Essay by Eric Worrall
According to the Climate Council, climate action will solve Australia’s skyrocketing cost of living. The facts say otherwise.
Action on climate change is action on the cost of living
When Treasurer Jim Chalmers delivered his first economic update to the new Parliament this week, he confirmed the worst fears of Australians eyeing rising household bills and shrinking budgets.
The Treasurer flagged life is set to get even more expensive in the months ahead, as inflation keeps rising towards an expected 32-year peak by the end of this year. Even once we get over that hump, Treasury is forecasting inflation will run well above the decade-long average for much of 2023.
These forecasts come on the back of June CPI data showing households have already copped a 6.1 per cent rise in the cost of living over the past 12 months – the biggest increase since the early 2000s.
Fuel prices are one of the main drivers, with people paying over 30 per cent more at the pump than they were a year ago – even with the federal government’s temporary cut to fuel excise.
Widespread flooding across Queensland and New South Wales has wiped out crops and stopped farmers getting new plantings into the ground. This has led to sky-high prices for staples like cucumbers, broccoli and the infamous $11 lettuce.
With Australian family budgets under so much pressure, governments are rightly focused on getting the cost of living down. As they do, there’s an important opportunity to rapidly cut our national carbon budget at the same time.
That’s because action on climate is action on cost of living – making the transition to a zero-emissions economy can save Australians cash on their power bills, at the petrol pump, in the supermarket and more.
This is obviously untrue, but lets pick it apart.
For starters, the transition, even if it worked, would do nothing in the short term to address immediate problems.
A better plan to alleviate immediate cost of living stress would be to build new coal plants. The Australian government plans to spend $13 billion on new grid capacity, enough to build 4 new coal plants. If this money was instead spent on coal plants, and the coal plants were sited next to coal fields, the coal costs would be pretty close to zero – the coal just has to be dug up and shovelled into the plants. If the planning approvals were fast tracked, and construction started immediately, within 2-3 years Australia would have a flood of cheap energy hitting the home consumer electricity market.
So renewables are already behind the cost of a conventional network upgrade, just on the cost of the network upgrade they would require.
Then there is the cost of the battery backup. The Australian solar battery index suggests the cost of battery + inverter costs $1200 (AUD) / KWh.
According to the Australian Government, Aussies consumed 265,232 GWh in 2020.
Divide by 365 gives an average 726 GWh / day, or 726,000,000 KWh / day.
Multiply 726,000,000 KWh / day by $1200 / kWh, and the cost of a single day battery backup is $871 billion dollars.
Of course Australia would need more than a single day of backup, Australia experiences widespread wind droughts like everyone else. If we assume 7 days, we already have a cost of $6 trillion dollars, just for a week of battery backup.
Batteries don’t last forever, so if we assume an average life of 10 years, that is $600 billion Australia has to come up with every year, just to maintain that $6 trillion battery pack.
And we haven’t even started building and maintaining the required solar panels and wind turbines – at 20% loading we would require renewables capable of producing 726GWh / day + whatever additional power was required to cover battery losses and transmission line losses.
Oops I almost forgot – power use goes up in winter, just as renewable output drops. So the real figures for battery backup and renewable capacity are probably a lot higher than my rough calculation.
I’ll leave that cost to your imagination.
Oh I almost forgot – the Climate Council also wants us all to switch to EVs, so we need a lot more power. Australia consumes around a million barrels of oil per day, so convert to GWh.
1700 KWh / barrel of oil x 1000000 barrels of oil = 1,700,000,000 KWh / day, 0r 1,700 GWh / day, which has to be added to the 726GWh in the original calculation. If you think EV batteries could stand in for battery backup, think again – people need their EV charge to drive to work or whatever. So we really need at least $20 trillion dollars worth of battery backup, and $2 trillion per year to maintain it.
Does this still seem like the low cost option, climate council? People who are struggling to pay their energy bills don’t have the spare cash to buy an EV.
Obviously you can play with these numbers, assume the government would get a good bulk deal on batteries (though with Lithium prices skyrocketing, maybe not).
President Obama once explained that the cost of the renewable transition would cause energy prices to skyrocket, because that cost will be passed on to ordinary consumers. But he never made it clear just how unaffordable it would be.
via Watts Up With That?
July 30, 2022 at 08:31PM