Australia’s Runaway Power Prices Kill Renewables-Rent-Seekers’ Dreams

Those who have spent the last decade or so milking wind and solar subsidies, probably thought the rort would last forever. When the Large-Scale Renewable Energy Target was upped to 41,000 GWh in 2010, renewables-rent-seekers thought that figure was set in stone. Until it wasn’t. Despite a hostile Senate and rats in his own ranks, then PM, Tony Abbott managed to slash that target to 33,000 GWh, a bit over four years later.

Since then, a dwindling band of increasingly nervous profiteers have been kidding themselves that the reduced LRET is still set in stone.

Power prices rocketing at 20% year-on-year and a grid on the very brink of collapse have split Australia’s political class in two: those desperate to avoid being flogged at the ballot box over rocketing power prices and those desperate to keep profiting from the greatest rort of all time.

Those, like The Australian’s David Crowe, who claim that the LRET is like some immutable law handed down from on high are deluding themselves. Any policy which is unsustainable will either implode under its own imponderable weight or its creators will be forced to scrap it.

What has forced the issue, is the fact that people want power as and when they need it; and they do not want to pay a king’s ransom for it. Both of those, quite reasonable, expectations have been turned on their head thanks to the LRET, and the chaos delivered by intermittent wind and solar.

In this piece, The Australian’s Janet Albrechtsen gets to grips with the politics of power, offering the embattled PM, Malcolm Turnbull some pretty obvious advice: kill the LRET and collect government at the next election, by default.

Doomed politics of your power bills
The Australian
Janet Albrechtsen
13 September 2017

A few weeks ago, the Prime Minister said more than two million Australian families and small businesses could save 25 per cent by changing energy plans or retailers. At a meeting with the heads of Australia’s major energy retailers, Malcolm Turnbull demanded that they write to customers informing them of better deals. Maybe the letter is in the mail.

I rang my energy provider a few days ago and asked a very obliging woman in AGL’s call centre how I could reduce my power bill. She immediately offered a 24 per cent discount. No new contract, just pay on time please. I inquired whether lots of people were asking for a better deal from AGL. She said not so many. People didn’t think to ask, she said, and they weren’t always told of new discounted deals. The woman said she was sad for older customers who were really feeling the pinch of steep electricity prices. Not to mention the poor, regardless of age, people trying to stay in business, even grow their business and employ more people. In fact, all of us are paying for a monumental policy failure in a country with abundant supplies of cheap and reliable energy.

Headlines about AGL boss Andy Vesey being a “victim” in the government’s power blame game don’t wash. As Scott Morrison likes to say, cry me a river. When Australia’s largest energy supplier offers a 24 per cent cut to your power bill only when a customer asks for a discount, it says something about how AGL prices power and how it treats customers. It says it’s charging more than it needs to, because it can. So who’s the victim?

AGL is doing nicely out of the country’s energy mess and that means Vesey, the chief executive, is probably doing very nicely too. Last week AGL share prices rose 2.4 per cent after Ord Minnett analysts pointed to a report by the Australian Energy Market Operator warning of the risk of blackouts and baseload shortfalls when demand peaks this summer. As The Australian reported, the AEMO’s conclusion was this would lead to higher and more volatile prices.

“We see AGL Energy as the biggest beneficiary of higher wholesale prices,” the broker said. AGL’s commitment to close down the Liddell coal-fired power plant in NSW’s Hunter Valley will only add to baseload shortfalls and price volatility. That’s a win-win for AGL and too bad for customers left with skyrocketing power bills.

So who’s to blame for this policy mess? And how do we fix it? In the words of Khal Drogo, the buff war lord in Game of Thrones, these are questions for wise men with skinny arms. But I’ll give it a go. Australia’s competitive advantage as a country with cheap, reliable energy has been sacrificed not just by hipster corporates like those at AGL who employ proteges of GetUp! and Al Gore’s climate-change leadership program.

In a rare show of bipartisanship, both Labor and the Coalition have allowed the politics of ­climate change to distort sensible energy policy. The only difference between the two major parties is one of degree, with Labor pushing a higher renewable energy target than the Coalition. In both cases, the climate tail is wagging the energy dog, with RETs and subsidies rendering investment in coal unviable, leading to gaps in baseload power, grid instability, blackouts and that insufferably high power bill on your kitchen bench. If renewables made economic sense without subsidies, the industry would thrive without an RET and without driving up energy ­prices. It’s hard to imagine a policy more certain to kill jobs and industry and drive investment offshore.

As an election strategy, “Blackout Bill” becomes a potent political weapon but only if the Turnbull government can admit that higher electricity prices are driven by twin policy demons: the RET and renewables subsidies. It will take some political and policy courage to walk away from both.

Consider the arguments the Turnbull government could then make. For starters, it takes a special kind of stupid for Bill Shorten to stick with Labor’s 50 per cent RET after the failed experiment in South Australia, where green policies produce the world’s highest power prices and regularly leave South Australians in the dark.

Shorten could be the gift that keeps on giving. His claim last week that past privatisations have caused the current electricity ­crisis was quickly exposed as daft. Not just because the claim was backed up by economic dinosaurs who double as Labor’s paymasters within the union movement, but because smarter Labor minds spotted a leader with no genuine reform credentials, let alone ­convictions.

Former NSW Labor treasurer Michael Costa pointed out that the Keating government started electricity market reforms and said that Shorten sounded more and more like a left-wing socialist ideologue whose 50 per cent RET was a betrayal of blue-collar ­workers.

Freed from the RET and subsidies for renewables, the Turnbull government could point with greater force to the AEMO’s recent report warning that there is an “increasing and unacceptable risk” that the market won’t provide enough power to meet ­demand over the next two summers. With the closure of coal-fired power stations in SA and Victoria, and next in NSW with AGL committed to shutting down the Liddell plant in the Hunter Valley by 2022, baseload power capacity shrinks further.

Alas, politics has reached a tipping point when it takes the ­Nationals to demand an end to subsidies. At their federal conference last weekend, the Nationals voted to phase out subsidies for renewables over five years and to ­reject the Finkel report’s proposed clean energy target of 42 per cent by 2030. Without the constraints of cabinet, former resources minister Matt Canavan was right to say “we’ve taken all the subsidies away from our farming sector and now the biggest protection racket is in our renewable energy sector”. As Malcolm Roberts said last Friday, scrap the RET and see how quickly the AGL boss likes coal again.

Barnaby Joyce told ABC radio on Monday we have to keep shelling out subsidies for renewables “to comply with our international agreements”. If doffing our cap to an international agreement that is neither binding nor enforceable did no harm, we might endure it. But the RET and renewables subsidies hit us in two ways: striking our hip pocket with higher electricity bills and, even before our money makes it into our wallet, through taxes spent on subsidies that drive higher power bills.

If the Turnbull government provides subsidies to keep Liddell open past 2022, it will be a case of the government giveth and then taketh away, by demanding discounted power bills from energy retailers and handing out subsidies to a coalmine to “fix” a problem caused by subsidies to renewables.

While the Turnbull government and Labor tussle over which party’s RET is less of a job-killer and a price-hiker, ring your energy provider and shop around. Minimising your energy bill is not just good financial sense, it’s become a moral imperative, kind of like minimising tax. As Kerry Packer once said to a panel of cowering Canberra politicians, “you’re not spending it that well that we should be donating extra”.
The Australian

Millions of votes are up for grabs, just kill the LRET to collect them.

About stopthesethings

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

Comments

  1. Not a word from Albrechtson that Tony Abbott was right…as he almost always is…and long before she was….in fact she says ‘it takes the Nationals to demand an end to subsidies’…so she’s deliberately denying any credit to TA as usual.

    Albrechtson knows Turnbull should already be gone from the PMship by now…by his very own criteria and hers….since she was one of those whose deceits and public denunciations weakened Tony Abbott for Malcolm Turnbull’s coup.

    At the time…in January 2015…when Turnbull elevated his slow-burn coup to SPILL stage…TA had been all of 16 months in office following his landslide win with a massive seats buffer that put Malcolm Turnbull and his plotters into government….and they had been months of enormous achievement…more than ANY other Australian PM had achieved in such a short time.

    So in January 2015…when Turnbull and his plotters in government and MSM…like Albrechtson…began their unprecedentedly relentless, brutal and ruthless 24/7 campaign 2 terminally wound him in order to oust him…. TA had had 15 or 16 [not 30] consecutive losing NEWSPOLLS.

    Having kindly allotted TA a probationary 6 months ‘to get his act together’ people like Albrechtson and the rest of the MSM team made sure their ongoing ruthless hatchet job on him meant that he never ever COULD….no human being could.

    They relentlessly publically demonised and vilified him on the basis of minutiae in order to force his polls and the LNP’s down…and yet….. even under that deathwatch…as they amused themselves in the prelude to the KILL…Tony Abbott performed exponentially better on every measure than his assassin ever has before or since.…TA’s polls were better than Turnbulls have been….especially on the all-important primary vote.

    Albrechtson wants Australians to forget her involvement in overturning the vote of the Australian people and making Australia a COUP country…and some WILL conveniently forget.

    But now she wants 2 help her incompetent loser PM to entrench himself in power by supposedly reinventing himself for 2019.

    As Australia’s often found to its horror…any perpetrator can be protected from accountability ….any rogue can prevail to wreak havoc on another day …if he can induce enough morally-challenged but stupendously powerful people to overlook his offence and sink the boot into his victims to dispatch them….to clear a new path for HIM and smooth HIS way to power and riches again.
    So Albrechston pretends she never heard Tony Abbott’s call for removal of subsidies—even though she’d have to be in a coma since he’s excoriated for it in the MSM 24/7—and she’s apparently not heard of the deep concern re certain ‘system collapse’ due to RET subsidies… from the late AEMO boss Matt Zema shortly before his death and only months before her pick for PM needlessly ratified the Paris Accord to make it harder to remove those very subsidies.

    I don’t believe we’ve heard Albrechtson call for her PM to disclose his special family interest in the fortunes of wind and its subsidies….and the possible influence of that vested interest on his rush to ratify …on his retention of subsidies…or on the decision on the CET.
    .
    Albrechtson’s Coup PM’s record is not of doing what’s best for Australia—that’s what the man she helped MT to destroy is focussed on with every fibre of his being and under enemy fire as usual.

    Turnbull’s record at every turn is to work to destroy Australia’s only competitive advantage—coal-fired electricity.

    Rudd’s CPRS….ETS……Gillard’s Carbon Tax…..MT’s attempt to sneak an EIS past us not long ago…ratification….retention of RET…appointing Finkel…allowing AEMO to be headed by a RE/ COAL-HATING zealot…recruiting Greens to his own PMO…and just his inertia…all these and everything about Malcolm Turnbull has been about KILLING COAL….and KILLING AUSTRALIA.

    So Albrechtson’s search for a policy….even one MT abhors… to get him re-elected….. is just as anti-Australian as her part in the terrible wrong he did in 2015…to Australia …to democracy and to Tony Abbott.

    It’s Tony Abbott…never Malcolm Turnbull…who has always had the right policies for Australia…[within the constraints of politics being the art of the possible]…it’s TA we can trust to always do what’s best for Australia….and so for Australia’s sake….TA should be reinstated ASAP….not a moment to lose!

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