Politics, economics and our changing climate

In seeking solutions to Tasmania’s energy deficit, Matthew Groom must cast a wider net.

Nigel Tomlin at his "Platypus Power Station", a river-run hydro station he built at Ellendale.

Nigel Tomlin at his “Platypus Power Station”, a river-run hydro station he built at Ellendale in Tasmania’s Derwent Valley. This small-scale form of hydro generation is one of several renewable alternatives, including wind and solar (rooftop and large-scale) that the Tasmanian government needs to put firmly on the table. PHOTO Peter Boyer

“In these times of power uncertainty, are you prepared for a power outage?” asked the ad for generator hire in yesterday’s Mercury. Not what any energy minister likes to see.

Matthew Groom is indeed faced with an uncertainty problem. But if he wants to really come to grips with it he should heed what John Lawrence (also in the Tasmanian Times) and Jack Gilding wrote in these pages last week.

Lawrence believes that entrenched attitudes may cause ministerial and parliamentary reviews to blame our pickle entirely on mismanagement and to overlook deeper and more fundamental issues. Gilding, who managed a community wind-farm before taking the helm at the Tasmanian Renewable Energy Alliance, puts a powerful argument for Groom to cast the widest possible net in looking for ways to deal with both the immediate and the longer-term.

At the heart of our electricity supply problem is a matter of critical public importance: the gap separating the alliance of government, big industry and power utilities from the rest of us. The domination of large-scale suppliers and users has led successive governments consistently to under-estimate the potential role of non-hydro renewables, feed-in tariffs and energy efficiency.

The other elephant in the room is climate change. Last week Groom drew our attention to “an extreme natural weather event” – the absence of rain through spring, summer and early autumn.

We don’t yet have evidence to show whether the present dry period is natural as Groom says – like the 1967-68 drought which led to power rationing – or whether it’s been affected by human-induced warming. But 2009 modelling suggests we shouldn’t dismiss the latter possibility.

That work, commissioned by the government and Hydro Tasmania, analysed how our climate will behave under various carbon emissions scenarios. It found a trend that looked a lot like what happened this summer: a drier western half of the state, where nearly all hydro power is generated.

Funding for “Climate Futures for Tasmania” ended in 2010. It shouldn’t have. Today’s better global models, better data and more powerful supercomputers would greatly improve our ability to see where the climate is taking us.

Natural or not, individual weather events will always be notoriously hard to plan for. Just like economic shocks. In a candid TV moment last year, former treasury secretary Ken Henry admitted that in 2008 he dismissed as unrealistic the concerns of his prime minister Kevin Rudd, about Australia’s vulnerability to a global financial crisis. Rudd turned out to be right; the professional wrong.

Tasmanian economist Saul Eslake has made a career out of looking ahead. His thinking about where our economy is going carries an authority born of a keen mind and years of experience. But he acknowledges that economic models take insufficient account of climate change.

That is a challenge for both economists and scientists, he told me last week. He believes the two professions need to work together on causal links between climate change and economic shocks and build these links into new models able to project economic consequences.

Our energy deficit was caused by both weather and economic factors. John Lawrence applied his economist’s training to the chain of events as the dam levels grew critical, and offered some good explanations for Hydro taking the steps that it did.

It’s easy to be wise after the event. Matthew Groom and his Hydro advisers can take comfort from that analysis. It’s not all their fault. But now they must change course and tackle the systemic changes needed to ride out future energy shocks, opening up to the advice of Gilding and others outside the inner circle.

Last week, acknowledging public anxiety about dam levels, Groom asserted that “the Government has a Plan in place to ensure that the energy requirements of the state continue to be met”.

He should end right now the pretence that he or anyone can “ensure” any such thing. Our future has always been less than certain and global warming has raised that uncertainty to another level.

He should take the Tasmanian public into his confidence and spread the burden of working out solutions – which without major rain events will have to include energy conservation measures. We’re all in this together. We all have to be part of the solution.

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