![\"Blackout\"](\"https:\/\/rogermontgomery.com\/wp-content\/uploads\/2025\/05\/Adobe-Express-file-33.png\")
\t\t\t<\/div>\nThis weekend Australia will vote for blackouts.<\/h4>\n
Australia\u2019s aggressive pursuit of renewable energy, championed by the Teal independents and the Labor government, is sold as a path to cheaper electricity and a cleaner future. The promise is seductive: wind and solar will slash power bills while saving the planet.<\/p>\n
Yet, recent events in Europe \u2013\u00a0most notably Spain\u2019s massive blackout and Germany\u2019s ongoing grid struggles \u2013\u00a0expose this narrative as dangerously naive. Forcing intermittent renewable energy onto aging grids without adequate investment in stability measures is a recipe for chaos, and this weekend, I suspect, Australia will vote to barrel down the same path.<\/p>\n Spain\u2019s blackout: a wake-up call<\/strong><\/p>\n On 28 April, 2025, Spain and Portugal suffered an 18-hour blackout that plunged 55 million people into darkness, halted trains, shut airports, and disrupted hospitals. At the time, Spain\u2019s grid was running on 60.64 per cent solar and 12 per cent wind power, a testament to its renewable energy leadership. Yet, this high penetration of renewables became a liability when two rapid \u201cdisconnection\u201d events in the southwest \u2013 likely tied to solar generation destabilised the grid, causing a collapse that severed connections with France and Portugal.<\/p>\n Initial attempts to downplay the role of renewables gave way to a grudging admission: the grid lacked the resilience to handle the intermittency of wind and solar. Unlike traditional coal, gas, or nuclear plants, which provide inertia through large spinning turbines to stabilise grid frequency, renewables rely on inverters that offer no such buffer. This leaves grids vulnerable to sudden fluctuations, as seen in Spain when a 15-gigawatt drop, equivalent to 60 per cent of demand, occurred in seconds.<\/p>\n Reuters, in a piece titled \u201cDon\u2019t blame renewables for Spain\u2019s power outage,\u201d argued that the issue was not renewables themselves but poor grid management and insufficient investment in storage and upgrades. This is a distinction without a difference. The rapid integration of renewables outpaced the grid\u2019s ability to adapt, a problem experts have warned about for years. Spain\u2019s grid operator, Red El\u00e9ctrica, had flagged risks of \u201chigh penetration of renewable generation without the necessary technical capacity\u201d in a recent report, yet the push for renewables continued unabated.<\/p>\n Germany\u2019s troubles: a cautionary tale<\/strong><\/p>\n Germany, with 64 per cent of its electricity from renewables, faces similar challenges. The country\u2019s energy transition, or Energiewende, has led to soaring electricity prices \u2013\u00a0among the highest in Europe \u2013 and growing grid instability. Periods of low wind and solar output, known as Dunkelflaute, have forced reliance on coal, gas, and imports to prevent blackouts. Social media posts noted that Germany\u2019s grid has avoided collapse only due to these fossil fuel backups, underscoring the fragility of a renewable-heavy system.<\/p>\n Germany\u2019s experience highlights the hidden costs of renewables. Wind and solar\u2019s intermittent nature demands massive investments in grid upgrades, battery storage, and backup generation \u2013\u00a0costs that are rarely factored into the \u201ccheap renewables\u201d narrative. Without these, grids become non-linear systems prone to cascading failures, where small disruptions can spiral into catastrophic outages.<\/p>\n Australia\u2019s blind march<\/strong><\/p>\n Australia\u2019s Labor government aims for 82 per cent renewable energy by 2030, a target that ignores the global evidence of grid strain. The Teals and Labor tout falling renewable costs, but this glosses over the systemic expenses of grid stabilisation. Spain and Germany show that renewables, while low-cost in generation, require billions in infrastructure to maintain reliability. Spain\u2019s government plans to invest \u20ac52 billion by 2030 to upgrade its grid for renewables, a sum that dwarfs the cost of maintaining traditional power sources.<\/p>\n Australia\u2019s grid, isolated from neighbouring countries, is uniquely vulnerable. Unlike Europe, where Spain could import power from France and Morocco to recover, Australia cannot rely on external support during a crisis. Australia\u2019s push for renewables, with a current mix approaching 45 per cent, risks replicating Spain\u2019s 56 per cent and Germany\u2019s 64 per cent renewable grids, both of which teeter on the edge of instability.<\/p>\n The South Australia blackout of 2016, caused by a storm but exacerbated by reliance on wind power without adequate backup, was a preview of what\u2019s to come. Energy expert Bruce Miller noted that Spain\u2019s blackout mirrored South Australia\u2019s, with insufficient battery storage and flexibility leaving the grid exposed. Australia\u2019s failure to learn from its own history, let alone Europe\u2019s, is a policy failure of staggering proportions.<\/p>\n The false promise of cheap power<\/strong><\/p>\n The Teals\u2019 claim that renewables will lower electricity prices is contradicted by global evidence. Germany\u2019s consumers pay some of the highest rates in the world, despite its renewable dominance. Spain\u2019s blackout revealed the fragility of a system lauded for reaching 100 per cent renewables just weeks earlier, a milestone that masked underlying weaknesses. In Australia, the cost of grid upgrades, battery storage, and backup generation will inevitably drive-up bills.\u00a0<\/p>\n Who will you vote for?<\/strong><\/p>\n Renewables advocates often ignore the need for \u201cgrid-forming inverters\u201d and other technologies to mimic the inertia of traditional generators. These are expensive and still underdeveloped, yet essential for preventing frequency oscillations that can topple grids. Spain\u2019s outage underscored this gap, with experts noting that greater investment in such technologies could have mitigated the crisis. Australia\u2019s current trajectory, prioritising renewable deployment over grid resilience, invites similar disasters.<\/p>\n Australia must heed Europe\u2019s warnings. First, grid upgrades and storage investments must match the pace of renewable adoption. Spain\u2019s lack of battery storage left it vulnerable, a lesson Australia cannot ignore. Second, maintaining baseload power \u2013whether gas, coal, or nuclear \u2013\u00a0provides critical inertia until renewable technologies mature. Germany\u2019s reliance on fossil fuels during Dunkelflaute shows that abandoning traditional sources prematurely is reckless. Finally, policymakers must be honest about costs. The \u20ac52 billion Spain plans to spend on its grid is a sobering reminder that renewables are not a free lunch.<\/p>\n The alternative \u2013 ignoring these realities \u2013 risks plunging Australia into its own mega-blackout. Spain\u2019s collapse was not a freak event but a predictable outcome of underinvestment in grid stability. Australia\u2019s isolated grid and ambitious targets amplify this danger. Without a clear, coordinated plan to ensure reliability alongside the transition to renewables, we risk becoming the next cautionary tale in the global energy shift.<\/p>\n The lights must stay on, and that requires facing the hard truths Europe has already learned.<\/p>\n Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.<\/p>\n He is also author of best-selling investment guide-book for the stock market, Value.able<\/a> \u2013 how to value the best stocks and buy them for less than they are worth.<\/p>\n Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.\u00a0<\/a><\/p>\n<\/div>\n<\/div>\n This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.<\/p>\n<\/div>\n<\/div><\/div>\n
\n
\n MORE BY Roger<\/a>INVEST WITH MONTGOMERY<\/a>
\n <\/span><\/p>\n![\"\"](\"https:\/\/rogermontgomery.com\/wp-content\/uploads\/2022\/01\/roger-montgomery-avatar-70x70.jpeg\"){kind=avatar}
<\/p>\n