HOW important is manufacturing to Australia?
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That's the question that Tomago Aluminium chief executive Matt Howell is asking when he endorses the comments of Rio Tinto's chief executive, Jean-Sebastien Jacques, who says big increases in power prices have left Rio's three Australian aluminium smelters on "thin ice".
An industrial chemist who held management roles in China, the US and Europe before returning in 2013 to take on the top job at Tomago, Mr Howell has been unusually outspoken about Australian energy policy, and what he sees as a headlong rush into inherently intermittent renewable energy at the expense of reliable -if ultimately problematic - baseload power.
As shown by the hundreds of thousands of roof-top solar systems installed across the country, householders and small commercial users can insulate themselves substantially against these substantial increases in power prices (provided they can afford the initial investment).
Some big industrial users have also taken to installing large-scale solar arrays, but they remain very much in the minority.
Most commercial users, then, are at the mercy of an electricity system that has prioritised and encouraged the installation of wind and solar power, so much so that the spot price of electricity has fallen below zero and into negative territory on occasions in recent weeks. While this may seem like a good thing at first glance, it also presents problems because we are yet to develop viable commercial ways of storing electricity to the degree needed to dispense with coal.
Thus we see AGL yesterday agreeing to extend the life of its much-criticised Liddell power station for an extra summer, to help ensure the state has enough power going into 2023.
Without a dramatic breakthrough in energy storage or "firming" technology - or the construction of a new coal-fired plant - there is the potential for the grid to be stuck in a "mid-state" status that is increasingly driven by renewables during the day, while relying on ever-ageing baseload stations in the cold or at night.
This is not to denigrate renewables, or ignore the greenhouse emissions of burning coal. But it is to say that our power system, as it stands, is making things very difficult for manufacturing in all of its forms.
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