Australia’s Treasurer, Joe Hockey says: Stop These Things!

shrek 2

Joe Hockey: ready to cut the subsidy stream for utterly offensive giant fans.

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Last Friday, the Federal Treasurer, Joe Hockey (aka Shrek) met with Alan Jones on his Breakfast radio show on 2GB. And what he had to say about giant fans has sent the wind industry and its parasites into fits of apoplexy. Predictably, the usual suspects – eco-fascist bloggers, the ABC and Fairfax Press – reacted with mortified, foaming outrage. But they’re just working through the 5 stages of grief: denial, anger, bargaining, depression and acceptance (see our post here).

Sit back and enjoy an interview that’s seriously upped the ante – transcript follows:

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JOE HOCKEY: … and the budget is overwhelmingly going to focus on how we can grow the economy. How we can expand the economy. And, at the same time we’ve got to deal with some of the issues that were raised by the Commission.

ALAN JONES: At the end of the day, though you know you can get money from somewhere. Now the two words (I tried to read all this -and I said this morning) there are two words in one instance I can’t find in here. And that is climate change. And yet you’ve still got 7 climate change agencies, 33 climate schemes and 7 departments. They seem to be protected in all of this. But because of all this nonsense about climate change and global warming we have a Clean Energy Regulator.

JOE HOCKEY: Yes.

ALAN JONES: And we’ve got Renewable Energy Certificates.

JOE HOCKEY: Well, they say get rid of the Clean Energy Regulator, and we are.

ALAN JONES: Ok. And the Renewable Energy Certificates?

JOE HOCKEY: And, as for the, all the ….

ALAN JONES: You and I should be in the business of wind turbines because they’re subsidised. You say we’re not going to chase SPC Ardmona, and Toyota, and rightly so, down the road with a cheque book. Why are we then chasing Thai and Chinese wind turbine proprietors down the road with subsidies of $400,000 a year for 75 years?

JOE HOCKEY: Well, if I can be a little indulgent, please.

ALAN JONES: Yeh.

JOE HOCKEY: I drive to Canberra to go to Parliament and so on, I drive myself, and I must say, I find those wind turbines around Lake George to be utterly offensive.

ALAN JONES: Correct.

JOE HOCKEY: And I think that they’re just are blight on the landscape.

ALAN JONES: And the people you are talking to are paying for them.

JOE HOCKEY: Yes. And look….

ALAN JONES: When are you going to knock them off?

JOE HOCKEY: Well, we can’t knock those ones off because they’re in to locked-in schemes.

ALAN JONES: You can knock the subsidies.

JOE HOCKEY: Well, they’re in to locked-in schemes and there is a certain contractual obligation I’m told associated with those things. But you will see in the budget we have addressed the massive duplication that you’ve just talked about – the vast number of agencies that are involved doing the same thing. We are addressing that in the budget. We’ve considered that very carefully. And look, when I say Alan, that we’ve seen the end of the age of entitlement, that applies to business as much as it applies to each of us.
Alan Jones Breakfast (2GB)

Great to see our Treasurer using the correct terminology there – as highlighted above. His fearless leader uses the same language to describe the most costly, ineffective and pointless technology ever devised – if providing reliable power and reducing CO2 emissions is what you’re out to achieve – (see our post here). When Joe talks about axeing the Clean Energy Regulator, we’re pretty sure he meant the Clean Energy Finance Corporation – although in the mood the Coalition is in at the minute, it wouldn’t surprise us if they both got the chop.

Alan Jones overstates the period for which Renewable Energy Certificates (the subsidy he’s referring to – which is a Federal Tax on all Australian power consumers) are available under the current mandatory Renewable Energy Target, when he talks about that subsidy being available for 75 years.

The legislation, as it currently stands, provides for the mandatory RET to run until 2031. So the fat pile of RECs being shovelled out by the Clean Energy Regulator has the potential to continue for another 17 years. However, he seriously understates the value of the subsidies per turbine over the life of the RET.

Take a 3 MW turbine. When the wind is blowing and that turbine is operating at its full capacity of 3 MW per hour, the operator collects 3 RECs: 1 REC per MWh. If the wind blew around the clock, the operator would collect 26,280 RECs from that single turbine: 3 RECS per hour x 24 hours x 365 days.

Assuming, generously, that the turbine operates at its full rated 3 MW capacity 40% of the time, the operator will collect 10,500 RECs from that turbine, annually. At current values (around $30 per REC) 10,500 RECs will “earn” the operator around $315,000 in REC subsidies.

The current large-scale annual RET of 41,000 GWh starts to bite from 2015 – increasing incrementally each year to hit the full target in 2020. Assuming the current RET figure is maintained, by 2015, the REC price is forecast to reach $90.

This increase will be, in part, a consequence of the “shortfall charge” under the RET – which is a $65 fine paid by retailers for every MWh that the retailer falls short of the mandatory target.

The fine is a cost that the retailer can’t claim as a legitimate tax deduction, whereas the REC is. This places an added value on the REC to the extent that its face value can reduce the retailer’s taxable income, so a retailer is bound to pay more for a REC than the amount of the fine. That fact, and the pressure that will mount on retailers to reach the increasing annual targets from 2015 (and the 41,000 GWh target by 2020) – with an under-supply of RECs predicted – means that the REC price will hit $90 around 2015 and, if anything, increase beyond that (for more detail on the operation of the RET, see our post here).

At $90, 10,500 RECs collected from a 3 MW turbine running 40% of the time will be worth around $945,000 annually.

So, an operator can expect to pocket close to a $1 million in power consumer subsidies for a single 3 MW turbine every year from 2015 to 2031. That’s a cool $15-16 million in REC subsidy for a single giant fan – that cost around $3-4 million to sling up – and which is supposed to be “free” to operate. And that $15-16 million will all be added to Australian power bills.

Money for jam!

But with Joe on the warpath – and the RET Review panel all set to bring the rort to a screaming halt – the “sweet times” for the wind industry are all but over.

shrek angry

No wonder Joe’s more than just a little angry.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Keith Staff says:

    Joe Hockey……… oh what a feeling!!!!

  2. Jackie Rovenksy says:

    While there are projects ‘locked in’ there are also conditions they are meant to meet. One way to stop the rort is to stop paying them their ‘free bonus’ when they don’t meet those conditions. This will stop these things in their tracks because we know they can never solve the problem of ‘poor siting’ and engineering of these existing things.
    Also, if a project doesn’t meet its advertised and promoted level of energy production then why should they get paid anything?
    Of course we and they know that it’s impossible for them to meet their advertised and promoted level of production as that relies on the things working at the advertised level of performance 24hrs a day by 365 days a year and that is impossible for them to achieve.
    They should have to pay a fine for every hour they don’t meet the advertised and promoted performance level.
    And the end customer should not be the ones trying to keep them financially viable with constantly increasing prices and having to pay more for Government services because so much of their taxes are wasted on subsidising these things.
    After all these companies have a strangle hold on the market don’t they, as the majority of individuals and businesses cannot go out and produce their own energy.
    It would be different if customers could elect to pay for the energy from the source they want, rather than as it is, having no choice but to choose between companies which are locked into (forced) sourcing electricity from so called renewable sources.
    A worthy requirement – IF it was working efficiently for the customer and not just a money making enterprise by corporate manipulators and liars.

  3. Reblogged this on Heartland Farmers.

Trackbacks

  1. […] And his Treasurer, Joe Hockey has pinned his colours to the mast as someone who can’t stand wind farms – and whose political mission is to bring the “age of entitlement” to an end, which includes the stream of subsidies directed at wind power outfits (see our posts here and here). […]

  2. […] Hockey has already declared his hatred of “utterly offensive” wind farms and is hip to the fact that wind power is inefficient, insanely expensive and fails in its principal claim of reducing CO2 emissions in the electricity sector (see our posts here and here). […]

  3. […] the “age of entitlement” that has wind power investors quaking in their boots (see our posts here and […]

  4. […] of entitlement” that should have wind power investors quaking in their boots (see our posts here and […]

  5. […] our last post we covered the Alan Jone’s interview with Federal Treasurer Joe Hockey that’s sent the wind […]

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