Tristan Prasser has worked in both the Queensland state government and Federal government. He has previously worked at the Institute of Public Affairs as a Research Fellow and written on energy matters on Urbansource.com.au. He continues to have a keen interest in energy matters, and describes himself as a layman trying to understand it. Some of his articles can be found at Online Opinion.
TRANSCRIPT:
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Well, thanks everyone for, um, having me tonight. Um, really, really glad to be here to talk about this, this topic. Um, and just the energy in general. I think it's a very important issue and it's gonna be a very important issue going forward for next, uh, few years. And, um, so hopefully, so tonight I'm gonna have a bit more of a look at the sort, what's been happening around the globes of global perspectives. Um, and, and then I think this will give some context to, uh, Ben's talk who's gonna delve deeper into the Australian situation and, and the implications there. So I think we compliment each other quite well. Um, so tonight I've, um, called my talk, uh, energy transition, a leap in the dark, and I think that's kind of a, a fitting sort of title for where we might find ourselves at the moment and the sort of uncertainty of what's gonna happen next, um, with where we're heading.
Um, so energy policy, what's gone wrong? Well, I think the, the main thing is, is that over the, the past 20 years or so, we've become obsessed about climate change and, and every facet, um, I think the Dilbert Carter in here sort of captures it quite well, is that all you know, you, you see the media, um, listen to the media and is all, and, and, and politicians talk and, um, you know, climate and ev everything and everything is climate. Um, and, and so we, so we we're sort of going down this pathway and, and this is meaning that we're, we're avoiding discussing other important issues and energy that have been really the first principles of energy policy for a long time, which we no longer seem to value, such as energy security, energy affordability, energy reliability, which, um, are just as important if not more important than, than reducing emissions. Um, I don't think anyone in this room here want, we don't, you know,
I think we all want to have clean energy systems and, and, and so on and so forth, less pollution. I think these are all good things, but I think what has happened over time, we've become obsessed with emissions reduction at the exclusion of everything else. And I think we've, we've fallen into this trap of the easy transition narrative.
So all the talk about hitting emission targets, be it 43%, 45%, whatever the, the notion is, or a net zero in 2050. But we're, we're, we've, we've become seduced or, uh, succumbeded to this idea about it's gonna be easy.
We just need to stop using gas and oil and, and, and coal and, and just, you start using solar panels and, and, and wind turbines and, uh, you know, frenchly some batteries and hydrogen as well, and it'll all be fine. And, and what happened is, what's happened is these platitudes have become framing statements, and then they've become policy. And we've seen this happen time and again, and we saw this again happen the most, most recent election where we've heard these platitudes from labor, which should now be gonna be potentially legislated this week.
Um, um, and, and, you know, legislating targets is one thing, and when whoever actually does anything as another, just look at Canada, they've legislated and rat rat ratcheted up their targets, uh, again and again, and they're still falling behind actually achieving any of them. Um, and so this is, and it's also cement the idea that's the, the, the policy sources that, uh, the, the energy sources that we've been using to date are, are, are bad and evil, and, and that they can be easily replaced by, by wind and solar and, and renewables. And it'll be all fine. And this is just not true. Um, and I think, um, the reality check of this, uh, easy transition narrative is Europe, we're seeing right now in Europe, what is happening when you go down this path of, um, climate utopianism. Um, and funnily enough, hitching your, your, your, your wagon to Russian oil and gas, who would've thought that was gonna go wrong?
Um, but it, but it has. And, um, the Germans in particularly have, have to, um, share a large portion of the blame here, uh, for the path that they've gone down and, and brought Europe down with them, uh, through their energy vendor, um, which has been a 20 year process, which costs billions upon billions upon billions of dollars.
And yet today, Germany is on the cusp of a recession, and it is, its industry is on the, the cusp of collapse. It's one of its biggest industries, uh, chemical industries.
The third largest export industry in Germany is, is struggling. Um, and this is because of the sort of self delusional policies that Europe has been pursuing, um, for the last 10, 20 years. Um, and it's now got them in this mess. And the irony, of course, is now they're after telling us and, and having a go at Australia last year leading up to the, the climate summit, now they're telling us, you know, now they're, they're scouring the globe.
They're going to Africa, uh, they're going to other parts of the world trying to get every last drop of gas, coal, and oil that they can to in preparation for winter that's coming, um, for their reserves and of course, which they were telling us last year, um, no new coal gas, but what are they doing?
They're going and trying to get new coal and gas in, in parts of, um, developing the developing world, particularly in Africa. Um, and of course, these developing countries are now missing out as well because of this, this is, this, this crunch is squeezing them. Uh, we're seeing power blackouts in, in Pakistan because of the, the shortage of LNG gas globally that's now, uh, affecting, affecting the world. Um, so there's this, this great hypocrisy.
So I don't think we've seen this level of self delusion in Europe since the 1920s in their discernment policies, and essentially the energy policies that pursued is equivalent to that.
Um, which brings me to the next point about the, the easy transition narrative and, and why it is a problem. And it's, and it's somewhat delusional because the, the reality is, is that the world still relies heavily on fossil fuels.
And this notion that we can rapidly decarbonize tomorrow is, is fanciful, let alone in, in a couple of years or 10 years. Um, and this chart from the BP Statistical Review of World Energy demonstrates this and to, to make hammer home this point, I'll just read a quote from, uh, a great energy writer called Vaclav Smil, a Czech Canadian from the University of Manitoba, um, and who's written over 40 books on energy since the 1970s and 500 papers. And he makes this point in his most recent book, How the World Really Works. I really recommend you read this. It's a great book that's got some great facts and some great lines about the energy transition that we're going through. Um, so he says this, we are a fossil fueled civilization whose technical and scientific advances quality of life and prosperity, rest on the com combustion of huge quantities of fossil carbon.
And we cannot simply walk away from this critical determinant of our fortunes in a few decades, nevermind a few years. Complete decarbonization of the global economy by 2050 is now conceivable only at the cost of unthinkable economic retreat, or as a result of extraordinary rapid transformations relying on near miraculous technical advances. The other thing that this chart doesn't show, it, it, it doesn't show that there's still another 3 billion people on the planet who require, who use as much electricity or less electricity than the average Australian refrigerator. And those people want energy and they want it today. They don't want it tomorrow or five years, or 10 years or 20 years. They want it now. And so this brings me to my next slide.
Why coal is still king. Why coal remains supreme. The, the, the reports of coal's death are, are greatly exaggerated. Um, and the reason why is because why coal continues to endure and it's, it's resilience is largely 'cause of its accessibility, it's abundance that's easily transportable. It's easily stored and has high energy density, and it's largely cheap. And for all these reasons, you know, you don't need to build special infrastructure to get coal. It's, it's, and, and that makes it very appealable for developing nations who want to get electricity as fast as possible and lift their, their people out of poverty as quickly as possible.
And this is exactly why, uh, countries, uh, why coal fire generation remains a mainstay for electricity generation for many countries led by China and India by itself, China accounts to 54% of global coal use. But what is quite notable in the last year or so, given the, the situation that has unfolded in Europe, and, um, anyone who tells you that's because of the Ukraine Russian rule, that's not true. It is exacerbated by it, but it's not caused by it. This is, this is a long time in the making, but notably Europe and North America are, are now showing an increase in coal consumption in 2021. And this will no doubt continue in 2022 after nearly 10 years of back-to-back declines. Now, this is from the BP Statistical Review of World Energy and, and coal use, um, continues to, to increase. Um, and China is doubling down this, and China is the, the Deputy Secretary of the China National Coal Association has said this coal's dominant role is unlikely to change in the next 10 to 15 years with consumption peaking no earlier than 2025.
That's, that's remarkable. And this confirms what, um, the American Energy Analyst and commentator, uh, Robert Bryce calls the iron law of electricity with electricity, the world's most important and fastest growing form of energy. People, businesses, and countries will do whatever they have to do to get the electricity they need.
And furthermore, when forced to choose between dirty electricity and no electricity at all, people will choose dirty electricity every time. This is why coal continues to endure. And you can see, you can see in this, this chart that since 1985, coal global electricity generation from coal continues to climb and has done more or less year on year for few exceptions. And most recently that the covid, uh, uh, year of after 2020, um, but, and, and Australia's reaping the benefit of it at the moment, given the supply constraints that, and, um, we're now, uh, got, um, great trade surplus because of, because of the coal prices. Um, but of course, coal in Australia has become like uranium. We can't use it.
We're happy to export it to other nations to generate electricity, but we don't want to use it ourselves. And I'm sure Ben will talk more about that in his talk. Um, but what about renewables? I hear you say, I hear you crying out. Well, look, I'm not anti renewables. They have a place.
But the fact is that we're not going to power the world with renewables. It's just this, this notion is fan. And the papers that have been written about a hundred percent renewables have been debunked. Um, and look, renewable generation is increasing.
It has been increasing. Um, I think in the BP Statistical World Review of Energy, they, they say it's increased by double, uh, percentage digits. But the problem with renewables is that they have limitations.
They're constrained technologies for basic physical reasons. They're interdependent, they're weather dependent, they're diffused, they're low energy, uh, density because there's a, and then they require large amounts of land. And there's a reason why we call them wind farms and solar farms.
They need land. They're, they're, they're low energy density sources, um, of energy. And to, to make sure that you get the, the electricity that you need from these, these technologies, which are often in regional remote parts of a country, you need large amounts of sufficient high voltage transmission capacity.
Uh, and we're seeing across, not only in Australia, sitting down in Victoria, AusNet scenario in Western Victoria about transmission, you're seeing in other parts of the world, in the US in Germany, France, uk, a pushback against not just renewable projects, but renew, uh, transmission projects. This is why Germany cannot expand its wind, onshore wind any further, because essentially the, the, um, transmission projects are tied up because of, uh, nimbyism essentially.
Um, and the other issue with renewables is that they require significant material inputs, um, be it steel, copper, concrete, rare earths and other minerals. And this is a, becomes a geostrategic, uh, problem. So as you can see here, and these are, these are figures from the International Energy Agency report on critical minerals that certain, uh, renewable technologies require large amounts of, uh, minerals.
And in the next slide you'll see that, uh, some of these minerals are sourced from somewhat questionable countries. Um, they also, in the processing stakes, China has a monopoly. They have a monopoly.
So this is a geostrategic problem. If we wanna ramp up, uh, electricity generation from renewables, we're gonna have to rely more on China. Uh, and this is true in also the manufacturing where China has a monopoly on the manufacturing of, uh, these technologies, these renewable technologies, and the components that go with it.
And most recently, the International Energy Agency just released a report this month actually, um, on solar PV global supply chains. And the, the key points they've made in this, this report is that, um, solar PV has, um, the manufacturing of solar PV has, has moved out of Europe, north America, uh, and Japan, and into China, and over the last, uh, decade. And this has, uh, substantially helped drive the cost of solar PV down. That's, that's a good thing if you, you like solar.
Um, but of course, the China's share and in solar PV today is around 80% in the manufacturing stages. And the key elements, including polysilicon and wafers, is set to increase more than 95% in the coming years. So that's a problem, particularly if it's a problem. If you are saying that, if you're the international energy agency who's saying if you want to decarbonize and get to net zero, you need to quadruple the amount of solar PV we're building, uh, scaling up globally. And that means you're gonna rely on China, and that means you're gonna rely on China. Uh, and here's a quote from the report. It says, the world will almost completely rely on China for the supply of key building blocks of solar panel production through to 2025.
This level of concentration in any global supply chain would represent a considerable vulnerability. Now, this is, this is exactly the sort of situation about, um, that the Europeans are finding themselves in now with Russian gas and Russian oil and Russian coal, and this is no different. Um, and of course, we're already seeing some of this flow through now with the high commodity prices, uh, the supply chain, the bottlenecks, um, around the world, which is affecting the, the cost of solar panels, which have actually risen in the past year by 20 20%. So it's, it's clear that if, if your, your goal is you're trying to decarbonize, um, and, and fossil fuels a huge share of our primary energy use around the world, um, surely your part of your solution would be looking at nuclear power.
But of course, the West has, has sort of abandoned its lead and its ownership of nuclear power. We haven't really built any proper new nuclear power plants, uh, for the last 20, 30 years with a few exceptions. Um, and, um, essentially China and Russia have now taken the lead on the West. Yet, yet, if, if your goal is to decarbonize electricity grids, in particular, uh, the IPCC, the International Energy Agency, the EU have always highlighted that nuclear has to be part of the solution.
But of course, in Australia, we can't even have that conversation because nuclear is prohibited. Um, and we keep getting told by the Labor Party that it's uneconomical. But how can that be if, if countries, if countries like the uk, France, Canada, and the US are now refocusing their efforts, uh, and looking at new nuclear technologies, the Netherlands have an unbounded plans for, uh, new nuclear Belgium.
Japan are looking at retaining their nuclear fleets. South Korea's new PM has overturned the, their prohibition on nuclear power and looking at expanding the nuclear, uh, domestic fleet. And even Germany, even Germany, one of the most fervent anti-nuclear countries, given their energy crisis that they now are in, are saying, oh, maybe we shouldn't have been phasing out our nuclear power.
That's probably a really stupid idea. Maybe we should be considering keeping our, uh, three remaining plants, uh, going. So yeah, it's, it's quite remarkable. Um, and the reason why at the very least you should be talking about nuclear powers is that those countries that have largely the cleanest grids on the planet are those countries that either have hydroelectric, large portions of hydroelectric, large percentage of, of, uh, nuclear energy or, or both.
Um, uh, if you look at the, the countries at the top there, uh, you'll see there's, there's no, there's no Germany, there's no Germany. The, the renewable kin is not there. Uh, they are down here in the middle, in the middle of the pack. Um, Australia is down here. So if, if your goal is to sort of clean up, get cleaner electricity, zero emission electricity, then you should be talking about nuclear power.
And the fact that many of the people who advocate the strongest about climate change don't, says to me that there's enough agenda at at play. And again, you know, we keep getting told that nuclear power is too slow, we can't do it. But the evidence suggests that if you want to get the greatest, uh, roll deployment of, uh, clean low carbon electricity very quickly, um, then the ever suggests that nuclear power does it, along with hydroelectric, um, Sweden, France, Finland have all, uh, done it within 10 years, um, and, and got large amounts of, uh, clean low carbon, zero emission electricity. But of course, Australia can't talk about this because I don't know, it, it just doesn't make sense. It's completely irrational.
But having talked about all these, these, these things, um, we get this great statement from, uh, our wise glorious, uh, energy minister Chris Bowen, um, in the past week talking about the energy transition to renewables.
Saying this is extremely important, is what every sensible government around the world is now saying, yes, we have some short term challenges, but renewable energy is more secure. There is no geo-strategic crisis that can impact on the supply of sun to our land and wind to our shores.
And this goes back to the easy transition narrative that I was talking about at the beginning and the sort of delusion that is in, in this, this, this narrative and this delusion in this statement. Um, there's no, there's no explanation of how, how we're gonna achieve, uh, these, these emission targets and, um, these renewable energy targets, or whether it's even beneficial economically, socially, or even environmentally. I would say that the, the, this idea that we should transition to a hundred percent renewables because it's good for the planet, I would be say, I would say it's highly questionable given the amount of land use material inputs that have to go into renewable technologies. So right now, I think energy policy, not just in Australia, but in, in the West, is on the, is what I'd say the pursuit of failure.
We are pursuing policies based on wishful thinking that are driven by ideological rhetoric and are ignoring the sort of real world realities, the material realities, the physical realities that operate in the real world. And that, and the ability to deliver those in, um, the, some of these policies and the time constraints is just completely, um, unfeasible. And it's continuing to demonstrate, and this is what Europe is demonstrating right now, the inability of, of policy makers and politicians to, to differentiate about what can be achieved, what can actually be achieved, and what's feasible in Australia. We seem to be failing to learn any of the lessons that have of what's been happening at home with our own energy system and abroad.
And I think we're just doubling down on the same mistakes that the Europeans, the Californians, the Texans, um, are, are making. And the result is we're gonna see the federalization of the grid.
We're gonna see distorted, distorted energy market. Well, it is already distorted, um, increased energy costs, increased risks of brownout and blackouts, uh, offshoring of our energy, what, what's left of our energy intensive industries, most likely to, to China or other parts of Asia. Um, and so that's a problem.
So I, I'll leave you with this quote that I, I heard this lady talking on, uh, radio National Helen Thompson, professor of Political Economy at the University of Cambridge. Um, and I think she sort of gives the game away and, and sort of highlights that we haven't really been told the full truth about the, the energy transition or trying to achieve targets by net of like, like net zero by 2050, or even trying to achieve targets like 43% by, um, 2030
So she said governments that have introduced commitments to net zero by 2050 haven't thus far presented that to their citizens in a way that allow their citizens to see what an enormous change it will be. And it will quite likely, particularly in western democracies, require sacrifice.
I'm not really convinced that politicians want to prepare citizens for the kind of choices that lie ahead energy. We all depend on every day of our lives, every hour of our lives in some sense. And if we actually say we're going to, going to try and largely eliminate the energy sources on which material life as we know, it has gone on for a long time now. Well, it's quite hard to put in words, describe the scale of change that will be.
And I think, I think that's the point. We, we haven't been told the full costs of this transition that we seem to be embarking down this path, we're going down and, and this, that's where the deceit lies. Um, and we should be very, very critical of our governments and our politicians for the path we're now heading down, particularly without hearing what the other side is and how it's actually gonna be achieved, um, and what the costs are and who's gonna pay.
And I know the Institute of Public Affairs have done a fair bit of work in trying to bring this, uh, to the attention of the public and the mainstream and, and highlighting the costs in terms of jobs and social impacts that it's gonna have in particularly now, uh, big industry regions of, um, the Hunter, Central Queensland, the Pilbara, and elsewhere around the country.
So, um, before I finish and hand over to Ben, I, I just thought I'd highlight some sources that I think I would encourage you to, to seek out and read if you are interested in finding out more and educating yourself about what's happening globally, globally, um, with energy and the energy transition. Um, obviously Vaclav Smil, How the World Really Works, as a great book. Robert Rice, he's an excellent, uh, energy commentator from the US called A Question of Power. It's a great book. Alex Epstein Fossil Future and Moral Case for Fossil Fuels and Meredith Anguin, uh, Shorting the Grid, and just a couple of, uh, newsletters that you could subscribe to. Arena Slab on Energy and Grid Brief.
They're both excellent. They're both weekly. Um, and they, they highlight some key things about those happening on a, on a weekly basis in the new world of energy, um, and the stupidity of some of the policies that are continuing to be, uh, embarked upon. Um, and if you want to listen to a really good podcast, listen to PO uh, power Hungry by Robert Bryce.
He gets some great guests on from all, uh, parts of the energy industry as well as, uh, policy makers and academics. Um, and he, he's, he's really great to listen to, does a great interview, um, and really sort of tries to get down some nuts of what, what are some of the issues that we're all facing around the world, um, on the energy front as we go down this path. So, that's it from me. I'll, I'll hand over to Ben.
