The ACCC Electricity supply and prices inquiry final report is a tacit acknowledgement that current strategies for CO2 abatement will not work at an affordable price for consumers.

It is the best analysis of the energy market that we have, and must lead to a rethink of the role of the AEMO, AER and AEMC. These bodies have comprehensively failed and pushed Australian power prices up to unsustainable levels.

The report also calls into question the NEG, proposing a role for the federal government to provide stability through the provision of stable baseload power generation.

The role of the Chief Scientist, Mr Finkel, must also be under review as it shows how ineffective his Review into the Future Security of the National Electricity Market was.

It also means that the states should undertake plans to wind-down their subsidy schemes for wind and solar and hand control of these matters to the Commonwealth government. With a proper network system, the decisions in one state impact on the prices paid by consumers in all states.

In an ideal world the ACCC proposal for the federal government to underwrite the construction of new baseload power is suboptimal, but a regrettable necessity in the current situation. It is likely to be less costly than building Snowy 2.0 to deal with the vagaries of increased penetration of wind and solar.

Another implication of the report is that Australia, and the world, also needs to adopt a new approach to CO2 abatement: intermittent energy will not power the world, even with storage.

Not only has the current approach led to unsustainably high power prices, but CO2 world emissions are still growing, and after an approximate 10% decrease since 2005, so too are Australia’s.

It’s likely that any decrease in Australian emissions is due to higher power prices creating a degree of de-industrialisation. But as we consume at ever increasing levels, the amount of CO2 embedded in our economic production and consumption is probably higher than it was in 2005.

All that has happened is there has been a flight of production from Australia to countries with lower electricity prices, and higher CO2 emissions.

A new approach to CO2 abatement would:

• measure national consumption of CO2 embedded in products and services rather than emissions;
• accept that zero emissions cannot be met using intermittent power and that some form of nuclear energy will need to be deployed if CO2 emissions are to be completely eliminated;
• redirect money being spent on intermittent power to research into nuclear power and handling of radioactive waste;
• look for bridging strategies involving energy efficiency and greater use of gas if CO2 abatement is seen as a worthwhile or achievable goal; and
• acknowledge the limits put on emissions in energy production through physics.

“The ACCC has belled the cat of intermittent, so-called renewable, energy. It doesn’t work at an economy-wide scale. And it has provided not just a work around, but a circuit-breaker so we can rethink our approach to CO2 emissions.”