Mandatory RET Threatens Jobs & Australian Energy Security

Jeff Dimery

Jeff Dimery: CEO Alinta Energy – RET is a job killer

The mandatory RET not only threatens thousands of real jobs, it’s threatening Australia’s energy security. The perverse market distortion created by the RET allows wind power outfits to dump electricity at prices approaching zero, on those occasions when the wind is blowing (see our post here). The result being that incumbent generators are precluded from the market, losing revenue and profits in the short run. Base-load generators are designed to run 24 x 7 and the interference caused by intermittent wind power output is having a dramatic effect on their ability to operate profitably. In the long run, this is creating a real threat to Australia’s energy security. Here’s The Australian on a brewing energy catastrophe.

Wind farms ‘to yield job losses’
The Australian
Adam Creighton
15 July 2014

THE chief executive of one of Australia’s biggest energy companies says the national pipeline of new wind farms is “old technology” that is damaging Australia’s competitiveness and threatening a jobs “catastrophe” in the coalmining regions of ­Latrobe and Hunter regions of Victoria and NSW.

In an exclusive interview with The Australian yesterday, Alinta Energy chief executive Jeff Dimery said current energy policy lacked vision and called for existing investments made under the RET to be grandfathered and further subsidies scrapped.

“Coal areas will be put under extreme duress if the RET isn’t changed, with loss of real jobs as opposed to the invisible, promised jobs that RET advocates point to,” Mr Dimery said.

Alinta Energy owns 14 gas and coal power stations around Australia and provides electricity and gas to some 700,000 households and businesses in South Australia, Western Australia and Victoria.

“Quite frankly, Australia has a real opportunity to reap the benefit from the overspend of capital in the energy sector,” he said, arguing building more and more wind farms was adding to supply when demand has been falling.

The RET requires energy retailers to purchase a rising amount of energy from “renewable energy” suppliers, which typically means wind farms because they are the most cost-­effective source.

“If we keep spending, though, you won’t get the benefit because investors will want to get a return on their capital,” he said, citing Europe as an example of how clean energy policies had damaged economic growth.

“Building wind farms for 25 years is solving yesterday’s problem with yesterday’s solution,” he added, noting 1.3 million households had already installed rooftop solar panels and the trend to leave national grids would continue.

Mr Dimery said if governments insisted on “picking winners” they should instead focus on battery manufacture: “Build the batteries that will go into households that will take people off grid.”

His comments come only weeks before the government’s inquiry into the RET — chaired by Dick Warburton — is due to make recommendations that are expected to scale back the RET’s requirements.

A week after the clean energy investors Acciona and IFM Investment told The Australian changing the RET threatened $15 billion of investment and Australia’s reputation, Mr Dimery said concerns about creating sovereign risk could be dealt with by quarantining projects that had been commercialised.

He dismissed recent modelling provided to the government’s RET review that showed electricity prices would be cheaper if the RET were maintained, and asked: “How could it possibly be cheaper for me to spend $40 billion of unrequired capital and then tell you it’s going to be cheaper as a consumer?”

“Of course if you put too much capacity into a market you will crash the wholesale price.”

Referring to his own farm, he pointed out that connection to the grid alone costs around $25,000 compared to a $17,000 set-up cost for solar and back-up diesel power with almost no ensuing power bill.

“Consumers don’t want electricity prices indexed to oil prices which are subject to what’s happening overseas,” he said.

He said the terms of the government’s Emissions Reduction Fund were still not clear but ­Alinta had every intention of applying for funds to abate carbon at its power stations if it could.

“This country would be much better off with a well-designed ETS than with a carbon tax or a RET — to have both is unworkable,” he said.

Mr Dimery was also puzzled by advocates of state ownership of electricity distribution networks given the projected slump in demand.
The Australian

light-in-darkness

Prepare to stock up if the RET debacle continues.

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 U.K. P.M has just culled some Greens from his Government. The days of many politicians being conned by the junk science of the warming alarmists is almost over.

    Voters across the western world no longer buy into or even worry about it any more. “The greatest moral issue of our time” – what a joke! It is mainly the BB, the Fairfax media and left leaning public servants, academics and unions believing in the nonsense and the exaggerated claims of the alarmists.

    What a wonderful opportunity for the Australian Federal Government to bring some order back to the circus that is Canberra. RET review reality is the only way to go.

    Keith Staff

  2. Terry Conn says:

    Well, its all pretty obvious isn’t it, except to anyone on a public funded salary or some other form of welfare. Why the people and corporations who pay the bills for these absurd schemes put up with it is a total mystery. Paying taxes to support the old age pension is one thing, paying taxes or allowing a direct siphon out of your pocket to support wind farms and other ‘fantasy green’ schemes is just plain ridiculous. The ‘she’ll be right’ sentiment is all about to come to an abrupt end if (as Rupert Murdoch has just said) this ‘silly business of building wind farms’ doesn’t stop right now. Those bright young things at the various banks who thought it a good idea to cash in on ‘subsidised ‘ (ie stolen) money and provided finance for wind farms deserve our contempt and then total disgust at suggesting they now be ‘grandfathered’ for their greed, ignorance and negligence (failing to do their due diligence on effectiveness of wind farms). The RET and ‘Wreck ‘ scheme has to be abandoned ‘lock stock and barrel’ immediately to give our nation a chance of a future for our grand children (children for the young amongst us). The coalition government needs our vociferous support right now — they have a 30 seat majority in parliament and can’t do a damn thing to save our bacon. Time to tell the lunatics to stand aside!

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