Multiple choice time: when the State adjoining yours has well-documented energy stability issues, due in large part to the high penetration and rapid uptake of renewable energy, what should you do?
(A) Nod sagely, and say ‘I told you so’, while reassuring your constituents that your Government is doing everything it can to keep prices down and supplies stable?
(B) Carefully plan a phased transition to more renewable energy, using natural gas as a transition fuel
(C) Continue to bow to activist pressure and commit to renewable targets that, if not managed properly, will see your State mirror the experience of South Australia?
For many rational policy makers, the answer would be (A) or (B), but in Victoria this week, Premier Daniel Andrews has gone with option (C), committing his Government to new renewable energy targets of 25 per cent by 2020 and 40 per cent by 2025.
While that might sound good in practice, a salutary lesson in the rapid uptake of renewables should be taken from the experiences of South Australia (for more on that, this report from the national market operator is worth a read).
And with energy costs rising, a State with such a broad manufacturing base should surely be looking to unlock access to gas resources that can increase supply, drive down prices and provide the fuel for the baseload and peaking power plants that will be need to support the ambitious renewable targets that are now being proposed.
After all, it was one of the key recommendations of the Finkel Review that new utility scale renewable projects are adequately backed by stable generation sources – something that is also critical to power quality across large electricity networks.
But even in the face of growing local government calls to unlock the gate to conventional onshore gas development, the Andrews Government continues to resist.
With the Victorian Government trumpeting this week that “it’s the first time such ambitious renewable energy targets have been enshrined in state legislation anywhere in Australia”, let’s hope that it doesn’t become a case of enshrining grid instability and higher prices for the tens of thousands of domestic, commercial and industrial customers across Victoria.