Coming back to haunt you

In his recent Budget reply speech, Opposition Leader Peter Dutton laboured (pun intended) on the increasingly difficult to achieve promise by Prime Minister Albanese that power bills will be $275 less in 2025. While the government is claiming the modelling done in 2021 supports the accuracy of the promise, 2021 modelling doesn’t account for changes in circumstances since then.

Technically, the Coalition has a point. It is hard to see how a substantial reduction in power bills in comparison to 2021 prices can be achieved anytime soon. It also shows the inherent risk in predicting certain outcomes into the future. While a ‘guaranteed’ reduction in costs sometime in the future when we are in an environment of rising prices, rising interest rates and wages falling in real terms sounds appealing, it’s policy shorthand like this that has a habit of coming back to haunt you.

There seems to be two problems here. The first is the marketing around election coverages. In the case of the power bill promise, either the promise was completely made up which is unlikely given the apparent care Albanese has taken with the implementation of his other policies, or secondly the power bill reduction was deemed to be too complicated to sell any other way in 30 seconds on the nightly news.

Renewable generation capacity has a far lesser variable cost than traditional coal/gas power generation. The inputs that create the power in renewable systems are sun, water and wind. All of them are free unlike the coal or gas used to generate energy in ‘traditional’ energy generation. While both systems have costs for capital, labour, materials, distribution and administration, a large component of the rapid increase in energy costs is due to the current demand for fuel. Assuming the government’s 2021 modelling relied on implementing increased renewable generation and their discussion about rewiring the nation, it is reasonable to expect the cost of inputs would fall before 2025, resulting in cheaper power.

Australians accept uncertainty in other areas of their life. For a start, anyone that backs a horse or enters the Lotto would like to claim a financial victory — alas most don’t. Your car probably doesn’t get the exact fuel consumption gained when tested to the applicable standard, at best it is a guide that your vehicle is better or worse than a similar sized and specified vehicle driven the same way. Arguably anyone that uses public transport would be used to the service turning up some time after the time published in the timetable. Most take out a loan to buy a house, promising the lender that you will be able to make payments up to 30 years into the future come what may. Unfortunately in some cases, that just doesn’t happen for a variety of reasons.

So why can’t we accept uncertainty in political promises? For example, would the person that has no solar panels or battery save $275, or would it be a person with a large solar system and batteries that may be almost completely off the grid be the beneficiary of the claimed amount? Former Prime Minister Julia Gillard fell foul of the same problem when claiming the Carbon Emission Reduction Scheme implemented by her government was not a ‘carbon tax’. Technically it wasn’t, however the political shorthand over the branding eventually caught up with her.

It’s a similar predicament to that faced by Scott Morrison and Josh Frydenberg when they promised that next year’s budget would be ‘back in the black’ — it wasn’t. Morrison and his Cabinet prior to the 2022 election were fond of suggesting that EV’s would destroy the weekend because the electric ute hadn’t been invented — well it has and one is available for sale in Australia this month. The ALP is just as ‘clever’ as the Coalition in pointing out when promises haven’t been achieved when it suited their marketing program.

As Opposition Leader, Peter Dutton doesn’t have to deliver anything until the next election. He has plenty of time to seek information, take advice, form a considered opinion and explain how his proposals would benefit Australia and Australians into the future far beyond the potential timeframe of either an Albanese or Dutton government. Pity he seems to be not letting the facts get in the way of a good story.

As The Guardian reported recently
Giving his budget reply speech, the opposition leader said the Coalition wanted more renewable energy, but it just wasn’t possible yet, and it was a mistake for the government to allow ageing and expensive fossil fuel power to be phased out now.

More specifically: “The technology doesn’t yet exist at the scale that is needed to store renewable energy for electricity to be reliable at night, or during peak periods. That is just the scientific reality.”

So on Dutton’s reading, the International Energy Agency is not an expert in the energy field
The IEA said in the most affected regions “higher shares of renewables were correlated with lower electricity prices, and more efficient homes and electrified heat have provided an important buffer for some — but far from enough — consumers”.

Russia is the world’s biggest fossil fuel exporter. As countries looked to source oil, gas and coal from elsewhere, this caused a huge spike in costs that continues to reverberate around the globe.

But costs had been rising even before Putin’s invasion.

“Climate policies were blamed in some quarters for contributing to the initial run-up in prices, but it is difficult to argue that they played a significant role,” the IEA report said.

“In fact, more rapid deployment of clean energy sources and technologies would have helped to protect consumers and mitigate some of the upward pressure on fuel prices.”

The report listed a host of factors contributing to rising prices, including the speed of the economic rebound from the pandemic, droughts in Brazil cutting hydropower, heatwaves in France cutting nuclear output, flooding affecting Australian coal production, and failures by governments to introduce policies to increase clean energy investments.
Dutton isn’t even correct when it comes to Australia’s electricity system. On the basis that everyone has to have a hobby, David Osmond, a Canberra based engineer with a global energy developer, has been recalculating Australia’s weekly energy usage based on a hypothetical grid that relied primarily on renewable energy with a five hour, predominately using large batteries, storage capacity. His Twitter reports seem to contradict Dutton’s claim that renewables cannot power Australia . Rather than taking their word for it, maybe the news media should be looking at claims of politicians and challenging the marketing and spin. It’s not that hard to find the evidence.

Absolute certainties have a habit of not being so absolute or certain given time, events or changing parameters. It would do politicians well to remember this. Rather than falling into the trap of promising absolutes when asked, maybe it’s time for a discussion on why the plan or program will benefit the community instead.

What do you think?

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