The Melbourne Institute is a research-only department in the Faculty of Business and Economics at the University of Melbourne. It partners with The Australian in delivering an annual Economic and Social Outlook conference. The latest such conference was held in Melbourne on November 2.
I know little about the Melbourne Institute. I assume it’s left-centric. A safe assumption these days, I’d say. Thus it deals in misapprehensions about the real world. An ideal setting for the federal Treasurer, Dr Jim Chalmers, to confabulate on the topic of “Energy, the economy, and this defining decade.” And he outdid himself when he covered what he called “the energy transition.” This, of course, is the transition from cheap and reliable energy to dear and unreliable energy. Though government ministers don’t see it that way, being all congregants in the church of the climate-change cult.
I’ll regurgitate below some of what Chalmers said. I’m not making anything up. But don’t be fearful. Nothing can possibly go wrong. After all, we are in the hands of obsessive zealots in headlong pursuit of turning Australia into a “superpower.” In their hallucinatory world, “our ability to become a superpower is reliant upon our ability to generate cheaper, cleaner, reliable, renewable power.” There are three things which make this objective hard to achieve and harder to swallow. Actually, there are more than three, but three will do.
The first is that many other wannabe countries are after the mantle of becoming green-energy superpowers. Not all can be winners. For instance, when the jetsetters at the World Economic Forum identified six likely leading candidates for producing green hydrogen, Australia was missing. There was China, the EU, India, Japan, South Korea and the United States. And Australia? A mere afterthought, appended among Chile, Namibia and Morocco et al. Memo to Chalmers: Talk to Klaus Schwab to get higher up the list.
The second is that the tyranny of distance seriously hampers Australia in exporting green energy; that is, in the unlikely event we can ever defile sufficient pristine land and seascapes to produce enough of it. We can fantasise about building undersea cables to, say, Singapore (apropos Sun Cable); or about making and shipping green hydrogen. But these ventures are never going to fly commercially. They will all flop once government subsidies subside. They are pie-in-the-sky.
The third thing is that while we are busy dismantling our reliable-energy generation our competitors will continue to be variously reliant on coal, oil or gas, as in China and India and in most of the rest of Asia, and/or they will be investing in nuclear energy. The whole business of wind, sun and batteries might be propped up for domestic consumption, if allied with despotic powers to keep the peasants in line as power prices soar and blackouts ensue, but forget it as an export industry.
But hold on. Hope springs eternal, as they no doubt say at AEMO.
“We receive 10,000 times more solar radiation each year than we can use,” Chalmers said.
Yes, he really said this. What does he mean? I know the sun powers the earth. We’d be a dead planet without the sun. I also know that if we received only one-ten-thousandth of current solar radiation we’d be dead. Presumably, he means that there’s an abundance of sunshine if only we could harness, transmit and store enough of it, cheaply enough. Ah, spotted it, there’s the rub.
Never mind there is always wind. “Our offshore wind potential is estimated to exceed the capacity of the world’s current coal-fired power stations,” Chalmers said. How unhinged from reality is it possible to get? Who among his jejune apparatchiks wrote this drivel for him? To, again, state the bleeding obvious, just because it’s windy out at sea doesn’t mean we can capture, transmit and store such turbulence in the form of electricity at an affordable price. Chalmers must be aware surely of the UK government’s recent failure to attract bidders to build offshore wind turbines. From Reuters: “Offshore wind developers stayed away from Britain’s latest renewable energy auction…arguing the price offered by the government did not reflect rising industry costs, something which is hampering wind projects globally.” That’s wind projects globally, Jim.
But, ever the optimist, ”we have the largest pipeline of renewable hydrogen investment proposals in the world,” he said. By a pipeline of proposals he means plans. Robbie Burns comes to mind: “The best-laid plans of mice and men often go gang aft agley.” (That is ‘awry’ to Sassenachs.)
Amid the quixotic, a hint of realism shines through:
It’s important for me to acknowledge that without more decisive action, across all levels of government, working with investors, industry and communities, the energy transition could fall short of what the country needs.
Indeed it could, and certainly will, unless we change course, including by turning a deaf ear tout de suite to the siren call of net-zero.