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Trevor St Baker backs Angus Taylor on renewables

Trevor St Baker backs Angus Taylor on renewables

Coal power station owner Trevor St Baker has backed the focus of new Federal Energy Minister Angus Taylor on preventing the surge onto the grid of new wind and solar farms from continuing to force up prices for energy users.

Mr St Baker, part-owner of the Vales Point coal generator in NSW and founder of business electricity retailer ERM Power, said the influx of huge volumes of solar and wind power onto the grid has been "mismanaged" by the market operator, forcing the closure of baseload coal plants and driving up prices.

That, combined with the framework of subsidies supporting the development of new wind and solar projects, had resulted in a "double-whammy" of unreliable and high prices that have hit consumers hard, he said.

The comments come after last week's first public speech by Mr Taylor, in which he voiced deep scepticism about the economics of many emissions reductions programs, and named cutting power prices as his "first and only priority".

The minister said he sees a "strong role for commercially viable renewables, alongside continued focus on coal and gas" and charged that Labor's prioritising of a 45 per cent Paris emissions reductions target above all else would force the closure of coal generators, with energy security to take a hit.

The words concerned renewable energy players who argue the wave of new wind and solar plants are bringing down electricity prices, with estimates last week that wholesale prices will almost halve by 2021.

But Mr St Baker, who is also an investor in clean energy technology, pointed to the impact at the energy user end, where the influx of wind and solar has forced out of the market coal generators such as Northern in South Australia and Hazelwood in Victoria by undermining the economics of their round-the-clock generation models.

Those closures triggered sharp spikes in energy bills for industrial users and households that have not been reversed.

He was speaking after stepping up efforts to buy out fellow coal entrepreneur Brian Flannery from his 50 per cent stake in Vales Point, a 1320-megawatt coal power station that was spectacularly revalued last year at $722 million, from just $1 million when the pair bought it from the NSW government in November 2015.

Mr St Baker, who has outlined ambitions to extend the life of Vales Point, noted that the Renewable Energy Target already requires the existing 5000 megawatt fleet of wind and solar generating capacity to be more than doubled and said that needed to be much better managed to prevent more coal closures.

"It is the market operator that has patently mismanaged the introduction of solar and wind: nowhere in the world do they let solar and wind force out baseload generation, and they have let that happen here," he said.

He said the Australian Energy Market Operator has not followed " clearly-outlined international practice", as recommended by the International Energy Agency, of curtailing intermittent wind and solar generation when necessary to prevent dispatchable power generation falling below 50 per cent of generation at any time, with the result that needed reliable power plants become uneconomic.

The draft of the now-abandoned National Energy Guarantee highlighted the issue, which was also raised by Chief Scientist Alan Finkel, but the later version of the policy went quiet on the option of curtailing instantaneous generation, which some say was the result of lobbying by the renewables sector.

Responding to the criticism, a spokeswoman for the Australian Energy Market Operator said that as the operator of the power system, the body ensures the secure connection of generators into the grid and is "fuel and technology neutral".

"As the independent market operator, AEMO has been open and transparent in its analysis to the market, outlining the needs of the system," she said.

Up until July 1, AEMO had no authority to refuse connection of a new generation project onto the grid as long as it met technical standards. Since then it can refuse a connection if the security of the grid is impacted but it is not thought to have used that power.

Australian Financial Review

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