Despite a flurry of media stories and statements from political leaders relating intermittent renewables to power failures, the number of blackouts in Australia has not increased in a decade, finds a report from Grattan Institute. However, it warns, without investment in new supply beyond generation such as coal and gas, there will be chronic shortfalls.
While the share of renewables on the grid continues to grow with a banner year in 2018, contributing 21.3% of Australia’s electricity , stakeholders with an interest in maintaining the status quo have been blaming the newly added generation capacity for reliability issues. For Grattan Institute, it is clear that poles and wires are the ones to place the blame on.
“[Blaming renewables] is wrong because almost all outages are caused by problems in transporting electricity, and have nothing to do with whether the power was generated from new renewables or old coal or some other technology,” states the report titled “Keep Calm and Carry On”.
“And it’s dangerous because if politicians over-react to public concern and rush to intervene in the market, electricity bills could rise even higher.“
A false narrative
As Australia’s ageing coal-fired generator approach the end of their lives, the supply and demand ratio will inevitably change, leaving the grid vulnerable. But, according to Grattan Institute, adding new generation such as coal and gas, which the Morrison government plans to underwrite, is not the right solution.
“To encourage investment and keep this problem [outages] rare, governments need to create a stable policy framework to reduce greenhouse gas emissions and ensure that retailers have enough supply,“ the report states.
While evidence is mounting that energy transition and lower energy bills go hand in hand, Energy Minister Angus Taylor has repeatedly described ambitious emissions reduction targets as “economy wracking“.
Noting that more than 97% of outages across the National Electricity Market over the past 10 years can be traced to equipment failures, Grattan Institute underlines that such power failures had nothing to do with renewables.
“A false narrative has taken hold that electricity supply has become less reliable with more renewable energy and that this is inevitably going to get worse,” authors Tony Wood, director of Grattan’s energy program, Guy Dundas and Lucy Percival say.
While it notes that increasing renewable generation does create challenges for managing the power system, Grattan Institute points to significant steps taken by energy market authorities since the SA blackout to ready the grid ready for a future with much more wind and solar generation.
“What Australia needs now is not panic and politicking, but cool-headed policy responses to manage electricity reliability without unnecessarily adding to consumer bills,“ the report states.
The report authors are calling for a comprehensive emissions and energy policy to encourage investment, involving an emissions intensity scheme and a reliability obligation.