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22.02.22

What does woke billionaire know about energy industry?

There is no doubt that Mike Cannon-Brookes knows something about making money.

But what does he know about coal fired power, in the wake of the $8 billion offer for AGL Energy with the Canadian asset manager Brookfield?

We have already had the announcement that Origin Energy will close Australia’s largest coal fired power station 7 years early, 2080 megawatts at Lake Macquarie, originally slated to close in 2032.

Union officials for Eraring’s Workforce said they had been “blindsided” by the news

This follows Energy Australia last year saying it would shut Victoria’s Yallourn coal fired plant in 2028.

And now Cannon-Brookes and Brookfield want to shut down AGL, with coal assets in Victoria and New South Wales.

Energy is a divisive issue heading into the Federal election.

The stakes are high but the answer is simple.

Tell the punter the truth.

Angus Taylor, the Federal Minister, deserves to be listened to. He rightly said that when Victoria’s Hazelwood plant closed suddenly, there were retail price hikes of 85%.

Now, multi-billionaire Cannon-Brookes has stolen the headlines with the “fashionable” go green argument. It will require more than money to go green.

The Canadian infrastructure giant Brookfield is cashed up and is chasing renewable energy assets.

But this is serious stuff, not to be left to the whim of billionaires.

AGL’s smaller Liddell plant is due to start being decommissioned from April. The bigger Bayswater plant, that supplies more than 30% of the State’s electricity, is due to close around about 2033. AGL was planning to shut down its massive brown coal-fired Loy Yang A plant in Victoria by 2045.

The fact is simple. Our power grid can’t handle these shocks.

In relation to Eraring alone, close to a thousand direct and indirect jobs will be lost and the vague, generalised promise of 2,700 construction jobs in transmission and renewable projects, borders on the realm of fiction.

At the same time that we learn of the Cannon-Brookes bid for the 180 year old electricity giant, AGL, to satisfy the overblown rhetoric about renewable energy, we learn that coal exports from New South Wales to India have nearly doubled in the past year.

China stopped buying from us because of its trade sanctions.

But 164 million tonnes of coal was exported from New South Wales in 2021.

How do you replace that revenue?

Exports to India increased by 45%.

Exports to South Korea increased by 25%.

Exports to Japan rose 8%.

Thailand imported 6.7 million tonnes of coal from New South Wales in 2021. And data from Coal Services Pty Ltd showed direct employment from the coal mining sector in New South Wales last year was almost 22,000.

There is no surprise about the demand for Australian coal.

We provide some of the highest quality in the world and, as technology improves, it will be cleaner.

As a result of coal mining, royalties are paid to State governments and taxes are paid by the workers.

As the Federal Resources Minister, the very sensible Keith Pitt, has said, “If the world is buying, we are selling”.

It’s pure fantasy that an almost 3,000 megawatt power station can be replaced by a battery.

Batteries don’t produce power. They store it.

Somewhere you have to produce the electricity. So who do we listen to?

Bjorn Lomborg, who is the President of the Copenhagen Consensus, and a Visiting Fellow at Stanford University’s Hoover Institution, has long argued the merits of the renewable energy push; but his latest book is compulsory reading, “FALSE ALARM: HOW CLIMATE CHANGE PANIC COSTS US TRILLIONS, HURTS THE POOR AND FAILS TO FIX THE PLANET”.

He is not arguing against a transition away from fossil fuels.

Only recently, he highlighted the energy mess in Europe, where costs are climbing out of control. Europe has been plunged into an energy crisis as heating bills soar.

In Britain, as he pointed out, there are warnings that elderly people are going without food or heat to cope with massively increasing energy bills.

As Lomborg rightly says, “Fossil fuels still deliver the vast majority of energy powering everything we value about life today, even for the most climate concerned people. The EU constantly puts climate at the top of its political agenda, yet more than 80% of its primary energy needs are met by fossil fuels, according to the International Energy Agency. Despite endless environmental talk, solar and wind contribute only about 3% of Europe’s total energy.”

Is Mr Cannon-Brookes listening? As Lomborg argues, “Europe is learning to its great cost, leaning on unreliable sources like wind leaves households vulnerable: wind speeds ran usually low for most of 2021, causing much of Europe’s current energy pain. When the sun doesn’t shine, or the wind doesn’t blow, prices rise quickly and we have to revert to fossil fuels for back up.”

But here is the real kicker.

As Lomborg says, to pursue the Biden target of net zero carbon emissions, “The Bank of America has found that achieving net zero will cost US$150 trillion over 30 years, almost twice the combined GDP of every single country on earth… the annual cost of US$5 trillion is more than all the world’s governments and households spend every year on education.”

And remember, all these heroic assumptions are based on the fact that the big emitters, China and India, will cut the most.

And that won’t happen.

As Lomborg says, “Most cuts will likely happen only in rich countries, which will mean a relatively trifling cut to global emissions. The rich world will get all the pain for little gain.”

Do the Matt Keans and Cannon-Brookes of this world care to make themselves aware of any of this?

But the voter deserves to know.

Lomborg recently wrote, “Research published in Nature finds that reducing emissions just 80%, will cost the US more than US$2.1 trillion every year from 2050, or more than US$5,000 per person per year. The cost of achieving Biden’s promised 100% reductions will be far higher. To put this figure in context, the annual US cost of participation in World War II, from 1941 to 1945, is estimated at US$1 trillion in today’s money – so every year, by 2050, climate policy could cost Americans more than twice what they paid during the war.”

When the Eraring announcement was made last week, the highly respected economic commentator, Terry McCrann, wrote, “Mindless, suicidal insanity are the only three words to describe the accelerating rush to close the coal fired power stations that were the foundations of our economy and, indeed, everything in our lives through the 20th century and into the 21st.”

As he says, “We are just drifting into a future of no real power stations, just some sort of hopeless grab-bag of functionally useless wind and solar, plus batteries, plus ‘demand management’.” And you know what ‘demand management’ means?

When the wind doesn’t blow, or the sun doesn’t shine, and the batteries go flat, turn off your lights and your air-conditioning and your heating and your manufacturing plant. McCrann asks sensibly, “Do we want to embrace mindless, suicidal insanity or not?” Because, as in Europe, “When the wind doesn’t blow, generating as little as 1% of their power, they have to very expensively turn on their gas burners and bring back coal.”

Or, as Terry McCrann has said, “Use their extension cords into Europe”.

Meanwhile, the power bills go up by 30% and 40% a year because, if you want to keep the lights on, you have to pay for back-up coal fired power.

Of course, Australia has no extension cords to any country.

I have long argued that all this talk of transitioning away from fossil fuels is a national economic suicide note.

Does the Federal government have the ticker to take on the latest Cannon-Brookes headline grabber?

Australians are not interested in the latest billionaire game.

Energy policy should be summed up by government in one sentence – our energy must be available, reliable and affordable.

Nothing about Cannon-Brookes and this Canadian crowd, Brookfield, can guarantee that; and by the way, Brookfield have a foot in both camps; they have billions of dollars tied up in ports, rail and property assets across Australia; they are no green angel; they have a 50% stake in Queensland’s giant Dalrymple Bay coal terminal, which exports coking and thermal coal.

On the racetrack, it’s called having a bob each way.

If the government doesn’t get into the ring on this critical issue, it can only be because they are frightened of the so-called green vote.

But if people like Allegra Spender, in the Federal Seat of Wentworth, represent the green attack on the government, then my advice is to replay her recent appearance on Q&A.

She’s apparently opposing the government’s failure to transition away from fossil fuels, but had no idea of anything beyond that.

This is a massive challenge for Federal Energy Minister Angus Taylor.

Intellectually, he is up to it; but is he being forced into caution because some of his colleagues are under threat from the green vote?

The answer to that is, give the voter the facts.

Or, as I said above, tell them the truth.