Go For Zero, ditch the Net

In the middle of weeks of positive news about renewables, the Grattan Institute released a report outlining the economic case for a transition to renewable energy. You'd be mistaken for thinking this well-researched report would have our governments, and market investors, scrambling to act. Saving the climate can also save investors - and electricity users - money, or so they would have us believe.

The truth is, the report - titled ‘Go for Net Zero’ - falls far short of the mark. 

Don't get me wrong - the report is meticulously modelled and researched, and it all adds up. It starts by looking at the current policy debate; given the goals of our two major parties to reach net zero by 2050 (or "ideally" so), and the fact that most of our coal plants are due to retire by then, if not sooner, what would the lowest overall cost option be? 

 

Figure 1.1 from page 6 - we'll be referring back to this one

From here, the report gets into an extensive discussion of the technical challenges in converting Australia’s main grid, the National Electricity Market (NEM), to run on renewables. This isn't ground-breaking - I have talked about some of these in earlier posts - but the detailed research and costing on different options, drawn from the most up-to-date science and prices, is useful to examine. I’m going to do my best to summarise it and do it justice, before I get into my points of criticism. 

The report looks at costs from two primary points of view - the "levelised" or "system" cost of electricity provided by different power stations, which are currently paid by private companies building assets, and flow onto consumers as wholesale and then retail costs (with a fluctuating degree of profit and losses along the way - the report is quick to point out that it essentially is forecasting the total system costs, not prices on our energy bills); and the cost of building transmission infrastructure, which is usually shelled out by government or regulators, which NEM users then pay as a direct fee added to their bill. 

Renewable energy already provides cheaper wholesale power than fossil fuels, even in a market like Australia without a price on carbon emissions. The trouble is, it's easier to distribute electricity from a small number of large fossil-fuel plants than a lot of smaller renewable energy assets, which need to be spread across a wide variety of climates to make sure some can keep generating even if there's bad weather in a particular region. At present, our grid has a mix of the two, which makes power cheap (even sending wholesale prices below zero) when the weather is good, but providing enough even when it isn't. 

Running a grid on renewables also requires some built-in storage to handle small fluctuations caused by changes in weather, which add to the cost as well; these could fall into either category of costs in the NEM, but moreso wholesale ones, as big batteries (like the Tesla one in South Australia) or pumped hydro (like Snowy 2.0 or the Kidston mine) work within the wholesale market, buying low and selling high. The report doesn't model household battery storage or rooftop solar increasing above present rates, and it allows for a big uptake in electric vehicles. 

The trouble, then, is finding the option that balances those two kinds of costs. The report picks the date 2040, and projects the balance of costs of what is projects to be the three most viable options by that point, which I'll call A, B and C: keeping the present level of renewable power and replacing retiring coal plants with the most up-to-date technology (A), letting renewables displace coal and keeping 30% of the grid fossil fuelled (B), and shutting all the NEM's coal plants by 2040, moving to 90% renewables, and relying on gas-fired power for the remaining 10% (C). To make those options a little more concrete, here's what A-C look like when compared with the timeline of our coal plants retiring back in Figure 1.1: 

 

Figure 1.1 as three retirement plans for coal

 

It isn't very surprising, given what I said earlier, that A and B end up costing basically the same, as there's still enough coal in the grid to cover most of the gaps, and the present infrastructure doesn't need to change very much. But even C, wiping out over 90% of emissions from our grid, comes out as less than 10% more expensive – increased investment in “smoothing” assets like transmission and storage balanced by cheaper production:

Page 20.

Given the goal of our major parties is Net Zero – reaffirmed today by our Prime Minister, getting a swipe in on inner-city voters concerned about climate change in the process – then how do we get there? This is where carbon offsets come in. The authors look at different prices and project the cost of buying offsets to match the emissions under A, B and C. At today’s prices for offsets (around $15/t), sticking with coal in A and paying to offset our emissions would still come out cheapest. But with even moderate rises in the cost of carbon offsets (inevitable as Australia, and the world, moves to net zero emissions), B almost certainly be cheapest, or even C:

 

The offset cost equation - Page 38

But if the costs for C didn’t end up being that much higher, why is there no model for option D – 100% renewable energy? This one would require no offsets at all. The authors dismiss politicians like the Nats pushing for new coal, but they also dismiss the Greens pushing for this target. They don’t say it’s impossible, but that the cost to remove that final 10% of fossil-fuelled electricity from the NEM would be far higher than relying on a moderate amount of transitional gas-fired power and offsetting the remaining emissions (10mt annually) until the other options become more affordable.

Thus, the report is titled “Go for Net Zero”; it could just as easily be titled “Don’t Go For Zero”.

The technical challenges of transitioning to a 100% renewable grid are real, and the authors look at various ways of solving the big one – what they call the “winter problem”. Up to 8 hours of battery or pumped hydro storage would see the NEM grid through the worst expected weather in summer, when the days are long and solar power has many hours to produce. But with the shorter daylight hours of winter, there could be days, weeks or fortnights where far less energy can be produced than is needed; our houses, after all, are glorified tents, and take a lot of energy to heat during such spells.

The key word here is “could”; a 100% renewable grid would need a solution to this problem to ensure supply, but in most winters it might only be drawn on sparingly or not at all. No power plant operators would want to invest in an asset that they can’t rely on using, and thus recouping their costs, every year.

To their credit, the authors look at most of the options which have been mooted to solve this problem in prior papers on this issue, like Beyond Zero Emission’s Stationary Energy plan. But they load them down with caveats and assumptions which rule them out, when they could just as easily rule them in. I’m going to examine those now, and suggest how their supposed pitfalls might easily be overcome.

It seems as though the natural answer to this problem is storage – if it’s good enough to keep solar power running through the night, then surely it’s good enough to get us through winter? The trouble is capacity. By their models, it would take us around 9 Snowy 2.0s worth of storage in reserve to get through the “winter problem”, and they would need to start the worst fortnight full. There are big problems with this approach – lack of viable dams or reservoirs, for a start – and even if we could do something clever like turn former mines into pumped hydro installations, the capital costs would take a long time to be recouped, and interest would keep piling up.

Biomass is another option the authors look at. Powered by burning wood, primarily, along with other sources like landfill waste gases, biomass provides a lot of power in Europe – around half of all renewables – and, while it emits carbon when it is burnt, it is carbon that has been drawn out of the atmosphere by trees. It could, then be considered “carbon neutral”. So why don’t the authors use it as the 10% backup instead of gas? The capital costs are high, but the main barrier is fuel.

Right now, biomass from agriculture and forestry waste in Australia is cheap, but it is likely to get more expensive. The authors suggest using it as our winter backstop would raise prices and require dedicated farming – not necessarily a bad thing, as that could be a carbon abatement or even draw-down mechanism – but while it might price in projects to harvest biomass that is currently wasted, it might also price in less genuinely carbon-neutral options, like shipping wood pellets in from North America – as Europe does today.

Hydrogen is the main option that the authors see as potentially solving the “winter problem”. I’ve written about the technology here; to summarise, hydrogen produced through electrolysis is as clean as the electricity that fuels it, and it can be used as transport fuel, in industrial processes – or burnt for emissions-free electricity.

That could easily provide the solution to our “winter problem”, as hydrogen can be produced in the summer to soak up excess production, and burnt in winter as needed. But if hydrogen is to be used for industrial applications, such as carbon neutral steel to go into all of our new power infrastructure, then it would need to be able to produce a regular supply – and thus, it might require its own renewable energy plants to ensure it, prone to the “winter problem” themselves. 

This is the case for a lot of projects right now – renewable agency ARENA is providing startup funding for these kind of standalone proposals – but a viable business model could also be based on hydrogen production connected to the grid, building up a supply of hydrogen over summer to see us through the winter – and in the spring, selling the excess to the steel industry - or northern hemisphere countries which are already looking to use hydrogen in the same way, like Singapore or Japan, before their own winter begins.

Together, these three options could provide the answer to the “winter problem” – even the authors admit that they may already be cost effective, if offset prices soar above their highest modelled price of $200/t. And as they start to be used they are likely to grow cheaper to build, as solar and wind did.

But the question is, why does it matter what the absolute cheapest option for de-carbonising our grid is? Aren’t there other things to consider – like what is the fastest? Or fairest?

That leads onto my bigger criticisms of this report. There are two main ways in which the framework the authors have set themselves falls short of the mark: the “market mechanisms above all” logic of the NEM, which got us into the problem of climate change in the first place, needs to be questioned, and amended – or ditched. And why we are even aiming for net zero needs to make sense.

The Grattan Institute’s report is essentially limited to decarbonising the NEM as it exists today. But the NEM has only existed since 1998, and it was only joined by Tasmania in 2006. It has been useful to create an interconnected grid across Australia’s east coast, but it is an institution of the neoliberal era, and takes it for granted that market approaches will always be cheapest. That is far from the case.

You remember, back at the start where I said the system cost for the power plants in the NEM is paid by private investors? Actually, it was largely paid by the taxpayers, or by governments issuing bonds - who then sold the assets to private companies in the era of privatisation. This isn't ancient history, and happened less than ten years ago in NSW. 

The companies that bought up assets made sure they got a good deal, but they expect a return on their investments. Private companies don’t do things for the public good, but to make a profit – and they pay higher rates of interest on loans than governments do, so assets built by them will usually be more expensive than if they were funded by taxpayers. They also prefer to build assets that will quickly repay the capital investment required – like solar PV and wind, but not like concentrated solar thermal, or assets only planned to be used intermittently.

The structure of the NEM has been naturally resistant to big changes, since they have to pass all sorts of tests. Even a no-nonsense extra connection between NSW and SA, facilitating better transmission and unlocking large areas on the borders of those two states for solar investments, has taken many years of discussion and better-off-overall testing to get approved. Under this framework, one of the biggest solutions to the “winter problem” provided by BZE's 2010 report will never even be considered: turning our grid into a true coast-to-coast grid to rival Europe’s “super grid”, by interconnecting Western Australia &or the Northern Territory to the NEM.

The idea of connecting all of Australia’s states to a single grid hasn’t been widely explored – as far as I can tell, market regulator AEMO has never even assessed it. But it would allow the transport of solar energy from across three time zones, as well as opening up areas of high solar resource like the Nullarbor for development of power plants. And it would do a lot to solve the “winter problem”, along with implementing a strategic reserve based on the above technical solutions. We could effectively extend the available winter daylight by 2 hours. The amount of duplication, or “overbuilding”, required would be far less.

Regardless of that proposal, the concept of keeping a strategic reserve of electricity in store for the worst winters isn’t out of the question. When it comes to something like transport fuel, which is necessary to keep society running through global disruptions (or to go to war), governments around the world think nothing of spending up big to keep huge reserves on hand. World agreements demand we should keep 90 days of transport fuel available. So why can’t we break beyond the market mindset and think that our government might have a similar strategic reserve of stored electricity (and the assets to use it) to address the defining problem of the 21^st century, averting runaway climate change?

That leads to my second criticism: the authors of this report mention our Paris Agreement commitments to address climate change, and then move straight onto the goalposts of our two major parties. But our two major parties have no interest in policies that will do anything meaningful about climate change.

The science grows more clear every day – in fact, the same week ‘Go for Net Zero’ was released, the Climate Council released another report stating that, if we are to keep to the Paris Agreement goal of limiting warming to 1.5c, then we will need to do the heavy lifting of emissions reductions this decade, and hit net zero by 2035, before moving into net negative emissions and drawing down excess carbon. A slow transition, at the rate the market will deliver, will mean the death of the Great Barrier Reef, and it may not be enough to prevent the crossing of ‘tipping points’ that send us into irreversible climate change.

Reports on renewable energy today must highlight the abject inadequacy of net zero by 2050 and the rate at which market mechanisms are decarbonising the grid, not take it as a given.

What, then, does the retirement plan we need actually look like? Something more like this:

 

Figure 1.1 with policy to match the science

Fossil fuel profiteers don’t want to see this kind of action, or policy and targets that will lead to it. It would mean turning a lot of their “sunk costs” into “stranded assets”, never able to recoup the cost of investment. Funnily enough, although this phrase has been in the policy debate, it hasn’t shown up in the report. Maybe it’s because the Grattan Institute is funded by investors in those assets, such as founding member and coal capitalist BHP, or affiliate and gas capitalist Woodside? 

 

Regardless of that potential (and undeclared) conflict of interest, the report’s authors have done considerable legwork in modelling our transition. And, although they have claimed that we need to “Go for Net Zero” and not “100% renewables”, they have shown that we are already on the cusp of that major transition – and the technologies to do it are already there.

Greta Thunberg v the Australian Academy of Science

Or - is 1.5c really out of reach? 

 

The Australian Academy of Science recently released a report on how damaging 3c of global warming would be to Australia's climate. This number wasn't arrived at by accident; it is the projected result of the current global action under the Paris Agreement, even though that agreement claims to target a 1.5c to 2c maximum on warming. 

The report projects the dangers that we can expect from the 3c rise of those business-as-usual emissions pledges - death of the great barrier reef, failure or severely reduced productivity of most Australian agriculture systems, hundreds of thousands of homes lost. These details were, in themselves, newsworthy, but sadly, not unusual.

More alarming, though, it also contained another projection: that it is now "virtually impossible" to limit global warming to 1.5c:

 

"Limiting climate change to 1.5°C is now virtually impossible. A rapid transition to net zero greenhouse gas emissions is required if the international community is to limit warming to “well below 2°C” in line with the Paris Agreement."

This exact claim runs at odds with most established science, and has drawn a lot of consternation from the scientific community and climate activists - even Greta Thunberg has echoed calls not to take the report as a defeat, while scientists have argued against the methodology. 

 

"Climate is not like a footy match where you lose and it is game over. The climate game continues, so even if the 1.5C game is lost, it is still game-on for 1.6C and 1.7C. /.../every fraction of a degree, every year and every choice matters."https://t.co/imNVz9k3O2

— Greta Thunberg (@GretaThunberg) April 6, 2021

 

Let's examine how the report arrived at the much-discussed projection, and see if the projection is actually substantiated.

 

It starts from the scientific consensus on emissions pathways, as documented in the IPCC Special Report on 1.5c. So far, so good. The red band is what would happen if current climate policies are maintained, orange if the Paris Accord pledges for future action are met - and green is what we actually need to do to guarantee a 1.5c limit to warming and a safe climate:

Page 18

However, the authors then break the timeline down into a carbon budget - putting a number on the amount of greenhouse gases that can still be emitted before that outcome is locked in. And that is where things get a little more anxiety-inducing:

Page 19 - keep in mind this is carbon, not c02e

Based on that IPCC special report, the remaining carbon budget to keep to a 1.5c timeline is 155 gigatons of carbon. The authors have taken that number, subtracted 25 to account for other greenhouse gas emissions, and 70 for carbon cycle feedbacks, to come up with a number of 40 remaining gigatons before we have crossed, irreversibly, beyond 1.5c of warming in the system - by their estimate, around 3-4 years at the present rate before those 155gt have all been emitted.

 

If we actually only have 40gt of current emissions left until 1.5c and our chance of preserving a safe climate is gone, then we really should start to panic - global c02 emissions from energy alone in 2020 were 30.6 Gt, which was "the largest ever" reduction on the prior year. Joy!

But there is a huge problem with those numbers: the 25gt of other gases has already been accounted for in the original 155gt base budget. Even more confusing is the 70gt. It is attributed to the wrong source, and comes from this 2018 paper and its supporting information supplement - but from my reading, the source doesn't say that crossing the line of 1.5c of warming will trigger all of those emissions, and definitely not straight away. The source speaks in terms of estimated impact by 2100, not within a matter of years and thresholds. And it doesn't even mention a 1.5c timeline, let alone estimate carbon cycle feedbacks by 2100 if we keep within 1.5c of warming.

 

In plain language, carbon cycle feedbacks are massive changes, where existing systems reach "tipping points" that mean they permanently change from one state to another, and that this new state will cause further climate change on its own. The classic examples estimated in the report are permafrost melting (releasing frozen methane, accelerating further warming and methane release) and Amazon forest dieback (ending the forest's ability to suck up carbon as it changes into savanna). Perhaps the best-known example of a tipping point is the melting of our Arctic ice sheets, raising sea level massively - and also reducing the amount of sunlight reflected out of the atmosphere and allowing further warming, since dark seawater absorbs more than pure white snow and ice.

 

As you might have guessed from the above, these tipping points are hard to account for accurately, because they can occur as events, not as regular measurable rates of release over time. Most of the numbers that have been estimated, including by the source, are under the RCP2.6 emissions timeline (2c of warming by 2100), and the estimates of carbon released by 2100 are close (112) to the number in the right hand column of table 1. But the column on the left is not supported by the source, or any that I can see.

My thanks to Joeri Rogelj for unpicking some of the confusion over measurements and numbers:

Today's news from Australia's @Science_Academy latest climate report: "limiting climate change to 1.5°C is now virtually impossible"

I'm quite confused by their finding & scientific evidence backing it up is questionable at best.#auspol

- a thread (1/n)https://t.co/a5z3AippL9

— Joeri Rogelj (@JoeriRogelj) March 31, 2021

However, there is a bigger conceptual problem. Regardless of where they got it from, the authors add the 70 to our net zero budget is if, as a species, we will hit net zero - and then sit around twiddling our thumbs, waiting for these feedback loops to occur sometime by 2100, while maintaining perfect net zero emissions year after year. But once we have hit net zero greenhouse gas emissions, then we can go the other way, and have net negative emissions, drawing carbon out of the atmosphere.

 

It is entirely possible, *scientifically*, to keep within this budget and to begin drawing down carbon once we have done so so that the feedback events might never occur. The human species could easily start reforesting and afforesting, adopting regenerative agriculture - without even getting into speculative carbon scrubbing technology. We just need plants.

 

And if we are burning up the budget too fast, then we can STOP DOING THINGS. It is within our power to turn off the lights. Before we start shivering in the dark, there are plenty of greenhouse gas emissions consumed by things that do nothing to better humanity, like war games. Or food being left to rot (and emit methane) because farm owners won't pay a living wage. We can start turning private transport into public, convert stationary energy grids to zero-carbon sources. The barriers to doing these things aren't scientific or technical - they are political and economic.

 

For all of the flaws in the numbers, the AAS report asserting that 1.5c of warming is all but confirmed has cut through the muddle of scientific messaging. Take out that 70gt from potential feedback loops, and the 155gt budget is all but gone within 5-10 years anyway - unless we manage to sharply drop our emissions from 2020 levels, today. That's scientifically possible but not going to happen, politically or economically, unless we change the rules of the game.

 

The push back against this report has been, essentially, to find the right scientific messaging to convince the electorate to do something - but no amount of messaging will convince the global capitalist class, who makes most of the decisions about how things are done, that they should stop profiting from their climate-killing investments in fossil fuels, private transport and industrialised agriculture. 

 

Making our cities more bike-friendly is ten times more important than introducing electric cars to reach net zero - but could you imagine the field day the car-obsessed Murdoch press would have with western governments redesigning our cities for bikes? The car barons, oil tycoons and coal-loving billionaires will only be stopped by force. 

 

A lot of scientists interviewed don't want to say true statements like "1.5c is almost impossible" because they think it'll sound too radical and gloomy, even when the scientific probability of keeping within 2c of warming is as low as 5%; but that kind of half-measure rhetoric has been tried and failed. Even the AAS report gives in to this trend, by making ten policy recommendations that stress how profit can be made in the transition, too. We need scientists to tell the truth - that those in control of our economy are sending most of our species over a cliff, because our economy is organised on the basis of profit, not need.

 

What is unspoken in the report's claim that it's now "virtually impossible" to keep to 1.5c isn't the scientific or technological capacity of hitting the targets in time - planting and protecting trees is an art as old as human civilisation, and there are all sorts of proven measures to reduce emissions rapidly, from seaweed in cattle feed to making cities more cycle-friendly - but the impossibility that capitalist decision-making in our economy can be subverted, supplanted or simply gotten rid of within 3-10 years. No capitalist will agree to just stop making a return on investment and let power plants and factories sit idle, even if necessary for the preservation of our safe climate, while we all go out and plant trees.

 

But that is what must be done.

 

If we want to preserve the relatively safe climate which has nurtured all of our recorded history, then we need to fight against capitalist control of our economy. The AAS report reveals the obvious but unspoken truth of climate politics - that so long as capitalists are generating profit from carbon-emitting economic activities, carbon will keep being emitted and our safe climate will keep on being destroyed.

 

And, by claiming that it is still "possible" to keep to 1.5c of warming and a safe climate, Greta Thunberg and the scientists are, in fact, pushing back against challenging that assumption. They don't want to question rules of the game. But as the AAS and other climate scientists have clearly demonstrated, pledges under the Paris Accords and the status quo of incremental market mechanisms are not going to preserve our safe climate, not even come close. The 1.5c game is being lost, and climate activists need to question why the referees are blowing the whistle on meaningful changes, not just try again for 1.6c on the same rigged field with the same rigged rules.

 

It's time to forget about market-based solutions to climate change. It's time to take carbon off the market. 

Port Grocer

Please excuse the time since I've last posted on this blog. Around that point, I took the skills I'd learned in ten years of fast fashion sport retail to a new project more in line with the values that I've been writing about here: a not-for-profit social enterprise grocery store in the somewhat downtrodden and de-industrialised suburb of Port Kembla. You can learn more about Port Grocer on our Facebook page.

 

Port has been going through something of a cultural revival over the last decade, and a business which sets out to do groceries and essential goods differently - keeping our packaging and food waste footprints as small as possible along the way - has been the right idea at the right time in many ways, but it has also been a massive challenge to get it up and running, especially during a pandemic. 

I've always liked sorting out and properly disposing of waste in my old workplaces, to the point where people thought I was wasting my time. Here I'm in charge of doing just that - and developing bin systems in the store, so our team of a handful of paid staff and around 30 volunteers can get food from paddock to plate while keeping our waste footprint as small as possible. It's a small thing and we're still less than 6 months into trade, but I'm pretty proud of what we've done!

One particular part of the project that I have been organising is our Library of Things. The idea is simple - take common household appliances or power tools that are expensive to own, take up space, collect dust and often end up in landfill without having done much to justify the emissions and labour that went into making them, and instead make a communal library of them. Unlike a hire shop, we are built with communal access, environmental benefits and facilitating people to make do with less in mind from the get go. 

The idea is simple but at the same time it runs at odds to most of our society's impulses, and our initial uptake has been slow. If you're local to the Illawarra and would like to browse our library, check out the catalogue here. Membership is $25 for six months. </endspiel>

Anyway, regularly scheduled content on here will resume soon. What time I have been making for writing, I have been dedicating to more creative historical fiction. I did even attempt to tackle NaNoWriMo, although my head of steam really only lasted for a week or so, until I ran into a conundrum and felt like starting over - but I have still been learning a lot about the issues of food waste and climate change which I'm itching to write about!

SuperMarkets - or, you're doing it right

"The propaganda is strong," Youtuber friendlyjordies tells us in a video extolling the power of switching superannuation to fight climate change. "We've all been sold a big lie."

Unfortunately, he is selling a big lie himself - that market mechanisms can do the job of averting climate change. Or, as he put it later in said video: "the platitude that 'you vote with your wallet' is actually true."

It's not.

friendlyjordies in said video, singing the praises of an Adani-loving government

This post is a follow-up to my 1.5c lifestyle challenge one analysing how much impact switching bank can make - and as I make it clear there, I have personally already switched my super (and bank) to one that invests in renewables (or doesn't invest in coal). I'm not trying to claim that private investment in renewables won't do anything. But, like switching lightbulbs, it's a "solution" that is vastly undermatched to the severity of the crisis we are facing.

Now, in his defense, while he might seem to relish in dunking on climate activists for painting "crap signs" like they are in Year 1 and taking to the streets, friendlyjordies didn't just pull this argument out of nowhere. As I mentioned in the prior post, Australian Ethical markets itself on the promise that their super will help to finance the zero carbon transition. His video is in support of another super fund - Future Super - and it actually draws on a report comissioned by them, alongside climate campaign group 350.org and the UTS Institute for Sustainable Future (ISF).

Sounds great, right? A well-researched plan that doesn't require us to get our lazy arses off the couch? And only 12.4% of Australians have to do it to decarbonise our entire economy - or as few as 7.7% to get us to 100% renewables by 2030? If that's all it'll take, why hasn't it happened already?

Unfortunately, friendlyjordies has fudged the numbers by more than a little. He says less than the 300,000 people who marched in days of action need to switch their super, and they'll make lots of money doing it, when the real number is more like half of all Australians, and returns are definitely not guaranteed. But before we get to that, there are a few big problems with the plan itself.

The biggest warning sign for me was the price tag. According to the report by these research and campaign heavyweights, the cost of transitioning Australia to a zero-carbon grid within ten years is a whopping $788 billion AUD (in 2018). That's several times the amount the federal government recently splashed out to stop our economy going into freefall because of the present pandemic; but more to the point, it's a lot larger than the price given by Beyond Zero Emissions (BZE). Nearly double as much. Their 2010 plan to decarbonise our grid is fully costed, and their initial capital investment is much lower at $370 billion AUD (in 2018 terms, $434 billion AUD). So why the difference?

The reason is, the frame of reference is completely different. The BZE Stationary Energy Plan is, above all, an engineering one; they look at the technical challenge and devise a way to overcome it. The ISF plan, on the other hand, is written from the point of view of an investment firm; they are more preoccupied with the return on investment (ROI), and how technologically sound the solution is doesn't matter as much as if it will generate a 7% ROI.

From the ISF plan

Although they haven't published the technical details the way BZE have, the overall breakdown of energy type in the ISF plan suggests the oversimplification that has led them to arrive at a figure nearly double that of BZE: more than half of power would come from solar photovoltaics (PV).

 

Solar PV and wind power have both been very good investments in recent years, with returns of around 10% on investment. So if that's the metric you're starting with, they seem like a good bet - just keep building them until we have enough, right?

This is the finance world equivalent of everyone in the country just buying 100% renewable energy. As I've talked about in the first post of the 1.5c lifestyle series, our grid doesn't actually work like that - and in fact, we're very close to reaching the limit at which intermittent distributed PV power and wind will start causing problems, unless there are major reforms by the regulators and governments. We are already likely to have days of 75% renewable energy by 2025 - and at that point, the regular will have to switch off power plants to maintain stability. Once that happens, the ROI on those assets will plunge.

The major changes that we need are ones that friendlyjordies and the ISF plan don't talk about - they are ones that market investment can't give us - and they are ones that the BZE plan has modelled and costed. They are grid connections from coast to coast, upgraded transmission lines, large-scale storage, and flattening our evening peaks.

While friendlyjordies does also lampoon the backward-thinking, bucket hat-wearing Dad for asking "what about when the sun doesn't shine?" - the truth is, that's a serious technical challenge. Australians use the most electricity on hot evenings in the summer and shoulder seasons, when they get home and switch on the AC - right as the sun is setting. This isn't an insurmountable challenge; the BZE plan fixes it, by investing in solid upgrades to our transmission infrastructure, linking the two main WA grids to the east coast NEM, and making concentrated solar thermal (CST) with inbuilt molten salt storage the backbone of our grid. That way, when the sun has set on Sydney and Melbourne, our AC units can still be chugging away on daylight in Perth.

The cost of linking the grids like this is significant, and returns on investment are not likely to be 7%. The Australian Energy Regulator recently approved a major interconnector between NSW and SA, which will provide both states with extra stability for distribution in peaks and troughs, as well as reducing the upfront cost of new renewable plants in western NSW. Even this 850km expansion, costing $1.53 billion (in 2020 dollars), is only estimated to return $269 million in likely net benefits - 12.5% overall, but most of these come in indirect consumer savings from dispatchable power and new investment in renewables, not directly from the interconnector's operational income.

The BZE plan puts a price tag of $93 billion AUD on the transmission upgrades required to convert our grid to renewables. This is a cost that will have to be paid, sooner or later - but without a likely ROI from the asset, a responsible super fund manager would never shell out the funds for it.

Then there's the question of energy storage. This is the main answer to Mr. Bucket Hat Dad, and Malcolm Turnbull's Snowy 2.0  is the kind of answer we've been given. There are major problems with that approach - which is why BZE made concentrated solar thermal, with in-built molten salt storage systems, the backbone of their plan. But the up-front costs are higher than solar PV, and despite it being commercially proven overseas, the market will not invest in CST in Australia.

At this point, I can only repeat that the ISF plan hasn't released detailed schematics of their plans. But it would seem that they have arrived at their huge number of $788 billion by picking the most profitable assets, and then massively duplicating them, until enough is built to run the NEM and WA's disconnected grids separately, and there is enough wind and solar power assets to keep on running the grid even when wind doesn't blow or sun doesn't shine.

The kicker is, as they don't seem to have incorporated any kind of storage, that most of these duplicated assets will be sitting idle most of the time. That isn't the case for renewable energy assets today. Bye bye 7% ROI - idle assets that are not selling electricity to the market don't make money.

This plan doesn't hold any water.

Even without all of those details, how has friendlyjordies fudged the numbers? Well, he himself admits 80% of Future Super's money goes into other things than renewable assets, even for their renewable-focused Renewables Plus. The rest sound like good things, don't get me wrong. But in order to reach our 7.7% of super fund assets needed to fund the switch to 100% renewables, then 38.5% of Australians would have to switch to Future Super, or other funds which are putting an equal amount of money into renewables. That's a lot more than the 300,000 who protested over the last summer; it's more than the 4.7 million (33%) who voted Labor in the last election.

So if the 300,000 people protesting in the streets all switched their super (assuming none of them were already ethical investors), we'd get a small portion of the way to 100% renewables. It might tip the stationary energy balance something like 5% towards renewables over the next ten years - not nothing, but a drop in the ocean compared to the task ahead of us.

But surely, friendlyjordies might ask, that 5% is better than achieving nothing, like you and your "crap signs" did in days of climate strikes?

It is true that our government doesn't seem to have budged very far on climate change. But Australians have. In the six months from July 2019 to January 2020, we went from 37% of Australians being "very concerned" about climate change to 47%, and from 43% thinking we are already suffering the impacts to 57%. The number of us "not very concerned" shrank over the same period from 16% to 11%.

Climate protests in that time cannot take sole credit. The summer of bushfires - and the fact that emergency service bureaucrats came out to say they were the product of climate change - no doubt helped shift the conversation. But so did hundreds of thousands of passionate youth. They may not have much in their super balance (and let's be honest, neither do I) - but they know that we cannot leave it up to the markets to solve climate change.

And as someone who attended the climate protests, there's another flaw in friendlyjordies logic; above all, the protests were an expression of anger by a generation of youth, whose future is being trashed - and who don't have much in the way of superannuation balances to switch. In 2017-18, even 25-34 year olds only had an average balance of $33,200 for women and $41,700 for men. Under 25s (the majority of the 300,000) don't even rate a mention. Those aged 45 and up have the decisive amount of the super pool, to invest as they see fit. Definitely not the majority of the protestors.

Voting with your wallet? It means that those with more money get more votes, even though they won't be the ones still around to live with the consequences.

My super is due to mature in 2055. If we haven't ditched our neoliberal obsession with market mechanisms and bloody well built the kind of smart grid that can support 100% renewables within a few years, then the worst-case scenario is collapse of civilization five years before I'm due to claim my lump sum. So I'm not particularly concerned about 7% returns, and I don't want us to fart around with the most profitable solutions when we have the technical know-how to do the job.

Protestors 10 or 15 years my junior, no doubt, care about it even less. They aren't voting with their wallets - they are voting with their feet. And they are doing it right.

We must take action now, regardless of the ROI.