Chris Uhlmann says power costs are soaring while renewables are falling short, but do the pair have anything in common?
What is “The Real Cost of Net Zero” the political journalist Chris Uhlmann asked this week, after weeks of trailing his new documentary on Sky News Australia.
Uhlmann is no fan of Australia’s shift to renewables and, in a preview published in the Australian said politicians and governments “pushing ambitious renewables targets” were “breathtakingly, stunningly energy illiterate”.
With hubris like that, the hour-long doco had a lot to live up to.
In a foreboding opener, the former ABC and Nine journalist told viewers: “As power costs soar, weather-dependent electricity generation is being found wanting.”
But is it? And do renewables actually have anything to do with the rising costs of electricity for Australians?
Perhaps the biggest hint of which constituency would have enjoyed Uhlmann’s documentary the most came in an advertisement that ran straight after, from the advocacy group Coal Australia.
Payday killer?
Featured in the doco is a Canberra resident, Belinda Jones, who shows Uhlmann her $1,073 electricity bill which left her only $71 left from her $1,144 pension – a “payday killer”, she said. The story was recounted in the Australian and the Daily Telegraph.
That is a high bill and it may have been tough for that woman until her next pension payment arrived in 14 days. Another power bill, however, wouldn’t have appeared for three months. That context was missing from the stories.
“Energy rationing is already a reality,” said Uhlmann, commenting on Jones’s situation.
But while conservatives consistently blame renewables for rising electricity prices, there is little evidence to support the claim.
The director of climate change and energy at the industry association Ai Group, Tennant Reed, said in the last 15 years, prices had gone up due to over-investment in the electricity network in the early 2010s, and then rising international gas prices, followed by Russia’s invasion of Ukraine that pushed up coal and gas costs.
A spokesperson for the Australian Energy Market Operator said in the last decade, the primary drivers of rising electricity costs for consumers were “market volatility and supply disruptions”.
“Key factors include transmission and generation outages, especially those affecting large coal-fired power stations. These outages cause price spikes, which in turn flow through to consumer bills over time.
“The Ukraine war has also played a role, triggering broader price increases that have taken years to fully reflect in consumer electricity costs.”
But what about renewables? Have they increased costs?
The statement added: “The increasing share of renewable energy in the generation mix has put downward pressure on electricity prices and emissions, but it’s important to consider that the higher costs in recent years have largely been driven by volatility in the wholesale market.”
Wholesale costs
Uhlmann wrote that renewables would mean higher costs because when solar and wind are not generating much power, the gaps will be filled “with higher-coast alternatives like gas, hydro power and batteries”.
Because, he claimed, the highest cost of generation sets the wholesale price in the electricity market, the Albanese government’s pledge to lower bills (scuppered significantly by Russia’s invasion of Ukraine) had failed.
Dr Dylan McConnell, an energy systems expert at the University of New South Wales, said the electricity market did not always choose the most expensive forms of electricity to set the price.
Instead, he said the market operator selects the lowest cost combination of generators to meet demand, with the price set by the last generator needed.
“So at different times, if there’s a lot of renewable energy for example, it might be solar and wind setting the price,” he said. “Gas does set the price occasionally, but the most common price setter is actually hydro.
“You can see this pretty easily these days. In the middle of the day we often see negative pricing [because of abundant solar and wind] but in the evening the price is higher when we have to call on more expensive generators like coal or gas.
“That is an argument for having alternatives [to coal and gas], rather than needing more of them.”
Dirty secret?
Uhlmann claimed there was a “dirty little secret” in the Australian Energy Market Operator’s blueprint for a system free from coal – that secret being gas.
According to Uhlmann, the blueprint’s call for 15GW of gas-fired power by 2050 shows renewables “cannot form a reliable electricity system without gas” (which, self-evidently, is not the plan anyway).
Uhlmann claimed the role of gas “is more backbone than backstop” and said the amount of gas capacity would be enough to power 15m homes.
Except the same blueprint document (known as the Integrated System Plan) says in the future a “typical gas generator may generate just 5% of its annual potential, but will be critical when it runs.”
Not much of a “backbone” if it’s only being used 5% of the time.
Alternative plan
The only alternatives offered in the doco come in visits to a nuclear power plant and a coal plant with carbon capture and storage, both in the United States.
Nuclear power, which is prohibited in Australia, would require the Coalition to win government and most experts say the technology is unlikely to provide any electricity before 2040. So there’s little chance of that offering a solution in the foreseeable future.
There are only four CCS projects attached to power plants now operating anywhere in the world, two of which are in China.
In Australia the CSIRO estimates gas or coal with CCS would have the highest cost range of all legal generating technologies.
Carbon capture?
Uhlmann visited the Petra Nova project near Houston where CO2 is captured from a coal plant. Not mentioned in the documentary was how the project was forced to close in 2020 (it restarted in September 2023) after the oil price collapsed during the pandemic.
Why would the collapse in the oil price affect a coal plant?
Because the CO2 captured at Petra Nova was being injected into an oilfield to push out more crude to sell.
In its first three years, Petra Nova stored 3.5Mt of CO2 in the oilfield but pushed out 4.2m barrels of oil (one typical barrel of oil releases roughly 400kg of CO2 when burned).
Fracking cuts emissions
In one interview on Sky, Uhlmann celebrated Donald Trump’s nomination of the fracking executive Chris Wright to be his energy secretary.
“For those that worry about climate change, by the way,” Uhlmann said, “the biggest reduction in the last 15 years of CO2 into the atmosphere” had come from the US, “which replaced coal with natural gas” after a fracking revolution.
But that’s not the only thing that has been happening to the US electricity sector. A congressional budget office report in 2022 said that since 2005, wind and solar had gone from providing 1% of electricity generation to 13%.
US government data shows that between 2018 and 2023, switching from fossil fuels to renewables saved an average of 380 Mt CO2 a year, compared with 570Mt by moving from coal to gas.
Crucial though are the emissions from methane leaks from gas wells, not counted in the data, which some studies estimate could greatly reduce any climate benefits, or even cancel them out entirely, of swapping coal for gas.
Give coal a chance?
In a page one splash in the Australian on Monday, a headline read “Give coal a chance to rein in energy risks”.
The story claimed “one of the world’s major miners has urged the Albanese government to slow down the transition from coal to renewables,” quoting Gary Nagle, the boss of Swiss mining company Glencore.
Nagle told the newspaper the transition to renewable energy “is not going to happen overnight” and said “many countries have accepted coal as a shorter term transition fuel”.
So now, to transition away from coal, we should be using … more coal? If you think that doesn’t make sense, you’re probably not alone.
Graham Readfearn is Guardian Australia’s environment and climate correspondent