rapidly diminished. The state’s four largest power stations — two at Port Augusta, Pelican Point and Torrens Island A — will have closed or will be in mothballs by this time next year, made unviable by unpredictable deluges of cheap wind power.
The combined lost capacity of 1250MW represents a third of the state’s generating potential. What has filled the gap? You’ve guessed it: imported power from Victoria, generated mostly by the same brown coal deemed unacceptable in oh-so-clean South Australia.
Upgrading the national grid to give South Australians the comfort of a reliable energy supply will be expensive. The costs inevitably will push up power prices, passed on as another hidden cost of Labor’s carbon fetish.
The same challenge is facing Europe, where a rapid growth in renewable energy in Germany has thrown the energy market out of whack. Last year Germany opened a new coal-fired power station, much to the distress of the Greens. Upgrading cross-border supply across northern Europe is a priority; how else is Germany going to be able to suck up French nuclear power, the production of which is banned within its own borders? The cost of bringing the entire European network up to scratch could cost as much as $500 billion.
One would have thought even the most credulous admirer of the Intergovernmental Panel on Climate Change’s modelling must concede that, short of sending half the planet back to the Dark Ages, their emission targets are impossible to meet. Convoluted interventions into the energy market to give wind and solar a helping hand have caused more problems than they solve, not least because the technology isn’t up to scratch.
There is no feasible way of producing baseload power without fossil fuels in Australia, a continent that lacks the mountains and rain required for hydro-electricity and the political determination required to press the nuclear button. At least one commentator last week suggested South Australia’s energy storage plans could be solved with batteries. Since no one has yet developed a battery capable of powering an iPhone for more than a morning, it seems somewhat ambitious to ask for one that would power a state.
Meanwhile, the South Australian Department of the Premier and Cabinet has invoked the Cuban response, urging consumers to ration consumption.
“Make a habit of turning off lights when you leave the room,” counsels the Easy Energy Saving Tips web page. “Use a shower timer to keep your showers to four minutes or less. Wash clothes in cold water … use a clothes line … hanging clothes out to dry is more energy efficient.”
Sadly, the South Australian government is a world leader in the emission of patronising, unsolicited advice. If only we could come up with a way of extracting the methane from this bureaucratic flatulence, pump it into a turbine and burn it for power.