Thread by @mcannonbrookes

I'll get to today's announcements later.

Apologies - been smashed busy, but here are some thoughts + understandings on Tuesday's announcements on energy + gas.

What have we learned? Here's my thinking. I'd love feedback to learn 🙏🏻

A long thread! 👇🏻

There were 3 announcements (my summary):

1. TRANSMISSION - New grid infrastructure for renewables
($250m funding + 5,000 jobs - 3-5 years)

2. GENERATION - New gas plant in the Hunter (3-4 years)

3. EXTRACTION - New gas pipeline network, hub + 5 new gas basins (10-30 years)

#1 TRANSMISSION - great. VNI, Marinus Link etc.

These are projects supported by #MillionJobsPlan.

They will help our grid get smarter, faster, support more renewables & lead to cheaper energy for all.

Also most funding ($250m) & most jobs created (5k).

Brilliant! ✅

#3 EXTRACTION - this one has nothing to do with energy prices (in the 3-5 year time frame as stated). It would cost tens of billions, take decades & likely not generate "cheap gas".

I cannot see how it can _possible_ be compatible with our emissions targets.

Forget it.

#2 GENERATION - now this one I really don't understand.

- You can't be "technology agnostic" & mandate a gas plant will be built
- You can't be "market driven" & intervene in the market randomly
- You can't promote "private investment" & undercut it with public funds

So what do we need for #2 GENERATION? Requirements? What do we _need_ by Dec 2023? How big? What generation? What time of day, market conditions etc?

@AngusTaylorMP's office hasn't sent any details - but this is what I can parse out.

Size?

2017
- @AEMO_Media said we _could_ have a 1000MW short fall.

2020
- Task force says a 215MW gap
- @AEMO_Media ESoO (last month) says 0 to 154MW gap (but closing & likely to be the former)

Why _has_ the gap closed? The market! Time! Capital! And we have 3 years.

It's also very worth noting that #1 TRANSMISSION (new & now funded above!) should greatly alter the size demands? (the prior figures assumed no new transmission)

They also don't take into account @Matt_KeanMP's 3 NSW REZs?

Unclear to me whether these are factored in or not?

(A side note here - I believe Hazelwood & Liddell closures will be vastly different. The former had less notice and less understanding of effects. The price spike from the former will result in capital coming in to mute the latter. This is how markets work & learn. Good design!)

"Dispatchable"? 🤦🏻‍♂️ Like "baseload" - this term is at best over simplified. At worst, wrong. What does it mean?

I don't get this one. I think it means "flexible dispatchable"? Am I wrong there?

We we clearly have no supply problems in the middle of the day? So it's _not_ 24x7?

Liddell is not flexible dispatchable (as many have noted), so this is not a "replacement"!

It can't ramp up or down "when the wind doesn't blow or the sun doesn't shine" (as the 'talking point' goes. Sun is reliable. Every morning. Millions of years. Clouds aren't. Get it right)

Is this really all about Tomago? Say that then? Many other experts here but my understanding is that aluminium smelters + demand management are _useful_ for a grid & long financed, demand side batteries might be a better solution (I assume they pay wholesale prices)

Lastly,. what are the learning rates implied in any details here? For batteries, storage, Snowy 2, new transmission costs etc.

The only data (solar learning rate @ScottMorrisonMP quoted - 50% cheaper by 2050) was vastly out of step with most.

Show us the numbers so we can help.

I've gone long enough! I hope this provides some insights and I'm sure I can learn. Please discuss / correct where I've missed a factual detail 🙏🏻

#electronsnotmolecules

Oh I forgot! $!

We need to understand the funding that govt is prepared to commit. Is it a subsidy? Is it an investment? What are the assumed returns? How big? Who is judging that?

(without this it's hard for market to debate alternatives)