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Just How Cheap are Wind and Solar?

Aidan Morrison

Monday, November 13, 2023

Dr. Chris Keefer  0:00  

Welcome back to decouple. Today I'm joined by Aiden Morrison, and I'm just reading his Twitter description here. laughs physicist, entrepreneur, blogger, interested small bars, small boats and big data, you run a YouTube channel Milltek and tack I believe, Aiden, if you've kind of burst onto the scene, you know, as as small and peripheral as it may be on the nuclear side, but I think also in a much bigger way, within the Australian context, you have dug up some very interesting information about some of the energy modeling happening in Australia, as exciting as that sounds, but it's gotten picked up. Claire layman of quillette It's been covered in national media. And I believe I've seen some footage of politicians on the floor may have been, you know, state houses or national parliaments, also talking about it. So we're gonna get into all that. But first off, why don't you build off of that Twitter bio and tell us a little bit a little bit about yourself?


Aidan Morrison  1:03  

Sure, okay. Yeah, I'm Aiden, I grew up in Tasmania. Though I was born in Australia, I now live in Sydney, studied physics University, which was, which was great funds actually said a little bit of nuclear, nuclear physics, and took small courses in my master's on my master's in my honours year in nuclear reactor design, but not to become a proper engineer, these were just kind of, you know, the, the end on courses in our sort of third fourth year physics degree. So let's, let's get to know that without nuclear things, then and then had a totally been career started a PhD, which I quit in experimental particle physics, the ATLAS experiment at CERN, quit that to become an entrepreneur. And so my first project was in the military tech space, which is why it's still sort of have an interest there at the mill tech and tech channel, fell into hospitality actually opened a bar restaurant with friends, then got into a bit of Economic and Policy Analysis, a bit of a change, learn to code doing that become a data scientist, then doing data scientist, and machine learning things, software engineering, some building out things for trading platforms recently. So and then yet dipping back into this energy space has been really sort of exciting and sort of kicked off. Yeah, just from Twitter debates recently. But yeah, a bit of a mixed background. Yeah, quite quite a mixed background. I'm not a professional in this space by any stretch. Just got some got some skills to be able to think about numbers and data and stuff. So seems to be working out. Definitely,


Dr. Chris Keefer  2:32  

definitely. Listen, I wanted to start off with you know, we have quite an international audience. Definitely a pretty dedicated following in Australia. But I had the opportunity to travel down give a speech in Australia and spend about 12 days not really sightseeing, I did see some brews and some wombat poo, which was, you know, top priority bucket list for me. But also got to meet with a number of politicians, policymakers think tank people and yourself had a great night out in the town with you. And that was that was a lot of fun. But, yeah, for the International listenership before we get into sort of what you've uncovered and the muckraking that you've done with regards to some of the, again, modeling that is the evidentiary basis for the bold leap that Australia has taken in his planning with further renewables deployments. Yeah, I wanted to get some of your insights on again, this this context, the country that you're speaking to us from the continent you're speaking to us from. So you know, just just a couple of my own observations that hopefully I get you to riff off of, I was a little surprised, you know, I think of ourselves to think as being quite similar Commonwealth cousins is kind of the moniker I used in the talk. Thank you, Bob Parker for that. But I think some pretty significant differences. I came away with the sense that Australia's kind of a Petro state of minerals. That's still very much you know, in its economic relationships, a bit of a colony, I guess the joke was colony of the UK, then call it the US and now a colony of China. You know, this economic complexity ranking number 93 out of 133 countries, just above Pakistan, just below Uganda was was pretty surprising to me, obviously, vastly different GDP per capita, etc. But, you know, these are some of the things that stuck out to me. And, frankly, have me, you know, a little bit worried about a Commonwealth cousin. So, why don't you build off of that introduction slightly. Again, I'm making some comparisons to Canada and Ontario more broadly. You know, certainly I think the West in general has undergone a fair amount of deindustrialization, you know, with with with globalization, but you know, we've we've retained a lot of our economic complexity and our kind of value add, and in Ontario, I'd make an argument that nuclear has been a huge part of that in terms of, you know, pretty robust precision manufacturing in History and everything that goes into supporting our nuclear industry. So yeah, rip off that, give give some more insights to our international audience, and to your Australian brothers and sisters about your take on on the country that you're from.


Aidan Morrison  5:15  

Yeah, yeah. My scathing review of Australia. I mean, Australia is the greatest place to live. It's just great. And people here are brilliant. But I feel like I'm a sort of tiny little microcosm of what happens in Australia. I studied physics, partly through a PhD in experimental particle physics. And my first full time job was running a coffee shop, working making coffee. And I feel like that's a, that's a kind of, like trite little example, I did. That was partly by choice. And I was trying to become an entrepreneur at the same time. But we have this thing in Australia, where the people you meet and the degree of education they have in the school, they have a brilliant, like, I think Australia is packed full of really people. And if you look around the world at where you see Australians around the world, it is I think we're an impressive bunch. And in various things in the arts and sciences, we punch at our weight or higher, but yet, there's this weird thing where we don't seem to be able to coalesce that into any kind of industry or institution of excellence that has kind of reached some sort of critical scale or mass. Much bigger than, like, a really good cafe, like, you know, isn't we have the best coffee in the world, you really do. Like Button on right. So I mean, that's, that's it. So how do we get this kind of extremely, extremely well educated, cultured, civilized people. And our, our top achievement as a nation is that we're the best place to come and buy, you know, a quarter cup, you know, a great coffee corner at a funky cafe with good people in it and like, you know, and and that's that's absolutely saddens me. I mean, there's lots of it's a it's a parody, of course, it's you know, there's plenty of things happening in Australia. But in terms of the the giant institutions and the top companies, if you go down the top kind of doesn't sort of, you know, ASX companies pretty much we have a couple of big miners, and we have banks, selling mortgages to Australians, right, like, you know, the joke I've heard is that, like, if you look at other countries around the world, they make stuff like Germany and Japan and Korea, they make stuff like ships, electronics, like, you know, cars and sell it to the world. Australia makes nothing and sells it to Australians, like, that's what that's what our housing insurance industry is. So and we still managed to be very wealthy because I suppose the services we have making ourselves out coffees and delivering things and just getting getting the place to run is overall pretty competently dominance. Good people here and we, but in terms of like, know what we are great at, like, what's the greatest trending export? what's the, what's the IKEA or the Panasonic or the you know, you know, Hitachi or the Siemens? What's, what's the what's the Australian heavy hitter? We have none, except mining companies. And yeah, that's kind of disappointing.


Dr. Chris Keefer  8:08  

You know, Rob Parker, who we had him on a little while ago, check out that episode, avoiding an energy blender down under he talks about the relic economy, which I thought was a great way to sort of summarize what you said real estate law, insurance and coffee. And yes, I can attest that the coffee was absolutely amazing. We flew back through LA and had some airport coffee. And I mean, I'm not sure if like MC cafe in Australia, it's gotta be better. I meant to sample it. Because I'm like, if like the absolute crap coffee that there should be some sort of like international standard of shittiness is way better in Australia than then I'm in the matrix or something.


Aidan Morrison  8:42  

You know, there was a point in Australia where the cafe actually had this big Mia culpa. And they said, like they ran this national advertising campaign in Australia said, We're sorry, our coffee has not been up to scratch. We're going to put extra effort in and retrain our baristas to try to meet the standards.


Dr. Chris Keefer  8:59  

Not to get too far off track here. But if they're called baristas, and McAfee, I think that speaks louder. Yeah, yeah. Oh, definitely.


Aidan Morrison  9:06  

Yeah, your barista at the cafe is Yeah, that's exactly right. So incredible.


Dr. Chris Keefer  9:12  

Incredible. Yeah, I mean, getting into this kind of economic complexity thing. I mean, I think there's, it's somewhat understandable given the richness of, you know, Australia's minerals and the proximity to shipping like, you know, just this kind of digging ship model. And the competition, frankly, with North Asia. You know, I understand Australia had a pretty significant auto industry, but, you know, to be charitable, I guess it's hard to compete in manufacturing in a globalized world. Do you have do you have any insights into sort of why that has occurred in Australia drops? I think 38 places in its economic complexity, not to harp on that too much since 1995. Is this just, you know, an inevitable result of being close to these highly productive, highly complex nor nation states? Or is there something else going on?


Aidan Morrison  10:05  

That's that's a really good question. I'm not sure if we have any answer to all of that. It's, it's a hell of a question. But I think part of it is yeah, I'm in car manufacturing is an interesting one. It's sort of it's it's sort of been bandied about politics for a while, because it is, it is hard to compete. But I've also heard people say that the degree of protection or the degree of subsidy required maybe to keep that industry compared to a whole bunch of other things that you might need to do to kind of you know, nurture or create an industry might not have been thought that high, it's still still in protection of so it seemed relatively kind of liberal economic kind of viewpoint don't like the idea of it. But yeah, that that went off. Sure. We're, we're a long way from anywhere. And that doesn't matter too much, so long as you're putting on ship. And it's not time critical. And it's not that valuable to offer the Time in Transit. But developing the more valuable goods I mean, the more valuable they could get, the more costly in terms of the supply, make up the Time in Transit becomes so we're, yeah, we're not a good place for intermediate assembly, things have to come to us like from, I don't know, other sophisticated places like Europe in America, which as far as it gets, and then go back there. That's, that doesn't make a good intermediate place in terms of value adding, it's really interesting. I refer to as many as many has amazing hydro, and there's a few more rivers we could dam but I mean, there were big campaigns to save them and I personally have been in my mom grew up in those campaigns. I've got a fairly green kind of background in my family and, and yet those rivers I love that things like the Franklin river aren't dammed they're just incredible, incredible, World Heritage sort of area, things so but there was a movement part of a think Tasmanian polity was this kind of vision for trying to have use energy for extra cheap industrialization like I think there was sort of this kind of Tasmania could be the hydropower, rural valley of Australia. Vision. And these smelting that happens in Tasmania. And also I suppose this kind of this, there's been various things about like raw materials extraction improvement is a big discussion Tassie about developing a pulp mill that was very controversial not far from where I grew up. And, and yeah, that eventually fell apart in after the company put a lot, they pretty much hung themselves out on that one and bought up all the vineyards, like a beautiful, beautiful, lovely little area, bought up a whole bunch of vineyards to try to not have too much resistance to it locally, and all that sort of stuff. And eventually, I think the economics didn't quite work out or that reached out too far overextend themselves. But those kind of improve manufactured things have always been hard. A lot of it's a bit of conservation isn't like, I mean, as in not wanting to develop. And I consider myself a bit of an old school conservationist in the sense that like protecting the forests and protecting the landscape, and keeping this pristine is important to me, grew up bushwalking love it. But I feel like there's a there's inherent resistance to kind of a big new industrial project that happens in Australia. And I think that's a little bit of what taps into the kind of nuclear space as well, like that inherent kind of like, ah, is it being new industrial thing? That's happening. But yeah, I don't know why we can't do a little bit more a bit in that space. It's, it's, I think there's opportunity that we should be able to punch a little bit higher than we currently do in terms of advanced manufacturing.


Dr. Chris Keefer  13:21  

Yeah, I mean, I think, you know, part of what is interesting about the energy debate is the energy modeling. And the plans that are laid out, seem to be leading to some pretty eyewatering prices and some real questions about reliability of the grid. And we, when we look at countries whose economic complexity is even lower than Australia's a commonality is often that they have an unreliable grid that they're scourged with blackouts, and that that impedes industry. And so the kind of manufacturing that Australia continues to have seems to be at threat from these high prices. And we've seen, you know, the rapid deindustrialization occurring in Germany, for instance, as its energy prices have really gone through the roof. And, you know, even in the mineral sector, when when I was invited to speak, I said, What's the motivation here? Because, you know, renewables are great for the for the mining industry, there's an enormous amount of rare earth minerals, and just, you know, steel and iron ore, for instance, that are required, and, you know, you build a few nuclear stations in Australia, does that have a huge impact on the amount of uranium you mine or your customers there? It's such a small part of, of, you know, the running a nuclear power plants. And, you know, my sense was, it's because even the mining industry is starting to be a bit concerned about the reliability of the grid and the cost of electricity in Australia consuming something like 10% of Australia's electricity. So that's, I mean, I'm trying to, I guess, poke a little bit at what motivated your interest in energy but any thoughts you have there in terms of, you know, whether Australia's economic complex is going to fall even further or whether that can be you know, deindustrialization of the industry that that still remains as a result of have energy policy.


Aidan Morrison  15:02  

Now, I don't actually think so. Because I don't know whether we have much discretionary industry that has somewhere else to go. Like I think the industry we have is making stuff that we kind of need here that's too expensive to get like, there's a certain amount of things like, I mean, like bricks, right? We have brickmaking companies and their energy is gas, right? So there's always a bit of a hoo ha, about when gas prices go up. But I don't think it's realistic. I mean, maybe it is, who knows shipping pretty cheap, maybe it is realistic to ship bricks, but you can see why you wouldn't want to do that, right? So so so these things actually, like the industry will cry out and scream and shout a little bit, and prices will probably go up and the rest of Australians might just pay more for stuff that probably has to get made here. I'm not I don't know, whether we have really that much industry that is could be made anywhere in Australia is the best place for it. Except in like very, very, you know, I mean, that. I mean, there are there are specialty tech sectors, but in terms of things that have kind of scale and big inputs in the material inputs, like cars, or bulky manufactured goods. I don't know we have, so I don't really have much left to lose. It's kind of my way of saying that. And, and the other thing is, I mean, as far as the mining and production goes, I mean, that's, that's really interesting. They have huge advantages in terms of like, the quality of the ore that we have at certain places is just great, like the best iron ore in the world, by Nan is in Australia, and we're closer to Asia than Brazil. So I mean, we just we just have a massively that we're not close to being picked off, number one, but you could make that up, right? I mean, these huge scale industrial processes are fine tuned to be the most efficient, they can be a few blackouts not having reliable power, I'm sure would be a pretty serious issue for them. So maybe we can lose that. I mean, the other thing, but the the industry kind of the Australian ever has right for it always struggling to have, for example, his men making steel, which is tiny compared to the amount of coal, including coking coal, and iron ore, we export, and we have this other weird geographic problem where all the really good iron ore is on one side of our country. And all the really good coking coal is on the other side of the country. And our Union's won't let us ship iron ore around the country. Right? That's that's basically prohibited. So we can't combine our world class iron and work world class coal into making world class steel, because of you know, labor arrangements, basically. So that's impossible. So energy is not a critical, important. But anyway, that's kind of the predicament Australia is in and like building a railway line is 3000 kilometers long across the middle. That's I mean, it's, and maybe, but not really likely. But so yeah, that's where and then we have much to lose, actually, right now that things would get way more expensive for Australia, we just pay more for everything. And it would be hard, and our quality of life would would suffer unnecessarily, which, which is a real shame.


Dr. Chris Keefer  17:48  

Right? Right. Well, maybe we should move along to the energy situation, the electricity planning that's that's occurring, right. And maybe maybe you could summarize that for us. I did have the chance to look at some modeling, again, courtesy of Rob Parker. And I mean, what's what's planned sounds pretty extraordinary. If I have a correct it's, you know, final deployments of 60 gigawatts of rooftop solar 60 gigawatts of utility PV 60 gigawatts of wind, seven gigawatts of gas, there's a lot of 60s in there. Suffice it to say that's that's a tonne of renewables. I'm not sure the overall side of size of the Australian grid, I think is something over 38 gigawatts. So maybe you can do a better job than me sort of summarizing what's what's the plan? And then we'll get into sort of, you know, what led your intuition to go and maybe this doesn't all stack up in terms of the cost claims. But first off, what is the plan?


Aidan Morrison  18:39  

Yeah, yeah. Australia has been coalfired. Mostly for quite as well as for as long as I as best as I can remember looking at it, we have we have some, some gaps actually get most of it from the west and export. Plenty here too, but less of that's been developed recently on the east coast to kind of the some governments have been sort of put pressure on that, that we have so much coal, ridiculously good amounts of coal. So I presume they've been with coal for as long as I've ever looked at it. So only the really in the last sort of 1520 years, people have been actively trying to move away from that. And there's been some some small gas power stations added to the system. But the big push in the last 10 or 15 years has been to sort of add more renewables. The plan that's been produced there on sort of following the hymnbook were sort of all singing to when I say we, not me personally, but Australia is something that came out of the Finkel review, had she scientist who kind of said how do we how do we make the grid sort of work with more renewables? And he commissioned or he said that we should have more central planning of the transmission. So a EMA our Australian energy market operator that normally run the live auctions to dispatch power best producer to the to the grid, they were given an expanded role to kind of think about how to plan trends transmission across the whole east coast of Australia. It's called the national energy markets really the East Coast states by South Australia which is most internet population So they so that's the AMO ISP and basically the IMA ISP has been a plan to produce renewables. It's been a it's been basically when your centric plan and and that's not their fault. That's not a conspiracy, it's because Australians have clearly fairly clearly indicated they want to go to decarbonize and Net Zero is now an official policy was actually adopted by a Liberal government. So the sense that sort of bipartisan, so EMA has done nothing wrong in the sense of trying to map out a renewables plan, because nuclear has been backed has been banned for quite a while in Australia. So that's the plan. And the plan at the moment is to characterize the step change scenario that amo has. It's a and that's the, that's the most likely plan. According to the latest ISP embedded system plan that was produced. They have to risk mitigate a couple of other plans that map out different scenarios that the farmer farmers likely want everyone talks about the stepchange scenario is basically to build a lot more rooftop solar, expand that five times heaps more industrial scale grid scale, solar, heaps more wind, and and then the thing that no one realizes is the big the big thing that fills out the massive wedge, there is a thing called distributed energy storage. So the vast majority of our thermal capacity is assumed to be power walls and Tesla's that get plugged in from people's homes and dispatched to the grid. And that's, that's, that's the big, that's the big thing about the step change plan, it's basically assumes that we have about 45 gigawatts of dispatchable, battery capacity. But it's all in people's homes and garages. And that, by the way, is not costed, there's no cost associated with that in the plan. And there's no cost with any of the distribution networks. upgrades that are required to make that amount of batteries and all that flow between the neighborhoods and whatever else. So that's the giant, the giant big what stepchange, about stepchange, that is about batteries in your home that the consumers will buy. They are far, far bigger than the batteries in the grid. And they are far, far bigger than even the pumped hydro in the grid by capacity at least. So that's what everyone should whenever he is Amis stepchange they should think, right? My car, my power wall. That's what stick changes?


Dr. Chris Keefer  22:23  

Yeah, it's interesting. I mean, it sounds like there's a love affairs, as there are many places in the world. And I think particularly on the left side of the political spectrum with this idea of distributed energy resources. You know, the economic analyses I've looked at rooftop solar is, you know, far more expensive and less efficient than utility grade solar. So from a perspective of just, you know, basic economics and trying to if you're if you're going to subscribe to a renewables centric vision, you know, roof topping, it seems like a more expensive way to get there, or, you know, distributed battery storage versus centralized battery storage, is that playing into, you know, this kind of national psyche and phobia surrounding large, centralized industrial projects.


Aidan Morrison  23:06  

It's a really good question. I don't think it is playing too much in terms of your peoples phobia. Oh, I just had a blackouts. Which again, just just one second.


Dr. Chris Keefer  23:17  

For those of you listening, the lights just went out and Aiden's building, but I think it's just a time I'm


Aidan Morrison  23:23  

right back in the lights and back. But let's get back on. Yeah, so as far as people's reaction to kind of that decentralized versus centralized thing, I don't think people are to have first decentralized batteries when we don't know what they look like, except for the cool one. hornsdale. And there's been a couple more there now 10 cents. But no, I think there I think there is a love affair with rooftop solar. And it's still a bit of the transition that is proceeding a pace, people are still putting lots of rooftop solar on their roofs. And, and the problem with that, though, is that that's basically driven by a totally unsustainable economic pattern, where we give people the right to have their power bills reduced in proportion to how much energy is saved through rooftop solar panels. But actually, most of your power bill, like more than half of that is actually for the distribution network, the transmission network, and the and the energy retail, and you need the same amount of all voters if you want to take this to the grid. So so the maximum you should ever really be able to say even if you had the biggest best battery system that got you 99.9% With rooftop solar to having the maximum you should be able to economically saves about a third of your power bill. But you can save 80 90% Right. So so you're incentivized quite strongly financially because the power companies still recoup all the distribution or most of the distribution and in transmission costs through your volume usage, the incentive is much, much bigger than the actual power that you save the grid. And the really, the really problematic thing with that is that that that means that all the power companies basically have to shift up their average prices to cover the fact that not selling as much power to a bunch of customers. And in particular, those customers, they're always buying power when the wholesale price is expensive and then never buying power when the wholesale price is low, it's because solar is starting to really tilt the wholesale prices too, in the market in Australia, so. So it's weird situation with because this is potential spiral, this feedback loop when the incentive to put a solar panel in your home gets higher, the further the power prices go up. But the more people that put solar panels on their home, the higher the power companies have to raise their prices to cut to cover the average cost of delivering have meeting all their needs. So So yeah, rooftop solar still growing at a pace because that but it's this incredible. Incredible, I think it's an it's a disastrous economic sort of feedback loop that we've set up. But it feeds into this idea that I think taps that people's heartstrings very closely, which is that well put that thing on my house, I can see it, it's feeding into my home, I'm taking demand off the grid. It's this kind of this kind of very, very warm, intuitive and tangible thing where people feel like they're doing their bit. And they feel like the economic reward, the financial reward they get is in proportion to that bit, which is not, it's terribly out of proportion to that bit they're doing there. But that sense, I think is nurtured very strongly by the economic reinforcement you get from something that feels like you're doing a bit but but as you say, yeah, like, literally a million tiny solar cells versus one big solar farm. Like it's the it's the worst in every sense in economically engineering, no economies of scale, terrible to control, the grid operator can't see rooftop solar, they have to guess how much is there and what the impact is, they can't it's just it's just a demand, that doesn't happen. But they don't, they've got very little visibility. And when a cloud blows, goes over somewhere, and a whole bunch drops out, and it creates it creates a nightmare for the grid. I mean, amo is being all chipper about it and saying new challenge to manage, we can do it, and maybe they can but like, it's, it's it's, of course it's not, it's it's the worst way to build solar, if solar was the solution. But it's the only way that economically, we've got the incentive set up to dry that really quickly. So it seems to be popular, and it's rolling out a pace.


Dr. Chris Keefer  27:13  

I was reading about an interesting event in South Australia, which I think has the most aggressive renewables percentages. And there was an entertainer that was knocked out, maybe my geography might be spotty, here, but between Victoria and South Australia, super sunny day, and the grid operator basically was telling everybody, you know, try and disconnect your your rooftop solar array and turn on every single appliance you possibly can to deal with this, this surge, which, which is interesting. But just you know, again, we're gonna get to the meat soon enough, there's been a lot of interest to both and muckraking you've done, but just the context is so interesting. In terms of that distribution side of things. I mean, two questions here, can the grid operator like are these these rooftop based systems controllable at all by the grid operator, and also in terms of this plan to have everybody buy a Tesla, which, you know, is a big ask in terms of how much Tesla costs? These are largely luxury vehicles EVs, but the kind of distribution upgrades needed for a whole neighborhood to be dumping power back onto the grid in terms of a sort of two way circuit with with their batteries and rooftop solar, what's what's the state of things there in terms of distribution upgrades that are required? Is that is that sort of something that's discussed or costed in or factored?


Aidan Morrison  28:30  

It's it's well, there's a clear answer in terms of our emails, ISP integrated system plan. So the official document that is our roadmap of how to do this, it does not cost any of that they absolutely stop at the transmission network. They do not cost any of the distribution network, it's just assumed. In fact, I found the table and I'll share this I think in my next video, that shows them saying explicitly, they assume the distribution network costs remain constant forever while we get to 99% EVs and assume that those EVs can charge the grid whenever we need to. So this crazy, crazy upset so emo doesn't, is there any other discussion about it? Not very much publicly. But the distribution companies and I found and people who follow me very closely to them, I've noticed, but there are there are plans in the distribution companies, basically they're foreshadowing in the next kind of price raises. They're asking the regulator's permission to increase their prices that they charge through the electricity bills in order to cover the costs of increased distribution, disputed distributed energy resources. So these Tesla's these paddles, so it is absolutely happening. They're relatively small increases, I think, across the power, like a few percent at the moment, but I mean, it will definitely accelerate as we get towards like that. You know, if we get to 99% We only have a few percent of EVs demand in Australia. So the writing's on the wall in terms of there will be costs they are starting now. Amo has ignored it 100% It's not their jurisdiction or domains. They have not included that in the past. Have the plan. But yeah, but just thinking about what it would require to step change projects, we get to 99% of the usage by, by 2050. Yeah, I think about that. And I find it really amazing because I mean, I live in a suburb, it's sort of medium density, urban area, and I live in apartment is 1515 apartments in our building. And we mostly have garages, but some a lot, we parked in the streets, the garage is too small and too hard to get into. So lots of people in these suburbs, for example, in other parts of Australia, too, they parked on the street, so we couldn't charge an Eevee unless there's on street parking, as well. So you need to figure it out, there needs to be a parking, Every garage needs to have a charger, and every apartment building has to have, every underground parking spot has to have a charger. And I've looked at the assumptions about when we're going to be charging, it won't be 65% of the time and stepchange it's not at the convenient time for you, which is when you get home from work 65% of the time, it's gonna be pretty much when there's extra capacity in the grid, and they model it is that you can then soak up the extra wind and solar that's that's there. So. So I think that actually, none of that will work very well at all, if we don't have faster charges, because the moment it takes to charge an Eevee at something like an hour, we'll get you 15 kilometers, which is a trip to another school and back to the office, whatever. But if you want to go further than that, you need a lot more than what you can charge per hour. So it's to get a full charge. It's like a day or two, a couple of days like it was continuous charging. So it makes sense to me that everyone at that kind of rate of charging would want to plug in as soon as they got home and start charging and not stop. And when it's fully charged, probably not have a discharge because it takes you hours to get back anything more than a quarter store trip. So I mean, I can imagine people being quite willing to try to contribute to the grid if it's incentivized if it's possible. And I would think either you need to pay them something good for the rest of their court short that they think that their car might discharge all of a sudden getting in the grid. And by the way to discharge fast enough, I think you'll have to, you'll have to graduate to be able to discharge fast enough to help the grid meet those those forms. That I think also you need to be able to charge if I could charge my car in four or five hours make it much happier to say, well, let's leave it start charging at two in the morning. That probably worked much better for me, but at the moment. So we're talking about stupendous distribution upgrades there, to be able to have that degree of charging, I believe, I haven't tried to cost the drawers to take to the ground assault, but like, these are big loads, cars are more powerful than the other appliances in your house. So if everyone is doing that, and I mean, it's easy when there's only like a couple of percent of the people doing it. But when everyone's doing that this is going to change things a lot. And none of its priced in Australia. None of it's priced in our master plan, the aim of stepchange Okay,


Dr. Chris Keefer  32:52  

so you've been the sort of pesky thorn in the side of several of the major agencies that have been doing the modeling CSIRO, maybe we'll you know, I don't know that these acronyms are super important to disaggregate maybe just the function of each of these institutions. But more more interestingly, to me, and maybe it's the the narrative here is, you know, again, kind of how you got interested and your intuitions and you know, that led you beyond intuition into using your data science skills to actually deep dive these documents. But what was, how did this all begin? I understand there was kind of a Twitter debate. And you started digging, but I want to get at this this intuition. I think you talked about it in your video, which we're going to obviously link to, but walk me through that.


Aidan Morrison  33:37  

Yes. So yeah, this was just a tweet about to start with, and I was debating with someone about oh, you know, the problem is that it'll get harder the more and more renewables we get, and the costs will start to increase. And I had an intuitive idea about how that must look. Because, yeah, as you put more and more renewables in the grid, basically, more and more the time, you'll have too much one place, and you'll have to move that energy further away. So you got to move the energy somewhere once you've got too much in one place, or wasted. But that will increase the amount of transmission or storage, either you got to move the energy through space or through time, you can trade off those two, but you can't move the energy less far. And you'll need to move more and more and more of it. And the very, very last bits of that as you start getting to the point where you've got like 980 90%, you've got very, very rare pockets where you don't have enough energy. And so whenever you add more stuff, it never falls into those pockets, you've got to add stupid amounts more stuff to move it further and further to get that so my intuition, it's a sort of a Skeeter ski jump shape, in terms of the resources required the size of the system, pretty strongly, I think you'd almost prove this mathematically. I don't think it's really disputable really. And so I hadn't looked very deeply at any literature but in one of these two debates, someone came back at me and said of course we don't believe that of course we know it's it's gonna go up of course, but here's the scrapping the CSR that shows you how much it's gonna go up. And it's it's no nice little graph that just shows you these tiny, tiny little steps. It's almost flat and kind of perfectly monotone. Little steps in the increase of cost of renewables meant to be at 60 7080 90% renewables. And I looked at that, and I was baffled, and I said, Oh, that can't be talking about the forecasts that must be just talking about maybe some spillage or something like that. And and they said, no, no, look at the paragraph above, it says that it's the cost of integrating renewables or the transmission or storage. And I was like, what the, this makes no sense. And so I apologized, I think quite politely and said, Sorry, I didn't read the full thing and went back and looked at it. And that's when I started later on looking at about page 50 how they define this. And page 50. They said, they described their business as usual case, which was not included in the cost of integrating meals business, as usual, included all the things that we had planned to build for our massive epic renewables transmission out of 2030. And we're meant to be at 82% renewables by 2030. So all the massive and the biggest most core trunk infrastructure projects, particularly to link our population centers, Melbourne and Sydney, which is a big part of that population. And then 40% of Australia's and the Snowy Hydro 2.0 scheme, we're just kind of halfway between the web of the mountains off the coast, all the transmission to link the kind of coastal and flat inland solar and wind to the Snowy Hydro. And Sydney is planning to build in a hurry right now. Before 2030 and stone hydro itself, that stuff is all excluded. And there's a whole bunch of batteries as well, like it is a batteries in New South Wales. And there's a bunch of things about it, there's a connection to Tasmania, another another new pumped hydro scheme in Tasmania. So as an underwater cable does he tie called Meritus links. So all the biggest most headline trunk kind of core mega projects for renewables were excluded from this cost of integrating renewables. And the way they justified that was just to say that it was only looking at the marginal cost after 2030. And kind of arguing that basically, because they already would have built that stuff at the time, the stuff that connected to them after that had nothing to do with the business case, of actually justifying building that stuff. So just absurd, bizarre things. And yeah, that's how I that's how I kicked off. So I kind of noticed that and found it confirmed in an appendix. So everyone just looked at the graph in the executive summary, sort of page two, or three or something. And on page 50, it explained pretty clearly that they've missed out the lion's share of the heavy supporting infrastructure. And they confirmed that again, that that was treated as a sunk cost in page 90. And so I came out swinging and, and, and wrote back and no, and the rest is history, but no one has been able to respond and say you got it wrong. In fact, the chief energy economist at CSIRO, after got beat up in the paper, wrote back and confirmed that they indeed had not included any of those costs. Other people were trying to argue that maybe some trigger the wording meant they had included those costs, but he confirmed in the national newspaper, they had not included all the costs, that's 2030. And said, all that's fine. It's the ISPs job to do that. And so, and of course, the ISP doesn't include any of the distribution network upgrades, any of the battery storage in your homes doesn't include Snowy Hydro too, as well, because that's something that they've already started building, so they just don't do that. So it's crystal clear. That just hasn't been clarity, communication, because Paul Graham from the CSIRO, Chief Chief energy comm CSIRO, he said, that is the job of the ISP to do the full cumulative system cost up to 2030. But yet, in the details, the ISP because things like Snowy Hydro two are assumed in all scenarios, they're an exogenous input, they're not testing the transmission plan around, they actually don't include that, too. So it's, it's a, it's it's 100%. Like there's a there's a perfect gotcha, there's no wriggle room, he said that include the full cumulative cost. Amo clearly does not. And that's been confirmed in correspondence declare in the Australian to so they don't include the Snowy Hydro, it's in neither this massive mega project that justifies these huge high voltage lines between Sydney and Melbourne, and all the renewables areas around it. That is not included in the cost of either document. It's madness. And we have been lied to a bit by Paul Graham, in that sense, in his in his letter to the Australian newspaper.


Dr. Chris Keefer  39:20  

What always strikes me as interesting, you know, beyond Australia, with, you know, the renewables intensive plans and renewables advocates, you know, that there's not an evidentiary base that this works. So it relies heavily Well, exclusively on modeling. But in Australia, maybe it's, you know, as a function of being an isolated continent. You don't hear a lot. I mean, there's a diversity of modeling studies, they tend to come from institutions that have a significant I think, buy in and there's some ideological blinders, which probably skew the modeling. But even you know, modeling from the States, I see, you know, netzero America saying, you know, having some clean firm is going to decrease your overall cost. Ask but again in Australia, it seems like there's this kind of Oracle on the mountain. And it may be several different institutions, but the degree of a call it pseudo religious faith in these institutions. And in the modeling, I found to be totally extraordinary. You know, failure to plan is planning for failure. But if you're not even considering the possibility of failure, and having any kind of plan B there, that seems to be a big problem to me, I think you always need to sort of read team, your ideas. And maybe you can comment, before we get into more details about that phenomenon. I think that this kind of faith that's placed in these institutions, you know, more broadly within, you know, Australian society, within the political class within Media, to me that this seems like a bold experiment, highly consequential one, if it doesn't work out, but there's, you know, a real lack of considering the what ifs and have faith that it's all going to go fine. Because, you know, these institutions are telling you so.


Aidan Morrison  41:01  

Yeah, yeah, look, I hadn't, I mean, to I hadn't I, I've come to this debate, you know, very quickly, quite recently, but like, it hasn't been on radar to follow this very closely. And instead of really critique the cultural take on this, honestly, more than a year ago, right, I haven't been very closely following the kind of how they're regarded. And even probably a few months ago, if, you know, if you told me at most ISP says this, I would have assumed that it was the authority and very good on that. So I, I wasn't aware of this kind of degree, I think you as a foreigner have unique insight into the degree to which we have this oracle on the mountain. For us, it's the kind of the only place you'd look right, because we're an island. And luckily, we don't have, we don't I mean, if you're in Europe, for example, the government dozen different countries with their own universities and institutions and power managers and whatever else, and different ways of doing things, they'd be easy neighbors to compare to, we don't really have that so much. And we are an island in that sense. And the other thing is, we're an island at the moment, that is, I think that Australians have become quite seized of concern. around climate change, there's a bit of a split, like there's, there's there's a part in, it was possible for quite a while for Australian politicians to not be that concerned about it, and not do something for quite a while. But I think the gravity has shifted in Australia. And now it's kind of politically assumed that we do care about that, and we need to do something about it. And this is the, this is the weird thing about if, if nuclear is banned in Australia, and you're quite seized with the need to go, and to go and sort of remove all the carbon from your electricity network, you don't really have any options. And in a way, I kind of have a forgiving moment for emo for being kind of like, you know, well, what would you do if you were the agency who was charged with delivering a clean transition in Australia, and the, and the other option was banned, you'd have to put on a pretty smiley face and you know, gritted teeth and and say, Let's go do this, right, like, what, what are the other things to come back and say, It's too hard for me, like, you know, you know, not keep your job in the public service, or make any friends with your sort of political masters by saying that. So, in a sense, I feel like just having removed and banned any competition from the table has, has meant that we have to have faith that it can be done. And it's kind of blinded us to kind of critical thinking about whether there's even a different way, because we've sort of silenced the other voices, in a sense. And now, sort of, it's sort of weird, I've encountered this, you know, rapidly connected to this nuclear movement and a bunch of people that, you know, Underground's that are rebels in Australia. But there's a lot of there's a whole bunch that are extremely accomplished, and a whole bunch of fields and engineering and business and, etc. But yeah, but they're the ones with total outsiders and not give them a lot of their time and attention, and certainly not for the institutions. And I guess they have an excuse, because this is not even legal, like, you know, Emo can just write back and say, Yeah, we don't, we don't pass the legal things in Australia. Therefore, our baseline that shows that this transition is cheap, is trying to do a renewables transition, without any transmission. And that does look quite expensive, because it's all like offshore wind next year cities and carbon capture and storage for gas plants and things that are even more kind of wildly expensive, but yeah, so it's, it's sort of, I think, a big part of it might have come from the fact that we're able to isolate it, but also, when you take out any alternatives to investigate. It's very easy to develop this kind of dogmatic faith that you just have to do it right. Like, you know, it's just you didn't choose this war, this war is coming you have to believe you can win right so it's and so I suppose, I think we seize upon the sources of truth that affirm what we want to hear, which is that we can we can win. And, and yeah, I think it's really bad and it's not only just starting to starting to crumble a little bit the edge quite recently but up until very recently CSIRO and even still like Chris Bowman is still at it suffer Oh, he hasn't for the last few days but even weeks ago after I'd released plenty information come out newspapers was still repeating. In fact, he couldn't have his weight pretty much right newspaper articles in the Finn review in the Australian colonies way to write editorials that pretty much said, trusted I email trust and CSIRO, this is still the cheapest even though the basis for that had already been extremely credibly critiqued. He just came out and said, just just said, one more time, please. I email and CSIRO have said, this is the cheapest, therefore it's the cheapest, let's go. And that's I think this is really disappointing politics. I mean, that's that's a that's he shouldn't get away with it. And I don't think he will, in the long run. We've got another year or two to the next election. But I Yeah, but that's, that's what happens in Australia.


Dr. Chris Keefer  45:59  

Yeah, I mean, if I had to tell you this story and your role in it as a children's fairy tale, it would be the Emperor's not wearing any clothes. And you are the the young player who is pointing that out. And it looks like bonus, I guess he is this is, you know, check out those duds. They're pretty sexy. But, you know, I think what you're saying, you know, there's the reason that this is coming from outsiders is, you know, talking to some folks who helped manage the grid, and it's getting to be a very complex system, and I won't name any names, obviously. But, you know, there, there's, I think, an understanding that, you know, this is a huge challenge, and that it may not work out. But it's not a sort of career advancing move, to raise the concerns that you're raising. And, you know, again, in terms of that unwillingness to consider the possibility of failure on a psychological basis, I think that really comes from, you know, the idea that, you know, climate change is going to be so cataclysmic there is no option for failure, we can fail. And we'll do whatever it takes to make this work. And as you're saying, If you narrow the options to, you know, when solar and batteries only, that leaves in a bit of a predicament, but, you know, again, I think there's a lot of, you know, I think energy is deeply aesthetic, you know, in terms of what we were talking about before that kind of distributed versus centralized. But, you know, our ideas or energy transition or, you know, obviously, deeply kind of psychologic. And, again, related to that, that framing, that climate change gives us that we just can't fail. So so let's not even consider that or read Zeeman. I'm not sure your thoughts on that. But


Aidan Morrison  47:37  

yeah, yeah, I think that's as true. The other thing that to think about, really carefully, though, is that how I suppose the institutions in the industry people and the people that have expertise, like what are the incentive structures that are set up for them? It's, I mean, it's, it's sad, if it's the case that in a emo or the other efficient students, you might lose your job and not get promoted, because you're holding outside of us that, you know, we should do nuclear have reasonably that might be the case, actually, which is sad, but but it is thinking about, let's, let's take him out of the picture, let's assume that there, you know, something might have gone wrong there. But if you think about if amo, gets it wrong, doesn't handle it. What are the other institutions or capabilities that kind of ended up just getting stuff done? Right, like, you know, if we have to keep the grid running, and I think that a fair bit of the talent lies in the private sector, or maybe the regulated parts of the private sector, but the people that are actually running the transmission systems and building the transmission lines and keeping the grid stable. From that perspective, there's maybe more there's smart people there, I'm sure. The what are the incentives, they're in these other kind of talent pools or people that run generators or have been installing generators, the the incentive structures, there aren't necessarily for you to speak out either because transmission and distribution, they're regulated assets. So saying that we need a whole bunch more of this stuff right now. It kind of it kind of suits them really, it seems to suit them quite well. Like you know, I suspect they know how hard it is that making your job harder provided you are guaranteed enough money to be paid to keep doing it is not it's not bad for you personally, and not bad for the business you work for either. So I think there has to be it has to be really clear. I mean, it is a it is a problem which you must must consider is that the Emperor really has no clothes and we just haven't had the motive if you like for enough people to really start speaking loudly enough with enough authority and I have no I have no credibility, because I haven't used any my data science skills yet. I just read to page 50 And page 90 and wrote about it on Twitter, right like you know, I opened some sex or spreadsheets but that's nothing nothing seriously data science on any of the stuff that's that's mapped to the public eye. Some data scientists tend to do but it's, it's nothing's required yet. It just requires, I suppose, I don't know, literacy and numeracy and a bit of backbone to speak up. But I think the people that have the most, the most need to be diving into the detail actually, that's what I have done. I've dived in a bit further than most people have, and are familiar and confident enough to speak about that. And maybe I'm just unknown odd characters happy to speak up about something that I'm not qualified in. But the people that should be qualified enough, they're not necessarily incentivized to speak loudly, which is, which is an issue. So yet we might just not have, we could not have contemplated failure, and possibly, because all the backsliding and all the things that would catch us from the bits of value might have, it looks relatively profitable to lots of the institutions and organizations that might end up, you know, just just handling it, you know, if we have to keep the grid running that way. So yeah, it's been totally under contemplated. There are people starting to make noises now, but in terms of the the credible things that press politicians? Yeah, I think the the extent, and that's a problem with renewables transmission transition, right. And things don't, things don't break all at once. Like in a nuclear power plant, if something goes wrong, generally shut down. And if something was badly wrong, then you generally have the regulator's crawling all over you for ages to make sure that you've definitely definitely definitely fixed it, right. But if something is not designed, right, it doesn't go together, right in the renewables transition. It just gets less efficient, it just gets more expensive, like someone just pays a bit more, we decarbonize more slowly, we wasted more energy, we just turn on some more gas, like, you know, that's there's nothing catastrophic, that might even trigger a serious degree of, I don't know, introspection, or repentance, like, you know, the costs are kind of diffused the blame. There's so many different layers of institutions or organizations and regulation, and government. So and that's what I'll be looking for from my next video, hopefully. But I think it turns out that many of these business cases and things that we're very sure of are actually paper thin in or maybe should have gone the other way, quite significantly. But there's been no trigger for pushing back and reevaluating, like, once a project has a bit of momentum behind it. Everyone just wants to get it done. All the people that are smart around it are about to make money by doing this thing. No one wants to kind of say, actually, this doesn't make any sense anymore, that will move energy in the wrong direction. This will probably mean that we, you know, I mean, so we end up paying more for electricity, or that that person will be available there to offset the law here anymore. Generally, once it's got a degree of momentum behind it, the industry just supports it through I think, and there's some real cases where Australians need to, yeah, this this, I think we could do much more on this later. But there is some there's some disasters unfolding that really, and in fact, all I'll just say quickly, that all the Snowy Hydro, I don't think there's any evidence to suggest that the whole Snowy Hydro scheme should be built now at all, or any of the transmission to the front. I think that it's just been, it seemed like both documents, just assume it's there. And all the transmission projects, they work if it's there, and we have to connect to it. But this whole thing that kind of pretty much has been the central piece of our whole east coast route planning, I don't think that it's necessarily obvious that the whole grid doesn't work better, cheaper, even for renewables, without it. And I think that it's possible that just as not been tested in any of the official institutions right now.


Dr. Chris Keefer  53:26  

I mean, it seems like what you're describing, it's analogous in terms of the kind of not necessarily institutional capture, but this kind of self licking ice cream cone element elements of it to the military industrial complex, I think, you know, to coined a term, maybe we have a modeling industrial complex here, you know, there's definitely plenty of funds that flow towards academic institutions and government institutions to continue to study an increasingly complex and difficult problem. But, you know, leaving that aside, I wanted to jump back again to some some of the framings that you have in your video. And again, we're gonna have that linked in the show notes. But I thought I thought you had, you know, some really poignant ways of putting things and one of the analogies I liked. And again, this this gets back to, I feel like there's a lot of gaslighting coming from the renewable plus, but not of course, this all makes sense. You haven't, you know, you just don't lack the skills to understand this. Have you opened appendix, you know, 32 and, you know, pored through through that. And I mean, there's, there's a beauty to going through the source literature. But there's some basic kind of intuitions that I think are off. So tell me a little bit about this framing you have of, you know, the irrigation versus scuba, because because I thought that was an interesting way, again, in terms of, you know, broad first principles of understanding why this whole thing is so difficult and so expensive in terms of a renewable centric transition.


Aidan Morrison  54:49  

Yeah, yeah, sure. Yeah, that was I think he's on algae like, just to think about how energy falls in a renewable sense. Like it just falls in splashes and splotches across the landscape. Like I mean, like rain or wind. And the analogy I use is that that would be okay, if we absorbed energy, like a crop needs rain rain or something like that. And to that extent that you don't need any right now, you don't need any tomorrow. But so long as you get enough overall over a good period of time, over a season or something like that, then things are all okay. But you have no particular fuss about exactly where and when it lands. That's, that's, to me is kind of how, that's how renewables work, we're collecting the energy as it falls freely in, you know, over the landscape in these patterns, we can't control. And it would match a consumption pattern of like a plant needing water. So I kind of describe the kind of collection process as like an irrigation system, it's kind of like, Oh, we'll get we'll kind of just pull it all together, so we can get enough of it eventually to the right place. And my Contrast, and this is kind of like why I think that renewables aren't necessarily good for human, certainly human domestic powering is that we need electricity, not in that kind of pattern. But we need electricity, like a mammal, or an animal needs air. Like we need exactly the right amount all the time, sometimes more than others. But we if if we don't have exactly the right amount, things get desperate in seconds. And so yeah, the renewables issue, it's not that the actual solar panels and wind farms expensive, are expensive, they can be very, very cheap. But they're just the collection part of that system, the energy has to be delivered in a manner that matches this oxygen delivering give me exactly the right amount of my breath right now, which I call the scuba system. So so it's the problem with renewables is not that they're not cheap to have the actual wind farms and solar panels, they can be as cheap as you like, is that you have to have all this machinery to then collect it in that frame, that kind of way, and then deliver it in this every second your breath depends on this kind of scuba system. So it's the irrigation to scuba connection, the irrigation to scuba mash up of machinery. That's what makes renewables hard. How do you deliver it in such a precise way that you need every second when it's collected in such this abstract dispersed kind of, you know, fluid flowing, unpredictable manner? Yeah, so that's, that's why it's hard. And I think that's the bit of the singular cost we'd ever have before because we've never had electricity produced in and produced is the wrong word. I didn't even we shouldn't even call them generators. Can I propose just to everyone here like, let's, let's not call solar and wind farms, generators. That's an active verb that implies that you are controlling what you do, right. And that's not what they do. I call them the best way to come up with a spit ball. And I want to do you want to create it, I call them collectors, right? They are, they are finding energy that occurs in the landscape, and they're picking up what they can find. But they don't have control over that. It's fundamentally a kind of a foraging process. It's not making something like Industrial Press, we say, stop producing X and go and produce it, which is what you can do with thermal power plants. So this kind of passive collection will get what we find out their approach to energy, they call it generation, there's not collection, it requires this whole other system to then convert it to this life giving steady stream like we need every breath every moment. That's the expensive bit. And that's transmission. And that's the storage. And that's why that's why I think this Yeah, the renewables transmission is transmission is not nearly as cheap, as everyone is commonly thought about it. Yeah, right.


Dr. Chris Keefer  58:31  

Or, or even possible in terms of, you know, the highly consequential matter of delivering energy, like, like oxygen. It another thing from the video I really liked was, you know, how you're explaining that early deployment of, of wind and solar within an existing traditional energy framework. It's fairly easy, because you're just sort of fuel sparing, and dialing down this underlying reliable generation system, as you were saying, but then as you start to blow up those coal plants or, you know, get to a certain point in renewables penetration, then you can't just rely on that, that backup network to float the whole society when you have even a black swan event. But when, you know, the weather doesn't cooperate for an extended period. I did have a really interesting discussion with a staffer from Chris Bowens office, and we had a sort of Battle of the incubators. You know, I was bringing up how I view the grid as a, you know, civilizational life support structure. And I think what made that very personal and poignant to me was the fact that my son was in an incubator for five weeks. And, you know, imagining and electrify everything world that's run with collectors, and this kind of Rube Goldberg machine attempting to turn irrigation into scuba. That's that's consequential. And again, it's a way that, you know, it bites her to the core of my being, I get emotional talking about it. And the staffer was like, oh, yeah, well, my child was in an incubator for eight weeks. And I'm like, Well, does it not concern you? I mean, again, just just open your mind to the idea that this might not all work out, you might end up with a highly unreliable grid. He's like, Well, that's why hospitals have generators. And you know, like, I've worked in a hospital, we had a road crew that ended up digging up our grid connection. And we went on to diesel backup, I mean, a that's, that's a pretty traumatic experience for the people responsible within the hospital for getting that system up and going. We did some load shedding. Interestingly, our vending machines still had power, but certain areas were shut down power was off there. And, you know, hospitals are not as robust as nuclear stations in terms of defense in depth. And, you know, just the kind of callousness with which he said, Yeah, well, blackouts will happen. But, you know, we have a critical infrastructure like our hospitals is back, don't worry about it, but we'll have the diesel for it. I just found to be, you know, just utterly, utterly shocking and irresponsible. So yeah, I'm just kind of agree. Yeah. Yeah, yep. Okay, what else did I have here? One other point that that's brought up often is, well, it's always windy, or there's always sunshine somewhere. And again, the staff are also made that point with me, I did point out, you know, and I should train for too long the data I had, if I can find that person's email, Rob Parker was showing me some periods on the NEM. Again, that very thin East Coast transmission system for those unfamiliar with the Australian context where, you know, there have been prolonged periods of minimal sun and wind. But yeah, I think you had a good response to that in the video as well just want to riff off some of the some of what I felt were the highlights of the video. But how do you respond to that? It's always it's always sunny or windy somewhere? Why is that not a solution to this whole problem?


Aidan Morrison  1:01:40  

Yeah, it's, I call it a call it this statement is perfectly true and absolutely useless. Because to make it useful to have some wind somewhere, you need to have enough wind or some somewhere to power somewhere, right? wherever that is, is coming to power, whatever that is. And you need to have enough to power everywhere else as well. And you need to have the transmission to get that power to everywhere else as well. It's the most it's the most ludicrous idea, though, because there's a little bit somewhere, everywhere is fine. And that's all good. Like, it just means you have to have this ridiculous idea of the overbuilt at that location, so that it's got spare capacity for what needs there and descend everywhere else and have the capacity to move there. It's like this, like this perfect image of just not having thought through, you know, how real energy works at all. Yeah, I mean, it's just I honestly, anyone, if you have you said that before, just don't say it again, it just sounds so so stupid, like, you know, is it is true, it is just so, so useless to think that, you know, because it's sunny somewhere, that means we'll have power everywhere, like, you know, imagine what you have to do to make that the case, you know,


Dr. Chris Keefer  1:02:50  

this feels, this feels like such truisms. And they're, they don't require a massive amount of modeling or analysis. They feel like they're just common sense. But they almost feel like weaker arguments up against this kind of modeling industrial complex, but


Aidan Morrison  1:03:10  

sorry, yeah, a little bit further. I mean, I think that a popular perception that people have is that the grid is kind of like, once something goes in the grid, it's sort of everywhere in the grid, like, you know, it's sort of a, it's sort of a super connected thing. But and, and essentially, I think it's a real problem that the, what we call the copper plate model, the infinite transmission model is that if it goes in the grid, it's everywhere, right? Like the grid, the grid connects it. All right, that, unfortunately, to the layperson, that's actually where they start, they think that the grid is like that. And then a bunch of people that shouldn't have had that kind of professional, make models that pretend the grid is like that. We have this again, kind of this kind of weird axis of deception between the least informed people and the most informed people that seem to have an agenda to push to kind of say, Yeah, it'll all work if we just kind of, you know, model everything, as if it's a Copper plate. But people don't realize that actually the amount of interconnection that you have between two big regions like South Australia, or Victoria, or Victoria, or the US, or in Europe, right, like between different countries or under certain seas, like, you know, the amount of connection that you have is generally something on the order of like, a gigawatt, like, you know, sometimes it's two or two or three, like, you know, sometimes half or a third of a gigawatt, but like, but this is enough to replace like a big power station, or a power station, not the whole state, not the whole country. A thought experiment I actually had over breakfast the other morning that would love to love to actually make a real experiments to figure out like, you know, if a country lost all its power, what fraction through the interconnectors of its power could it get from all its neighbors if it had enough if all the neighbors had enough power to give them for free and I think that people don't realize that it's not a very, it's not actually a very big fraction like these are meant to support a relatively small topper that you might need. It's never meant to support would like, half or most of that whole country, your state's power. So moving like, you know, powering Victoria from Queensland is strictly impossible. I can know when the and and not nothing we're contemplating building will get us anywhere in here being able to do that. Right. So yeah, I just think this, unfortunately, is copperplate model is, is it's an intuitive first place the grid, the grid connected, all right, it's completely connected. Like the internet connects us all, we're all converted. It's not it's not true. Not true for power. It's got a capacity, it's got a bandwidth limit. And and yeah, I think these cotton plant models like, again, I just wish that I wish that people were ashamed of producing them, and using them to draw the conclusions that do they're still not it's, it's strange, but it's just such a, it's just such a far from reality approximation. And it reinforces this really quite intuitive but not right perception that people that have no information, the space kind of take with them all the time as a starting point.


Dr. Chris Keefer  1:06:00  

Denmark might be the closest country to a Copper plate, if we had a conversation with things you want to select random, I'd be messing up his last name, but they have more intertype capacity than power generation capacity in country. It's just ridiculous all acted with it. But anyway, that's definitely not a situation. So so the other talking point that, you know, came up in my debates on Channel Seven, I'm blanking on the guy's name, highly accomplished Order of Australia type guy. But you hear this a lot. You know, Australia has the best, you know, wind and solar resources in the world, I think, you know, Simon homes, accord vast areas that are windswept and sun drenched, and you know, huge open plains, in which the district you know, to deploy this, this, these, this tech, and that this, this gives Australia, you know, you know, an advantage, or it was really interesting, that concession from a lot of the anti nuclear folks that, hey, nuclear works great elsewhere, it just won't work in Australia, because our resources are so it's such a concession, I found that really interesting. They were willing to make that, you know, given where the anti nuclear debate was that it'll mutate your children or whatever, you know, 510 15 years ago. But in terms of, you know, the capacity factors in Australia, how much give a sense of like, how much better they are, I mean, clearly, solar is far better in Australia than Europe. But I mean, I imagine Arizona is pretty analogous, is there's something that's so special about Australia, and with regards to this idea of, you know, kind of a land with other people, for people with lots of wind and solar. How true is that in terms of, you know, how people are feeling in rural areas around hosting this stuff?


Aidan Morrison  1:07:44  

Yeah, I find, I mean, I hear it all the time, exactly. As you described, it is exactly how I would describe it, like, you know, this, this concession that our nuclear maybe but we have such good renewable resources, and we couldn't, it would make, almost


Dr. Chris Keefer  1:07:56  

as if wind turbines and solar panels Sproat like plants out of the out of the ground, right. Like that's,


Aidan Morrison  1:08:01  

that would be the impression therapy impression you get right. But But hey, but no, to answer to answer the real question, I want you to entertain that idea. Imagine if and this and this is sort of my answer to why that's not a compelling advantage, right? Imagine if wind and solar panels were not cheap, they were free. Imagine, imagine they sprouted out of the ground, literally, they just they just kind of popped up. And we had so much space, they were just everywhere. Why would our electricity not be free? And the answer is that we still have the rest of the machinery to get it from the irrigation system to the school system to build, it doesn't matter how much we have, we can have any amount of free solar panels and wind turbines out in wherever they are. And we'll get to that in a sec. We still have to connect them up and make sure that energy is kind of cool and aggregated in a way that delivers it in the nice steady moments. You know, we need it into our population centers and city. So I actually don't think that it's I think it's I think it's silly, it's intuitive. Again, it's a first cut kind of like quick knee jerk, most intuitive thing to say we got lots of it, right? Therefore it's good. We can just use this having lots of a thing. I mean, the thing that you have lots of is this splashy, splashy kind of intermittent energy, that's not the thing that you need, you need the steadily delivered kind of energy, right? So you've got lots of raw material. Like imagine we got lots of iron ore, we should have great steel, right? No, we don't, because we need to coking coal on the other side of the country, and you're gonna move it around, right? So it's, it's just as simple as that, like, what you know, we've got the raw, one of the raw, the very cheap inputs to what we actually need. We don't have the rest, that's not free, we still have to build it. And in fact, when you look at the kind of the issue with Australian, like, you know, we got so much land that we we don't, we don't use such abundant land, like we're not space constrained. Actually, Australians have already found economical ways of utilizing that relative abundance of land and we have relatively lots of agriculture like you know, and yeah, so like out to a very moment so There's a lot in Victoria. Very full, we grow wheat, like, you know, if you go hungry cane lands to lots of wheat country like so the amount of space we kind of like generally as there's nothing else to do with this little land, there's no other competing options is I mean, you got to go a long way, a long way inland to get to kind of like there is no thing going on here, no reduction. And then if you want to get that power to the cities, it's a really long way away, right? So you tend to build things. And if you look at the Rena, renewables own mapping, that Australia has the ISP, the renewable zones, these kind of like, kind of oblong, not oval, oval, like elongated oval kind of ellipse shapes that are meant to have a transmission line going through the guts of them, I assume. But they're, they're big. And there's lots of them. And they they're kind of everywhere, except within about 100k. The city, I think they figured out that lands too expensive there, but that they kind of cover most of the east coast of Australia, there's a zone somewhere in the map to be planning the next sort of 2030 years. So the plan is to build everywhere along the east coast. Inland that does have other uses, we've already figured out and this is what I think we're starting to realize is that, you know, you've got to go on clash with a lot of farming communities, a lot of agricultural communities and say, Hey, we want lots this space when a big power lines down here. And it's starting to annoy people, I think that's what's starting to kind of Ignite more of the sort of resistance through your view of that, but but we haven't, we have figured out uses for lots of our land, the land that we haven't figured out uses for is miles away. And all that abundant energy is just a very cheap, raw material input to produce the kind of energy we actually need and consume in our society. And we still have to add all the other things that we need to make it that actual usable system. So it doesn't matter if we have literally solar panels sprouting out of the ground in our unused vast landscapes for free, because we still need to connect it and and that's what I think yeah, that's what I think, unfortunately means that nuclear in Australia is still the best low carbon energy option. Even though we have all this abundant, raw resources, finishing it, just like our coal and iron ore, we can't finish it and make steel, much of it. The raw inputs aren't very important in the scheme of things, you have to have the rest of it and advantage in them too.


Dr. Chris Keefer  1:12:18  

So I'll freely admit to having a psychological bias towards a little bit of catastrophism. You know, I thought COVID was going to be far worse than it was. My brother was more on the sort of y2k is going to crash society, I didn't jump on that train. So I'm aware of cognitive biases and the need to challenge them. You know, after that meeting with the bone staffer, and you know, that was just the day before we left Australia, it almost felt like I was getting off of a sinking ship. And clearly, things are gonna move in much slower tempo, and there's some ability to absorb pain within such a wealthy society that still has, you know, such a valuable set of export commodities. But, you know, I really had a premonition that things were heading in a pretty dangerous direction. Just to get your sense, how do you see the next 1015 years going in terms of this energy transition and its consequences? And the prospects for nuclear make that kind of a closing? Question, I guess, big question. But yet, give me your sense of where you where you see things going.


Aidan Morrison  1:13:27  

Look, I'm not a catastrophize. I think I've maybe had the opposite bias. Not sure. But I'm relatively kind of like, I mean, I'm not just at peace, even if there's a catastrophe. I think I can kind of just to calmly kind of slide into it. Without without too much. Excitement, agitation, perhaps, maybe. But I I'm not. I think that Australia will be nuclear at some point in the next few decades. The question is really like what it takes to get us there. Actually, that's not perfectly true, there's a chance that we may just still stumble and wind up just with lots of coal, still, that's a possibility as well. And so I hope that it changes really soon and that we wake up and realize that nuclear is the only thing that kind of finishes the decarbonisation rates and we should start it straight away so that we can finish the decarbonisation rate race quite soon. But in the next few years, there is absolutely critical like we are absolutely a fork in the road, we've reached sort of 35 40% renewables. We're right now we're about to start figuring out whether we want to keep going to very high levels of renewables. And to do that, we, at some point, need to start building these huge amounts of infrastructure and storage and we've already started building some of them right so snowy, hydro 2.0. And we've started with energy connect, and it's Hume link Vienna was the is the big trunk transmission lines. And I think there's a huge question about it. Whether they happen, because they will cost billions of good number of billions merriness think as well. And I think we're at a tipping point where we could wind up like Germany, with just having waltzed into higher, much, much higher power prices that do affect what industries we can, we can support and do affect quality of life and, you know, standard of living. I don't know how far down the German path you have to go before you come back. Germany is an amazing experiment to kind of see where that leads, right. Like, you know, that they absolutely have, you know, yet they've, they've engineered it, they shouldn't realize that it's not coming back down the prices, it gets harder and harder, the price will stay high and get higher again. So, gee, I hope we don't go too far in that route, I hope we realized that adding more or less replacing our coal fleet with nuclear is about the right thing to do. And renewables are not that harmful in a grid, so long as they're not harmful. They're not that economically disastrous to have that not that helpful thing in the grid at around about the percentage since we currently have them, that we're about to tip over the brink of putting enormous enormous investments that are only useful for supporting renewables. And they definitely will be added to our regulated asset base, and we will have to pay for them somehow. So I had the sense of trepidation about what happens in the next year or two or three, what happens in the next ISP integrated system plan. Because all of the and this is a bit of a spoiler. But all of the projects that are now being rushed as the most urgent priorities, the true economic analysis in the ISP said that that was an absolutely on a knife's edge, according to their numbers. And there was no real need to rush them at all. And they could have been left to the next one a couple years later, but they're being rushed now. And I think the narrative has taken hold that we have to keep rushing them. And actually, we don't need to rush them. It's it's only economically in the interests really of the renewables investors, because they'll get less curtailment, they'll get better dispatched to the grid, they'll have a better return on their investment. So in terms of the overall thing, us having to pay a little bit more to walk a tail renewables operators, is probably borderline no worse than us paying little bit more for massively transmission lines. In fact, with new numbers, it's probably much better. But we haven't realized that and we're on the tipping point of now committing to these enormous mega projects that we will never need if we had nuclear in the system. But we're buying them now. We're committed to them now. So it's a fork in the road. And I do worry about our lifestyles and our standard living taking an unnecessary hit, because we just, it'll get in so much momentum, we will, we will do another 510 15 years 10s, hundreds of billions of dollars worth of investment, and it will be more or less wasted. Once we once we finally turn around and go nuclear, which I think will happen at some point. There'll be a revolt at some point. There will be a Germany at some point, too, I think. But But yeah, the next year is is is crucial. People don't realize where we stand on that stuff. And, and I think that I really hope we wake up and, and walk back and, and can these transmission projects, which which won't get us to full decarbonisation and won't do anything at all, if we decarbonize through nuclear?


Dr. Chris Keefer  1:18:34  

Well, as a climate Hawk, I hate to say this many, but long may your coal stations hold up terms of just propping up this grid? You know, that was that that was I think that was again, from the Boeing staff or a key thing was just like, you know, nuclear would have to be ready in time for our end of life with coal stations, and not just, you know, the sort of, strictly speaking premature end of life of the climate imperative, but also just the physical end of life of these stations that I believe are mostly built in the 80s. You know, the timing of a call to nuclear transition is pretty sensitive in terms of, you know, being able to fit something in both for the stability of your grid, and also for the lives of those communities and workers who depend on on those assets and on having something replace coal in their communities. But


Aidan Morrison  1:19:25  

well, I just hope that the stuff or is like actually kind of weighing up the costs of closing that little gap with you know, I don't know, some, some cheap quick gas plants or something like that. Because the costs we're about to sink into the enabling infrastructure for renewables and closing the gaps between you know, every cloud blowing over on every sunset and every low and the wind is just absolutely profound. So I tend to look at those kind of, what will it take to keep coal running what look like seek to close the gaps with something else in between and say, Yeah, we If we need to, if we need to plug some gaps there, we probably can still on should do it. Because if you were at the costs of doing that compared to what we're about to spend on, on the renewables, transmission, etc, it still might look very, very cheap, very, very good value. So, I think that we will, I think that we will get there eventually anyway. And the lifetime of that particular coal plant won't matter a dime in terms of what the right policy is because the end state I think, is relatively clear. It's the one that sustainably economically low carbon.


Dr. Chris Keefer  1:20:32  

Okay, and I can talk to you for hours. This is one of the longer episodes been a lot of fun. Everybody hop over to tube mill tech and tack is that tic tac toe? What's What's the Yep,


Aidan Morrison  1:20:44  

it's Milltek and tech, MI, L, T, ch, N, THC Milltek and tack to military technology and tactics, which is a shortening of those words, which is a interest area of mine for many years. But yeah, that's the channel I had and started launching into this stuff on that and


Dr. Chris Keefer  1:21:01  

given the follow at quixotic quant on Twitter, one of the most under followed people I think, compared to the quality of your output. So get on that as well, folks and Aiden, I'm sure we'll have you back at some point in the near future. Thanks for staying up late to get this done.


Aidan Morrison  1:21:20  

Cheers, Chris, ready to talk to you. All right. Bye for now.



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