Australia’s $60bn Business & Job Killing Renewable Energy Target: Turnbull & Frydenberg Dare Not Speak Its Name

Finally, the message is starting to get through: Australia’s Renewable Energy Target is a $60 billion tax on all Australian power consumers and, therefore, a guaranteed business and job killer.

However, those tuned in to the PM, Malcolm Turnbull and his hapless sidekick, Josh Frydenberg wouldn’t know it.

Frydenberg continues to rail about Labor’s ‘aspirational’ 50% RET; go into hysterics about notional State-based targets; while holding the renewables-rent seeker line that all that’s needed to run the country entirely on sunshine and breezes are a few billion dollars’ worth of Elon Musk’s (as yet to materialise) mega-batteries.

Turnbull, on the other hand, is stuck with the deluded belief that berating Australia’s power retailers into offering discounts of a few percent on retail power bills (or at least telling their customers that they might get a ‘better deal’) is somehow going to correct the destruction wreaked by a $3 billion a year, market distorting, tax on all Australian power consumers.

Among the mainstream press, The Australian’s Economics Editor-in-Chief, Judith Sloan is one of the few with a detailed grip on the causes and consequences of Australia’s self-inflicted, renewable energy debacle.

Earning STT frequent flyer points this week, here’s Judith again. This time with STT Champion, Alan Jones (the radio broadcast appears below for those with fast Internet, for those without, the transcript follows).

 

 

Transcript

Alan Jones AO: Now, I hope you’re checking your electricity bill. I’m checking mine. The increases are astronomical. One period of billing in my 24-hour cycle has gone up by 35%. Now, the Prime Minister and the Energy Minister, Turnbull and Frydenberg, are now going to meet electricity industry chiefs for the second time in three weeks.

An audit by the Australian Competition and Consumer Commission has estimated that roughly a million households, that’s more than 10% of all dwellings, are locked into the highest electricity prices. Why the hell the government needed an ACCC to tell us that electricity prices are going through the roof, I’ve got no idea. You’ve got BlueScope Steel telling us last week that their share price is down 22%. $1.7 billion wiped off the company’s value. And they cited electricity prices.

Malcolm Turnbull was having his picture taken yesterday in relation to the Snowy Hydro scheme. More money to be spent, $29 million of borrowed money. $29 million on a feasibility study! For a scheme which basically will use more electricity to pump the water uphill than will be generated when the water comes downhill. Work that out.

I’m sorry. Every energy bill should have Malcolm Turnbull’s name on it, and Josh Frydenberg’s name on it, because they are the reason these bills are where they are. And again, the retailers are going to be asked to outline how they plan to help families get a better deal, and what measures they’ve put in place.

There are three words that are never mentioned: Renewable Energy Target. And yet the spin is, the Prime Minister’s going to ramp up measures to lower household power bills. And he was talking all this nonsense in Cooma yesterday. The slogans were out again, “Jobs and Growth.”

Let’s get down to the nitty-grit. The United States Energy Information Administration confirmed early this month that South Australia has the dearest electricity in the world. New South Wales are now the fifth. Queensland, the seventh. Victoria, the ninth. The world’s highest electricity prices.

When the Eastern States National Electricity Market was formed, in the late 1990s, we had the lowest retail electricity prices in the world. Along with the United States and Canada. And I said in the week that I came out of hospital, back onto this program, that I believed this was the greatest national crisis we are facing. I’m not an alarmist.

We have a ridiculous Renewable Energy Target, at 23% by 2020, and then under Finkel, 42% by 2030. And all Turnbull and Frydenberg can do is attack the Labor Party. Now there is no doubt that a Shorten Labor government will massively increase power bills in the name of climate change. Shorten wants a 45% reduction in carbon dioxide emissions by 2030. Close down all coal-fired power stations. They want a 50% Renewable Energy Target. Labor’s energy policy will accelerate price rises and drive massive blackouts.

But no use looking to the Turnbull government. They have no credibility in this at all. Under the Finkel Report, which the government says has already been adopted, save for one remaining recommendation, renewable energy, or call it “unreliable and intermittent power,” 42% by 2030. The only difference between the government and the opposition is one of degree.

Abbott could credibly attack Labor on this, because he doesn’t believe in this climate change nonsense. Turnbull’s up to his neck in it. Malcolm Turnbull’s whole history is one of taking climate alarmism seriously. Frydenberg doesn’t believe in this stuff. He’s told me he doesn’t believe in it, but that was before he became the Energy Minister. Now he’s sucking up to the leadership, and doesn’t have the guts to say “This is rubbish!”

Hence, Professor Judith Sloan saying that “Frydenberg doesn’t know whether to laugh or cry.” She’s made the point that retail electricity prices for households last week rose between 15% and 20% in most of the eastern states. And she made the further powerful, unchallengeable point that residential power disconnections have risen by 140% in the past six years, and there’ll be more.

Judith Sloan said this, quote, “For businesses, the situation is worse. They are facing even steeper rises in their power bills. For those operations that use gas directly, their annual gas bills will be two to three times higher than they were last year. That’s,” she says, “if they can secure any deal in the context of a shortage in domestic gas.”

Writes Judith Sloan, Professor Sloan, “In the mean time, the debate about securing the three objects of energy policy, affordability, reliability, and sustainability,” she rightly says, “provokes debate.” Now we’re constantly told by the government that they’re not related to the increase in the penetration of renewable energy. As she says, “The other side of the debate is rising electricity prices are the result of too much subsidised renewable energy, which in combination with low demand, has driven cheap, reliable sources out of business.”

Now, you can talk about this until you’re blue in the face. There are some aspects of this that are unchallengeable. Here’s one, which won’t be discussed today, unless it’s raised, of course, by electricity retailers. Through the Renewable Energy Target, we are forcing upon electricity retailers the cost of buying an additional 4.6 million Renewable Energy Certificates this year, because we’re ratcheting up the Renewable Energy Target. That will bring the total we’re forcing them to buy to 23 million.

Now, the cost of these Certificates currently is about $85 each. That money is paid to wind and solar farms, mainly owned by foreigners. So we’re forcing them to pay, this year, an extra $391 million to purchase these certificates. A total of almost $2 billion for this year alone.

Now if the electricity retailers don’t buy the certificates, which of course they have a price they have to pass on to consumers, the government hits them with a high penalty. And each year, we’re forcing the retailers to buy more and more certificates, as we ratchet up the Renewable Energy Target.

Labor want to whack it up to 50% by 2030. Now, we want to ratchet it up to 42% under the Paris Agreement. So if you wanted to take pressure off electricity prices today, the first thing is freeze this wretched Renewable Energy Target, and that would save consumers, this year alone, $391 million.

I asked Judith Sloan to come on the program, but I think we’re both sick and tired of talking about this, because the answers are so obvious. But she’s with me. Judith, good morning.

Prof Judith Sloan Hello, Alan, how are you doing? I think I’m blue in the face.

Alan Jones AO: Yes. Stop it! I love you. You’ve got this very dry sense of humour. I mean, you wrote, only a week or so ago, about this ideological nonsense, and the government telling us that green schemes contribute only 8% to the cost of electricity, according to Josh Frydenberg, and you said, “Pull the other one.” I mean, these people are just off the planet, aren’t they?

Prof Judith Sloan Look, I think they are. I think they’re trying to sell us a pup. In the sense that they think, or try to persuade us, that we can have affordable, reliable, and what is called, I think euphemistically, “sustainable electricity.” I mean, what is driving this, as you say, is the increased penetration of renewables. And, in turn, that’s being driven by their commitments to … I think unrealistic commitments to reducing the growth of emissions.

And I have made this point elsewhere, that on the very day that President Trump was elected, there was Malcolm Turnbull confirming our commitment to a reduction of between 26% and 28% in CO2 emissions from our 2005 levels. Now, we are a very, we’ve talked about this in another context, Alan, a very rapidly growing population. And in per capita terms, that’s between 50% and 52% reduction. Which is miles higher than Canada, the U. S., Europe.

So we’ve basically got ourselves stuck in a government-made trilemma. They like to call it a trilemma, they’ve made that word up. Whereas my argument is “Let’s throw open this debate, and just figure out what the real consequences are.” I know … and I’m really sympathetic to households, but let’s just go back to basics.

If we look at all our electricity demand, half goes to big energy using businesses. Lot’s of high paying jobs. A quarter to other businesses, and a quarter to households. Now, households we need to worry about. But what we are, I think, possibly about to encounter is the exodus of a lot of these large-scale manufacturing businesses like BlueScope Steel. They produce a lot of jobs. A lot of high paychecks. Well, you said-

Alan Jones AO: Yeah. Absolutely. That’s what I said, Judith. This is an-

Prof Judith Sloan A lot of unionised jobs.

Alan Jones AO: Yeah. This is a national economic suicide note. You have said, and I quote your words, this is Professor Judith Sloan, “The main effect of the Renewable Energy Target has been to drive out low-cost coal fired plants, with the increasing proportion of intermittent energy being backed up by highly-priced gas.”

Now, if you’re in the market, Judith, and you are subsidising with taxpayers’ money, two forms of energy. Then the other outfit, coal-fired power, can’t compete. It’s as simple as that. So they’re driven out of the market.

Prof Judith Sloan Well, I think what turns me even bluer in the face is when the Prime Minister says, “Coal will continue to be part of our electricity for a long time.” That’s right, but only existing coal. There’s going to be no new coal.

Alan Jones AO: No.

Prof Judith Sloan And what’s going to happen is that, what we had for Hazelwood, which was a massive contributor to the Victorian base load, 1500 megawatts. We’ve got Liddell sitting there in New South Wales,

Alan Jones AO: It’s going to close in 2022.

Prof Judith Sloan Yep. So essentially this is going to get worse, not better, as these plants exit the system, and they’re not replaced by other coal-fire, or even perhaps if we could sort out gas exploration and exploitation, even some gas-fire power stations. We’re becoming a land of solar panels and windmills.

Alan Jones AO: But just come back to the-

Prof Judith Sloan And the trouble is that … Look, I can understand why households love their solar panels, and the like, and that may make sense. This will not support heavy industry.

Alan Jones AO: Correct.

Prof Judith Sloan So let’s just save that for –

Alan Jones AO: We just can’t get the volume of energy we need. We can’t get it. I mean-

Prof Judith Sloan Which is linked to the base load.

Alan Jones AO: But what about this solar thermal plant in Port Augusta now? Well, see, this is … Judith Sloan, who has been on the board of the Reserve Bank, laughing. It’s a joke. This is the Prime Minister of Australia, and the Energy Minister. Thermal power, forget the fact that it’s double the cost of wind and solar. It was an experiment a decade ago, completely obsolete in the United States, not a single solar thermal plant being built anywhere in America.

No one’s called this madness out. $650 million, and the government borrowed money, is racing off to support it to the tune of $110 million. And they say, “Oh, it’ll create 700 jobs.” So, what? That’s a million dollars per job. Have these people lost all common sense, Judith?

Prof Judith Sloan They have, it looks so. $650 million, which is a guess, let’s face it, for 150 megawatts. They blew up the Northern Power Station in Port Augusta, same place where this new outfit’s going to be, which had 520 megawatts. They blew it up, right, and it wasn’t particularly old.

And the owners of that, Alinta Energy, had gone to the South Australian government and said, “Look, for $20 million, $25 million … peanuts. We’ll keep the Northern Power Station going.” And for completely ideological reasons, the South Australian government said, “No, no. There’s no future in coal. Go away.” Unbelievable. Unbelievable. I mean, I’m just like, absolutely gobsmacked at the stupidity of all levels of government.

Alan Jones AO: And so energy in South Australia is four times the price of what it is in the United States. And New South Wales about three times the price in the United States. And, I mean, you’ve made the very, very valid point, which has never, ever been discussed here. You can’t even get a discussion of it. About these “clean coal plants.” High-efficiency, low-emissions. Which could easily compete with renewables, if the renewables had to pay their own way.

But you make the very valid point as to where these things are. And you’ve said, this is Professor Judith Sloan, not Alan Jones, she said, “There’s a surge in investment worldwide in next-generation, high-efficiency, low-emission, coal-fired electricity plants. 45 being built in Japan. More than 100 in Africa. Hundreds in China and other parts of Southeast Asia. Some in Europe, including Germany. And Germany has extended the date when the use of brown coal will be phased out.”

So Judith, how is it possible that governments overseas see the sense in building or facilitating the construction of high-efficiency, low-emission coal plants, but not Australia?

Prof Judith Sloan Well, I’d be inclined to say “Buggered if I know, really.” But I think … No, it’s … the truth is, I think, that I think the activist groups are incredibly powerful here.

Alan Jones AO: Yeah, that’s it.

Prof Judith Sloan They have … No future in coal here. And you have to read The Guardian every day. Where it’s interesting, if you actually go and read the serious press, you’ll find that, for example, exports of coal out of the U. S. have begun to increase. That industry is in a resurgence. And there was a –

Alan Jones AO: Now listen, listen. We’ve got to go. I’m going to cut you off here, Judith.

Prof Judith Sloan … 40 –

Alan Jones AO: We’ve got to go. We’ve got to go.

Prof Judith Sloan No problem. Any time.

Alan Jones AO: Great to talk, but it’s unbelievable, isn’t it? There we had Professor Judith Sloan, and these people are meeting today. The three words they won’t use: Renewable Energy Target.
4BC

Hear no evil, see no evil and definitely speak no evil.

About stopthesethings

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

Comments

  1. Weasels 2 Go says:

    One might be tempted to assume that the wind industry has the TurnFry twins in a monkey grip. That is not actually possible, better to conclude that that the senior member of the twins is happy to ruin our power industry so as not to scare the idiot green voters or perhaps he is one such

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