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Energy policy: can we have a Carbon-Cutting Reliable Affordable Programme (C-CRAP)?

By Geoff Carmody - posted Wednesday, 20 September 2017

Shifting priorities within the Government's energy policy 'trilemma'

The Commonwealth Government says we have an energy policy 'trilemma': trying to deliver lower emissions, reliable electricity, and affordable power, all at the same time.

But now it has also ranked these objectives. Apparently, they're not equal. Now, reliability and affordability are most important (well, d'oh!). Reducing emissions seemingly ranks third (a reversal from the last decade or so).


The Government wants to 'keep the lights on', at a price punters can pay. But it still wants to reduce emissions as per our international commitments.

Here's the thing. With foreseeable technologies, we can choose to achieve any two of these objectives, to any extent we like, if we are prepared to pay the price. But we can't do so for all three. One (or, two, or all, to some extent) must miss out.

Why? Each of these objectives has been chosen independently, for political reasons. Sure, we want to keep the lights on. Sure, we want cheap power. (We had both before.) Reducing emissions these days is Holy Writ (for believers if not sceptics and deniers).

However, technical trade-offs between these conflicting objectives didn't get a look-in when they were set. Let's look at some specifics.

Renewables are not only intermittent: more importantly, the intermittency is usually uncertain

The root cause of the 'trilemma' is renewable energy. We could deliver reliability and affordability, as we have in the past, if we didn't have renewable energy targets.


Why? First, as the resident cockie in every pet shop screeches, it's intermittent. With blackouts, polly doesn't want a cracker – not yet, anyway. It wants candles plus a log fire. Second, this on-and-off intermittency is uncertain. We can't be sure when the sun won't shine or the wind won't blow.

The recently rediscovered reliability objective requires government action, not just talk. We need urgent measures to insure against this uncertain intermittency, to which governments have allowed us to become much more exposed.

The reliability-emissions reduction trade-off

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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