Australia’s Green Energy Delusion and the Collapse of Industry

A leading Australian energy system analyst calls the nation’s blueprint for the green energy transition “worse than useless” and declares Trust in Australia’s energy establishment completely broken

As Australia heads into a federal election reeling from convergent crises in cost of living, energy and productivity, there are myriad unanswered questions about the viability of the Australian Labor government’s net-zero driven green energy reindustrialisation agenda.

The Albanese government is unwavering in its rhetoric of Building Australia’s Future on weather dependent (wind and solar) renewable energy that is taxpayer funded. It has set a target to achieve 82% renewable electricity generation by 2030.

The ideological zeal from the government, loyal bureaucrats and green activists has birthed many vacuous slogans intended to paper over 21^st century economic, technological and engineering complexity.

“Renewable energy is free. The wind and sun won’t send you a bill,” is a personal favourite. But I can think of a more apt one:

“Don’t let engineering get in the way of a Green Energy Superpower fantasy”

The green energy transition is by far the most complex, costly and disruptive engineering project in the nation’s history. And the biggest question that has been rarely asked, much less answered is this: how can Australia achieve something – a reliable, affordable wind and solar-powered energy system - that other more developed and engineering-driven countries have realised they can’t?

A generation ago, Australia - a resources powerhouse - had the lowest energy prices in the world.

Now we have one of the highest globally and the highest in the Asia Pacific region @ 41 cents per kw/hour. That’s double the price of the South Koreans, 190% more than what the Indonesians are paying; 220 percent more than China; and 400 per cent more than Bangladesh.

It has made a laughingstock of Federal Energy Minister Chris Bowen’s 2022 election campaign promise that 2025 would see electricity bills drop by $275 per year. For most consumers and businesses their energy costs have doubled and tripled in the last year.

“What is truly troubling is that we have not yet had a serious and objective analysis of the true system costs of wind and solar in the grid,” says Aidan Morrison, Director of the Energy Program at the Centre for Independent Studies.

But we know from the lessons of other advanced economies that no one has got to high levels of dependence on wind and solar without having the highest electricity prices.”

Long before newly installed American President, Donald Trump pulled out of the Paris climate agreement, businesses and governments around the world were retreating from aggressive net-zero policies and green transition plans because they can’t make the numbers work with the technology available even with generous subsidies.

Once great manufacturing powerhouses like Germany are deindustrialising; incumbent governments wedded to aggressive net-zero targets are being ousted; Automakers are slowing their electric vehicle production; Utilities are extending the lifespan of coal plants; tech companies at the cutting edge of the AI arms race are turning to nuclear; Off-shore wind projects are being cancelled because they aren’t economic.

The Australian Labor government’s response to this shifting reality is to pretend it’s not happening.

Last week, the government announced another $2 billion in production tax credits (starting in 2028) to help the nation’s four aluminium smelter companies move to renewable electricity.

This adds to a range of subsidies and incentives introduced under the Future Made in Australia policy umbrella. It includes the $15 billion reconstruction fund; the $20 billion Rewiring the Nation Fund; $13.4 billion in hydrogen and critical minerals production tax credits; $1.5 billion for businesses solar and battery manufacturing supply chains; and $2 billion for green aluminium production credits.

The Prime Minister says there is more to come once the election campaign officially kicks off.

And all this largesse, along with the fantasy of making Australia a green energy superpower is being justified on the basis of a single, controversial document – the Integrated System Plan produced by the Australian Energy Market Operator (AEMO).

The government demands us all to have blind faith in the validity of the ISP and those who dare to challenge its key assumptions are likely to get called a cooker or a conspiracy theorist.

That’s exactly what Assistant Minister for the Future Made in Australia (FMiA), Senator Tim Ayres levelled at Nationals Senator Ross Cadell during a senate hearing last November.

Senator Ayres retracted the insult.

But it was a pivotable moment for the CIS’s Aidan Morrison, who has poured over the ISP since its public unveiling and can’t find much reality in it.

“We have been given the impression time and time again that this massive document, huge amounts of work, lots of computing power, expensive software, experts and consultations, massive methodology presents the lowest cost pathway to a reliable energy system is renewables firmed by gas. But they never tested it against anything else.

“The accountability mechanisms that were put in place are not being followed and we’ve ended up in situations where a document that is so badly flawed we can’t use it for pretty much anything, has been allowed to get this bad because the institutions have acted essentially to protect it.”

In 2023, Morrison exposed the bias of the now-infamous CSIRO GenCost report which was tasked to assess the cost of adding nuclear energy into the energy system, (now a key plank of the Federal Coalition’s election platform). The CSIRO is majority funded by the government of the day.

GenCost concluded the Government’s wind and solar energy system was the optimal pathway for Australia. But it excluded the huge costs required to integrate renewables into the energy system (and firm them) by treating them as sunk costs.

Now Morrison, who is also an advocate for exploring the nuclear energy option as part of Australia’s long term energy generation, is laser focused on publicly exposing what he says are flawed and politically motivated assumptions of the ISP.

In a series of detailed explanatory videos and podcasts, Morrison has embarked on what he calls a “war on the ISP” and on the institutions that he says have given “shelter and succour” to it and failed in their statutory obligations.

“(The ISP) is a terrible breach of trust,” he say. “It’s worse than useless and it’s completely debased our debate about energy and railroaded our planning system into hugely excessive expenditure on a system that won’t work.”

Now there are signs of revolt from several quarters as business insolvencies rise and renewable energy projects stall or are cancelled.

Business owners and industry groups are declaring a national energy emergency and calling for the Government to drop its 82 per cent renewables target and ramp up gas and coal production to bring prices down sooner.