South Australia’s Wind Power Obsession an Economic Suicide Pact

alan moran

Alan Moran gets it. Setting a cult-like feel-good power policy, obsessed with wind power isn’t just fanciful nonsense, it’s nothing short of an economic suicide pact. Here’s how things are playing out in Australia’s “wind power capital”, South Australia.

Renewable energy demanding a high price for unreliability
The Australian Financial Review
Alan Moran
29 July 2016

The recent energy crisis in South Australia demonstrates how costly and imprudent it is to rely on renewables.

Exotic renewable energy from wind and solar costs three times as much as electricity from coal and gas generation plants. Renewables are subsidised by households and firms being required to include growing proportions of renewable energy in their electricity supply.

The Renewable Energy Target (RET) in place requires 23 per cent of electricity to come from wind and solar by 2020. The renewable lobby estimates this is costing $40 billion for wind and large-scale solar installations. Unfortunately that expenditure is not beneficial investment. Rather, it is money spent on incendiaries to destroy existing productive fossil-fuel plant. And it is being unwittingly provided by electricity customers whose reward is higher prices due to subsidised renewable plant displacing low-cost coal and gas generators.

Over the past 20 years the renewable energy requirements’ noose around the Australian economy has been progressively tightened. Australia, with its low-cost coal and gas supplies, was once one of the world’s cheapest electricity markets but, due to renewable regulations, is now among the most expensive.

Not only are wind and solar high cost but a renewables-heavy network is unreliable, as is illustrated by the recent near breakdown of supply in South Australia. A cold snap, windless days and work on the interconnector with Victoria – coupled with subsidised wind forcing the closure of the state’s coal power stations – left South Australia reliant on undependable wind generators.

Prices peaked at $14,000 per megawatt hour compared with the norm of under $100. Though the crisis has now abated, this is only because South Australia has become even more dependent on supplies from Victoria’s highly reliable, low-cost coal generators. But Victoria has embarked upon the same path as South Australia. It plans to have 20 per cent of its electricity from exotic renewables (up from 12 per cent at present) with an eventual goal of 50 per cent. This involves abandoning the coal supplies that have allowed low household prices and been the backbone of the state’s industry.

Richard Dennis earlier this week claimed that South Australian electricity prices are now 40 per cent lower than in 2007. That’s a dishonest cherry pick of an outlier year. South Australian electricity prices in 2016 are actually 30 per cent above their long-term average; compared with last year, electricity future prices for 2017 are up 50 per cent.

The beneficiaries of the renewable subsidies are now calling for a double down of the regulatory policies. Consumers rather than those suppliers who stand to gain have already had to pay for more transmission capacity.

We have also seen calls for expedited spending on battery storage technology by those who assure us that this will mend one deformed arm of renewable energy – its unreliability – leaving only its cost penalty. Even that prospect, like so many other mirages associated with renewable energy, is said to be years in the future.

AGL, a firm never shy of avoiding subsidies, is calling for a different form of market, one that will provide it a more certain reward for having its fossil fuel generators available on standby. Such a “capacity market” is presently in place in Western Australia where it has proven to be exorbitantly costly.

To his credit Energy and Environment Minister Josh Frydenberg has rejected the proposal. AGL has, however, had more success in recruiting $2 billion-$3 billion of public money to finance a fund for its renewable ventures.

In escaping the self harm of renewable energy regulations, Australia’s salvation may come from an unlikely direction. The current basis of climate change policy is the UN agreement established in Paris in December last year. Under this Australia pledged to reduce its carbon dioxide emissions by 26-28 per cent. The renewable energy policy is the cornerstone of this.

But the policy’s architects were the EU and the Obama administration. China, the largest emitter of carbon dioxide, and India, the fourth largest, are taking no meaningful abatement measures.

As president, Donald Trump would dump the US participation in the Paris agreement. That would leave as its sole promoter the economically moribund EU, responsible for only one tenth of the world’s emissions. Moreover, Britain’s departure from the EU may presage a European rethink.

Without developing-country participation, the Paris accord was always an empty gesture to decarbonising the world economy. Future developments would make any Australian obligations even more purposeless. There are many negatives associated with both candidates for the US presidency. But a Republican victory in November would offer one silver lining for Australia in the provision of an escape hatch for a deleterious policy seemingly set in stone.
The Australian Financial Review

SA 7.7.16

Reliable? If regular and guaranteed failure is the mark, then indeed it is.

Here’s more of Alan Moran, on fire.

The sad saga of self-harm from renewable energy continues
Catallaxy Files
Alan Moran
29 July 2016

I have this piece in this morning’s AFR  which develops the theme about the poisonous economic effects of renewable energy.  The $40 billion in capital expenditure that windfarms/large scale solar will require is nothing more than a requirement for electricity consumers to finance the creation of incendiaries that will bomb the productive coal and gas electricity generators which provide low cost electricity both to the direct benefit of households and to the productive sector’s competitiveness.

In the process it takes a swipe at the gross misinformation of some of the renewable lobby – in particular the absurdities of the Australia Institute’s Richard Denniss who tried to claim that renewables had reduced prices in Australia by focusing on one outlier year (South Australia prices have actually risen by 30 per cent and the forward price for next year is up 50 per cent).

The article also addresses the self-serving proposal by AGL to transform the existing energy-only electricity market with one that has capacity payments.  Angela Macdonald-Smith, drawing from the market manager, John Pierce, completely demolishes this cost imposing monstrosity of a proposal.

Elsewhere, the Minerals Council’s Brendan Pearson has an understated attack on the renewable agenda.

Josh Frydenberg clearly had to swear fealty to the Turnbull-Martin Parkinson protectors of greenhouse orthodoxy as a condition of getting the Energy and Environment portfolio.  He has declared the current renewable policy, under which 23 per cent of electricity must by 2020 be from exotic renewables that cost three times electricity from coal, set in stone (I have a bit of fun in showing recalling how an earlier Joshua dismantled stone walls).  I finish up with the best hope for Australia namely:

In escaping the self harm of renewable energy regulations, Australia’s salvation may come from an unlikely direction. The current basis of climate change policy is the UN agreement established in Paris in December last year. Under this Australia pledged to reduce its carbon dioxide emissions by 26-28 per cent. The renewable energy policy is the cornerstone of this.

But the policy’s architects were the EU and the Obama administration. China, the largest emitter of carbon dioxide, and India, the fourth largest, are taking no meaningful abatement measures. As President, Donald Trump would dump the US participation in the Paris agreement. That would leave as its sole promoter the economically moribund EU, responsible for only one tenth of the world’s emissions. Moreover, Britain’s departure from the EU may presage a European rethink.

Without developing-country participation the Paris accord was always an empty gesture to decarbonising the world economy. Future developments would make any Australian obligations even more purposeless. There are many negatives associated with both candidates for the US presidency. But a Republican victory in November would offer one silver lining for Australia in the provision of an escape hatch for a deleterious policy seemingly set in stone.

Catallaxy Files

suicide-note

About stopthesethings

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

Comments

  1. estherfonc says:

    Hi,

    I just started a petition “SA PREMIER JAY WEATHERILL : Demand the resignation of the Energy Minister for HIGH POWER PRICES CAUSING SA’s JOBS CRISIS and also 15,000 household POWER DISCONNECTIONS, frequent POWER BLACKOUTS and the JULY 2016 POWER CRISIS” and wanted to see if you could help by adding your name.

    Our goal is to reach 100 signatures and we need more support.

    You can read more and sign the petition here:

    https://www.change.org/p/sa-premier-jay-weatherill-demand-the-resignation-of-the-energy-minister-for-high-power-prices-causing-sa-s-jobs-crisis-and-also-15-000-household-power-disconnections-frequent-power-blackouts-and-the-july-2016-power-crisis?recruiter=135406845&utm_source=share_petition&utm_medium=email&utm_campaign=share_email_responsive

    Please share this petition with anyone you think may be interested in signing it.

    Thankyou for your time.

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