You might think that British tech investors have little to learn from Alice Springs, Australia.
And you’d be right.
But sometimes that little bit you can learn is still worth learning. So let’s dig in…
On the 13 October, the air conditioners went out in Alice Springs. 12,000 people were without power for up to ten hours. Not ideal at 39 degrees Celsius heat…
It was the third “system black” for Alice Springs since 2015 and the ninth “incident” since then.
In other words, Alice has been struggling with its electricity of late. But why?
Now I read about what had happened on the ABC website (the Aussie version of the BBC) and the Northern Territory News website. But there was absolutely no mention of what had actually gone wrong that day. What had caused the blackout?
The media reported in astonishing detail how government incompetence was to blame and why people have been fired. There were investigations which revealed people couldn’t find the right manuals. Nobody knew who was supposed to restart the grid. And so on and so forth.
But no mention of the initial cause.
At the bottom of the ABC News story about the drama was hidden the tag “solar-energy”. Meaning someone at the ABC had identified the article as topical for anyone interested in solar energy, even though the word “solar” didn’t get a single mention in the article.
Well, Alice Springs is heavily reliant on solar power. And on 13 October, this happened according to a report from the Utilities Commission:
The output of Uterne solar station was relatively constant at around 3.3 MW until 1:43 PM. At 1:43 PM a cloud passed over the station and station output became highly variable with reductions in output to as low as 0.5 MW.
Yes, a cloud laid low a town’s electricity supply for ten hours. And I’d like to mention there aren’t exactly many other towns nearby you can go to for relief.
As the Katherine Times put it, “The NT’s claim to be home to one of the world’s leading solar energy resources lost some of its shine yesterday. All because of a cloud.”
The sudden drop in solar power wreaked havoc on the city’s grid. Rooftop panels experienced the same sudden loss of power at the same time as the main station, adding household demand to a depleted supply all in the same moment. A perfect solar storm, you might say.
But as the Utilities Commission pointed out, even in Alice Springs, the prospect of clouds is foreseeable:
[…] reduction in solar generation due to cloud which precipitated the system black is not considered a root cause of the system black, as a power system should be designed as far as practical to be sufficiently robust to withstand this.
In other words, don’t blame the cloud. Not that I’m sure who would.
And don’t blame solar either. Blame human error – clouded judgement. Clouded by a renewable energy frenzy perhaps?
The lack of backup power was the key issue in the end. The thing is, there was backup power. A battery and gas backup both failed too.
And what’s the point of solar if you need gas standing by for every cloud that passes by?
Solar power critics jumped on the event. If you have to maintain backup power for cloud cover incidents, how does solar power compare in terms of costs? The same for wind.
Having a gas power station sitting there waiting for clouds is expensive, I’m assuming. And it must add a lot to solar’s CO2 emissions on cloudy days in any fair comparison.
A quick hunt around the internet and I found next to nothing on the topic. Although I do know that solar-friendly Australia has exorbitant electricity prices. Perhaps we now know why.
I’ve asked our energy expert and e-believer James Allen to come up with an “all in” renewable energy cost given it isn’t always sunny and windy.
My question for you today is whether this sort of thing is just part of life under climate change. Or is it enough of a problem that renewables will be hampered wherever they’re implemented?
The Alice Springs hospital was down for about 30 minutes before its emergency power supply kicked in. If renewable energy costs human lives instead of just birds’ lives, will it be popular for long?
Then there’s the plan to power Singapore with solar panels situated in the Northern Territory. The Guardian reports investment in the project is underway:
The desert outside Tennant Creek, deep in the Northern Territory, is not the most obvious place to build and transmit Singapore’s future electricity supply. Though few in the southern states are yet to take notice, a group of Australian developers are betting that will change.
I think I can see storm clouds gathering over the project…
It’s easy to think about events in Alice Springs as growing pains for a brighter future, pun intended. And I hope that’s true.
But I’m worried about the Green Bubble – the Grubble. It’s struggling everywhere I look. From people getting dragged off Tube roofs to people protesting against windmills and the cost of electricity, the tide is turning on green energy.
You know something has reached its peak when central bankers support it.
The deeper concern is that, when renewables finally do become viable, they’ll be held back by the interest groups which rely on government support to keep their inefficient failed investments of the past viable.
Mark my words – the renewable energy source that should be rolled out won’t be.
Sound absurd? Then have a read about the history of thorium and uranium nuclear reactors. You’ll discover how interest groups will undermine renewables too.
But Eoin Treacy disagrees with me. He claims to have found a company that’ll become part of an energy revolution right here in Britain. A new North Sea Oil is what we call it in the office.
See if he can convince you.
Until next time,
Editor, Southbank Investment Research
P.S. If you haven’t already, check out Eoin’s other work. He’s found a fortnightly anomaly in the US stockmarket. It’s to do with their version of opt-out pensions. If you visualise just how much money that floods into the stockmarket each paycheque, you’ll have an inkling of what’s going on. To find out how to profit from it, click here.