Brian Wawn

What is the ‘energy transition’?

For Labor, it is a transition to renewables. For the Liberals, it is a transition to nuclear power and renewables.

As part of the transition, Labor wants nothing to with nuclear power; the Liberals support it. Labor dislikes coal; it is not clear what the Liberals think about coal.

Both aim to reach Net Zero greenhouse-gas emissions by 2050.

There is a much simpler and more effective transition at hand – a transition to coal, nuclear power, and natural gas, with little place for renewables and no place for Net Zero.

Underlying this approach are the following considerations:

• coal, nuclear energy and natural gas are the only ways of providing baseload electricity in Australia – meaning in practice, reliable, around-the-clock, low-cost electricity
• wind and solar energy cannot provide such electricity

The proposed coal-nuclear-gas transition is the centrepiece of a campaign planned by a group in the Latrobe Valley, provisionally called the Coal-Nuclear-Gas Alliance.

The alliance will focus on three key actions.

The first action is the development of a new coal plant in the Valley and the refurbishment of the Loy Yang A and B coal plants, using high-efficiency-low-emissions (HELE) technology.

Such technology is not only more efficient than current technology, but also results in a lowering of greenhouse-gas emissions from coal plants of up to 30 per cent.

Further coal capacity in Australia is vital.

It will take until at least the 2050s for nuclear power to become a significant component of overall electricity generation in Australia.

And coal will not be replaced quickly by natural gas, which is in short supply in the eastern states and, in any case, has historically been more expensive than coal or baseload electricity.

The second action is to offer the Valley as the location for Australia’s first nuclear power plant.

Should this be supported in the Valley, the political task of introducing nuclear power in Australia will be greatly facilitated.

The third action is the promotion of natural-gas development in the Valley.

This requires the reversal of the state government’s effective banning of gas exploration and production in Victoria and of the federal government’s recent interventions in the eastern states’ gas market, including the price caps introduced in late 2022.

The Latrobe Valley is probably better placed than any other region in Australia in successfully addressing Australia’s energy future.

It has enough coal for over 500 years of electricity generation.

It can offer sites for a nuclear plant close to transmission lines and with a workforce to operate such a plant. One possible site is Yallourn (the coal resource currently being mined at Yallourn will be exhausted by the mid-2030s).

In addition, Gippsland has significant untapped natural-gas resources. In the words of journalist, Robert Gottliebsen, it is one of ‘three major fields that will end the shortage of gas for domestic market’ in Australia (the other two being Narrabri in NSW and the Surat Basin in Queensland).

Tapping these resources opens the possibility of gas becoming price competitive with coal for baseload electricity and, even if this is not the case, of making a major contribution to gas use outside the electricity sector.

What are the arguments against wind and solar power?

The first is their intermittency. Theoretically, it may be possible to overcome this with battery support. However, such support would be impossibly expensive if applied to the grid as a whole, taking account of the need to allow for wind and solar droughts and the enormous battery stock required (over 5,000 times the current stock).

Second, wind and solar farms are proving to be high-cost.

For example, wind and solar farms are typically distant from the grid and thus often require substantial new transmission infrastructure. This is expensive.

In addition, they entail significant over-building – to illustrate, if a coal-fired power plant of, say, 1,000 megawatts is to be replaced by wind and solar farms, the capacity of these farms will need to be well over 3,000 megawatts because they only produce electricity for around 30 per cent of the time.

Furthermore, electrical engineers refer to costs associated with frequency control when wind and solar power are fed into the grid.

Up to the early 2000s, Australia had among the lowest electricity prices in the world, with coal being responsible for over 80 per cent of our electricity production.

Since then, the role of coal has steadily declined and retail electricity prices have increased nearly twice as fast as overall consumer prices. Australia no longer has cheap electricity by world standards.

Third, the expansion of wind and solar farms requires radical changes to Australia’s countryside. In the words of former chief scientist, Alan Finkel (who supports renewables), ‘think forests of windfarms carpeting hills and cliffs from sea to sky; think endless arrays of solar panels disappearing like a mirage into the desert’.

Protest movements are spreading around the country strongly opposing such outcomes.

For those critical of the idea of supporting coal, nuclear power, and gas, a simple question can be asked: How else do you ensure that Australia has access to reliable, low-cost electricity, a critical component of any modern economy?

The coal-nuclear-gas campaign emerging from the Latrobe Valley is at an early planning stage. To succeed, it will need to be well financed and to develop a detailed plan for mobilising support, including grass-roots support in the Valley and other parts of Victoria and political support in Melbourne and Canberra.

Last year’s referendum on The Voice exposed a large gap between grass-roots views on the issues involved and the views of those seen as opinion leaders – political parties, major corporations, universities, the media and environmental organisations.

Does a similar gap exist in the case of energy policy? And will it increase if (as is feared) electricity supplies become less stable, electricity prices keep rising and regional protests against wind the solar farms become more widespread?

If so, a shake-up in energy policy lies ahead, with the Latrobe Valley well placed to lead the way. If it can do so, other regions are likely to follow (e.g. Hunter Valley in NSW, Surat Basin in Queensland).

Finally, what does this shake-up mean for the future shape of our electricity sector?

The table below shows the share of differing sources of electricity in total generation in Australia, as of today and as a possible scenario for 2050: 

The share for wind and solar energy shows a sharp drop – from 28% today to 10% in 2050. The main role for wind and solar energy will be in locations not serviced by the grid.

The 2050 shares for coal, nuclear power, and gas are rough approximations only. For example, the share of nuclear power and gas may be higher – and the share of coal lower – than in the table.

How this works out is of secondary importance.

What is of primary importance is that coal, nuclear power and gas – not renewables – become the mainstays of our electricity system.

Let the shake-up begin!

In a famous 1963 speech, US civil rights leader, Martin Luther King Jr. said: ‘I have a dream that my four little children … will not be judged by the colour of their skin, but by the content of their character.’

There is a less exalted but nevertheless alluring dream concerning our electricity system: that it not be judged by its colour (green or non-green), but by its reliability and cost.

Labor does not share this dream. The Liberals say they do. How, then, do they best implement it? Here is a proposal for the Liberals.

First, take to the next Federal election (due by May 2025) an energy policy that embraces coal and nuclear power.

Argue that, if Australia wants to reduce emissions in the electricity sector, it can do so via nuclear power, but that this will require coal for the next 20-30 years.

Why?

Because nuclear power will play no role at all before the mid-2030s and no significant role before the late 2040s.

There are no sensible alternatives to coal in this period.

Renewables can’t supply reliable electricity and, in any case, are inherently expensive, taking into account high transmission costs, the overbuilding of wind and solar generation (to allow for their intermittency), the need for backup from coal and natural gas, and the cost of frequency control.

Wind and solar power played almost no role in Australia up to the year 2000, when prices were low by world standards. They are now high by world standards.

Natural gas is in short supply in the eastern states and, in any case, has always been more expensive than coal for electricity generation in Australia.

There is little scope in Australia for any significant expansion of hydroelectricity.

In short, ‘we face a black hole in energy supply from the late 2020s to the 2040s’. (Michael Asten, The Australian, March 28, 2024.)

Labor recognises that coal is still needed. e.g. through its support for keeping open the Eraring and Yallourn coal-fired plants, both due for closure in the 2020s. However, its support is reluctant and described as just ‘short-term’.

Second, make clear that the redevelopment of some coal-fired plants, using high-energy-low-emissions (HELE) technology, will be required.

Without such redevelopment, plants are at risk of breaking down in the coming years.

Highlight the point that emissions from HELE plants are up to 30 per cent lower than from current plants.

Third, abandon the commitment to Net Zero emissions by 2050, which Liberals leader Peter Dutton continues to push, based on nuclear power. But nuclear power only applies to electricity generation, which in turn only accounts for one-third of Australia’s emissions

To achieve Net Zero emissions outside electricity generation is a pipe-dream.

It requires getting rid of petrol, diesel, jet fuel, natural gas, and burping cows.

And getting rid of the hundreds of products that contain fossil fuels (notably petrochemicals). Examples: asphalt, fertiliser, insecticides, toothpaste, detergent, blinds, mobile phones, computer screens, keyboards, mouse pads, battery casings, wind turbines, and solar panels.

Abandoning fossil fuels won’t happen.

‘Fossil fuels are the most important factor in explaining the advance of modern civilisation.’ (Professor Emeritus Vaclav Smil, University of Manitoba, Canada.)

The Liberals will not find it easy to adopt the approach here, given that they barely talk about coal and seemingly suffer from self-delusion about Net Zero emissions.

The immediate problem is coal (their approach to emissions does not yet have much practical impact).

Without coal, our energy system is at risk, with serious flow-on risks for the economy as a whole.

If they do not recognise this now, the Liberals will be forced to do so should they win the next Federal election.

In addition, they will lose the opportunity of formulating a coherent energy policy leading-up to the 2025 election, a policy that should stand out from Labor’s faith in renewables, unbending opposition to nuclear power and unwillingness to acknowledge its reliance on coal.

The transformation of economic policy by the Hawke-Keating governments in the 1980s ‘set up Australia for two decades of unprecedented prosperity from the early 1990s’. (Michael Stutchbury, Australian Financial Review, February 22, 2018.)

Can the Liberals mobilise the courage and political salesmanship to do the same in the 2020s for energy policy in Australia?

And perhaps make a contribution to the global approach to climate change, seen by Danish commentator, Bjorn Lomborg, as ‘hugely problematic’:

‘The World Bank is charged with ending global poverty. Yet, the Bank is now aiming to spend no less than 45 per cent of its funding toward climate change. This is hugely problematic. Spending a dollar on climate initiatives delivers low benefits, typically far into the future, whereas smart development policies can deliver upwards of $50 back on the dollar, often near-instantaneously.’ (Presentation by Bjorn Lomborg at Stanford University, April 1, 2024.)