Article by Chris Kenny in The Australian, November, 16th 2024.

Anthony Albanese and Chris Bowen have long argued that renewable energy is the cheapest form of electricity. However, while tens of billions of dollars in subsidies and investments flow into renewables, prices keep going up. A reckoning must come, and it will be ugly.

Not only is Labor’s plan to reach its net-zero goal by switching the electricity grid to 90 percent renewable energy physically impossible (it has committed to get to 82 percent within 6 years), but the attempt is sending us a broke. At some stage, the facts will break through the delusion.

The unavoidable logic behind firming up a renewable energy grid makes additional costs unavoidable – a renewables grid demands two grids. You need to construct an expansive network of wind and solar generation plants, enough to cover about three times peak demand spread across vastly different microclimates in the hope that wind or sun will be available somewhere when you need it.

On Friday, the Coalition released estimates from Frontier Economics putting the total requited spend for the renewables transition at $642bn – that is $500bn more than Labor has estimated, and about five times what we have already spent. All of this must be recouped with profit, so our power price pain can only ­increase.

The catch with renewables is that they will always require backup, in effect another electricity grid, perhaps using much of the same transmission lines, but capable of generating peak demand without wind or solar. Most likely this backup grid would be powered by gas.

Once we know there is enough backup to supply peak demand, we can understand that the entirety of the renewable asset build is an additional and unnecessary energy cost we have chosen to impose on ourselves. It alienates land, increases complexity, and escalates costs without providing additional power, all so we can meet emissions reduction targets that other countries are not meeting, and which will make no discernible difference to global emissions or, therefore, the climate, anyway.

And whenever gas is needed to firm up the grid, the price the gas generators can charge will determine the cost of electricity. Two grids, a vast and inefficient renewable grid we could well do without, and an effective and reliable fossil-fuel grid are needed to guarantee the energy that underpins our society.

The lies being told on renewables costs have been brilliantly exposed by simple observations and arguments run by entrepreneur Dick Smith in an, until now, private debate with The Guardian Australia. Smith responded after The Guardian ran a piece slamming him for running “ill-informed claims” about renewable energy costs and practicality.

Smith does not contest the need to reduce emissions. His arguments are about whether renewables can power a modern economy and whether nuclear might not be a crucial part of the energy mix. In his letter, Smith says the underestimates from the CSIRO allow it to “falsely claim that renewables with storage is the cheapest form of energy”.

The electronics entrepreneur, adventurer, and environmentalist made a killer observation that exposes the ruse. “No doubt you have noticed all the wind and solar farms that exist around our country,” Smith wrote to The Guardian. “If the CSIRO claim that wind, solar, and storage is the cheapest form of energy is correct, these facilities would include batteries to supply power 24/7 – or at least for five hours. None of them do.”

This connects to a point I have made for a decade or more – instead of subsidising the installation of unreliable renewable energy, we should have made any subsidies or targets contingent on generators firming up their own supplies, either with batteries or dispatchable generation. Smith provides a clear explanation for why this is impossible: “That is, the cost of even limited storage results in solar and wind power being so expensive it is unaffordable.”

Dick Smith has also pointed out that when Broken Hill went dark last month because the main transmission line from Victoria was taken out in a storm, neither the nearby solar factory, wind farm, or big battery were able to keep the Silver City in power. He cites the real-world example of Lord Howe Island where despite a $12m grant for a renewables grid with storage, they have ended up with higher power prices and a reliance on diesel generators for 100 percent of their electricity at times.

This is just the reality. No developed country has even attempted to run on a 90 percent renewables model, and unless there is a watershed development in energy storage no country ever will – so what is Australia playing at?

A clue for a secure, prosperous, and clean energy future comes from our defense force—not the inane net-zero strategy but their plan to run nuclear-propelled ­submarines.

Instead of wasting government subsidies and burdening consumers with the investment costs of unproven renewable models and other “green energy superpowers” hyperbole like green hydrogen and pumped hydro, the time is ripe for nuclear power. It is dense power with a small land footprint that can use existing transmission infrastructure,

Remember the Whyalla wipeout? A decade or more on, it is still on the way with grave doubts about the future of the steelworks, delayed only by taxpayer subsidies and green energy posturing.

A steel manufacturing centre established with the advantage of cheap and reliable coal power is struggling again, as it awaits some kind of “green hydrogen” saviour. Yet a couple of hours up the road is one of the world’s largest uranium mines, and Whyalla and Port Augusta are linked to the national transmission grid because of the now-demolished coal-fired power plants in the region.

A nuclear power station near Port Augusta would buttress power supplies for Whyalla, South Australia and the national grid. Any excess power at times of low demand could be used for desalination or hydrogen production.

It is a much more logical and efficient solution, with proven technology, than our current renewables-plus-storage experiment. The only thing stopping the nuclear option is an honest and truthful appraisal of our options – and the political will.