Energy Minister Angus Taylor's solar warning: 'system under strain'

Federal Energy Minister Angus Taylor says the government's gas incentives are not ideological but about ensuring balance in Australia's energy generation. Picture: Simone De Peak
Federal Energy Minister Angus Taylor says the government's gas incentives are not ideological but about ensuring balance in Australia's energy generation. Picture: Simone De Peak

The runaway success of solar panels in Australia, covering the roofs of one in four houses, is threatening the stability of the national grid and low energy prices, the federal energy minister warns.

The speed and scale of growth in variable renewables, that cannot be switched on or off by grid operators, was causing disruption on a level never before seen, Angus Taylor says.

"This is making the grid more difficult to manage, creating volatile prices, and undermining the retention of less flexible dispatchable capacity," Mr Taylor will tell the Australian Energy Week conference in Melbourne on Tuesday.

The minister said the system needs balance to ensure renewables are complemented with established technologies including thermal power generation like coal and gas, but that call was not ideological.

"Our system is already under strain, with out of market costs and market interventions increasing," he says.

"This is not about ideology, just a simple, pragmatic focus on the solutions required to ensure consumers have continued access to affordable and reliable power."

Australia's two largest states have not built a new dispatchable generator - any source of energy that can be turned on or off on demand, such as coal, gas or pumped hydro - in around a decade.

Meanwhile, Australia's intermittent supply via household solar panels was outpacing the world, Mr Taylor says.

He warns about the risk of relying on solar after withdrawing coal, which provides 66 per cent of Australia's electricity supply, and indicated a long-term future for liquid gas in Australia's energy supply with new generators typically built to be hydrogen ready.

Pumped hydro with deep storage, transmission between states and batteries can all play a role in the technology mix Mr Taylor say will be critical to keeping energy prices stable late in this decade.

Mr Taylor says the government will continue encouraging new investment in dispatchable capacity and tweaking market interventions to ensure those sources are competitive with intermittent sources like solar and wind farms.

"Ultimately we need balance between these technologies and between intermittency and dispatchability," he says.

The grid will also need investments in new transmission, the energy minister says, and is calling on state and territory governments to end disunity and commit to a coordinated investment plan.

"An uncoordinated approach will lead to uncoordinated investment and higher prices and greater reliability risks," Mr Taylor warns.

Affordable, reliable power was not a soundbite, he says.

"It is felt by families and workers who have more money in their hip pockets. It means uninterrupted access to essential services, like hospitals and telecommunications, and it means our businesses and industries are better able to grow and thrive," Mr Taylor says.

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This story Solar success is why we need gas: Taylor first appeared on The Canberra Times.

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