In a “we can’t believe our luck moment”, Labor’s ‘Electricity’ Bill Shorten came out last week to announce that Australia’s Labor Party is now hell-bent on destroying the Australian economy, with a 50% renewable energy target. Shorten’s lurch to the outer reaches of the intellectual cosmos – to a policy position that only the lunatics from the Australian Greens would endorse – came as a complete surprise to Labor’s old guard; and as an election winning ‘gift’ to Tony Abbott’s Coalition.
The battle-lines are drawn; the policies are diametrically opposed; and the election result will be a guaranteed shoe-in for the Coalition.
Traditional, blue-collar voters (already terrified about their job prospects in an economy that has well and truly come off the boil) – miners, manufacturers and thousands of small businesses (already under serious threat from escalating power costs), and hundreds of thousands of struggling Australian households fretting about how on earth they’re going to pay next month’s record-breaking power bills – will all flock to Abbott’s Liberals at the next election.
You see, for all the talk about how much voters just ‘love’ renewables, that apparent bond tends to give way when the same folk are called on to actually stump up for its ludicrous cost.
Labor’s love of wind power has nothing to do with ‘saving’ the planet; and everything to do with saving the superannuation slush funds that Shorten and his Union buddies own and run – like IFM Investors (set up by Labor’s former Environment Minister, Greg Combet and his mate Garry Weaven).
IFM Investors stumped up a couple of billion dollars of super-money to pick up wind power outfit, Pacific Hydro – with ultimately disastrous results for its working-class, mum and dad investors – with a record $700 million loss booked up in just 12 months:
In response, IFM has taken steps to ditch Pac Hydro and Pac Hydro is in the throes of cutting and running from its legal liability for its Cape Bridgewater disaster:
But, Shorten’s efforts to salvage his mates’ Union super funds involves an almighty political gamble.
The mainstream media jumped on to the story with new-found fervour: following the announcement, The Australian’s front page was taken up with five headlines and stories that overflowed and filled page 6 – and an editorial headed “Labor’s loony turn on the renewable energy target” – referring to it as a political “death wish” and “a spectacular error of judgment” which will see Bill Shorten “fighting an election where he is committed to higher electricity prices and a mass clean-out of energy-sector jobs”.
What Labor’s lunacy has achieved is to draw a focus on the cost of the current wind power debacle in Australia, which will, in the result, spell the end of the wind industry.
For the first time journalists are facing up to the facts about the wind power fraud, namely that:
– wind power is meaningless as a power source:
– the subsidies being squandered are colossal:
– that voters will not tolerate power prices doubling or even tripling from their current punitive rates:
– and that rural communities – already incensed with the 2,000 or so turbines which have been speared into their backyards, so far – will simply revolt at the prospect of the 10,000-11,000 turbines that Labor’s plan calls for, which for rural communities will mean turbines in EVERYONE’s backyard:
With that revolt extending to those farmers – who wind power outfits have lied to and bullied to get them into contracts to ‘host’ them on their properties – without which, wind farms would never get built:
It’s facts like those collected by STT in the posts linked above that bring the greatest economic and environmental fraud of all time to an end.
The end is inevitable, but now that Labor has descended to the ludicrous, the wind industry’s collapse will be swift and brutal – principally because journalists with a modicum of common sense have woken up to the fact that they’ve been lied to and taken for fools by the wind industry, its parasites and spruikers for years now.
Here’s a little of the backlash resulting from their recent awakening.
Renewable energy: glut of supply will raise prices, drain productivity
23 July 2015
Labor’s plan to require half of Australia’s electricity to come from renewable sources such as wind and solar power will greatly sap productivity and could significantly boost retail electricity prices, as more unwanted supply is forced into a market already groaning under excess capacity.
The renewable energy target, due to reach 33,000 gigawatt hours by 2020, would need to surge to 110,000GWh by 2030 to meet Labor’s ambitious policy, according to ACIL Allen, which undertook analysis for the government’s recent RET review.
ACIL chief executive Paul Hyslop said: “If this were met by wind power it would require 10,000 to 11,000 additional turbines … with capital costs for the turbines alone of $65 billion.”
He suggested such a move would undermine productivity.
ACIL said the total capital cost would be in the order of $100bn — about three times the cost of the National Broadband Network.
“Basically, we’d be spending another $65bn on turbines to effectively get no more output,” Mr Hyslop said.
“This is investment that would not have otherwise occurred. We are net importers of capital, so if you want another $65bn and still want to do other things you’re going to get higher interest rates.”
The Coalition and Labor agreed in May to trim the RET from 41,000GWh a year by 2020 to 33,000GWh, to allow for the fall in electricity demand that was projected to lift the share generated from renewables to 26 per cent by 2020, rather than the 20 per cent envisaged. The new RET is forecast to provide 23.5 per cent.
ACIL estimates a total power demand of 300,000GWh in 2030, of which half would come from renewable sources under the Labor plan. The firm believes 25,000GWh would come from rooftop solar systems, with another 16,000GWh from existing hydro-electric plants, leaving 110,000 GWh to be provided by large-scale renewable projects — or 92,000GWh more than existing capacity.
The RET added about 4.5 per cent to a typical household electricity bill, or a little more than $100 a year in NSW, according to last year’s RET review, because wind and solar energy are significantly more expensive than coal and gas.
The Energy Supply Association said recent market prices for wind energy were between $82 and $92/MWh and $178 and $186/MWh for solar. This compares with less than $40 for brown and black coal and $80 for gas-fired power.
Labor’s policy would increase an average household’s electricity prices by $4 a year in today’s dollars between 2023 to 2030, according to modelling by Frontier Economics.
But the effect on power prices would be more significant if existing baseload power stations closed, increasing the reliance on more costly renewable sources of power. “Existing generators bear most of the costs of such an expanded target, via reduced profitability,” said Frontier’s Matt Harris.
Frontier calculated the net economic cost of Labor’s policy to be $35bn in today’s dollars.
The government’s review found that the net effect of the RET on retail prices appeared “to be small (but didn’t) diminish the economic costs associated with the scheme”. The impact on retail prices depends on the extent to which coal and gas-fired power stations are willing to withstand losses or leave the market.
Alinta Energy has already shut two coal-fired power stations in South Australia, crowded out by the growing wind presence. Extra renewable energy capacity, especially in an electricity market with falling demand, pushes down wholesale prices, forcing existing coal and gas generators to bear losses.
In the shorter term, the fall in wholesale prices can be greater than the extra cost to retailers of having to buy the more expensive renewable energy.
Matt Harris from Frontier Economics runs the line clung to consistently by the wind industry, its parasites and spruikers that an increased renewable energy target will result in falling wholesale power prices; and goes on with a claim that “Existing generators bear most of the costs of such an expanded target”. Matt seems a little confused about who actually pays the costs of the LRET.
The swift, and obvious retort to Matt’s ‘modelling’, is that retail customers, funnily enough, pay the “retail” price and there is absolutely no doubt that the LRET adds to retail power prices.
For every MWh of wind power dispatched to the grid, the wind power outfit receives a renewable energy certificate (REC aka LGC). The REC cost is recovered as an additive tax through retail power bills, as described by Origin Energy’s Grant King, who as Australia’s biggest power retailer should know:
“[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.
Under the LRET, RECs are designed to trade at $93 each (they’re currently trading at about $52) – the current scheme requires 495,600,000 RECs to be issued and surrendered from now until 2031. At anything like $90 the REC Tax will ADD around $45 billion to retail power bills:
Here’s another piece from the Australian that starts to pick up on the unassailable fact that an increased renewable energy target can only ADD to spiralling retail power costs.
Power prices ‘certain to rise’ under ALP’s increased RET
23 July 2015
The $120 billion energy sector has declared there are “no ifs, no buts” that increasing renewables to 50 per cent of electricity supplies will increase power prices.
While Labor argued that renewable energy was putting downward pressure on wholesale electricity prices, the Energy Supply Association of Australia insisted renewable energy costs more.
Minerals Council of Australia chief executive Brendan Pearson said that it was not clear whether Labor was proposing an increase in the mandatory renewable energy target for renewables such as wind farms but, if it did, this would come at “extraordinary cost to energy consumers”.
Labor spokesman on climate change Mark Butler said Labor did not have a “predefined” view on how it would meet the goal.
Energy Supply Association chief executive Matthew Warren insisted that if renewable power were cheaper, “we would not need targets or other incentive schemes to build it”.
“Increasing the proportion of higher-cost renewable energy into the market will increase power prices. No ifs, no buts,” he said.
Mr Warren said that modelling showing renewable energy suppressing wholesale energy prices was only discussing a short-run phenomenon. He said this had no bearing on the cost of a 50 per cent renewable goal by 2030. …
The current LRET – set by s40 of the Renewable Energy (Electricity) Act 2000 – involves the payment of a $3 billion a year subsidy to wind power outfits (the REC Tax/Subsidy), reaching that figure by 2019.
To take it to an annual target of 100,000GWh means the REC Tax/Subsidy ALONE would add more than $10 billion to Australian power bills each year.
Then, of course, there’s the little problem of the …. ahem … ‘wind’:
Frontier Economic’s Matt Harris might like to let us know just what impact wind power was having in the wholesale market on the 10 occasions in June when wind power output crashed to less than 250MW – or less than 6.8% of the Eastern Grid’s 3,669MW total capacity – 3 of those to less than 100MW – or less than 2.72% of capacity? He might also have crack at calculating the cost of holding spinning reserve equal to the total of that capacity (necessarily available around the clock) to account for total and totally unpredictable collapses in wind power output, like that seen above? Over to you Matt…
The meaninglessness of wind power as a generation source is a point picked up on in the same edition by STT Champion, Graham Lloyd.
Renewable energy: Flings of desire do not soar over truth
23 July 2015
The real fight over renewable energy is about technology, not ideology: whether it works and how to pay for it.
Coal dominates global power generation for reasons that go beyond simply cost and the status quo. Until ways are found to generate renewable power efficiently and store it for use when it is needed, fossil fuels are here to stay.
The issue is not whether generating half the nation’s power from renewables is desirable. It is whether it is technologically feasible and politically possible given the cost.
The evidence from early movers such as Germany and Britain suggests the green energy revolution is more difficult, and expensive, than glossy brochures and campaign pamphlets would suggest.
Hard-headed analysis from people such as Microsoft founder Bill Gates, who has sunk a billion dollars into renewables with another billion to come, is that existing technologies are not fit for purpose.
The problems are manyfold.
At a fundamental level, the “density” of energy provided by the wind and sun is no match for the compact power of fossil fuels such as coal, oil and uranium.
And unlike fossil fuels, renewable energy, with the exception of hydro-electric power, suffers the perils of intermittency. Without sun or wind renewable sources provide no supply and something must be there to back them up.
Without storage, current renewables fall short and the problem is exacerbated as the amount of renewables in the system increases.
Great advances are being made in storage but at the present time it is more at the household than utility scale.
Renewable energy advocates foresee a future of electric cars and decentralised grids with micro wind and rooftop solar fed to batteries in the home.
This transition is coming fast but is likely to present as many problems for governments as it solves, not least of which is the inequity of the less well-positioned or less well-off being forced to subsidise those who can afford to move off-grid.
Labor may be correct to argue that ideology is needed to drive change. That pressure is necessary to solve today’s problems so that promises made for a decade down the track can be delivered.
But getting there is about more than setting targets.
Politically, Labor no doubt believes it has tapped into the Zeitgeist for a renewable world in the lead-up to the Paris climate change meeting in December.
It has secured the support of the politically savvy rooftop solar lobby and a large-scale renewable energy industry which fears losing a funding lifeline from the Abbott government.
But the enduring challenge, and political contest, will always be about cost. Public subsidies are brittle and finite but the technological challenge remains long and deep.
Graham Lloyd turns in a typically solid effort there, the only quibble with which is that he panders to the delusion that electricity generated by wind power (usually when there’s no demand for it) can be stored in bulk, at anything like an economic cost. It’s a furphy STT has speared a few times, and again, just last week: