More gas will be needed to offset State’s renewable energy splurge, says Blue Energy


Queensland and NT explorer Blue Energy has weighed into Australia’s power struggle, saying the company believes the “misguided headlong rush” into renewable energy’s role in the national power grid will both stimulate gas exploration and spike energy prices in the country.

In it’s June quarter activities report released recently, Blue Energy managing director John Phillips commented that despite the May federal election providing continuity of Government, the States still hold the balance of power when it comes to energy source, supply and distribution.

“The reality is that the States control the levers for facilitating onshore exploration activity and development of new gas supply. The ACCC has for many years recommended more new gas supply be developed to alleviate chronic price and supply issues for east coast domestic gas users,” Phillips said.

“The ACCC has also called out foreign controlled companies for exacerbating the supply issue by “gas warehousing” reserves and resources on the east coast — a scenario some might argue facilitates the ability for these entities to play the arbitrage on the price differential between the domestic price and the North Asia spot LNG price.

“Equally, electricity generation is in the hands of the States. Whilst Federally there is a reluctance to allow uncontrolled amounts of renewable energy to be introduced into the National Energy Market (NEM), the States are continuing the headlong rush to bring high levels of de-stabilizing, asynchronous, intermittent and subsidised electricity into the grid.

“This is presumably in the belief that more renewables will reduce CO₂ emissions in Australia to such an extent that average global temperatures will be reduced (which is patently absurd) and we will avoid catastrophic weather (like floods, droughts, cyclones, snow, sea level rise, coral bleaching, ocean acidification and a plethora of other non-weather related social issues and purported extinctions).”

Mr Phillips posed the question: “What other possible reason would some State Governments have to ensure some investors profit from taxpayer subsidised renewable schemes? The concept of free electricity from renewables, which has been touted by some of Australia’s leading journalists recently, is an absolute fallacy.”

He said South Australia, with more than 50% of its electricity supplied by wind and solar, “has the highest retail electricity prices in the world, and which is causing the increase in energy poverty at an alarming rate for our most vulnerable people.”

“In any event, gas is setting the cost of electricity at peak demand times and gas fired generation (synchronous) is required to stabilise the grid plus back up the inherently intermittent wind and solar.

“Therefore, if these aggressive wind and solar generation targets are to be fully met by the politicians, much more gas will be required.”


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