What do the US DoE Grid Resiliency Pricing Rule and Australia’s proposed National Energy Guarantee have in common? – both decisions represent attempts to balance the grid while appearing to favor fossil fuels for electricity generation above solar and wind.

The federal governments of both Australia and the US are defining energy security and reliability as possible only with fossil fuels and nuclear energy as the base upon which other energy options (renewables) can be built. This argument assumes that renewable energy technologies are inherently unreliable and ignores storage, system configurations that use different RE technologies, energy efficiency and conservation as the energy paradigm of the future. Doing so ignores international agreement that the climate warming must be held to 2 degrees centigrade or lower.

Australia’s proposed National Energy Guarantee does not include a renewable energy target, carbon pricing or other clean energy mechanism.  It does have an emissions guarantee but favors coal, natural gas and oil via its reliability guarantee.  Emissions and reliability guarantees can be traded between utilities and even traded internationally.  In fact, the emissions guarantee may be satisfied through international marketing. The guarantee levels have not been set and will vary state-by-state depending on the level of wind and solar in each state. The state of Western Australia is not part of the plan. As to Australia’s future deployment of wind and solar, the country’s Energy Minister Josh Frydenberg has apparently indicated that the country’s RE target appears to be 95% met via projects in development and already installed. Recently Minister Frydenberg indicated that new coal plants need to be considered and indicated that the government could intervene to ensure a stable energy supply.

NEG Commentary:  Concerning Australia’s National Energy Guarantee, is the government intervening as Minister Frydenberg suggested was possible? Details about the NEG are in such short supply that an assessment of its impact is in the realm of speculation. Though an anti-RE stance can be inferred, in particular from Energy Minister Frydenberg’s comments, it cannot be confirmed even though the bare outline of the NEG indicates a preference for fossil fuel generated electricity. Two well-known entities have taken starkly different views on the NEG.  Despite a lack of detail Bloomberg termed it “innovative” and called it a “blueprint” for other countries. An idea can be innovative, though the devil is in the details, blueprints, however, require detail.  Meanwhile, Deutsche Bank downgraded the value of Tilt Renewables, an Australian wind and solar development firm, assessing that its 1.7-GWp pipeline had little chance of being developed.

When two companies, one known for punditry and one a financial institution make radically different judgments on a subject, follow the money.