Unachievable At Any Cost

Written by:
6 March 2024
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In this article, Rocco Loiacono contextualises and disseminates the findings of the IPA’s research into the economic cost of net zero.

$52 billion is only the beginning for WA

Two weeks ago, we got a taste of the brave new world of renewable energy. Victoria’s grid collapsed on a hot and windy afternoon. 530,000 homes were left without power, train lines were shut down, schools and businesses had to close their doors, phones couldn’t be used even for emergency calls, and hundreds of sets of traffic lights were out of order.

The same fate awaits Western Australia unless it reverses course on its ideological determination to pursue Net Zero.

In June 2022, the WA state government announced its plan to close all coal-fired power stations (Collie, Muja, and Bluewaters) in the state by 2030 as part of a commitment to an 80 per cent emissions reduction target by that year.

This will result in the removal of two-thirds of the WA network’s current electricity supply.

The justification for this policy was the ‘overwhelming uptake of rooftop solar’, adding that, ‘…an estimated $3.8 billion will be invested in new green power infrastructure in the South West Interconnected System (SWIS), including wind generation and storage, to ensure continued supply stability and affordability. This investment is expected to pay for itself by 2030-31 relative to the status quo of increasing electricity subsidies.’

A detailed analysis conducted for the IPA by Senior Research Fellow Kevin You, former General Manager of Generation at Western Power Mark Chatfield, and this correspondent, demonstrates that this plan is neither feasible nor achievable at any cost.

Our research shows that the cost to replace coal-fired power generation will be far more than the already huge sum of $3.8 billion – it will be far greater than even 10 times that amount.

WA’s vast size means that it is geographically isolated, not only from the rest of the country, but internally. Therefore, it cannot be connected to a national energy grid, as is the case with states on the eastern seaboard. It must – and does – produce and rely on its own energy. Therefore, the huge fluctuations that arise from taking out coal in the main network cannot be addressed by relying on other states.

In the southwest of the state, there has been an historical reliance on coal, but WA also has abundant energy in the form of gas.

Following the discovery of large gas reserves in the mid-1970s on the North West Shelf, the Dampier to Bunbury Natural Gas Pipeline (DBP) was constructed. It is one of Western Australia’s most critical pieces of energy infrastructure.

The pipeline was privatised under the Court government in 1998, however, the easement surrounding the pipeline was not privatised. In fact, it was enlarged to accommodate potential future expansions to the gas pipeline’s transmission capacity.

Until now, gas has been able to back up the increasing move to solar and wind. The state’s domestic gas reservation policy, which requires gas exporters to set aside 15 per cent of reserves for domestic use, has been considered a key to avoiding the energy shortages and price rises seen in the east.

However, the warning signs are already there that the WA government’s Net Zero energy policy will not provide the stable, affordable, reliable power its proponents claim.

The Australian Energy Market Operator (AEMO) in a recent report suggested WA could face electricity blackouts as soon as 2025 unless it fills a forecast shortfall in energy supply.

This report is the first time AEMO has given a forecast that takes into account WA’s commitment to transitioning off coal-fired energy by 2030, which it says would strip an estimated 1,366 MW of power generation out of the system.

Unfortunately, the WA public is not being told of the true costs of the WA government’s 2030 renewable energy feel-good dream. There is the real threat that Western Australians will not be able to keep the lights on or turn on the air conditioning when they need to.

A key finding of our analysis is that by phasing out coal by 2030 and without expansion of the DBP, even if:

  • wind capacity from today is trebled
  • battery capacity is increased nine-fold
  • the state’s solar capacity is doubled

Greater Perth and the Wheatbelt still risk blackouts close to four months in a year.

Our analysis shows further that, theoretically to maintain the network in the absence of coal and gas, there would have to be a massive overbuild of renewables, requiring approximately:

  • 50 batteries, with a total capacity of 5000 MW, (currently one battery is in service)
  • 8,000 MW of solar factories, currently at 180 MW
  • 12,000 MW of wind factory capacity, currently at 1,040 MW
  • 4,134 MW of rooftop domestic solar capacity, currently it is 2,406 MW

Once transmission easements, poles and wires are added in, we calculate the total cost to be – not $3.8 billion – but more than $52 billion, which is equivalent to over 130 per cent of budgeted general WA government spending for the financial year ending 2024.

This can only result in ever-increasing energy bills for ordinary Western Australians. As far as we can tell, no thorough cost-benefit analysis has been done of the government’s plan, especially in relation to battery production and storage.

Consider also the destruction of the environment – and much of the state’s available arable land – by plastering its landscape with solar panels and wind factories.

All in a reckless pursuit of emissions reduction. Let’s not forget that Australia is responsible for just over 1 per cent of the world’s emissions.

Less than one-fifth of that 1 per cent comes from WA, and about 6 per cent of that one-fifth of the 1 per cent comes from WA’s coal-fired power stations.

Therefore, shutting them down would contribute to reducing roughly 0.013 per cent of the world’s carbon emissions.

For $52 billion, the money would be better spent keeping coal-fired power stations open for the foreseeable future and in the meantime expanding the DBP and buying gas, which is the only way to avoid blackouts while sensibly reducing emissions.

If WA wants to avoid what happened in Victoria, its government must abandon its ideological fantasy of Net Zero, which, as our research shows, is unachievable at any cost.

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