Grattan on Friday: Albanese government faces an uphill road and angry locals as it drives change to renewables

Fire fear is gripping many Australians, with extremely high temperatures for September.

One day this week some 20 schools on the New South Wales south coast were closed, amid rising weather risk. Sydney national parks were shut. Multiple fires broke out in the eastern states.

The nation is bracing. The memory of that horrendous 2019-20 summer is embedded in our psyche.

The Bureau of Meteorology this week formally declared an El Niño event, looking to a hot dry summer. That will put pressure on ageing coal-fired power stations and thus the power system.

Apart from for a small minority, the argument about global warming is over. But the debate still rages about dealing with climate change and, close to home, Australia’s energy transition, which is under way but accompanied by increasing pain and problems.

Labor scored well politically when it issued its pre-election plan for the transition to renewables. It came with an election promise of an average $275 saving on household electricity bills by 2025. The promise will be unattainable, and in the meantime households face sky-high power bills, with only some benefiting from the government’s relief package.

Most people accept our energy system must move from fossil fuels, especially coal, to renewables as soon as practicable. But there are serious obstacles on the ground – literally.

The government uses the “not in my backyard” scare when the opposition proposes nuclear should be added to the energy mix. Now it is confronted by “not in our backyard” resistance from farmers and local communities to the big transmission cables needed to carry the renewable power. As well, there’s a backlash in some areas to wind turbines.

In 2014, then-Treasurer Joe Hockey was ridiculed when he described wind turbines around Lake George (near Canberra) as “a blight on the landscape”. The then opposition environment spokesman, Mark Butler, said Hockey was making “an utterly ridiculous contribution”. Labor can’t afford to laugh anymore.

Climate Change and Energy Minister Chris Bowen was in the NSW Hunter region this week to try to calm anger about the government’s declaration of a zone off the coast for future wind projects. Among their objections, locals have raised the harm to birds, sea life and the view.

The South Australian government has argued the proposed Southern Ocean zone for wind farms, off the coast of Victoria and SA, should stop at the Victorian border.

The rows breaking out over power cables and wind turbines are classic examples of major developments clashing with other priorities, whether commercial (tourism, fishing, agriculture), environmental or aesthetic. We’ve seen these battles for decades with mining projects. They’ve now moved into the age of renewables.

Australia is not alone on this issue, which is rearing its head in Britain and elsewhere. The Albanese government’s difficulty is there will be so many breakouts. It remains to be seen whether citizen discontent will translate into voter backlash in particular seats.

Infrastructure Minister Catherine King has felt the heat in her electorate of Ballarat. In a submission earlier this year, made as the local MP, to an Australian Energy Market Operator’s report on the proposed Victoria-New South Wales Interconnector (VNI) West transmission link, she repeated her long-held concerns about the consultative process.

As Australia continues its transition to net zero, there will be increasing need for new projects,“ she wrote. “In rolling out these projects, it will be important to engage thoroughly and honestly with impacted communities all throughout the process – from project conception, to construction and beyond.”

In July, Bowen announced a “community engagement review” to improve engagement on renewable energy infrastructure upgrades and new developments, to report
by year’s end.

The process is tortuous and often fractious. And, as the Grattan Institute’s energy expert, Tony Wood, has pointed out, investment in renewables is stalled because of the slowness in getting the transmission grid in place.

The implications are substantial. The government is committed to having renewables generating 82% of our electricity by 2030. The present level is 35%. Wood says: “We are nowhere near where we need to be. We are way behind in time and way over in cost.”

The transition problems are making the opposition bolder in pushing its case to have nuclear power on the agenda. It argues if nuclear could replace some of the retiring coal-fired power stations, the existing grid could be used, reducing the disruption by new cables. But it has produced nothing specific on how nuclear will feature in its policy. Nor is it clear how politically risky raising the nuclear option is for the Coalition.

In an attempted political hit, Bowen this week issued an estimate that replacing coal-fired stations with nuclear would cost $387 billion. Given all the uncertainties, numbers mean little, although most experts maintain the nuclear path would not be economically viable any time soon. Even so, the government suddenly sounds defensive when rejecting even lifting the present ban on nuclear.

Pushed on Monday on the ABC’s Q+A about the ban, Bowen said that would be “a massive distraction. It would take a lot of our public debate”. This seems an odd argument. Whether nuclear power should be considered surely rests on two basic questions: whether the the conversation
market believes it viable and whether the public considers it acceptable.

At least the government this week had some good news on the gas front: the latest estimates by the Australian Competition and Consumer Commission indicate the country will go into early next year with an adequate supply for the domestic market. Treasurer Jim Chalmers was quick to declare the opposition’s “fearmongering” about the government’s imposition of pricing caps had been unjustified.

On the other hand, gas is coming under mounting attack from climate activists, as the government defends it as a transition fuel.

In political terms, the energy transition will put pressure on Labor on several fronts between now and the next election.

The first, and most obvious, is high power bills, feeding into the cost-of-living crisis.

Second, the localised arguments about the infrastructure will continue.

Third, investors will need more reassurance.

Fourth, the efficiency of the energy system must be maintained through difficult times.

And fifth, the government will need to hold the line against the Greens and the more militant parts of the climate movement that will attack it for not going fast enough to meet the climate challenge.

Those are the knowns. One unknown is whether we’ll get a really bad fire season and the implications that would have.