Wind Industry Armageddon: Power Retailers Win Round One in Battle to Kill LRET

Ali Vs Patterson

In the LRET battle, it’s round one to power retailers, on points.

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As STT has pointed out, just once or twice, the policy debacle that is the Large-Scale Renewable Energy Target (LRET) is completely unsustainable, on every level: economic, social and political.

In the absence of the mandated subsidies (“the carrot”) directed to wind power outfits, and the mandated penalties (“the stick”) whacked on retailers under the LRET, there would simply be no market whatsoever for wind power (see our post here). Kill or cut the LRET, and the wind industry is completely finished.

Political operatives on both sides of the fence, the wind industry, its spruikers and parasites continue to run around like headless chooks trying to cut a “deal” to save the LRET.

However, all of them have either failed to appreciate – or are simply choosing to ignore – the fact that their problem is NOT the target set by the LRET (the current focus of the panic stricken efforts to save the wind industry). The problem is that Australia’s electricity retailers have, quite apparently, resolved to destroy the LRET, and the wind industry along with it.

Commercial power retailers have not entered any Power Purchase Agreements (PPAs) to purchase wind power (or, rather, to obtain RECs) since November 2012. And, for that reason, wind power outfits have been unable to obtain the funds from commercial lenders needed to help them execute their plans to carpet Australia in giant fans: as a result, wind farm construction in Australia has come to a grinding halt.

The panic exhibited by Australia’s political betters in Canberra is, in part, being driven by the realisation that the imminent implosion of the LRET will see all Australian power consumers hit with, what is, pure and simple, a $50 billion electricity tax.

On the current settings, around $30 billion of that whopping figure will be collected as a “stealth tax” – by way of the $65 per MWh shortfall charge – and directed into general revenue; the other $20 billion will end up in the pockets of foreign owned wind power outfits, as REC subsidy.

Grant King

Grant King measures the chances of Origin
signing a PPA with Infigen, Pac Hydro & Co.

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Retailers, like Grant King from Origin Energy, have made it known that they have no intention of entering PPAs with wind power outfits – and, instead, will simply pay the shortfall charge, collect the full cost of it from their customers (ie $94 per MWh – compared with the average wholesale price of $35 per MWh) and declare the cost of the fines on their retail power bills as a “Federal Tax on Electricity Consumers”.

STT has likened the scenario to a “political time bomb”, where the government of the day will be belted at the ballot box for the utterly unjustified escalation in power prices, that will inevitably result from the LRET debacle.

The theme of power price punishment being pure, policy dynamite is picked up by Liberal Democrats Senator for NSW, David Leyonhjelm in the piece from the AFR below, and emphasised with his observation that:

“Everyone with knowledge of the electricity market knows the RET is a political time bomb about to go off.”

Correct! For the reasons laid out below by the Senate’s Captain Common Sense; and picked up in our analysis that follows.

The RET bomb is set to explode
The Australian Financial Review
David Leyonhjelm
10 April 2015

You know you have a dog of a policy when the government, opposition and various minor parties agree it should be reformed, but the Greens and their cheer squad think it’s great.

That policy is the Renewable Energy Target. What seemed like a good idea – to encourage renewable energy – is now a mess of rising energy costs and a distorted electricity market.

Renewable electricity generators have received $9 billion in industry subsidies over the 15-year life of the RET, in addition to the price they receive for the electricity they produce. Without change, a further $22 billion will be paid by 2030. In the words of the Warburton Review, the RET is “a cross-subsidy that transfers wealth from electricity consumers and other participants in the electricity market to renewable energy companies”.

The renewable energy legislation was designed to ensure renewable energy makes up 20 per cent of the energy market by 2020. Electricity retailers must purchase Renewable Energy Certificates – from power companies that generate renewable energy – for at least 20 per cent of the power they sell. Each certificate (representing 1 megawatt-hour (MWh) of electricity) currently trades for around $40, which retailers then add to your electricity bill.

However, the legislation also contains a hard target for renewable energy of 45,000 gigawatt-hours (GWh), which at the time was assumed would equate to 20 per cent of the market. Due to falling consumption, this is now expected to be closer to 30 per cent. The problem is – leaving aside small-scale solar (ie rooftop panels on houses), which is allocated 4000 GWh of the target – we currently generate just 16,000 GWh of large-scale renewable energy towards satisfying the target.

Put another way, in 15 years we have incorporated 16,000 GWh of new renewable energy into the RET, leaving just five years to generate another 25,000 GWh to meet the large-scale target of 41,000 GWh. Nobody believes this is possible.

If retailers cannot purchase enough certificates, the legislation requires that a penalty charge of $65/MWh be imposed. With retail margins added, this will nearly triple the cost of the scheme to electricity retailers, who will pass it on to consumers. Electricity prices will skyrocket.

Everyone with knowledge of the electricity market knows this is a political time bomb about to go off, most likely within 18 months when interim targets are not met. Electricity retailers have for some time been refusing to enter new long-term agreements to purchase power (and Renewable Energy Certificates) because they know the scheme will implode due to bill shock and political pain. The public will not stand for increases in electricity prices of up to 20 per cent.

With this problem looming and negotiations between the government and opposition stalled, late last year I developed a detailed reform package for the RET. Since most opposition to reform is based on cuts to the 41,000 GWh large-scale target, my plan is to maintain this but to recognise established hydro-generation in the calculations – essentially Snowy Hydro and Hydro Tasmania – which together produce about 15,000 GWh. There would also be no cap on small-scale solar generation, which is expected to grow to 13,000 GWh.

My proposal would ensure the renewable target is achieved, with no penalty charges kicking in.

There would be strings attached for existing hydro-generators, though. To be allowed to produce valuable Renewable Energy Certificates they would have to commit to upgrading their existing generators, thereby introducing around 3000 GWh of new renewable generation into the grid.

The only losers would be the major wind-energy generators, which are eagerly waiting to build dozens of new wind farms in an effort to meet the target and get on the subsidy gravy train. Against that, many people are hoping these are never built, among them those who suffer adverse health effects from the inaudible infrasound they generate, plus those (like me) who hate to see our majestic eagles and hawks splattered all over the countryside.

The importance of reasonably priced electricity cannot be overstated. My plan will reinforce Australia’s commitment to renewable energy while solving the RET problem before the time bomb goes off.

David Leyonhjelm is Liberal Democrats senator for NSW
The Australian Financial Review

david leyonhjelm

David Leyonhjelm: Captain Common Sense. And the best bit is, he’s on the Senate Inquiry into the Great Wind Power Fraud.

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It seems almost churlish to quibble with an analysis that leads to a political conclusion that couldn’t be much clearer or much simpler: “the public will not stand for increases in electricity prices of up to 20 per cent.”

Correctumundo, again! However, David is well and truly understating the electricity price hikes that will follow, if the LRET is retained.

That could be the consequence of his observation in relation to “industry subsidies” that “a further $22 billion will be paid by 2030.”

That figure comes from the RET Review analysis; and relates to the “cross-subsidy” as between conventional generators and wind power outfits. While that is a clearly significant matter within the electricity generation industry, it’s the full impact of the $50 billion REC Tax on all Australian power consumers at the retail level that will have the long-term political wallop of a thermo-nuclear device, rather than the mere momentary pop of TNT.

atomic-bomb-e1355417893840

An aftermath that leaves TNT in the shade.

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And that brings us to efforts by Ian “Macca” Macfarlane to salvage the wreckage of the LRET, his mates at near-bankrupt wind power outfit, Infigen (aka Babcock and Brown) and his political skin.

Macca has tossed up a pitch whereby the ultimate annual LRET target gets pulled from 41,000 GWh to 32,000 GWh per year (he’s planning to sell his Infigen salvage plans to the cross-bench senators this week).

The LRET target is set by s40 of the Renewable Energy (Electricity) Act 2000 (here); and it’s the annual target set under that section that Macca is hoping to pull, with help from cross-benchers, including David Leyonhjelm. Macca needs at least 6 cross-bench votes to help his mates at Infigen stave off insolvency and avoid a looming date with its receivers.

At the present time, the total annual contribution to the LRET from eligible renewable energy generation sources is 16,000 GWh; and, because retailers have not entered PPAs with wind power outfits for nearly 2½ years – and have no apparent intention of doing so from hereon – that’s where the figure will remain.

With no new wind power capacity being added – and none likely to be added – that leaves the shortfall at 16,000 GWh, or 16,000,000 MWh (1GWh = 1,000MWh); based on Macca’s 32,000 GWh ultimate annual target.

So, we’ll put some numbers under what Macca’s last-ditch Infigen salvage mission means – should he succeed – for Australian power punters and their retail power bills – assuming, of course, that they aren’t already among the tens of thousands that have been chopped from the grid, because they can’t pay their power bills now (see our posts here and here); or among those whose businesses are getting slammed against the wall, due to rocketing power prices (see our posts here and here).

In the table below, the “Shortfall in MWh (millions)” is based on the current, total contribution of 16,000,000 MWh, as against the 32,000 GWh target being pitched by Macca, set out as the “Target in MWh (millions)”.

The target currently set for 2019 is 36.4 million MWhs, but we’ll assume that gets pulled to 32 million too, under Macca’s ‘ingenious’ Infigen rescue plan.

A REC is issued for every MWh of eligible renewable electricity dispatched to the grid; and a shortfall penalty applies to a retailer for every MWh that they fall short of the target – the target is meant to be met by retailers purchasing and surrendering RECs. As set out below, the shortfall charge kicks in this calendar year.

The REC price is, due to the impact of the shortfall charge, expected to hit $94, and, due to the taxation treatment of RECs versus the shortfall charge, the full cost of the shortfall charge to retailers is also $94.

The shortfall penalty’s numbers stack up below.

Year Target in MWh (millions) Shortfall in MWh (millions) Penalty on Shortfall @ $65per MWh Minimum Retailers recover @ $94
2015 18 2 $130,000,000 $188,000,000
2016 22.6 6.6 $429,400,000 $620,400,000
2017 27.2 11.2 $728,000,000 $1,052,800,000
2018 31.8 15.8 $1,027,200,000 $1,485,200,000
2019 32 16 $1,040,000,000 $1,504,000,000
2020 32 16 $1,040,000,000 $1,504,000,000
2021 32 16 $1,040,000,000 $1,504,000,000
2022 32 16 $1,040,000,000 $1,504,000,000
2023 32 16 $1,040,000,000 $1,504,000,000
2024 32 16 $1,040,000,000 $1,504,000,000
2025 32 16 $1,040,000,000 $1,504,000,000
2026 32 16 $1,040,000,000 $1,504,000,000
2027 32 16 $1,040,000,000 $1,504,000,000
2028 32 16 $1,040,000,000 $1,504,000,000
2029 32 16 $1,040,000,000 $1,504,000,000
2030 32 16 $1,040,000,000 $1,504,000,000
Total 483.6 227.6 $14,794,000,000 $21,394,400,000

 

Between now and 2031, Macca’s 32,000 GWh total target could be satisfied by the issue and surrender of 483,600,000 RECs. However, with only 16 million RECs available annually there will be a total shortfall of 227,600,000; as only 256 million RECs will be available to satisfy the LRET’s remaining 483,600,000 MWh target, set under Macca’s ‘brilliant’ 32,000 GWh ‘plan’.

Under his plan, assuming that RECs hit $94, as the penalty begins to apply later this year, the total cost added to power consumers’ bills will top $45 billion (483,600,000 x $94), as set out in the table below.

Power consumers will end up paying for the shortfall penalty collected by the Federal government, and for the cost of the RECs issued to wind power outfits; in relation to collecting the cost of the REC Subsidy from power consumers, Origin Energy’s Grant King correctly puts it:

[T]he subsidy is the REC, and the REC certificate is acquitted at the retail level and is included in the retail price of electricity”.

It’s power consumers that get lumped with the “retail price of electricity” and, therefore, the cost of the REC Subsidy paid to wind power outfits.

To give some idea of how ludicrously generous the REC Subsidy is, consider a single 3 MW turbine. If it operated 24 hours a day, 365 days a year – its owner would receive 26,280 RECs (24 x 365 x 3). Assuming, generously, a capacity factor of 35% (the cowboys from wind power outfits often wildly claim more than that) that single turbine will receive 9,198 RECs annually. At $94 per REC, that single turbine will, in 12 months, rake in $864,612 in REC Subsidy. But wait, there’s more: that subsidy doesn’t last for a single year. Oh no. A turbine operating now will continue to receive the REC subsidy for 16 years, until 2031 – such that a single 3 MW turbine can pocket a further $13,833,792 over the remaining life of the LRET. Not a bad little rort – considering the machine and its installation costs less than $3 million; and that being able to spear it into some dimwit’s back paddock under a landholder agreement costs a piddling $10-15,000 per year. Money for jam!

As David Leyonhjelm points out, the REC Tax/Subsidy has already added $9 billion to Australian power bills, so far.

At the end of the day, retailers will have to recover the TOTAL cost of BOTH RECs AND the shortfall charge from Australian power consumers, via retail power bills.

And that’s the figure we’ve totted up in the right hand column in the table below – which combines the annual cost to retailers of 16 million RECs at $94 (ie $1,504,000,000) and the shortfall penalty, as it applies each year from now until 2031, at the same ultimate cost to power consumers of $94.

Year Target in MWh (millions) Shortfall in MWh (millions) Shortfall Charge Recovered by Retailers @ $94 MWh Total Recovered by Retailers as RECs & Shortfall Charge @ $94
2015 18 2 $188,000,000 $1,692,000,000
2016 22.6 6.6 $620,400,000 $2,124,400,000
2017 27.2 11.2 $1,052,800,000 $2,556,800,000
2018 31.8 15.8 $1,485,200,000 $2,989,200,000
2019 32 16 $1,504,000,000 $3,008,000,000
2020 32 16 $1,504,000,000 $3,008,000,000
2021 32 16 $1,504,000,000 $3,008,000,000
2022 32 16 $1,504,000,000 $3,008,000,000
2023 32 16 $1,504,000,000 $3,008,000,000
2024 32 16 $1,504,000,000 $3,008,000,000
2025 32 16 $1,504,000,000 $3,008,000,000
2026 32 16 $1,504,000,000 $3,008,000,000
2027 32 16 $1,504,000,000 $3,008,000,000
2028 32 16 $1,504,000,000 $3,008,000,000
2029 32 16 $1,504,000,000 $3,008,000,000
2030 32 16 $1,504,000,000 $3,008,000,000
Total 483.6 227.6 $21,394,400,000 $45,458,400,000

 

Under the current ultimate LRET target of 41,000 GWh, the figure tops out at $3,854,000,000 a year; and $55,178,000,000 in total, so Macca’s BIG compromise drops the REC Tax/Shortfall Penalty impact on retail power prices by a piddling $846 million a year, or $9,719,600,000 over the life of the LRET rort.

Whether it’s RECs being generated by current (or additional) wind power generation, or the shortfall charge being applied, retailers will be recovering the combined costs of BOTH – and power consumers will not “avoid” or, as Macca’s youthful ward, Greg Hunt asserts, be “protected” from any of it under Macca’s Infigen rescue plan.

As our simple little exercise in arithmetic makes plain, over $45 billion will be added to all Australian power consumers’ bills; irrespective of whether Macca is able to satisfy the desires of his mates at Infigen & Co to carpet the country in giant fans.

Not that it matters much to Australian power consumers footing the bill, but the ONLY difference is where that $45 billion gets funnelled. In the case of the REC Tax, that gets directed as a subsidy to wind power outfits (like Infigen and Pac Hydro); in the case of the shortfall charge, that gets directed to the Federal government, and goes straight into general revenue – as we call it, a “stealth tax” – as young Greg Hunt calls it, a: “massive $93 per tonne penalty carbon tax.”

Under Macca’s piece of energy market ‘magic’, the $45 billion cost to power consumers of the REC Tax/Shortfall Penalty is just the tip of the iceberg.

The wind power capacity that Macca’s mates at Infigen & Co are so desperate to build (in order to keep their Ponzi scheme from collapsing, as it has with Pacific Hydro) – and which Macca hopes will satisfy his target – will cost at least a further $80-100 billion, in terms of extra turbines and the duplicated network costs needed to hook them up to the grid: all requiring fat returns to investors; costs and returns that can only be recouped through escalating power bills:

Ian Macfarlane, Greg Hunt & Australia’s Wind Power Debacle: is it Dumb and Dumber 2, or Liar Liar?

LRET “Stealth Tax” to Cost Australian Power Punters $30 BILLION

And it’s the cost of all of the above to retail customers that’s driving retailers’ efforts to crush the LRET; and the wind industry with it.

This might sound obvious, if not a little silly: electricity retailers are NOT in the business of NOT selling power.

Adding a $45 billion electricity tax to retail power bills (the ‘modest’ figure under Macca’s cunning Infigen rescue plan) can only make power even less affordable to tens of thousands of households and struggling businesses, indeed whole industries, meaning fewer and fewer customers for retailers like Origin.

The strategy adopted by retailers of refusing to ‘play ball’ by signing up for PPAs will, ultimately, kill the LRET; it’s a strategy aimed at being able to sell more power, at affordable prices, to more households and businesses.

And it’s working a treat, so far.

The daily bickering in Canberra over Macca’s ‘magic’ LRET number, is simply a signal that the retailers’ have already won. Once upon a time, the wind industry and its parasites used to cling to the idea that the RET “has bi-partisan support“, as a self-comforting mantra: but not anymore. And it’s the retailers that have thrown the spanner in the works.

Power retailers have no incentive to lock themselves into PPAs that run for 10-15 years (the time frame demanded by wind power outfits or, rather, the banks lending to build wind farms), at prices 3-4 times the wholesale price, where the demand for power is falling, along with the wholesale price.

Nor do they have any incentive to support a policy that will simply price their customers out of the market; leaving them sitting in their – soon to be, if not already, disconnected homes – freezing (or boiling) in the dark; or shutting the doors on power hungry enterprises, like mines and mineral processors, or manufacturing, for starters.

With iron ore miner, Atlas Iron, suffering from the collapse in ore prices, being left with no option but to shut down its operations in WA – with the potential loss of 600 jobs, and plenty of others about to pile into the same boat, it’s clear that Australia’s economic dream run is over.

That Macca, despite the economic punishment that’s coming, is pulling out all stops to ensure the survival of his mates at Infigen, via a $3 billion a year wind industry subsidy, that will simply result in further generating capacity (albeit of the kind that can only be delivered, if at all, at crazy, random intervals) – when Australia has REAL power generating capacity coming out of its ears – begs the question: just whose side is this clown on?

For power consumers – and the economy as a whole – salvation comes from the fact that power retailers do NOT have to follow the insane path set by the LRET: by refusing to sign PPAs with wind power outfits, they hopped off that commercially suicidal track nearly 2½ years ago; which has given them round one on points.

The fact that power consumers (read ‘voters’) will be walloped with a $45-55 billion electricity tax under the LRET is not so much a problem for retailers, as a brewing political nightmare for the Federal government. That the bulk of that tax will be collected as fines by retailers, provides them with the perfect piece of political leverage. Once power punters work out that they’re being slugged with a fine that’s around 3 times the cost of the power being supplied to them (ie an additional $94 per MWh, on top of the average wholesale price of $35 per MWh), they won’t just be a little miffed, they’ll be furious.

With wind power outfits in a state of grief stricken panic and their political saviours, like Macca, powerless to make retailers enter PPAs, retailers need only keep their nerve, keep their pens in their top pockets, and watch the whole LRET debacle implode.

STT suspects that the final round will be decisive, it’ll be won by a knockout and that it’ll be Infigen & Co that are left flat on the canvas.

CLAY LISTON

It’s a final round knockout: power retailers take the LRET title, in favour of their businesses, the power market and power consumers.

About stopthesethings

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

Comments

  1. Sleepless in the City says:

    With Pacific Hydro being on the market are IFM prevented from selling forward their Power Purchase Agreement’s in their dealings?

    For how many years are wind facilities allowed to rip off the public with these hidden costs of electricity to the people of Australia?

    Why should the next owner of Pacific Hydro or Energy Equity or whatever be allowed to profit at the expense of the taxpayer and their own shareholders, while the problems of noise, vibration and sensation emissions at their wind farcilities remain unsolved?

    How may the ex-employees of these companies (or government bodies) be prevented from continuing their miserable tactics elsewhere?

  2. Why was Ned Kelly hung, when all these windweasel GRUBS run free? Come on Tony Abbott, get these things sorted out. This is Australia.

    • luisadownunder says:

      That’s what he’s trying to do Bruce, but the numskulls that are the Greens, Shorten’s Labor and some strangely twisted Independents, won’t let him.

      I had hoped the LRETs would have become a little more mainstream news, but it seems that the television stations, particularly ‘our’ ABC and ‘partially ours’ SBS, are doing their level best to hide this from the public domain, specifically so that no discussion takes place, obviously.

      The people are to be kept dumb and dumber.

  3. Jackie Rovenksy says:

    It seems absurd that we have to pay these fines, especially when companies have committed to and constantly agreed they can meet targets. Can’t the Government prevent them from passing on the cost of these fines to the end user?

    It appears we as customers are in a system which supports the inefficiencies of an industry and encourages it by allowing it to charge the end user for its failings, where the end user is expected to pay for an essential service at a price which makes it impossible for many to access it, creating an even greater impost on those who currently still can access it.

    We are and have been for years bombarded with ways of how to cut energy usage, we have been bombarded with sales speak on why Wind Energy can meet targets they have agreed to, yet we are being slugged with ever increasing energy prices to pay for the installation of these things in the form of subsidies and paying in energy bills for the constant need to upgrade grid and connection systems to meet an imaginary large influx of more wind energy.

    Now we are going to have to pay fines these companies are charged for NOT meeting their targets.

    Not meeting the target of production in part is due to the cost of energy which causes people to remove themselves from electricity connection or reducing their usage and prevents other industries and companies remaining in business due to energy costs. This in turn results in the loss of jobs which in turn reduces the number of people able to afford to use electricity.

    Also and perhaps more relevant is the overestimation of the capability of these turbines to meet targets, a fault of the companies not the end user.

    With more and more people unable to find alternative employment relying on Government payments requires more taxes from those who do have work leaving less money to pay electricity bills.

    With less energy being used and more turbines being installed and others reaching the end of their usefulness, the shortfall gets bigger and so it goes on and on with no end.

    Until the industry stops blaming everyone else and accepts its failings we will continue with this ultimate never ending story of rort and blame, with the end user being the fall guy and the one who has to pay the price for an industry that never could be relied on to meet targets and stand on its own financial feet.

    It’s time the Government ensured we the end user did not have to foot the bill for this industries failings and the failings of government policies.

    These were obviously made without fully understanding the industries capabilities and the creation of policies which supported the industry at the expense of the people of this nation were failings that should never had occurred.

    • The one thing that electricity retailers passing on the cost of these fines to the end user will achieve, is waking more people up to the wind farm fraud, when the increases in peoples’ electricity bills are questioned. But no, we shouldn’t have to pay for the fiasco that wind power is.

    • Martin Hayles, Curramulka says:

      A well put summation Jackie.

      Ultimately, this is government policy and corporates taking advantage, and have they not?

      I wonder how much government “hold back” is at play, in the sense that both sides of our governance, through ill-conceived and populist, poorly executed legislation have left us where we are.

      The morons of the leftist greens and the opportunistic left/union super-parasites will not back down from their position, as they have everything to lose and nothing to gain.

      When the LRET falls over, the likes of Weaven and Combet will have nowhere to go and will have to explain to the union based investors where their invested entitlements have gone.

      Ugly. Very ugly

  4. luisadownunder says:

    No one seems to have noticed the “elephant in the room”.

    This is all about Anthropogenic Global Warming, now down-scaled to Climate Change (for the great, unwashed masses) by that most humungous of NGOs, the IPCC, and the need to “save” the planet from possible “destruction” – man-made of course – by 2020; although the bar has now been raised to 2050, kind of like extra insurance.

    AGW doesn’t even exist! Who are these stupid people?

    I do not understand why the LRET is not just scrapped, just like the Carbon (Dioxide) Tax? This tax ensures that there will nothing but pain, for absolutely no gain, for generations to come. It will do absolutely nothing to “save the environment” as the environment does not need saving – certainly not with this tax.

    I agree with Martin: this is death for the purposes of re-election, but if the Labor opposition are the problem, then they have to be punished, not rewarded by electing them over the Coalition, when it is they who started this whole God-forsaken mess in the first place!

    Is there a chance of STT drawing up a petition, asking for the LRET to be summarily scrapped, which can be signed by all your members and circulated (preferably electronically) to family, friends and acquaintances?

    This would surely help send a clear message to Canberra that we, the people, do not want this!

    • STT agrees.

      Why not start by emailing the link to this post to all members of the Coalition, from the PM down, and Senate Cross-Benchers. Send it to all of your email contacts; facebook friends etc – and ask them to send it on in a similar way.

      The only reason people are not rioting in the streets over the LRET debacle is that they have no idea what is going on. STT does it best, but the rest is up to you.

  5. Before we blame the current Government for the hare-brain RET scheme.

    It is my recollection that the RET and associated legislation was passed with great fanfare, by the Green/Labor alliance!

    In view of the state of the Senate and the inevitability of the LRET, I think it’s a bit unfair that Macca gets the blame for something he has very little control over. I am quite sure that if the Coalition had control of the Senate, the whole BS legislation would have been repealed by now. I think that Macca is trying to ease the pain, our collective anger and frustration should be directed to the Watermelon Party that sits opposite. They proposed and passed the Legislation, now they Oppose any amendment, improvement or the Total Scrapping of the Legislation! They are the ones that have to be made accountable, Not Macca or Abbott.

    • Macca designed the original RET with ‘help’ his mates from Babcock and Brown (now known as Infigen). He is in it up to his neck. For a general rundown, see this post:

      https://stopthesethings.com/2013/05/04/the-ret-the-rec-the-anatomy-of-a-national-fraud/

      For the history of the RET (an invention of the Howard government in response to the Kyoto Protocol & global warming – as it was then known – hysteria) see this paper:

      http://quadrant.org.au/magazine/2012/7-8/the-ruinous-privileges-of-renewable-energy/

      The fact that Macca was the driving force in getting his mates at Babcock and Brown off and running explains why he continues to push Infigen’s interests over sensible energy policy.

      True it is that the increase in the RET to 45,000 GWh was the result of a push by the Green/Labor Alliance (driven by Greg Combet – Members Equity Bank/IFM Investors/Pac Hydro), but see if you can find a single word uttered or printed from Macca challenging the need for that increase.

      Macca is the problem; he is NOT the solution.

      Fortunately, his boss sees things very differently.

      • luisadownunder says:

        Dear STT,

        All of these are facts and indisputable, however we still have the Labor opposition and their silly mates, the Greens and many Independents, obfuscating and blocking any chance the current Government have of scrapping this nonsensical tax.

        Macca might be a drongo and eating out of the palms of Infigen et al but, as you rightly point out, his boss does not agree with him.

        Thank you for your advice, following my previous reply, to email the link to this post to all members of the Coalition and Cross-Benchers; I will follow this pronto.

      • Martin Hayles, Curramulka says:

        Touche’

  6. The goat of greenhill road says:

    In developing news on Senvion’s Ceres project:

    1/ Investors allege the guru is not the alpha and omega but just a naughty little boy.

    2/ Pretty boy in head office when questioned on his lack of visibility on the fight for the RET by industry stalwarts declared
    “I’m a lover not a fighter.”

  7. But surely STT, the wholesale price of wind power is now competitive with that of coal power? Or so we’re reliably informed by various wind industry spruikers.

    Obviously, then there is no further justification for the compulsory LRET subsidy – is there? Unless of course Dr. Ross McKitrick is right when he says that the wind industry doesn’t run on wind it runs on subsidies.

    The tincy wincy problem some of us have with the wind spruikers proposition is that us mum and dad electricity users somehow don’t just get to pay this elusive “competitive with coal” wholesale price but, in addition to normal network and retail margins, must also pay the LRET tax, collected on behalf of the wind industry parasites by electricity retailers.

    How does the song go, Get your money for nothin’ get your chicks for free

  8. Martin Hayles, Curramulka says:

    A clear and concise portrayal of a looming disaster.

    It would appear that the architects of this nightmare would have considered that the RET would now be travelling along a different trajectory.

    Surely Macca knows this is political self-destruction, suicide by a thousand cuts.

    Surely his team mates must be considering whose team he is really working with, and whether they go to an early election before RET punishment really begins to bite, as it is inevitable we will have ever increasing retail price rises.
    Not good for the purpose of re-election

    All of this for nothing.

    How sad.

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