Daily BulletinDaily Bulletin

The Conversation

  • Written by Glyn Wittwer, Professorial Fellow at the Centre of Policy Studies and IMPACT Project, Victoria University

Ahead of Saturday’s federal election the Coalition has latched onto economic modelling claiming Labor’s target of a 45% emissions reduction would cost the economy as much as A$187 billion in 2030.

The modelling released by BAEconomics contrasts strikingly with 22 different reports, many peer-reviewed, which all indicate a far lower economic cost to moving Australia’s energy mix towards renewables.

Labor’s own costings, released last Friday, show a substantially smaller cost to its emissions reduction plan.

But, beyond reports, the example of South Australia is a real-world rebuke to the credibility of BAEconomic’s conclusions. SA has already moved substantially towards Labor’s 2030 target by generating 50% of electricity from renewables and proven its ability to deal with heatwaves that caused mass blackouts in Victoria earlier this year – without breaking the bank.

Read more: Fixing the gap between Labor's greenhouse gas goals and their policies

False assumptions in the model

An appropriate carbon tax is one that makes renewable energy generation competitive with existing fossil fuel generators. Technology advances have already lowered the cost of renewables to the point they’re becoming cost-competitive even without a carbon tax.

The final bastion of fossil–fuel cost advantage is in baseload generation, but the falling costs of battery storage and potential for pumped hydro will close this gap as well.

South Australia's experience contradicts Coalition emissions scare campaign Renewable energy can be competitive with fossil fuel generators. Shutterstock

In the modelling undertaken by BAEconomics, the economic losses depend entirely on the cost gap assumed between renewable and fossil fuel generators. When the Gillard government introduced a carbon tax, it was set at A$24 per tonne. This is of a similar magnitude to carbon taxes set elsewhere in the world.

But the BAEconomics modelling assumed a carbon tax of up to A$405 per tonne. There appears to be no justification for this gap, made even more extraordinary by the much smaller price assumed for purchases of carbon credits from overseas.

The Coalition has shown a complete lack of discernment in reporting the consequent modelled results.

Read more: Carry-over credits and carbon offsets are hot topics this election – but what do they actually mean?

What does the real world show?

The transition to renewables is a complex process. It will rely on many emerging technologies and require different approaches in different regions. But there are places in Australia that show the real cost and benefits of transitioning to renewables.

In southeastern Australia we see electricity demand peak on a limited number of days each year when temperatures in Melbourne and Adelaide soar.

South Australia has heavily invested in renewables. In contrast, Victoria is much more reliant on traditional fossil fuel power stations.

We can look to the Australian Energy Market Operator (AEMO) for comprehensive reports on wholesale electricity prices.

AEMO also prepared a report on load shedding (deliberate rolling blackouts designed to prevent damage to the grid) in Victoria on January 24 and 25 of this year.

Adelaide suffered record heat on January 24, as suburban temperatures neared 48℃. On this day of extreme demand, the state’s back-up generators were fired up for the first time. Wind and solar plants generated almost 50% of South Australia’s electricity on that day.

The state’s generators coped much better than Victoria’s. A combination of maintenance outages, unexpected disruption and poor heat performance in Victoria’s ageing coal-fired power plants caused mass blackouts.

South Australia has already moved much of the way towards the 2030 carbon reduction target. Subsidies over the past decade or so have contributed to transition, but these are shrinking as the costs of renewables fall.

It has not all been plain sailing. A severe blackout occurred in September 2016 as cyclonic winds battered the state, taking wind generators offline and mangling power pylons across the state. In response, the SA government commissioned a Tesla battery and back-up generators to improve the network’s capacity to deal with adverse conditions. On January 24 this year the state’s network passed a severe test.

South Australia's experience contradicts Coalition emissions scare campaign A severe 2016 blackout prompted the South Australian government to commission back-up generators. David Mariuz/AAP

Read more: Australia’s major parties' climate policies side-by-side

The real-life comparison between a state advanced in energy transition and a state that is less advanced shows Labor’s emissions target will result in economic losses much smaller than those modelled by BAEconomics.

Authors: Glyn Wittwer, Professorial Fellow at the Centre of Policy Studies and IMPACT Project, Victoria University

Read more http://theconversation.com/south-australias-experience-contradicts-coalition-emissions-scare-campaign-117079

Here's how the Victoria-NSW border closure will work – and how residents might be affected

arrow_forward

Why Weiner Mobile Estates?

arrow_forward

The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Prime Minister Interview with Ben Fordham, 2GB

FORDHAM: Thank you very much for talking to us. I know it's a difficult day for all of those Qantas workers. Look, they want to know in the short term, are you going to extend JobKeeper?   PRI...

Scott Morrison - avatar Scott Morrison

Prime Minister Scott Morrison interview with Neil Mitchell

NEIL MITCHELL: Prime minister, good morning.    PRIME MINISTER: Good morning, how are you?   MICHELL: I’m okay, a bit to get to I apologise, we haven't spoken for a while and I want to get t...

Scott Morrison - avatar Scott Morrison

Prime Minister Interview with Ben Fordham

PRIME MINISTER: I've always found that this issue on funerals has been the hardest decision that was taken and the most heartbreaking and of all the letters and, you know, there's been over 100...

Scott Morrison - avatar Scott Morrison

Business News

SEO In A Time of COVID-19: A Life-Saver

The coronavirus pandemic has brought about a lot of uncertainty for everyone across the world. It has had one of the most devastating impacts on the day-to-day lives of many including business o...

a Guest Writer - avatar a Guest Writer

5 Ways Risk Management Software Can Help Your Business

No business is averse to risks. Nobody can predict the future or even plan what direction a business is going to take with 100% accuracy. For this reason, to avoid issues or minimise risks, some for...

News Company - avatar News Company

5 Ways To Deal With Unemployment and Get Back Into the Workforce

Being unemployed has a number of challenges and they’re not all financial. It can affect you psychologically and sometimes it can be difficult to dig your way out of a rut when you don’t have a job ...

News Company - avatar News Company



News Company Media Core

Content & Technology Connecting Global Audiences

More Information - Less Opinion