Australia's energy crisis

Can Australia keep the lights on in the face of record-breaking heat?


Australia grows ever hotter. The winter of 2017 was the warmest since records began in 1910. But the country’s attempt to curb greenhouse gases is creating its own problems. 

Australians will start 2018 with warnings that an ailing energy system may not see them through the summer. The lights started going out in 2016, when South Australia suffered a blackout. More blackouts hit New South Wales during a heatwave in 2017. Faults at Liddell, a 45-year-old coal-fired power station, left that state short of power. The body that operates most of Australia’s energy market says there is an “unacceptable risk” of blackouts in 2018 and over the next four summers.

The crisis has mounted as Australia tries to cut carbon emissions. It has closed ten coal-fired power stations since 2012. But it has yet to agree on how to replace them. Political wars have torpedoed plans to devise a reliable energy policy that includes more renewable sources. 

Charting a path to such a policy will be the biggest challenge in 2018 for Malcolm Turnbull, leader of Australia’s conservative government. Energy investors are crying out for certainty. But divisions among his coalition colleagues have left Mr Turnbull drifting. Some want to keep Liddell and other ageing coal plants open beyond planned closure dates. Conflicts also loom over gas, another abundant resource. From 2018, a policy will allow the government to restrict gas exports if it decides the stuff is needed to fuel energy at home instead. 

That policy contradicts Mr Turnbull’s free-market instincts. But he needs to convince voters that he has an energy plan. Poor opinion polls have dogged his government; it clings to power with a lower-house majority of just one. The next federal election is due in 2019. Unless he can stop the government’s conservative and liberal factions bickering over energy and other policies, the centre-left Labor opposition will win. 

Despite political uncertainties, the economy will stay healthy, with a 27th year of unbroken expansion. The end of Australia’s biggest mining-investment boom in over a century has barely slowed things down. Drawing athletes from 70 countries, the Commonwealth games in April will boost Queensland, a former mining-boom state. About 225,000 immigrants in 2018 will bring another stimulus, helping Australia’s population grow by about 1.6%, one of the rich world’s highest rates. 

Australia’s military focus will sharpen towards Asia. It sent surveillance aircraft in 2017 to help the Philippines fight an Islamic State insurgency in the south of the country. Australia does not want such extremism spreading in the region, especially to Australian cities, so it will send more help if asked. When ASEAN leaders gather for a summit with Australia in Sydney, due in March 2018, much of the talk will be of regional security and terrorism. Like the climate, it is a hot topic.

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