With all due respect, Mr. Abbott, you’re wrong. Energy prices aren’t high because of “wishful thinking” and “green religion” - they’re high because of too little thinking and the wrong kind of religion.
I’m a fiscal conservative. Politically and socially I lean to the right. And I’m in the energy business. So naturally, I’d be an ally of Tony Abbott on energy policy, right? Nope. I’m anti-coal. Vehemently. Here’s why.
Coal may be abundant but it is not cheap. It isn’t failing as an energy solution because “green religion" has a stranglehold on common sense or the levers of commerce and government. Coal power isn’t being regulated out of existence, it is being priced out of existence. We have witnessed an unprecedented drop in the price of renewables and the market isn’t stupid. We are moving to a zero-emissions future because it now makes obvious economic sense to do so.
The economics of alternative energy is a coal killer
I’m not a lone voice here. The Big 4 banks made headlines recently when they announced that they would stop lending to coal projects. An analysis of the Adani coal project loan concluded it was “high risk”. And the global head of BlackRock infrastructure investment group, Jim Barry, said this after claiming the Australian government was “denying gravity” on coal investment: “That’s not to say all the coal plants are going to shut tomorrow. But anyone who’s looking to take beyond a 10-year view on coal is gambling very significantly.”
Why a significant gamble?
In part because we are witnessing an energy revolution driven by a rapid decline in price in the cost of renewables, particularly solar. The same number of people, 50,000, are already employed in renewables as by both coal industry —and the renewable number will only grow. Solar panel prices has dropped by more than 300% in just three years. As a result of this price drop, innovative economic models have emerged that can supply free power through solar and generous returns to investors impossible only a few years ago. There are now large-scale solar projects that can cut power bills in half from day one. Moreover, much of this is locally generated, meaning the cost of the energy transporting infrastructure is completely avoided. This kind of micro-generation is supplemented by the rise of solar farms that are generating serious power for communities, power that as battery storage likewise declines in price will be readily stored.
The risk of coal is not just market-driven, it’s built-in.
Coal has unknown long-term liabilities and they are potentially massive
Is coal today’s tobacco? There’s good evidence to suggest it is and that any prudent policy must treat investment in coal as potentially as risky as an investment in asbestos, tobacco, or Takata airbags.
This week’s news about Energy Australia possibly needing to shut a new coal-fired plant because of pending litigation is one harbinger. If you think an even more damning class-action lawsuit implicating coal producers and energy suppliers is far-fetched consider the Australian Medical Association’s submission for the inquiry into health impacts of air quality. In it, the AMA singled out coal-fired power stations: “Populations who live in close proximity to major sources of air pollution, including coal-fired power stations or traffic freeways, may also be at a heightened risk due to high exposure levels.”
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