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Is affordable, 24/7-reliable, electricity ever possible again?

By Geoff Carmody - posted Monday, 5 August 2024


Current policy is for 100% renewables plus 100% battery back-up. That will deliver even more unaffordable and unreliable electricity.

Power bills are already soaring. These exclude extra costs unknowingly borne by taxpayers.

Even as reality starts to take hold, it's going to get a lot worse.

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The rush to renewables generation is hitting installation and transmission/distribution headwinds. Base-load generation has been shut down well before alternative power supplies are in place. New plans to delay closure of those still operating is very expensive. The power cost trend is up.

In the NEM, renewables-heavy States depend on inter-State interconnector 'extension cords'. Other States' base-load and fossil fuelled 'peaker' generation are used to keep the lights on when their solar, wind, and hydro don't. South Australia, Tasmania, Victoria, and the ACT are net base-load importers. So far, Queensland and New South Wales are net base-load exporters.

Check out spot wholesale electricity prices over the recent past.

What happens when all NEM states are 100% reliant on renewables and battery storage?

For power storage, grid-scale batteries needed for anything remotely like 24/7 reliability would cost a fortune. See my opinion pieces (here, here, and here).

Can electricity become affordable and 24/7-reliable again? Consider these proposals.

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Add more renewables. Power users' demand, whether continuous or intermittent, can never match renewables supply intermittency, seasonal or otherwise. Most extra power would need battery storage to be usable. Cost? Time to deliver? Beyond 2050? A renewables 'fail'?

Use EV batteries to avoid blackouts. How? Recharge EVs when sun and wind renewables allow? Redirect stored EV power to the grid when they don't? This would 'un-firm' EV owner investment expectations, at best. Time to deliver? Long (see below). Another renewables 'fail'?

Why? EV battery supply is paid for by EV owners themselves. That's their choice. Assume the average EV dispatches 100kWh from peak charge to zero. Isn't this wildly optimistic? But, if so, to dispatch 194,000kWh, the capacity of the SA Hornsdale 'big battery', would require 1,940 EVs.

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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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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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