Australia’s energy debate has,at long last,moved beyond the question of whether atmospheric pollution is affecting our weather,and onto a discussion about how best to reduce emissions. While the science may be settled,the costings aren’t. The energy transition to low emissions power sources is the biggest thing humanity is currently attempting. Big things take big budgets,which must be spent for maximum impact. But what if we’re basing our spending,in fact our whole transition,on lousy numbers?
Bent Flyvbjerg,a professor of major project management at the University of Oxford,recently published a book relevant to this challenge,How Big Things Get Done. In it,he brings together the important lessons from his decades of experience. He draws a conclusion on how to best decarbonise the global economy.
But before I tell you what it is,it’s worth starting as he would start a project. Flyvbjerg is a proponent of what he calls “right-to-left thinking”. Before working out what to do,he argues,it’s vital to work out why you’re doing it. That’s a really interesting question where it comes to energy. What are we actually trying to achieve? Because different people would give different answers.
For some people,the goal is to guarantee our energy needs now and accommodate an increased need for power in future. Others believe we should beusing less energy – not just better insulating our houses,but reducing our private and commercial consumption. This is the degrowth movement,which argues that development has gone too far and we should be living more modestly.
The future we’re aiming for – our why – is at the core of our energy ambitions. We’ve agreed thatemissions have to be lowered,but we haven’t agreed on the goal:whether we’re trying to decarbonise our high-output energy system for an innovative Australia,or make energy a luxury good. Let’s say for a moment that the goal is the one most people assume when they flick on the light switch,heat their homes and enjoy power-hungry modern conveniences:they want our decarbonised new energy system to produce and distribute plentiful,reliable power at the lowest possible price.
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If that’s our why,we need to think backwards from that goal – from right to left. We must ask whether we’re doing the right things to achieve our objective:is the technology mix we’re currently building going to deliver the outcomes we want?
We’ve long been told thatrenewables are the cheapest form of power. Producing energy from renewable sources may be cheap,but it’s useless without the grid and storage system which is required to manage the intermittent nature of renewable energy and move it to where it is needed,when it is needed. That system is devilishly expensive.
At the end of last year,before he joined the Centre for Independent Studies,energy analystAidan Morrison challenged the CSIRO – the Commonwealth Scientific and Industrial Research Organisation,to use its long and descriptive title – to include these indispensable parts of the grid into its full costings for different sources of power. The CSIRO’s GenCost report had accounted for the money we’re about to spend over the next six years to facilitate a renewables-based energy system as already spent,a “sunk cost”.