A Wall of Blackouts

by Jerry Ellis and Sir Rod Carnegie 20 February 2019

The Chairman of the Saltbush Club, Mr Jerry Ellis, today warned that Australia needs more reliable baseload power.

“With the population and the economy growing, but with electricity availability and reliability in decline, we are racing headlong into a brick wall of blackouts.

wall of blackouts

“Recession and disruption will probably follow, bringing to mind those memorable 1990 words of Paul Keating: ‘This is the recession we had to have’. Except in this case the recession will be self-inflicted.

“Much of my working life was in the steel industry in the 1970s and 1980s. It operated 24×7, with large numbers of electric motors requiring a continuous supply of low-cost electrical power. Un-planned interruptions were rare, but when they occurred they were very costly.

“Now we face the prospect of planned and unplanned loss of power due to the rundown of base-load power capacity. It must be a nightmare for today’s steelmakers and aluminium refineries facing this growing crisis.

“It is essential that Australia rebalances economic imperatives against populist ideas regarding the release of carbon dioxide to the atmosphere.

“A strong Australian economy is crucial to Australia’s welfare and will also make a valuable contribution to world prosperity.

“Australia produces a tiny proportion of the world’s carbon dioxide. Even total closure of our industry would have no detectable impact on carbon dioxide emissions or global climate.

“We urgently need new supplies of reliable energy from coal, gas, hydro or nuclear.”

Jerry Ellis was supported by Sir Rod Carnegie, former Managing Director, CEO and Chairman of CRA (Rio Tinto) who said:

It is essential that Australia regains its reputation for cheap reliable electricity or we will lose our manufacturing and refining industries, returning only to our backbone industries of agriculture and mining.

Jerry Ellis once managed Australia’s biggest steelworks at Port Kembla, and one of the world’s largest mining enterprises BHP minerals. He is a past Chairman of BHP and of Landcare.

2 thoughts on “A Wall of Blackouts”

  1. Just an aside: Do we remember that the “recession we had to have” was self-inflicted?

    In 1986, Treasurer Keating’s first public utterance was “I am going to stop wealthy businessmen negative gearing their rental properties”. He frightened landlords into selling their rental properties. A month later a delegation of charities visited Canberra to state that Keating had caused a substantial rental shortage. Keating rescinded his edict but it was too late. The rental shortage became an artificial housing boom. Homesellers spent their windfall profit on imports (e.g. luxury cars). Home-buyers borrowed money from overseas damaging our trade balance. Keating caused his ‘pocket Treasury’ to offer a 17% Treasury note for 18 mths. Investors then placed most of their money with the Treasury rather than the banks, which payed less. The banks raised their interest rates for depositors to compete against the Treasury. The banks then charged 22-25% for borrowers and collapsed Australian industry. It took Howard’s Government about ten years to repay the Keating-caused recession and debt. The debt repayments could have easily bought 100,000 million-dollar homes.

    Keating’s people blamed Bond and Skase for the recession that Keating caused. Their wealth if shared amongst the Australian population would have resulted in each Australian ony receiving about $100, and the loss of thousands of jobs.

  2. I think Jerry Ellis and Rod Carnegie, (like the rest of us) haven’t fully realized how dependent we are on electricity for every activity we do and how critical the situation is.

    These days from the time we turn the lights on in the morning, until we turn them off at night we are dependent on electricity. Even then (for 24/7) it keeps the white goods running, the security systems, the street lights, the night shift, the list is endless. Have a think for yourself, if the power was rationed to two hour segments across the day in your suburb, for your business, on your farm, what effect would it have? The nation would come to a halt. We wouldn’t just have a recession, we would have a depression!

    And don’t think it can’t happen. The Labor Party with their policies of a 50% renewable energy target by 2030 and The Greens with a policy of a ban on HELE coaled fired power stations and the phasing out of all fossil fuel power generation, could mean all our coal fired power stations are closed or clapped out. And then as it takes a number of years to build a power station, we have drifted into the situation, as mentioned above.

    You know that on the 25th of January 2019 at 2pm in Victoria, I believe that the spot price of electricity reached $14,000GW. That is in Venezuela territory.

    I think we all (but particularly big and small business and their associations, because the future of your business and your employees are at stake) should make a stand and ask each political party at the next Federal Election, what they will guarantee to have providing 100% base load power at 7am on the 2nd of July 2025 (When the Sun is not shining, and the wind is only providing 4% of base load) What is going to provide the other 96%.

    And then support and vote according to the response.

    I believe a Government is elected to govern and to provide an essential service, which low cost, base load electricity 24/7 certainly is.

    I believe if a Political Party at the Federal Election had the fortitude to commit to underwriting the building of four HELE coal fired power stations, which had the mission of providing base load electricity 24/7, with a cost plus 10% tarrif to all of Australia. With the carbon emissions from the power stations, being taken up by increased perennial grasslands,and forest areas as carbon sinks. At the same time cancelling Snowy Hydro 2 pump/hydro and all renewable subsidies. Then I believe if campaigned honestly then that party will win the election.

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