An unsustainable future

In summary, the proposal for renewable power is unachievable. It is unachievable in terms of installation, present transmission network capacity and present market operation.

In addition it is an economic folly where the use of natural gas would substantially reduce carbon dioxide emissions, provide energy when needed and save some $40 billion in expenditure.

So why not follow the example of the United Kingdom and convert some thermal power stations from coal to natural gas? This would be a short term fix. Long term this would be a misuse of a vital industrial feedstock.

None of this addresses the second of the Federal Governments schemes for reducing carbon emissions.

So we now have both a projected reduction in demand from thermal power stations as the available wind energy sources increase but also a carbon emissions tax. This can be described in one word as a shambles with wind power subsidies to continue at a state and federal government level. These schemes will presumably be merged at some time.

There have been a number of detailed analyses of the generators supplying power in the National Electricity Market i.e. South Australia, Tasmania, Victoria, New South Wales and Queensland (NEM). These show that Victoria has the cheapest marginal cost electricity and the best planned system of generators. A comparison with NSW is quite shocking. The load on the Latrobe Valley generators is 88 per cent of their installed capacity of 6,000MW while NSW has a load of 65 per cent for its three largest generators with total capacity of 7,300MW. If NSW generators operated at the Victorian level it would be the equivalent of a new 1,900MW generator! This would be a major reduction in the need to construct more power stations.

The imposition of a tax, if it were set at $25 per tonne of emitted CO2, would make the Victorian generators marginal cost base the same as that of the NSW generators. This is a reflection of the use of brown coal in Victoria. However, in each of these states there would be a tax of some $1.7 billion.

This tax would remove any cheap power advantage Victoria currently enjoys while making power more expensive for consumers and threatening the viability of coal burning power stations. It provides no incentive for the future development of a well managed and economically responsible power supply system.

These policies will be subject to the claims of special interest groups and “politically correct” technology.

It is no wonder that large tax concessions have been proposed for the coal burning power stations. As Mrs Thatcher has said: “TINA” (there is no alternative)!

Wind farm reliability: power curve for South Australian wind farms from July 1, 2006 to June 30, 2007. The capacity factor or average output is 33 per cent of total capacity of 307MW. The 90 per cent reliability figure is 7 per cent.