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A Looming Disaster in Energy Security
The constant headlines say it all: Australia’s energy system is in crisis. “High power costs floor business” says a lead story in the Australian Financial Review: “Shell-shocked businesses are re-assessing investments and jobs slugged by huge increases in electricity bills.” The Energy Users Association of Australia, which represents the country’s largest power users, believes major industries are on the verge of collapse because of the price of power. BlueScope Steel has warned that climate policies could produce an “energy catastrophe”. A country blessed with massive coal and gas reserves, economic resources that traditionally drive economic growth, has suffered a power blackout in South Australia and is suffering from extremely high power prices.
Let’s start with a brief overview of Australia’s energy system. Australia gets 73 per cent of its power from coal, 11 per cent from natural gas, and about 15 per cent from renewables (hydro 7 per cent, wind 4 per…
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