Don’t blame renewables for blackouts, energy experts say

A new Grattan Institute report says fears that rising levels of renewables will cause blackouts are misplaced, and by trying to fix the wrong problem we may risk more blackouts.

The report Keep Calm and Carry On said the conversation on reliable power had been wrongly focused on coal against renewables to keep the lights on instead of correcting problems with network reliability and how to create incentives for more investment in new generation.

The power problem doesn’t lay with coal or renewables as much as the poles and wires, the Grattan Institute said.Credit:AP

“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,” the report said.

“Yet, the overwhelming source of outages is problems in transporting power; it has nothing to do with whether the power was generated from renewables or coal or some other technology.

“Over the past ten years, more than 97 per cent of outage hours could be traced to problems with the local poles and wires that transport power to homes and businesses,” the Grattan Institute report said.

In the ten years from June 2008 to June 2018, there were 70 blackouts. Of these, 45 were caused by failures of the network itself, 23 by lightning strikes, bushfires and storms, while only two were caused by generator issues, one of which was the major South Australian blackout in 2016.

The recent blackout in Victoria, which cut power to around 200,000 households, brings these generator related incidents up to three.

The report said the likelihood of blackouts is rising unless the industry and government work together to create stable policy.

“The market is tight and likely to remain so as old coal generators are retired and heatwaves become more severe,” the report said.

The government has developed a number of policies aimed at bringing more electricity generation into the grid, while at the same time attempting to force down record high power prices.

These include subsidising new generation, creating a regulated power price and forcing any energy company found to be behaving badly in the market to sell assets.

“The government introduced its ‘big stick’ legislation in response to the recommendations of the Australian Competition and Consumer [electricity review] report,” Federal Energy Minister Angus Taylor said.

“The bill prohibits energy companies from unfairly setting retail prices, from manipulating prices in the market and from acting to prevent competition and supply in the market.

"If the market was working well, it would not be required. Instead, your power bills are being held hostage to the market dominance of the big energy companies – and every Australian is wearing the cost.”

The Grattan Institute believes more blackouts are likely as coal-fired power stations age and heatwaves grow more extreme. Credit:Fairfax

The Grattan Institute said energy policy, which includes consultation with state energy ministers and industry, is the best way to build a system with fewer blackouts.

“A stable policy framework to reduce emissions and ensure that retailers have enough supply will encourage that investment and keep this problem rare," the report said.

“What’s needed is not panic and politicking, but a cool-headed policy response to manage reliability without unnecessarily adding to consumer bills."

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