The “mess” of electricity systems in Europe with dramatically raised power prices and uncertain supply will occur in Australia unless plans to go it alone on carbon pricing or extend renewable energy targets face “rigorous cost-benefit analysis”, a new study has found.
According to Robert Bryce, a senior fellow of the conservative US Manhattan Institute think tank and expert on European energy, European experience of emissions trading schemes and renewable energy targets to cut carbon emissions “provides some readily discernible lessons”.
Mr Bryce said the European lessons are that large-scale integration of renewable power does not provide savings but is a net cost to consumers and industry as well as unbalancing electricity markets and destroying investment values.
As Malcolm Turnbull rejects any prospect of an emissions trading scheme or impost on power generators under an emissions intensity scheme and South Australian Premier Jay Weatherill threatens to “go it alone”, Mr Bryce, who is visiting Australia, says there is “an object lesson for Australian policy makers” in the European experience since 2005.
At the COAG meeting today in Canberra crucial reports on electricity costs, the reliability of renewables and the electricity market will be discussed against a backdrop of political differences over power prices and reducing carbon emissions. Yesterday the Prime Minister said states had already pursued their own agendas on energy policy “to the cost of their businesses and the cost of households” and South Australia was a good example.
“What South Australia is doing is putting at risk the jobs of South Australians, the prospects of South Australian business. Jay Weatherill’s approach to energy has been condemned by the business community in South Australia, they’re appalled,” Mr Turnbull told 3AW radio.
Bill Shorten said Australia needed a national approach and claimed Mr Turnbull had become a “complete coward on climate change”.
“Malcolm Turnbull is demonstrating that he is under pressure, that he is lashing out, and that now he is making terrible decisions about the future of climate change,” the Opposition Leader said.
In a paper to be released next week, Mr Bryce said: “While emissions-reduction policies are politically fashionable, the obvious result of the EU’s policies has been ... growing backlash at the soaring cost of the renewable-heavy mandates. The backlash is also coming from rural landowners who are inflamed by the encroachment of large wind-energy projects on their neighbourhoods. This backlash has forced European policy makers to begin scaling back their plans.”
In a report for the Manhattan Institute, Mr Bryce said the German energy transition now faced problems of higher costs, continuing reliance on fossil fuels and “pushback” from consumers and landowners.
“Europe’s entire electricity sector is, to be polite, in a mess. Costs for industrial and residential customers have soared,” he said.
Mr Bryce said blackout-hit South Australia is the only Australian state to have adopted the EU road map of reducing greenhouse gas emissions by 80 per cent by 2050.