Australia’s new Labor Prime Minister, Anthony Albanese, has promised to ramp up green energy, but a national electricity crisis is showing that fossil fuels are hard to drop.

In June Australia’s grid operator suspended the national spot market for power to prevent looming blackouts. Regulators ordered power generators using fossil fuels, when they could run, while also fixing prices. The grid operator last week lifted market controls, but warned they could be reimposed if prices spike.

Australia’s Left blamed the mess on fossil-fuel companies manipulating markets. Some accused coal generators of deliberately withholding power to drive up electricity prices to boost profits, before they are forced to close by climate regulation.

The Wall Street Journal states that the real culprit is bad energy policy. Australia has plentiful gas reserves, but it lacks the pipeline capacity to transport the fuel to metropolitan areas in Australia’s south.

Coal still generates about 60% of Australia’s power, and renewables a third. The latter is about the same as California, which is experiencing similar power shortfalls.

Renewable mandates in Australia have made it harder for coal plants to turn a profit, so many have shut down. Others have skimped on maintenance, though they are stressed from powering up and down to back up renewables.

Weak solar and wind output at the start of Australia’s winter has also squeezed power supply.

Australia’s grid problems could grow as many coal plants are to be retired. Renewables are set to increase, but don’t provide reliable power around the clock. Australia has invested heavily in utility-scale lithium-ion batteries to store renewable power, to little effect.

The grid operator says the solution is to build more transmission lines to connect more green energy. But building out transmission involves the same permitting headaches as pipeline construction.


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