Want to Wreck Your Nation? Plug Into Intermittent Wind & Solar – Australia Did

A week or so back, we picked up on a brilliant article in The Australian by Henry Ergas – Professor of Infrastructure Economics at the University of Wollongong’s SMART Infrastructure Facility – in which he likened Australia’s renewable energy policies to a death wish (our post here).

Henry’s back, this time on 2GB detailing the depth of Australia’s self-inflicted power market calamity in this interview with STT Champion, Alan Jones. Click on the play button for audio – transcript follows below.

 

 

Transcript

Alan Jones AO: Matter of weeks and we’re almost back to where we started. This is very, very serious stuff. I don’t think anyone except businesses who have signed forward contracts and consumers who’ve been listening to me and are now scrutinising their electricity bills, but I’m not sure it’s sunk in. What kind of energy crisis confronts us. You’ve got these people, Turnbull and Frydenberg blaming everyone else except themselves and flirting with this Finkel rubbish. Forget that Finkel is utterly unqualified to be advising on energy policy or climate change or whatever else they want to call it. The notion that we could accommodate a renewable energy quotient of 42% is beyond fanciful. Of course, now there are some minor concessions that we need to pump up coal fired power. As if you can walk out tomorrow and suddenly a coal fired energy system will emerge out of the ground.

While you’re subsidising renewable energy to the tune of billions, coal fired power is unviable. I had an email this week from a bloke who keeps an eye on what’s called the Australian Energy Market perator. This is the outfit responsible for the administration and operation of the wholesale national electricity market in accordance with the National Electricity Code. John sent me a screenshot of the nation’s power usage at 8:20 a.m. on June 30, a week ago. South Australia was paying nearly $300 a megawatt hour. 10 years ago, the price was $40.

Here’s the further rub, New South Wales is generating plenty of electricity but we’re shipping it across the borders while pensioners and others here are freezing. A state which exports power, and we may not be able to keep the lights on. The energy minister in New South Wales, like most around the country, Don Harwin, is completely, totally, and irreparably out of his depth. Just on renewable energy, I read a piece recently by Matt Ridley, Lord Ridley actually, who posed his own question, quote: “To the nearest whole number, what percent of the world’s energy consumption was supplied by wind power in 2014, the last year for which there are reliable figures?” The nearest whole number. He asks, “Was it 20%, 10%, 5%, or none of the above?” Well, as he said, none of the above. It was 0% to the nearest whole number. Wind is 0.46% of global energy consumption.

If you take world energy demand growing at about 2% a year, for almost 40 years. If wind turbines were to supply all of that growth but no more, just the growth, you’d need another 350,000 wind turbines. And as Lord Ridley points out, that’s one and a half times as many as have been built in the world since governments started pouring your money into this so-called industry in the early 2000s. This is just new energy demand, remember, new. Not to displace existing energy needs; new energy. Viscount Ridley, elected to the House of Lords in 2013, whose books on this nonsense have been translated into 32 languages, Viscount Ridley said recently of the 350,000 wind turbines, quote: “At a density of very roughly 50 acres per megawatt, typical for wind farms, that many turbines would require a land area greater than the British Isles, including Ireland, every year.” As you said, if we kept it up for 50 years, we would have covered every square mile of land area the size of Russia with wind farms. I mean, this is how ludicrous it’s become.

Professor Henry Ergas AO is the Professor of infrastructure economics at the University of Wollongong’s Smart Infrastructure Facility. He wrote recently, quote: “Things used to go from bad to worse. Now they go from dreadful to execrable.” To just put you in the picture on that observation, the dictionary definition of execrable is abominable or detestable. The Professor Ergas made this observation after analysing the Finkel report. He’s on the line from New York. Henry Ergas, good morning.

Prof Henry Ergas AO: Good morning.

Alan Jones AO: Thank you so much. You’ve said a death wish seems to be at work as we shred low cost options, your words, pile distortion on distortion and reward rent-seeking at the expense of efficient investment. In summary, renewable energy versus coal fired power.

Prof Henry Ergas AO: Yes, that’s absolutely right. That’s what we’re doing on a massive scale and that’s what’s reflected on the ever higher power bills that Australian families face.

Alan Jones AO: You made the point that the Finkel report was supposed to break that cycle. You’ve described the present energy policy as a shemozzle. But you say the Finkel report is, quote: “Flawed by cavalier conclusions and unacceptably poor modelling.”

Prof Henry Ergas AO: Yes, that’s the fundamental problem with the report in which I and many others had invested high hopes. Unfortunately it starts with some assumptions that get in the way of drawing sensible conclusions, then the modelling on which relies, seems to be very poorly done or at least is extremely difficult to understand.

Alan Jones AO: I mean, the concern here is, unless you’re a complete nitwit, we’re talking to Professor Henry Ergas, the professor of infrastructure economics. Unless this man’s a complete nitwit, and you’ve heard what he just said then … Henry Ergas, can I just say to you, the Turnbull government, I’m not sure if any people in the cabinet have read this damn thing. But the Turnbull government have accepted all but one recommendation of the report.

Prof Henry Ergas AO: Yes, so it seems. Though perhaps the recommendation that they haven’t accepted or accepted yet and are still considering, may be quite a fundamental one, which is really about how the system evolves going forward.

Alan Jones AO: It’s all about the submissions trading schemes and the Paris agreement and so on. You say, the errors in the report are hardly random. They systematically overstate the advantages of renewable energy and understate the continuing importance of coal, Australia’s most abundant energy source. Professor Ergas, the problem with this of course is that you just can’t walk outside the door now and create a coal fire power station. You shut these things down; investment is a long range thing, isn’t it? You’re the professor of infrastructure.

Prof Henry Ergas AO: Oh absolutely. What we’re doing at the moment is essentially dismantling our coal fired capacity without putting in place alternatives, which can provide the electricity the country needs, even at the moment, much less to cater for growth. That is a fundamental problem that the time, as you say, to constructing new coal capacity are very long, particularly in Australia, where what is happening is that the opponents of coal with almost religious zeal are using every means they can to shut down capacity and to ensure that no new coal capacity will be built.

Alan Jones AO: But you don’t expect a Liberal government to cave in to that sort of nonsense. I mean, you say that nothing better illustrates the pattern than the reports assertion, this is the Finkel report, you’ve heard, Professor Ergas, the assertion that, quote: “Delivering a secure power system …” Now, remember, there’s two things here, security, which is basically reliability and price. The report says, “Delivering a secure power system with a high penetration of renewables, is technically and economically feasible.” I mean, that just defies, as you say, the weight of evidence, doesn’t it?

Prof Henry Ergas AO: It certainly does at the moment. I mean, of course, it’s possible that in a century’s time it will be feasible. But at the moment the bulk of the evidence is that that cannot be done. Yet the report’s modelling, for example, proceeds on the assumption that we will have an emissions free national electricity market by 2070. That is, at least on the current state and protected state of technology, completely unrealistic.

Alan Jones AO: Well, I don’t even know what your views are. We won’t canvas them here. But this notion of CO2 is destroying the world and therefore, we have to worry about all this emissions. I mean, that, to me, is the root cause of all of these problems. But you say in your assessment of Finkel, that ensuring the lights stayed on, and this has been completely ignored, ensuring the lights stayed on in a high renewable scenario would require extra investment, and the Finkel report ignores that. So in other words, it understates the cost of renewable energy, albeit we know that is a very high cost anyway.

Prof Henry Ergas AO: That’s right. It’s very difficult to tell from their modelling because they haven’t released the underlying model, and the descriptions they’ve given are rather partial and incomplete. But as best one can tell from what they’ve said, it looks like they have systematically understated the system-wide cost of the high level of relying upon renewables that we’re now placing. As a result, they make renewables look much better than they are relative to conventional forms of generation, particularly coal.

Alan Jones AO: So you’re much more of a gentleman than I am, Professor Ergas, but you see, I have the view that in government, and we’ve had this now, over this renewable energy nonsense, we’ve had it over global warming, we’ve had it every report, that he who pays the piper calls the tune. So therefore, at the end of the day, before even this Finkel thing was released, I said on air here, “Well, I know what the conclusion will be. It will be a surrender to the advocates of renewable energy and global warming within the Turnbull government, including the leader himself.”

Now, you say in your assessment, quote … Sorry, Finkel says: “What is clear is that the assumed financing costs for coal based plants are so high as to be prohibitive.” In other words, tell the government, well, look, I know everyone’s going on about coal fired power, but this is far, far too expensive. Renewable is going to be cheaper. That is a nonsense.

Prof Henry Ergas AO: Well, it is quite inconsistent with what’s happening worldwide.

Alan Jones AO: Quite.

Prof Henry Ergas AO: I mean, worldwide, if you look across the globe at the moment, there’s about 1600 coal plants that are either in the planning stage or under construction in 62 countries. Now, what that suggests is that coal remains highly competitive and its financing costs are nowhere near as great as the modelling on which the Finkel report relies. But yes, that modelling, in my view, is quite inaccurate.

Alan Jones AO: Yes, in all those countries, except here of course. You make the very valid point. Now, this man is a professor of infrastructure economics. You can hear by the gentleness of his tone that he’s not going out there bellowing stuff. It’s a thoughtful assumption. You say in this report that the estimates of the cost, and that’s coal fired power, quote, your words: “Are almost double those for the large US coal based generators.” So there’s a bias in this report.

Prof Henry Ergas AO: Yes, I find their numbers, to be honest, incomprehensible. I just don’t see how they could reach those conclusions on the basis of the evidence that’s available. I think there’s an obligation upon them to explain how those conclusions were reached.

Alan Jones AO: Absolutely.

Prof Henry Ergas AO: If you just look at them at the moment, they’re likely to lead policy down …

Alan Jones AO: Yep, in other words, forget it. The report says, coal fired power is too dear, look, we’ve got to go somewhere else. Now, if that’s true and we don’t have anyone, Frydenberg, Turnbull, or anyone articulating this, but why would it be that Japan and Germany and China are leading the cleaner coal way to reduce carbon emissions, if that’s what we must do, and that there are more than 1200 new generation high efficiency, low emission, coal fired power plants built around the world to add to the existing 1,115, and none in Australia.

Prof Henry Ergas: Yes, I find that really striking and disappointing, because after all, we have one of the world’s most abundant resources in terms of coal and we ought to be putting our coal to good use, providing Australian consumers and businesses with inexpensive, reliable, and secure generation. We’re not doing that, we’re doing the opposite.

Alan Jones AO: We’re not doing it. I love your sentence, and this is the guts of it in language that people listening to you can understand. Professor Ergas says this, criticising the basis on which the report has been fashioned and of course its conclusions in particular, “When the review’s preferred option is implemented, costs rise, but prices fall.” Hello? Which textbook is this from?

Prof Henry Ergas AO: Yes, again, that’s the result that I found incomprehensible and that it really doesn’t explain anywhere. So that what you’re left with is a modelling base, a set of results that I don’t believe provide a good foundation for a public policy in any area, that is of crucial importance to the future of the Australian economy.

Alan Jones AO: Wonderful to talk to you. Thank you for taking your call. I know you’re in New York. But thank you for taking the call, and we’ll keep in touch.

Prof Henry Ergas AO: Thank you very much.

Alan Jones AO: Not at all. There he is, that’s Professor Henry, disgraceful isn’t it? And on the same day as the professor of infrastructure economics at the University of Wollongong Smart Infrastructure Facility, but this is on the same day, when Frydenberg the energy minister, is blaming Abbott for the problems the government has. They’re kidding me. I mean, this bloke, Frydenberg has abandoned any sense of responsibility to the Australian nation. They’re preaching this rubbish mantra and this is where we are. The Finkel report, as I’ve said many times, should be put in the bin.
2GB

Josh Frydenberg measures up the Liberal’s chances of avoiding
electoral annihilation over Australia’s self-inflicted energy fiasco.

About stopthesethings

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

Comments

  1. A major concern I have is that new AEMO CEO is Audrey Zibelman, an avowed “energy reformer” from New York. She was recently in the news, full of praise for the Finkel Report.

    • Agreed, she is a major cult player. However, the politics of power have turned. Power prices are killing businesses and punishing families. The LRET is unsustainable and will be scrapped, a question of when not if. Then Zibelman will scurry off like an indestructible cockroach and find some other country to wreck from within.

  2. Terry Conn says:

    How sick does an island continent nation have to be be before it dies? This article clearly sets it out – ‘not much longer’. This current federal government has to be the most brain dead in Australia’s history – despite the accurate descriptions by many of what would happen if this ‘wind farm’ insanity persisted there was always the dream that it might be okay, but now, even in the sunlight hours the proof it is a massive failure (South Australia) is ignored but the ‘dead horse’ is still being flogged by Turnbull and co. How ironic it will be if the Labor party gets elected and then says ‘hey, we’re over this wind farm bullshit, let’s build some Hele coal fired power stations’ – I’ve heard the rumblings, it’s on the cards.

  3. Reblogged this on UPPER SONACHAN WIND FARM.

  4. Hi,

    Here’s the link to the Petition on the Federal Government website for Australia to Withdraw from The Paris Climate Agreement.

    Please Sign it by clicking on the link below and please also share it with everyone you know. There are only 1497 signatures to date, so it needs to move FAST !

    Closing date for petition is 19/7/17.

    http://www.aph.gov.au/Parliamentary_Business/Petitions/House_of_Representatives_Petitions/Petitions_General/Sign_an_e-petition?id=EN0264

    Thankyou.

    Esther

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