Elon Musk has turned Australia’s energy debate on its head

Original article appeared on RenewEconomy.

We can’t be sure what was said in the phone call between Musk and Australian prime minister Malcolm Turnbull last Sunday, but Musk’s views  on the future of energy are well known: He wants to kick fossil fuels out as quickly as he can. And he is not one to hold back.

So, it’s hard to imagine that Turnbull was putting the case for baseload power plants in that phone call with any conviction. Musk would have been hammering home – as the tweet below suggests – the value of storage and flexibility, essential for the new technologies that he knows will dominate the grid: wind and solar.

Five days later, and just a few weeks after trumpeting clean coal in a National Press Club address, Turnbull was announcing his plan for Snowy 2.0: a plan for 2 GW and 175 hours of new pumped hydro storage capacity that would support wind and solar and make the push for new gas plants and added baseload all but redundant.

The haste with which it was put together was betrayed by the fact that New South Wales (NSW) and Victoria, the common shareholders in Snowy Hydro, didn’t know about it, and the company itself didn’t even mention pumped hydro in its Finkel submission.

Bloomberg New Energy Finance wrote that it was a sign of long-term strategic thinking and planning “that has been desperately lacking in Australia’s energy policy debate for 10 years.”

BNEF said the sheer size of the project would add tremendous flexibility to the electricity system and capability to smooth the intra-seasonal variability of renewables. It was cheaper than gas and even below its projections for lithium-ion storage in 2025.

But also noticeable was the change of language that went with it: In an interview with Australian broadcaster ABC on Thursday night, Turnbull chose to use the word “variable” rather than “intermittent” when talking of wind and solar, and highlighted the need for “flexibility” over baseload.

He was being careful about his language. For the first time in months, he was treating wind and solar – which are now clearly the cheapest form of new energy generation – with respect, and talking seriously about the readily available technologies needed to bring these technologies together.

In South Australia, the same energy discussion was being held. South Australia’s energy plan is not focused on baseload, but on flexibility and dispatchability, and on technologies that can provide a fast response to grid faults and weather events, and unlock the stranglehold of the incumbent oligopoly.

Its focus is also on storage. In this case, battery storage, because its needs are urgent. There will be at least 100 MW installed by next summer in a tender that has already started.

And as RenewEconomy revealed, there will be a further 50 MW of battery storage in a world-first pairing of gas and battery units. (That proposed peaking gas plant is more than it seems).

One energy insider who has had extensive conversations with Turnbull on energy in very recent times says the PM “gets it. He understands renewable energy.”

Turnbull’s task, now, is to try to infuse that enthusiasm – if it is actually real – through his party. The Coalition has been told in no uncertain terms – by the market, by analysts, by scientists and the general public – that the pursuit of “clean coal” is an absurdity, and not justified on economic, environmental or market grounds.

Chief coal spruiker Matt Canavan, the resources minister, only has to look at the jaw-dropping list of large-scale solar farms that are now being built in north Queensland. There simply isn’t an economic case for new baseload power in the region. Or anywhere in Australia for that matter.

Musk is a long way from being the first person to explain the future of energy markets to Turnbull or the Coalition. But it may be that Musk can be the acceptable messenger, who can cause them to listen, and bring a change in attitude.

He’s not Labor. He’s not a Green. He’s a billionaire who wants to send people to Mars, makes electric vehicles they all want to drive, sells solar panels and home battery storage systems they want to have, and is a ruthless and successful entrepreneur.

Of course, the political battles will continue, and so will the hypocrisy. The extraordinary public spat between South Australian premier Jay Weatherill and federal energy minister Josh Frydenberg on Thursday (at the launch of another world-first trial of a virtual power plant) is a sign of the huge frustration over federal policy.

The Coalition’s exploitation of South Australia’s spate of blackouts has been a disgrace, as Weatherill rightly pointed out. This is not about technology, this has been about system management, the lack of leadership on energy policy, and a failed market.

Petty politics and hypocrisy abound.

Turnbull and Frydenberg lambasted Weatherill for pre-empting the Finkel review, and then went ahead and did exactly the same thing two days later. They have mocked the state’s reliance on the interconnector, and then howled when the state moved to lessen its dependence on a link that keeps failing.

And Turnbull’s taunt to Weatherill – my storage is bigger than yours – was pathetic. Turnbull’s plan may not ever see the light of day, and will address a medium to long-term problem. Weatherill’s will happen before the end of the year and will address a pressing need.

The events in the US, where the election of Trump has defenestrated environmental protections, climate change initiatives, and given carte blanche to the fossil fuel industry, underlines how a change of leader can turn things on its head.

Australia, and Turnbull, know well the risk. And it is the main reason that Australia still has no credible climate or energy policy.

But perhaps this last week, and this subtle change of language, are signs that we are starting to get on the right track.  The Finkel review will be critical in that process, even if the Far Right are howling already. Perhaps, though, it will need more phone conversations. And a lot more tweets.

Article reproduced with permission from RenewEconomy.