In an opinion piece for Tuesday’s Australian Financial Review, the Australia Institute’s Richard Denniss asserted that cheap coal was responsible for energy wastage. He then proceeded to list a number of examples, including:
A great idea for wasting energy was to install giant electric kettles that heat half a tonne of water each night in homes across Australia. These giant kettles, otherwise known as off-peak hot water systems, now use around a third of all the household energy in Australia. Bizarrely, they heat water to a temperature that is just hot enough to burn a toddler but not hot enough to make a cup of tea.
Millions of tonnes of coal are burned each year to heat water to a temperature that requires us to add cold water to it before we can shower. Genius
Apparently, coal is now responsible for the vexed problem of hot showers.
Of course, there is nothing wrong with energy efficiency per se. The ability to save money and find better ways to do things is an important component of capitalism, free will and economic and personal freedom. To paraphrase Deng Xiaoping, more discretionary money is glorious!
But what is actually most concerning about such an argument, which is cut from a similar cloth to the assertion that new coal mines should be banned for encouraging coal consumption, is that it seeks to punish individuals for their own life choices, and to punish markets for finding ways to satisfy them.
Electricity is only generated in the first place because of consumer demand – not the other way around. It is the same with the development of new mines – you don’t spend hundreds of millions of dollars to develop a mine then hope to sell the product somewhere. It is demand that drives supply, and companies seek to meet this demand using various technologies at the lowest possible cost. Coal is preferred because it is plentiful, affordable and reliable.
Blaming coal for efficiently meeting individuals’ consumption habits only makes sense if meeting consumption is considered to be a “problem” and the real agenda is to permanently cut consumption or punish people for using electricity.
The alternative to energy markets existing to meeting individual demand is that energy markets exist to implement government beliefs about how much energy people should be allowed to use.
One of the big differences between free marketeers and others is the answer to the question “is it the role of the state and of markets to serve the individual, or is it the role of the individual and of markets to serve the state?”
When anti-coal activists can demonstrate fossil-fuel alternatives that aren’t weather or government-subsidy dependent or that exist without the need for expensive back-up power options, then we can have an objective debate about the most appropriate energy technology.
Until then, they are free to turn off their own hot water systems before going to bed.