Stephen Wilson Discussing IPA Research On System Cost Energy Research Credlin Sky News Australia – 2 July 2024

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2 July 2024
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In this interview, Stephen Wilson appeared on Credlin Sky News Australia to discuss the IPA’s research on Nuclear Energy.

All media appearances posted onto the IPA website are directly related to the promotion and dissemination of IPA research.

Below is a transcript of the interview.


Peta Credlin:

Despite repeated claims by the Albanese government that they would bring down your power prices, analysts at UBS now expect prices to peak at $1.4 cents per megawatt hour by 2029. Now that’s a 20% increase on this year’s forecast, and almost 50% on 2023. A new report by the Institute of Public Affairs says, while Australia’s previously benefited from some of the lowest consumer power prices in the industrialised world, it now has some of the highest. It also points out that a renewables only power system is likely to be five or six times as expensive as what we have now, which is our existing coal-fired power base load. The author of that report is adjunct professor at the University of Queensland, Stephen Wilson, and I’m delighted to say he joins me now. Stephen, I just about tear my hair out when I listened to Chris Bowen saying that renewables are the cheapest form of energy because he’s playing with the numbers, isn’t he?

Stephen Wilson:

Yeah, so the problem is that they’re not including all the costs when they present the cost numbers. We’ve heard this number thrown around recently of 121 billion or $122 billion of capital investment. But when you look at what’s included, it turns out that the things that are not included are actually larger than the things that are included.

Peta Credlin:

So how do they get away with it?

Stephen Wilson:

Well, I think the issue is, Peta, that if you use a simple metric like the levelized cost of energy, which you’ll find in places, you’ll find this reported in the CSIRO GenCost report, and you’ll find it reported by Lazard and other people like that. The levelized cost of energy, it’s very simple calculation, but it’s far too simplistic. And it doesn’t take account of what does it really cost to run the whole system and to deliver the service to the customers, which means balancing the demand of the customers every second of every day, and that’s a non-negotiable technical requirement of any power system.

Peta Credlin:

To give me a practical example, are you saying that when they compare apples and oranges, when they comparing, say, coal-fired power with the solar farm or renewable energy outfit, wind turbines or something, they’re not calculating the cost it is to get the energy from the wind turbines in country New South Wales to consumers in Sydney. They’re not factoring in the transmission lines required, and they’re not factoring in the firming power when the wind’s not blowing. Is that what you’re talking about?

Stephen Wilson:

So they’re not factoring in the cost of balancing that whole system. So you can’t run the whole system just on those resources alone. You need other resources in the system to balance. So for example, simple example is have they included all the cost of all the storage? And it appears that they’re not… They’re assuming that there’ll be very, very large quantities of batteries owned by you and me and all the other private customers on the system, and they won’t count the cost of those in their calculation. But then they’ll assume that all of the customers will make those resources available to the system and put them under the control of the system operator to make sure that the generation and the load, the supply and the demand can be balanced at all times.

Peta Credlin:

What I find extraordinary, and I listened to the minister and the prime minister today in the parliament, and they talk about their green hydro. None of this is available at great scale. We might have household batteries available and they’ll develop over time, but we still don’t even have suburb wide battery storage. We don’t have citywide battery storage. And the examples we’ve had in the past that keep a place like Adelaide going for under half an hour, how can they put together a price on energy and make this huge transformation in six years time? It’s all going to happen by 2030, if we really don’t know what we’re buying and we really don’t know what it costs.

Stephen Wilson:

Yeah, well, that’s the issue. It’s been mis-sold, I think. The amount of storage that you would need just to solve the problem on paper is enormous. And when you start to cost that in, you see these very, very high costs. And then beyond that, the question in my mind is, will this system even work on a technical level? Will it have the stability and the resilience and the robustness to maintain power at all times? Will the frequency remain stable? Will the voltages remain stable, or will the system be very vulnerable and subject to collapse, which is what I and many other engineers think will be a problem?

Peta Credlin:

Well, well on the report, I think it’s incredibly comprehensive. My audience are really interested in the energy issue and I encourage them to head to the IPA website and read your report. Stephen Wilson, thank you for your time.

This transcript with Stephen Wilson talking on Credlin Sky News Australia from 2 July 2024 has been edited for clarity.

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