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3rd October 2019

A mechanical engineer who has become one of the nation’s foremost energy experts has praised and pilloried public and private enterprise in the annual Sir Thomas McIlwraith address in Brisbane this month.

Our client Trevor St Baker, AO, the insightful energy entrepreneur who began his Queensland career in the public sector 45 years ago, used the annual Australian Institute of Progress annual event to explain that:

  • Well-managed government departments can intervene in the energy sector for the common good.
  • Simple calculations show that current policies of just loading up with wind and solar and allowing other technologies to wither are not sustainable.
  • If pumped storage is not being promoted as a major solution to base-loading intermittent wind and solar anywhere else across the globe, the flattest and driest continent on earth will struggle to prove the rest of the world wrong.
  • Nuclear will need to be part of the mix in reducing carbon emissions.

With the sale of his ERM Power to Shell Energy Australia imminent, Trevor provided some sage advice to the audience of Queensland business and political leaders.

“The ERM story is testimony to the most important ingredient of new business development: that is stick to what you know, and make sure you really know your business,’’ Trevor said.

He also used the example of the Bjelke-Petersen Government and that generation’s outstanding departmental heads as an example of how clever and cost-savvy governments can influence energy policy to deliver growth, development and public benefit across the state.

The Queensland Government’s successful negotiations on coal pricing with suppliers enabled a consortium of international partners to commit to the construction of the Boyne Island Aluminium Smelter at Gladstone. This and the successful planning and construction of the Gladstone power station was part of two decades of outstanding development across the state, with public enterprise and private enterprise working together.

“It has always underlined for me that private enterprise has its own failings and deficiencies, as does public enterprise, and both have to be nurtured for productive outcomes and for the common good,’’ Trevor went on to say.

Trevor said the sale of state-owned monopoly transmission and distribution network assets, as regulated monopolies, had been a disaster for electricity consumers.

“Network prices grew to be even greater than wholesale generation prices, because of demonstrable poor regulation, and government imposition of supply reliability rules, guaranteeing investors’ returns on regulated investments,’’ he said.

As to the formula showing the deficiencies of current zero emissions energy policy, Trevor pointed out that:

  • Internationally, intermittent wind and solar are not projected to supply more than 25% annually any time soon.
  • The International Energy Agency’s latest projections are for 50% zero emissions energy sources for the electricity sector globally by 2040 made up of 22% wind and solar, 28% dispatchable nuclear, hydro-generation and bio-mass, and 50% fossil fuel-fired generation.
  • Electricity will increase from 35% of global energy supply to 60% by 2060 with the electrification of the transport and fixed energy sectors.
  • Australia is already close to achieving 22% wind and solar generation, more than double the present uptake of wind and solar globally.
  • With only 8% hydro-generating capacity, and a nuclear power generation ban, it will be difficult for Australia to achieve much greater than 35% zero emission generation for the electricity sector, and it will therefore be reliant on fossil fuels for up to 65% of total electricity generation.
  • Electrification of the transport and fixed energy sectors could increase electricity demand in Australia by more than 50%.

Trevor said coal would continue to be a major portion of the non-zero-emission proportion of this increasing electricity generation demand for many decades into the future.

“We have to nurture such capability for it to be as economical and clean as possible and convince the public this is part of ‘the action on climate change’ that is necessary, not shutting down power stations and business in Australia.

“If Australians want to seriously reduce CO2 emissions, then nuclear generation needs to be part of the mix.’’

TSB Larry


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