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Illustration for The hottest place on earth runs out of energy…

The hottest place on earth runs out of energy…

FROM THE ORIGINAL 2016/17 SITE: Take a close look at the picture above. On Saturday, Australia (and New South Wales in particular) was the hottest place on the planet. Our air conditioning systems were all running flat out...

|Tony Ferguson

Take a close look at the picture above. On Saturday, Australia (and New South Wales in particular) was the hottest place on the planet. Our air conditioning systems were all running flat out to beat the heat and during the evening peak period, when it was still around C40 degrees in many locations, we had little or no contribution from solar PV. It was crunch time!

For many people – such as the young, the sick and the elderly – controlling the temperature is not a matter of comfort but of life and death.

Such is the state of our electricity system that New South Wales was perilously close to having to introduce rolling blackouts. As it is, the grid's integrity was only maintained through reducing the energy supplied to the Tomago aluminium smelter which consumes over 10% of the state's electricity. The production of Aluminium metal, more than any other process, relies on a constant supply of electricity. Cutting the power to Tomago puts at risk economic output and workers' jobs and raises the dreaded spectre of the "frozen potline". Such an occurrence, when an interruption in the electricity supply causes the liquid aluminium in the cells to solidify – is a major industrial disaster requiring the solidified metal to be jackhammered out and causing major damage to the production equipment with the repair bill in the tens of millions. This is not just a theoretical risk – it happened at Alcoa's Portland smelter in Victoria last year.

So, our electricity grid, one of the core pieces of infrastructure for our modern society, has become inadequate. This is threatening our industry, our pocketbooks and ultimately people's lives. That isn't acceptable.

Many commentators say that the lack of clear long term policy in the sector has hampered investment in new energy sources. The energy industry has called for a degree of consensus so that some non-partisan guidelines can be developed. Unfortunately at present that seems too be much to ask our politicians.

This article is not about the idealogical battle between coal fired energy and renewables. It is about what we can do right now to address the problem.

Firstly, we need to realise that, even if political consensus were reached tomorrow, the energy shortage is going to take several years to rectify:

  • if we go with new investment in coal fired power stations they will take perhaps five years to be designed, approved, built and commissioned;
  • if we concentrate on renewables then we must await advances in battery technology – there are some questions around whether Lithium Ion is the right technology for grid scale storage but, even if it is up to the task, a sufficient volume of affordable large scale storage will take time to be acquired and deployed.

So, whichever way we go, it looks like it will be five years or more before we have sufficient energy to meet our peak needs. Continued indecision about which technologies to pursue will only lengthen that period. What do we do in the meantime? Sit in the dark and heat twiddling our thumbs every time we have a heatwave? Each time the grid fails we face more risk to property and lives.

As a society we have some serious decisions to be made about the focus of investment in our energy generating capacity. While we are doing that, at least let's keep the lights on!

Take care, Tony


The views expressed here are my own and do not represent those of any organisation unless explicitly stated. This is not financial or investment advice.

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