As promised, a more thorough review.

The headline claim is a really disappointing word-squirm, because it shifts costs to expensive capital purchases (which are ignored) to reduce operating costs (bills).

But there are other deep problems with their price analytics. 1/

https://twitter.com/GrattanInst/status/1977313663426916695

Firstly, what are they arguing for?

To introduce some explicit carbon pricing, because coal isn't leaving fast enough to reach our carbon emissions targets.

They say that coal is leaving for financial and ages reasons, but too slow. 2/

I missed a crucial footnote.

Remember this drawn-out exchange with @DavidOsmond8 about CSIRO's capacity factors? Post-curtailment or pre-curtailment?

@CSIRO made their method explicitly clear in a previous report, which they reference in the latest.

Let's finish this. 1/

https://twitter.com/DavidOsmond8/status/1970438479504121909

And on page 80 of the 2022-23 report we have CSIRO's explanation.

These are historically achieved capacity factors in the NEM.

They explicitly discuss economic and transmission curtailment being reflected in these.

Dave was wrong. 2/

Chris Uhlmann asked the NSW goverment whether they've modelled electricity prices.

And he's found a trove of modelling and analysis.

Which the NSW government has entirely refused to disclose to the public.

They know prices are going UP.
And are hiding it. 1/
This is a recent document... from a serious consultancy, all about "Price impact of coal exit". And some industrial loads.

That would tell us for sure whether the energy transition is working, or whether we still need coal.

REFUSED.
2/

Round 4 on my latest take on GenCost. 🥊

Dave and I are duking it out on 2 key questions:

1. CSIRO's definition/use of 'capacity factor'. Is it pre-curtailment or post-curtailment?

2. Is Marginal Loss Factor (MLF) a fair representation of transmission losses? Or Average?
🔔

https://twitter.com/DavidOsmond8/status/1971101643275108765

Let's start with capacity factor.

The crux of David's latest reply is in this highlighted quote.

"these capacity factors are not used at all in the modelling of renewable integration costs".

This is correct, and I understand. 2/

https://x.com/DavidOsmond8/status/1971101658240409761

As promised, a critical thread. 🚨

Here's the simplest sufficient proof that any realistic roll-out of integrated renewables will drive prices up.

$176/MWh is, in fact, the LOWEST cost that CSIRO's GenCost analysis supports, and it could be much, much more.

It's all in the capacity factors: the key performance metric of renewables. There are dozens of additional flaws and shortcomings, but this is the cleanest, clearest kill-shot for all the "renewables are cheapest" nonsense. The rest is bonus material.

CSIRO's "range" of integrated costs comes from their selection of upper and lower bounds for how much power, on average, wind and solar produce.

But their upper bounds are insane (32% solar, 48% for wind), essentially the highest imaginable from a single star-performer, in ideal conditions. Not a credible average for a massive roll-out.

Their lower bound is really close to the current average. Just 10% below, to be precise. But even this is still in ideal conditions.

But even that's an optimistic average to expect as we scale up, since the best and easiest renewable sites are taken.

And neither of these upper and lower bounds incorporates the real-world conditions that we know renewables actually face, including transmission losses, equipment degradation etc.

With just transmission losses incorporated, we land on CSIRO's worst-case as the current best-case, and it'll inevitably get worse from there.

My analogy is this:

Imagine trying to raise an army, and assess the performance your soldiers advancing on foot.

For an upper-bound, you take Usaine Bolt's track time for the 100m.

For the lower-bound, you take a near-average recruit (just slightly lacklustre) but still assess them running without gear on the flat, firm sports-fields used for PT.

With a range that starts near the average, and extends out to stardom, you claim the 'mid-point' as your expected value. This is already far, far higher than the average recruits can manage on exercise.

But the situation is worse... not only do people slow down when you put them in rough real-world conditions, ie rough terrain, and load them down with gear, the average quality of recruits is declining too:

Imagine is the second, or third year of the war. The pick of the litter have already been recruited and been deployed.

So in reality, if you want to roll out absolutely massive scales of renewables, you can rule out the performance of your star-performers, just as you can't raise an army of Usaine Bolts. Individual peak performance is a useless metric. The exception will never become the rule. The average will be, by definition, pretty average, and won't get any better than the average you've had to date.

Which is all you need to prove that renewables are not cheapest, and never will be. Details below.
1/ Here are the ranges for CSIRO's 'ideal' mix of integrated, firmed wind and solar. Their chart just shows a mid-point. I'll focus on the 90% Variable Renewable Energy (VRE), because that's what policy says we're aiming for, but it's much the same.

(See Apx Table B.10, page 96 to see those numbers come from CSIRO's GenCost at source. Not my calculation, I've just drawn them on the chart.) 2/

Our Prime Minister:

"I can guarantee that the cheapest form of new energy is renewables."

This is insane. At some stage soon I'll write up why CSIRO's GenCost actually proves the opposite.

But below, I'll just re-link the earlier commentary on the AEMC's work quoted. 1/ In this thread, I spell out how the @the_AEMC has created a piece of fan-fiction for the ISP, abandoning their terms of reference. It repeats and accepts the most ridiculous assumptions of the ISP. Like ignoring costs of consumer investments. 2/

https://x.com/QuixoticQuant/status/1864288957321892048

It's pretty to easy to see how utterly debased the @CSIRO modelling underpinnning the economic claims regarding the 2035 targets is.

They assume the whole world is committed to Paris targets, ie. Net Zero. They don't have any baseline where that doesn't happen. 1/ That's right, they derive a "global carbon price" commensurate with the world hitting net-zero targets. And apply it to Australia.

(Without saying anywhere in the document what that price is!)
2/

Late last week the Business Council @BCAcomau released a report prepared by @McKinsey on the 2035 carbon targets, showing that over $500bn capex was required for a 70% target. It was widely interpreted as a call for caution and realism.

But the report is still anchored in a fantasy, assuming that the 2030 targets are achieved first, and net zero by 2050 can be achieved affordably thereafter.

So the call for grounded, well-informed consideration of the 2035 target, amidst the utterly fanciful, unrealistic targets on either side, is plainly absurd.

This is like the captain of a ball sport giving a pep talk warning about how gravity and Newtonian mechanics still dominate the ball's behaviour. But the game is Quidditch, and the balls are animated by magic, and the entire team is riding around on broomsticks.

The Business Council of Australia, in particular the CEO @JAWestacott, need to decide which world they actually claim to inhabit. 1/ Here's the spiel announcing the report. Fully committed to net zero by 2050, claiming that can can be "affordably and reliably achieved".

Then pivot to suggesting that only 50% should be targeted for 2035.

This is hard to take seriously, as I'll explain.
2/

We now have the official reason that @CSIRO won't reveal the modelling behind GenCost.

- CSIRO is a "commercial entity"
- The modelling in GenCost was done for CSIRO's "exclusive benefit"
- Revealing the model would put CSIRO at a "considerable commercial disadvantage" 1/ This was in response to a Freedom of Information request @CISOZ put in, inspired by this brilliant take on CSIRO's refusal to disclose their model in this year's publication, despite repeated requests. 2/

https://x.com/jaelubberink_/status/1950015398818017614

This is the story of how a fund chaired by former Labor PM Julia Gillard acquired a wind farm project just six days before Labor Energy Minister Chris Bowen underwrote its future revenues with taxpayer money.

Today we've learned Julia's fund is trying to flip it. For a profit.

HMC Capital's 'Energy Transition Fund' rushed to acquire the Neoen Victoria portfolio. They hadn't even raised any money in their fund. They closed with almost a billion dollars worth of borrowed money and IOU's.

Less than a week later, Chris Bowen announced Kentbruck Wind Farm to be successful in the first round of the Capacity Investment Scheme. My rough calculations suggest they will receive something like a billion dollars from taxpayers (and maybe much more) over 15 years.

Sweet deal. A billion dollars of fancy financial monopoly money one week. A billion dollars of promised taxpayer dollars the next.

I want to emphasise that I have no evidence of anything illegal or improper taking place. Rather, I want to point out how odious and repugnant the official, proper, legal business of renewable energy has become.

Yesterday Chris Bowen announced he wanted to supersize the CIS subsidy scheme, yet again.

Today Ross Garnaut seemed to cheer this on, whilst pointing out "There are now virtually no new investment commitments for solar and wind generation that do not have CIS or other Government underwriting,"

What happened to a sense of propriety? Since when do we celebrate people rushing to put their snouts in the trough? Or rushing to fill the trough even higher?

Unlike the UK who publish a 'going rate' for technology subsidies, our renewables are subsidised through a secret tender process. Every project gets to ask for whatever revenue they want to proceed. @AEMO_Energy facilitates a secret beauty pageant, where they award points for things like indigenous participation or community engagement, alongside financial value.

And Chris Bowen makes the final call.

The bids remain secret. There's no cap to the pay-outs. Since AEMO is a private company, there is no scope for an FOI request, and AEMO aren't not subject to parliamentary oversight through Senate Estimates.

So no-one can ever prove an allegation that Bowen has bestowed special favour on a friend's project if that was what he did. But equally, he can never prove that he selected strictly according to merit. We are just expected to trust the black-box of Bowen's subsidies.

So I'm going to say out loud, with full voice, that I hope everyone can agree on:

If this is what the future of 'clean energy' looks like in Australia, it looks absolutely FILTHY.

Any firm that talks about ESG seriously should start taking the "G" a bit more seriously and steer clear of projects that thrust their snouts into Bowen's hopelessly opaque, bottomless trough of government funds.

Or at the very least, purge their boards and senior leadership of all the former Labor staffers, donors, and industry lobbyists who have had a hand in designing the trough, and filling it up.

The reality is that there are no natural profits to be made in generating renewable electricity in Australia.

Every dollar of profit in this industry is really a cheque signed by a politician, with Chris Bowen signing all the biggest cheques, worth untold billions, in the next three years.

It's all legal. It's all official. And it's absolutely obscene.
Mega-thread below.
(It'll come in stages)
1/ I'm going to start with the epilogue. This just dropped a few hours ago from the @australian.

HMC is trying trying to sell the portfolio. For a profit. Having done nothing with it, not even settled on it, but landed a massive subsidy. 2/
theaustralian.com.au/business/datar…

First-pass on @CSIRO's GenCost, with the final version for 2024-25 released this morning.

The headline should read that coal is cheapest, and will remain so.

The contortions required to avoid saying that out loud are absurd.

It's coming undone, stitch by stitch. 1/ Between the Draft (with red writing) and the final, there are some adjustments to the integration costs in 2024.

More for raw generated energy.
More spillage.
More synchronous condensers.
More transmission.
Storage similar. 2/

Follow-up. @DavidOsmond8 and @GilesParkinson have bitten back, on Linkedin mostly.

TLDR:
"Of course the wind farm had subsidies... but this particular "stage" of said wind farm was financially islated from the rest of the wind farm, so those subsidies don't count." 1/

https://twitter.com/FootnotesGuy/status/1947142347764146455

First up, I welcome being called out on footnotes. But I still completely reject the idea that the relevant transactions were "subsidy free". For two reasons:

1. Each stage or sub-stage still received subsidies.
2. The subsidies to one stage still benefit the other.
2/

As promised, there's a plot twist on this question about CIS funding curtailment.

The first 6GW of generation contracts of CIS did get funded for curtailment.

So @simonahac is dead wrong about this blanket claim.

But CIS is changing... maybe? 1/

https://twitter.com/FootnotesGuy/status/1945410154129973402

David Osmond has pointed this out, and I also know that Ben Beattie @EnergyWrapAU also discovered this.

The pro-forma contract for the upcoming round (closed, but not awarded, which is Round 4) removes the provision.

We're all in agreement there. 2/

https://x.com/DavidOsmond8/status/1945720113535373402

"No, you're wrong, because my friend in high public office assured me in private that I'm right."

This is the "SHaC excuse" for ignoring uncomfortable facts.

Last week @simonahac tried it on @EnergyWrapAU, who patiently and exquisitely dismantled Simon from public sources.
1/ The context is here... AEMO releases some modelling showing that vast proportions of the projected wind and solar being built will be 'constrained'.

I.e. wasted.

Unless utterly implausible amounts of transmission get built. 2/
afr.com/policy/energy-…

On Friday I appeared on @SkyNewsAust, and commented Orica accepting a $430million subsidy for a 50MW green hydrogen project.

I've just started running some numbers... I think it looks far, far worse than I thought. 1/

skynews.com.au/opinion/slap-i… The cost difference on consumeable inputs looks like at least $3/kg.

That's with expensive Australian natural gas, and an optimistic take on wholesale electricity, zero costs for network etc. 2/

Every week @DavidOsmond8 does this copperplate simulation, demonstrating a net-zero grid is quite achievable and affordable.

Slowly, as energy literacy improves, I think he'll succeed in proving the opposite.

Let's chat through some charts. 1/

https://twitter.com/DavidOsmond8/status/1940256309183750578

First, I admire Dave's persistence, and commend his transparency. He acknowledges the limitation of the copperplate assumption, that any energy from any source can be pooled, and consumed in any place is the biggest.

His defence "ISP's got this" will unravel slowly. 2/

So VNI West has had its timetable shifted back a couple of years.

Apparently mostly because it's clear that they can't steamroll the farmers that fast.
1/

…files.s3.ap-southeast-2.amazonaws.com/1017/5124/5871… This will be encouraging to the farmers like @MarciaMc10 who have been busy mapping out the community sentiment in the areas where these transmission lines must go. 2/

https://x.com/MarciaMc10/status/1939838064400179543

Spicy take: Transgrid's finances are shot.
They're no longer viable as a regulated utility.
Their shareholders are rushing for the exits.
Taxpayers are bailing them out.
Transmission costs will explode. Again.
This should be a scandal.
Quick 🧵 to explain. 1/ The key thing is Transgrid's credit rating. They're meant to be a monopoly utility, with access to low-cost capital.

As the CEO has explained: "If we blow our credit rating up, we can’t continue to invest in anything".

@angelamacd reported this. 2/

afr.com/companies/ener…

A couple of weeks ago I found this stunning chart.
Note the log scale.

That green line "Base Case" shows NSW being crippled by blackouts costing us between 10 and 100 BILLION dollars annually from 2029/30.
1/ Also interesting... It appears that no matter what we do, we're heading for an increase in "involuntary load shedding costs" (ie economic destruction due to black-outs). Rising to between $100mil and $1bil in 2028-29.
Not great. 2/

Yesterday this news broke: transmission costs rising, and pushing up power bills.

For those watching closely, this is no news at all, but belated confirmation from official sources of the inevitable. Quick 🧵on the @AEMO_Energy source. 1/

theaustralian.com.au/nation/politic… Two years ago prices were increasing massively. (left chart)
"Unprecedented" we were told.
This year they're increasing even more. But this time (right chart) the costs are almost entirely real, rather than half made up of inflation. 2/

This insane. @abcnews runs a story about all the endangered wildlife from a UNDERGROUND coal mine extension.

Just 17 hectares of land will be cleared.

Ahem...

JUST 17 HECTARES!!!

The poor bats and koalas!!!
1/ Of course 17 hectares is NOTHING compared to what's required for wind farms.

The 'direct impacts' to the bats is from 630 hectares of land that will WON'T BE CLEARED, but may gradually subside, over years. 2/