Walking a political tightrope

The impending closure of the Yallourn power station poses a major reliability problem for Victoria. After Hazelwood in 2017, it will be the second of the state’s four giant brown coal generators to close.

That’s the withdrawal of more than 3000 megawatts of dispatchable generation, and the emissions that go with them. Victorian Energy Minister Lily D’Ambrosio simply points to the 5000 megawatts of new renewables that will be built in Victoria from 2014 until 2028.

That might work as a sound bite, but you can’t run an electricity system on media releases alone. According to the Victorian Government’s own VRET progress report, the 5,000 megawatts of coal generators supplied around 63 per cent of the state’s electricity, while 6,888 megawatts of renewables capacity supplied only 25 per cent.

That’s because coal generators tend to run constantly around the clock, while renewables surge in and out according to the variances in the wind and the sun. There are times when electricity from renewables is abundant, and times when it is scarce or even non-existent.

This constant mis-match between renewable generation and the electricity demanded by Victorians is not a new idea, nor is it particularly technically complex. So why does the Victorian Government keep pretending it doesn’t exist?

The Andrews Victorian Government’s has remained a constant supporter of new renewables and battery storage, supporting each with its state renewable energy target (VRET scheme) and financing for selected renewable and battery projects.

It similarly describes its coal generators as old, dirty and unreliable, even though they still provide around two-thirds of the state’s electricity. Gas generation is similarly disliked, not mentioned as part of any energy strategy, banning all onshore gas exploration or development until last year.

The problem with this approach is it ignores some of the basic engineering required to run an industrial electricity system. Renewables generation is highly seasonal: during winter there can be days or weeks where solar and wind generation are low, while electricity demand is high. A pure renewables-battery system will run short of power. Extra large scale supply or generation is needed.

The two main options for Victoria by 2028 are to increase transmission to other states or build additional gas generators. The Victorian Government has pushed hard to upgrade its transmission connection with NSW through the VNI West project which will deliver an additional 1800 megawatts of electricity from NSW by 2027. Presumably this will hope to access the output from Snowy 2.0 whenever it is completed, although the NSW and South Australian Governments are also relying on the same supply.

The Andrews Government is conversely publicly unimpressed with the proposed $3 billion Marinus Link project which would increase transmission by 750 megawatts from Tasmania’s hydro dams. It funds an energy policy agency which produced a report last year claiming Victorian batteries would be a better option than upgrading the undersea transmission line with Tasmania. Tasmanian manufacturers have warned that they are too small to fund such a large project that will deliver national benefit.

This is odd given Victoria stands to be the biggest beneficiary of the project, and it would provide just the deep, zero emissions firming generation the state needs when Yallourn exits. The widely held industry view is that Victoria would privately welcome the project, but is mounting a staunch public campaign against it because it has no intention of paying for it.

New gas generators are also likely to find their way into the Victorian supply mix, but the Government will remain disdainful and at arm’s length. It is mindful of the handful of inner city Melbourne electorates that they hold narrowly from The Greens, and are conscious of doing nothing to give oxygen to their political rivals campaigns.

Energy policy is on a finely balanced political tightrope in Victoria. The rhetoric doesn’t match the engineering reality, only the political one.