Rolling Blackouts and Renewable Energy Operated Networks – Part 2

In this post I explore blackouts fear-mongering from a socio-political and socio-economic perspectives and talk about why shifting from fossil fuel based electricity production to renewables electricity production cannot happen overnight.

Are People Warning About Rolling Blackouts Just Playing Politics?

One of the major political parties at last month’s (March 2021) Western Australian state election proposed that if they won, they would shift WA’s power production from coal fired to renewable sources by 2025 (a whole 5 years ahead of the national starting target of 2030). The other major political party pointed out that this would cause rolling blackouts and destabilize the economy.

I have already addressed the rolling blackouts issue in this post, where I explain rolling blackouts are a procedure to deal with established power infrastructure being used in ways other than its intended purpose.

Since I believe rolling blackouts are not going to stop Australia from shifting to renewable energy operated networks from 2030, two intertwined issues remain: the economy and timing.

Why Can’t Australia Shift to Renewable Energy Operated Networks by 2025?

The simple answer is payback periods on investments (part of the economy).

Whilst some power plants can be functional for up to 50 years, generally they have an operating life of around 35-43 years, construction itself takes anywhere between 2-5 years, and a typical payback period is 10 years. That makes it 12 to 15 years before a power plant starts making a profit to then only be in operation for 20 to 30 years beyond that.

This should give you an idea as to why government (which invested in coal fired power plants back 40 or so years ago) is reluctant to close these early.

What Difference Can 5 Years Really Make?

The issue of timing is not just about payback periods but is also relevant for the laying of new infrastructure that specifically caters for renewables powered electricity. Part of the shift to renewables in Australia has been to ensure that electricity storage is part of the equation but mobilizing such changes takes time; I will use battery storage as an example.

As I mentioned in a previous post, solar panel power production infrastructure was always meant to combine with on-site battery storage systems. These systems take physical space, which means the provision of battery storage falls across two policy jurisdictions: renewable power, and land planning & development. Co-ordinating a battery storage systems strategy and ensuring it complies with both policy fields, takes time.

Even when everyone agrees to go-ahead, from a construction perspective, a new law mandating every solar panel installation is to be provided with a battery storage system, will require dedicated physical space on each site. This has implications for planning and health & safety, necessitating reviews of multiple standards in such topics as fire safety, soil/land/water pollution, planning densities, minimum open space per lot, batteries enclosure materials and ventilation requirements, safe disposal at end of life, etc. All of the above is not impossible but it takes time.

In some parts of the country, years of work in this area are finally bearing fruit. I was rather impressed and excited to hear that in late 2019 the New South Wales government reviewed storage battery installation laws for safety and amended planning legislation to allow people with larger roof-top solar powered systems to install storage batteries on their land without local council approval. I have included a few resources at the bottom of this post that go into this matter further, including a link to the New South Wales battery storage installation incentive scheme.

I am expecting this type of intervention to slowly take place across the country as 2030 draws nearer and as states and territories learn about benefits and drawbacks from the New South Wales experience.

Will Shifting to Renewable Energy Operated Networks Destabilize the Economy?

Change of any sort from the status-quo somewhat destabilizes the economy; war-time, natural disasters, pandemics, global financial crises all disrupt economies. What is more difficult to establish is what degree of disruption is classified as destabilizing and how many sectors of the economy will be affected.

Decommissioning power stations is synonymous with retiring power station workforces. This has employment, education, and economic implications for whichever government executes the shift from fossil fuels to renewables; existing work forces will require to be retrained or a re-shuffled into new work roles.

Governments are also aware that any time a major shift in policy is canvased, a certain portion of the workforce may have just begun their careers in jobs that will be lost because of the shift in policy. For these reasons it is wisest to be tortoise like with change, allowing plenty of time for generational employment transformations to occur. By that I mean, for example, factory workers advising their children to skill up into a different area because the factory will be closing down in 10-15 year time.

My thoughts? On one hand rushing the process of shifting to non-fossil fueled energy is more likely to cause hiccups in the economy. On the other hand I don’t believe these hiccups will be large enough to destabilize the economy at any state, territory or National level.

References – websites accessed and correct at time of publishing.

For more information on coal power plants life expectancy, payback periods, and shut-down unemployment consequences see: Burke, Paul J., Rohan Best, and Frank Jotzo. “Closures of coal‐fired power stations in Australia: local unemployment effects.” Australian Journal of Agricultural and Resource Economics 63, no. 1 (2019): 142-165.

Available on line here: https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-8489.12289

For more on change to battery use and installation standards in New South Wales see: https://renew.org.au/renew-magazine/solar-batteries/new-battery-installation-rules/

General information on changes to local planning application laws in New South Wales relating to installation of battery storage systems is here: https://www.pv-magazine-australia.com/2020/04/25/nsw-amends-laws-to-pave-the-way-for-rooftop-solar-and-big-batteries/

Information on the New South Wales battery storage system incentive scheme can be found here: https://energysaver.nsw.gov.au/households/solar-and-battery-power/empowering-homes-solar-battery-loan-offer

Information on the rate of renewable infrastructure development in Australia is here: https://theconversation.com/australia-is-the-runaway-global-leader-in-building-new-renewable-energy-123694