RET Review Panel says: Now THAT’S a Submission

thatsaknife

Michael Crawford’s paper: now THAT’s a Submission

In the week just gone, eco-fascist blogs like yes2ruining-us and ruin-economy have crowed about their team sending 23 million submissions to the RET Review Panel (okay, so we’ve exaggerated a bit, but so did they – and you get our point).

Likewise, the Twitter-sphere has seen a flurry of self-congratulatory messages from the lunatic fringe of the hard-green-left about the number of “submissions” made to the RET Review Panel on behalf of Trotskyite fronts like 350.org and GetUp! – whose principal aims are to destroy free-market based economies – starting with the fossil fuel industry and everything that depends upon it, which means, well, everything.

By the way, next time you meet one of these intellectual pygmies in a car, on a bus or train, or in a plane – make sure you ask them to hop out and walk – it’ll help ease their conscience and be for “the greater good”.

Now, back to their so-called “submissions”.

Sorry to rain on the greentard parade, but Tweets like: “CO2 BAD – Wind Farms GOOD 🙂 ”; I LUV Wind Turbines XoXoXo”; “Fossil Fuel is for FASCISTS 😦 ”; and “Save the Planet – HUG a turbine today!!” – just don’t cut it.

Nor do the hundreds of near identical form letters – all based on mantras knocked up by the Clean Energy Council, GetUp! and 350.org – and sent to the Panel by their Twitter followers at the panicked urgings of their political overlords. None of them satisfy the strict criteria set by the Panel and – we hear – will simply be ignored, ditched or deleted.

Not so with this brilliant piece of work: “Australian Renewable Energy Policy: All Pain and No Gain” by Dr Michael Crawford. Here’s the complete submission in pdf: RET Review Submission – Dr M Crawford – key parts of which we’ve extracted below.

Michael has degrees in Science (Maths and Physics) and Economics; a PhD in Organisation and Management Strategy; worked in the Commonwealth public service for almost 10 years; spent a couple of years in the army; researched and taught at the Australian Graduate School of Management; and spent 30 years as a management consultant across most industry sectors.

So – with that track record – you’d think Michael might be just a tad more qualified to speak about the impacts of renewable energy policy than a starry-eyed 20 something, whose biggest claim to fame is having 500 “friends” on Facebook.

But, we digress.

The only point of difference we have with Michael’s detailed and learned analysis is that he spends way too much time dealing with arguments concerning “global warming”. Now, apparently, referred to as “climate change” – since the planet stopped getting hotter 17 years ago.

For the sake of the argument concerning the “merits” of wind power, STT is happy to concede that man-made emissions of CO2 gas may have a negative future consequence for the environment.

However, simply because wind power can never provide power “on demand” – let alone “base-load” power, it will never displace fossil fuel generation sources and, therefore, will never reduce CO2 emissions in the electricity sector (see our post here).

There is no evidence that wind power has in fact reduced CO2 emissions in the Australian electricity sector – or anywhere else, for that matter (or that it is ever capable of doing so). All of the evidence points to the contrary (see this European paper here; this Irish paper here; this English paper here; and this Dutch study here).

As wind power cannot reduce CO2 emissions in the electricity sector, it fails in its central claim (the reason for its very existence): there is, therefore, no basis for the $8 billion which wind power generators have already received in the form of Renewable Energy Certificates and the $50 billion more in REC Tax/Subsidy they would receive between now and 2031, if the RET is maintained (see our post here).

In short, wind power has NOTHING at all to do with “climate change” or “global warming” – it provides no solution to either; and, therefore, the premise upon which the wind industry rests is nothing more than an insanely costly infantile delusion.

But all that is to quibble with an otherwise well structured and well supported analysis of the energy market fiasco that is the mandatory RET.

STT particularly likes Michael’s description and analysis of the REC as a regressive Federal tax on all electricity consumers – which does nothing more than destroy Australia’s competitiveness and harm the poorest and most vulnerable in Australian society.

Here’s some of what Michael had to say:

REC Costs

RECs impose multiple costs on the Australian community:

• The most obvious is increasing the price of electricity as the REC cost imposed on retailers is passed on to consumers. This is a regressive tax, since the proportion of income spent on power tends to decline as income rises.

• The reduced competitiveness of Australian industry due to relatively higher power prices tends to drive manufacturing offshore. That in turn adversely affects Australia’s balance of payments. This effect has been masked by the boom in Australia’s mineral exports, particularly to China. However, the boom has now slowed and will likely slow further as China cannot continue the massive credit explosion of the last few years and as the growth in its exports slows or actually falls. This will adversely affect both the price and volume of Australia’s mineral exports, so the exports side of our international trade will take a very big hit while the cost of the RECs erodes non minerals exports and requires more imports to replace destroyed domestic manufacturing.

This has a negative impact on employment and wages, and on the portfolio of skills available in the Australian economy. It also weakens the country strategically. That will be a huge cost if Australia ever faces another war in its vicinity or there is conflict that impedes its seaborne supply lines. Anyone who imagines those things cannot happen is paying no attention to recent events in Ukraine or China’s sabre-rattling in relation to the South China Sea and currently directed at Japan, Vietnam and the Philippines.

• The solar panels, wind turbines and most of the associated gear used in pursuit of the RET policy are all made overseas. Again, they adversely affect Australia’s balance of trade without any compensating benefit. The same might be said in relation to equipment for thermal power stations, though Australia already has most of its requirement for them in place. However, such a claim ignores a fundamental problem with solar and wind power, ie its intermittent nature.

Because of the volatile production from these forms of renewable energy generators, they must be backed up by reliable alternatives, since Australians are not prepared to have their lights, air conditioning, refrigerators, etc go off whenever the wind does not blow or the sun doesn’t shine. In Australia that backup generally takes the form of thermal power plants. So renewable energy generators do not displace the need for thermal generators and their capital cost at all. Consequently, the import costs of renewables power plant is additional to, not a substitute for, the power plant imports required in the total absence of these forms of renewable energy in Australia.

• Wind turbines, in particular, impose large external costs on surrounding communities. They adversely affect health, lifestyle and property values of rural residents. Just like the tobacco and asbestos industries before them, the wind industry has fought an active campaign to suppress relevant information and been aided by those areas of government that are invested in promoting “renewable energy”.

It is noteworthy that commercial solar installations do not attract the same strong criticism and persistent local opposition as do windfarms. Unlike the latter, the former do not make noise that harms health and drives people to distraction, making houses unlivable. Nor do they loom over the landscape, to be seen 10kms or more away, totally inconsistent with the rural characteristics which originally drew people to live in those localities. The bulk of commercial renewable energy installations in Australia are wind turbines, nor solar panels. These are viable only because of the RECs. So the current RET policy is inflicting widespread harm on communities in rural areas.

In the first instance, these costs are imposed on individuals who are not party to the transactions establishing wind turbines complexes. Longer term, the losses in assets, health and family cohesion, initially borne by individuals, will make some of them more dependent on the state, thereby throwing some of the burden onto taxpayers more generally.

….

It also appears likely that government agencies in Australia estimating the price impact of “renewable electricity” have underestimated, for several reasons:

• They tend to compute the isolatable price increase, eg the specific value of RECs purchased by retailers, without taking account of the consequent margin addition likely on the part of the retailer.

• They do not take account of changes and costs that non-conventional renewable operators force onto other parts of the overall electricity system, such as infrastructure changes for distribution, or thermal plants being forced to run less efficiently, or the shutdown of other parts of the system that then affect supply and prices at peak times, all of which ultimately gets wrapped up in prices required to keep the whole system operating.

Disproportionate Impact on Low Income Recipients

The 2009-10 Household Expenditure Survey showed that, at the time, the proportion of income spent on domestic fuel and power by the lowest quintile (4%) was twice that of the highest quintile (2%). The proportion declined progressively for the intermediate quintiles, being 3.4% for the second lowest quintile.

Since that time (2009-10), the price of electricity has risen by 58%, while the price of gas and other household fuels has risen by 44%. This would increase the proportion of income being spent on fuel and power by each quintile but not materially change the ratio between the highest and lowest quintiles, except to the extent these price increases have caused lower income groups to cut back on power consumption to meet their bills, ie forced them to forego something that was previously part of their accepted standard of living.

To the extent electricity is part of the cost of most other services and products, it seems likely that the effect of electricity prices increases flowing through the prices of other products will impact disproportionately on lower income earners. For instance, there is no obvious reason why the amount of electricity required to ship, refrigerate and distribute an expensive cut of meat should be more than for a cheap cut. Likewise the electricity involved should differ little whether distributing and retailing an expensive bottle of wine or a cheap one, or distributing and selling an expensive automobile or a low priced one.

Thus we should expect Australian electricity costs to be a smaller part of end user prices for higher quality products and services. And since higher quality products and services are more likely to be purchased by high income recipients than low income recipients, that means the latter are more exposed, in the products they purchase, to electricity price increases. Thus, increases in Australian electricity prices will have the biggest inflationary effect on the price of goods and services purchased by low income recipients.

So the effect of RECs falls most heavily on low income recipients, through both their direct purchase of electricity and the Australian electricity component of other goods and services they purchase. The REC is a tax, since it is a government mandated mechanism for compulsorily transferring wealth from one party to another, and where the consumer has no way of avoiding it unless they stop buying electricity and all goods and services with an electricity component. It is as unavoidable as the GST and both are imposed by the federal government. The only difference is that GST funds pass through the government’s hands directly before distribution, while REC revenues don’t. With RECs, the government has eliminated itself (largely) as the middleman but still determines the beneficiaries of charges levied on consumers.

The current government and its Commission of Audit have made it very clear Australia has been living beyond its means, consuming more than it produces. The government has also made clear its intention to end “the age of entitlement”, cutting back on benefits and services it provides. That will directly reduce the discretionary income of a large number of families and/or raise their costs. This will certainly impact on low income recipients.

The government’s stated policies in relation to ending “the age of entitlement” may be entirely appropriate. But it is unconscionable to do this in a way that adversely affects low income recipients while simultaneously forcing them to bear a disproportionate share of the cost of funding a government “renewable energy” policy. It is even more egregious a practice given that the “renewable energy” policy provides zero benefit to Australia, or indeed globally, and only acts as a form of entitlement to a class of rent seekers.

Any government policy to pursue a RET should be so structured that it does not impact disproportionately on low income recipients. Since the whole point of RECs is to raise electricity prices, which unavoidably has greatest impact on low income recipients, this means RECs should be abolished even if the government retains RET targets.

What Should Be Done? 

Given that the RET makes no difference to future global temperatures and in particular none to Australian temperatures, we have a government policy that produces no benefit to the country but imposes very substantial and widespread costs. The only beneficiaries are rent seekers, including foreign companies, and any politicians who have aligned themselves with those rent seekers, as well as public servants who jobs are also connected to serving those vested interests.

The Australian government should totally abandon the RET and with it the requirement for RECs.

Should the Australian government persist with the RET, then it should still abandon RECs and subsidise its preferred forms of “renewable energy” directly from consolidated revenue.

….

No doubt proponents of the existing policy would claim that eliminating RECs would unfairly affect companies that have invested on the basis of a previous Australian government introducing RECs. However, the introduction of RECs impacted adversely on other companies, in all industries, that made investment decisions based on government policy before RECs were mooted, as well as on people who bought property before REC-dependent windfarms were established. The adverse impact on them was not allowed to block the introduction of RECs.

When RECs were introduced, companies had a choice whether to make an investment or not. No such option was available to consumers who were forced to bear the cost of those policies and decisions. So choosing to protect “renewable energy” investors would show a preference to them that has been denied the majority of the Australian economy and society. It would be blatantly unfair.

Should the government retain the RET and, in one way or another, continue subsidies to windfarm companies, then it should be scrupulous to ensure windfarms are not allowed to impose costs on residents in their vicinity. There are four steps that should be taken to achieve this:

• Require rigid compliance with operating conditions imposed by relevant planning authorities, with very strict penalties for any non compliance; 

• Review operating conditions for all windfarms and adjust to satisfy the latest health evidence as it emerges over time; 

• As a condition for acceptance of subsidies, require all windfarms to offer a property put to all residents already living within 10 kms of their turbines when built, where the put would allow any such resident to sell their property to the windfarm company at an unimpaired market value plus reasonable transaction and relocation costs and the put would exist for three years after becoming effective; 

• Prohibit gagging contracts being used with hosts and affected parties.

(Extracts from): “Australian Renewable Energy Policy: All Pain and No Gain” by Dr Michael Crawford.

Now, THAT’S a Submission.

****

 

 

 

 

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:

    The review panel are grown up intelligent people,
    Mass, all the same “submissions” by the greentards and the
    radical left-leaning fringe groups are hardly likely to impress them.

  2. genie81 says:

    ps it just shows how stupid kids are when they cannot see the wind for the trees.

  3. genie81 says:

    Why is it that there is so much evidence that these wind turbines do not help but contribute to CO2 emissions, cause health issues etc., yet the media continues to sprout the wonders of wind turbines? Jounalists do not seem to find all the peer-reviewed evidence of the problems with wind turbines. They do not show peer-reviewed evidence of how good turbines are supposed to contribute the environment, peoples’ health etc. The Government is so tied up with the money the wind turbines produce but continue to fee the industry with billions. Thank goodness more and more are showing wind turbines are a BIG BIG EXPENSIVE problem not producing electricity without some form of backup adding to expense and the worst of all the damage turbines are doing to peoples’ health. IT HAS TO STOP

  4. Yep, lots of submissions from the idol-worshipping eco-fascists. The funding for their religion is at stake. Time to treat their religion like any other: no public funding.

  5. Now, that’s a submission. The wind weasel and greentard goons are just a mob of kids, that are shedding rivers of tears.

  6. Put the Wind Turbines around Canberra.
    Cut all other sources of power generation to Canberra and let them rely on Wind Turbines only for electricity

Trackbacks

  1. […] of 7-10% on top of that). As such, the REC is a Federal Tax on all Australian power consumers (see our post here). On the other side of the equation, the RECs issued to wind power generators operate as a direct […]

  2. […] The cost of the REC is ultimately borne by retail customers and, therefore, constitutes a Federal Tax on all Australian electricity consumers (see our post here). […]

  3. […] The cost of the REC is ultimately borne by retail customers and, therefore, constitutes a Federal Tax on all Australian electricity consumers (see our post here). […]

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