With battery storage to the rescue, the Kodak moment for renewables has finally arrived

Who would have thought that, scarcely five weeks after Treasurer Scott Morrison, paraded a chunk of coal in parliament, planning for Australia’s energy needs would be dominated by renewables, batteries and hydro?

For months now, the Coalition has been talking down renewables, blaming them for power failures, blackouts, and an unreliable energy network.

South Australia was bearing the brunt of this campaign. The state that couldn’t keep its lights on had Coalition politicians and mainstream journalists vexatiously attributing the blame to its high density of renewables.

But this sustained campaign, which would eventually hail “clean coal” as Australia’s salvation, all came unstuck when tech entrepreneur Elon Musk came out with a brilliant stunt: to install a massive battery storage system in South Australia “in 100 days, or it’s free”.

The genius of the stunt was not to win an instant contract to follow up on such a commitment, but to put an end to decades of dithering over energy policy that major political parties are so famous for in Australia and around the world, and which have intensified the climate crisis to dangerous levels.

Musk’s stunt was not without self-interest. It also aimed to position Tesla as a can-do company for future contracts. But where it was lethal was in completely neutering the campaign against renewables.

Anti-renewable politicians around the country, regardless of whether they are captive to the fossil-fuel lobby, could no longer argue for a dubious “clean-coal” powered station that would take between five and seven years to build when Tesla could fix a state’s energy crisis in 100 days – and not emit one gram of carbon at the end of the process.

Both the South Australian and Victorian governments have responded to Musk’s proposal by bidding for 100 megawatts of battery storage in their states. In South Australia’s case, a state-owned 250MW backup gas-fired fast-start aeroderivative power plant is also to be commissioned.

The state-owned gas power plant is, however, only a support to plans for a renewable-fed grid to be the main source of emergency dispatchable power. It is a plant that anticipates the way extreme weather can impact on energy infrastructure in much the same way desalination plants do for water infrastructure.

This is one reason it must be state-owned. But another is that a private operator would insist on full-time generation to maximise investment and profits. Thus, the South Australian gas plant is actually a critique of the privatisation of energy provision in Australia, which is the single greatest cause of why electricity prices have gone up.

As Giles Parkinson from RenewEconomy points out, within a framework in which privatisation dominates, the current market rules actually disadvantage the merits of non-domestic battery storage for consumers – because private power retailers can exploit arbitrage between low and high prices.

They can load up the batteries when excess wind and solar are cheap and sell it at peak demand for inflated prices. So, storage can actually enhance profits for power suppliers and create a bad deal for consumers.

However, the intrinsic value of storage is that the more you add, the less volatility there will be in a market. This creates a stable price for consumers and less profits for the corporations.

An example Parkinson uses is the Wivenhoe pumped storage facility in Queensland. This is:

… rarely used, because it would dampen the profits of its owners, which also own coal and gas generation.

Nevertheless, as a concept, the battery storage solution proposed by Musk, followed by South Australian Premier Jay Weatherill’s decisive action, really had constricted Malcolm Turnbull’s options. For a start, it makes redundant the longstanding fiction of “baseload power”, which was coined by the fossil-fuel industry to justify coal.

By last week, Turnbull would have already had the results of focus groups telling him that “clean” coal doesn’t wash with voters at all.

So, after reeling for most of last week over the humiliation that the Tesla and Weatherill challenge presented, and after scrambling for a counterpunch, Turnbull came up with Snowy Hydro 2.0. Here Musk’s stunt could only be really met with another stunt, but one in which Turnbull is only trying to salvage a very bad hand that he has played against battery-friendly renewables.

It is true that pumped hydro is currently cheaper than battery storage, but cannot be implemented nearly as quickly, and is not infinitely scalable as battery farms are.

Also, whereas the cost of battery storage continues to fall, the cost of the engineering needed for pumped hydro is not. And there are limited locations suitable for its operation.

But more important than all these considerations is that it while Snowy 2.0 will stabilise the national grid no matter whether clean or dirty energy is powering its pumps, it will only assist decarbonisation if the pumps are powered by wind and solar, which has all been glossed over in its PR sell.

With current energy market rules, there is still some incentive for dirty generators to feed the Snowy pumps. This helps energy security but does nothing for the climate crisis.

Yet, with his PR campaign, Turnbull thinks he is on a winner. The Snowy is also an icon of Australian nation-building and fable. And there is probably some political capital to be scored there. But the Snowy is a once-off, and not a part of the future as battery storage is.

But in having to play the part of the Man from Snowy River, Turnbull may have forestalled the inevitable onset of batteries, the price of which was that he was snookered into committing to an alternative substantial renewable-energy-friendly project.

So significant was the original stunt by Musk that set off a train of events cornering Turnbull into offering counter-storage that Giles Parkinson declared:

Turnbull drives stake through heart of fossil fuel industry.

But then, just when you thought coal had been cremated for the last time, it is revived over the weekend with the work of Chris Uhlmann, the ABC’s political editor, who gained notoriety for his anti-renewable stance on South Australia last year.

In his latest piece on the ABC, Uhlmann forewarns that the closure of the Hazlewood power station (5% of the nation’s energy output) will lead to east coast blackouts and crises in the manufacturing sector.

Uhlmann salutes the language of the coal companies in predicting that an energy crisis will result from no new investment in “baseload” power, even though this is precisely what renewables plus storage actually amounts to. He then quotes a Hazelwood unit controller as his source to raise the bogie of intermitancy once again:

Intermittent renewable energy could not be relied on during days of peak demand.

But the most misleading part of his piece was to point to the Australian Energy Market Operator’s prediction that shortfalls in supply next summer can be attributed to the closure of coal power stations, rather than the fact that climate-change-induced hotter temperatures are driving up demand during this period – as they did in the summer just gone, when Hazelwood was operating.

Perhaps Uhlmann’s piece would not look like such an advertorial for the coal industry had it not appeared on the same day as Resources Minister Matt Canavan’s speculation that a new coal-fired plant could be built in Queensland that will be subsidised by the A$5 billion Northern Australia Infrastructure fund.

On the ABC’s Insiders, Canavan lamented that Queensland did not have a:

… baseload power station north of Rockhampton … We’ve got a lot of coal up here, the new clean-coal technologies are at an affordable price, reliable power and lower emission.

It seems that while South Australia is leading the progress on a renewables Kodak moment, Queensland, with plans to build a coal-fired power stations and the Queensland Labor government going to great lengths to support the gigantic Adani coal mine, at least two states are moving in completely opposite directions.