Australia’s Self-Inflicted Renewable Energy Fiasco: Product of Political Treachery

Last Sunday, STT detailed the workings of Malcolm Turnbull’s National Energy Guarantee and the associated Emissions Obligation faced by power retailers. Not that we were out to defend it. Indeed, while it has some promise of restoring stability to Australia’s electricity grid (being pushed to the brink of collapse by a ludicrous attempt to run on sunshine and breezes), having the NEG and Emissions Obligation running side-by-side with the Large-Scale RET is patent policy nonsense.

Someone who shares STT’s view in that regard is Dr Michael Crawford. Here he is again ripping into Energy Minister, Josh Frydenberg.

Dear Minister Frydenberg…
Quadrant Online
Michael Crawford
19 October 2017

This complex ‘green energy’ mess you refuse to correct is costing Australians a wholly unnecessary $30Bn to $50Bn a year. Yes, you read that right: tens of billions of dollars squandered to pleasure rent-seekers and destroy thousands of jobs– your political career among them

I understand you have devised an ingenious plan to rectify the current government-directed destruction of our once reliable and affordable power system. According to media reports, your scheme will require electricity retailers to do essentially what they are currently doing, while the “renewable” rorters do what they are currently doing, and electricity distributors continue to do what they are currently doing.

Despite the fact that everyone will be continuing as at present (except of course that we will now pay for more bureaucrats to oversee this plan, and for some more bandaids), I understand that you and the Prime Minister are confident electricity prices will fall in maybe ten years time, by a paltry amount, and the lights will stay on because you have willed it so.

Could you please clarify whether your advisers got the script for this plan from Monty Python or from Blackadder? Attribution should go to the right source.

I understand the crux of your ingenious scheme is that retailers will be obliged to purchase at least 1MW of electricity from baseload sources for each 1MW of unreliable (i.e. wind and solar) electricity they purchase. What exactly do you think they are doing at present?

Dr Finkel’s report was grossly misleading in multiple ways. However, he did provide some basic facts pertinent to your plan. On p. 87 of his report, he noted that “In FY2016, 76 per cent of electricity produced in the NEM came from coal-fired generators.”

So the ratio of electricity from coal-fired baseload sources to all other sources was 3:1 in 2016 – and those other sources included gas and legacy hydro. Dr Finkel’s projections (Figure 3.8 in his report) are for the ratio of baseload to intermittent sources to be 3:1 in 2020 and 1.5:1 in 2030 under his “Clean Energy Target”, and 2:1 in 2030 under current arrangements.

Consequently, your mandated 1MW:1MW requirement would make no difference to the behaviour of wholesale purchasers of electricity in the immediate future and, indeed, for decades. Consequently it will not deter the “renewable energy” rorters from building more unreliable, intermittent power stations, causing increased variability across the grid and more expensive power which your government forces electricity consumers to purchase.

Your ingenious plan demonstrates a complete lack of understanding of how the introduction of intermittent power generation has created system unreliability and doubled real electricity prices in Australia, and how it will continue to do so. In short:

  • Intermittent wind and solar is highly expensive electricity, requiring the combination of high wholesale prices plus LRET subsidies (paid by consumers) of a roughly similar amount, to make them viable.
  • Because of the subsidies and the nature of the NEM, subsidised generators are able to always place their output into the grid, at the expense of baseload generators, with the latter then being turned into intermittent generators – not because of any deficiency on their part but because they keep getting shut out of the grid on an intermittent and unpredictable basis.
  • Since they are thus prevented from operating at full capacity, baseload generators then also require high prices per MWH in order to be viable, and those necessary prices increase as the intermittency forced on them increases.
  • Given that the proportion of intermittent generators is continuing to increase under your policy, and thus also the intermittency forced onto baseload generators, and given Australian government is driven by irrational ideology, no independent party will invest in new baseload plant or in the refurbishment of existing plant.
  • Wind and solar generators are not just intermittent, they also fail to provide the frequency control and other functions essential to a widespread grid and which are an intrinsic part of baseload generators. Thus the increasing proportion of intermittent generators also adds increasing instability to the grid.
  • Because of the multiplicity of intermittent generators mushrooming around the country, much more transmission infrastructure is required. Each of those generators requires an expensive substation to convert its output into a form suitable for the grid, plus new transmission links. The cost of this comes out of the pockets of electricity consumers.
  • Many members of the public have responded to your high electricity prices (and in many cases encouraged by government subsidies) by placing solar panels on their roofs. Most of them remain connected to the grid because they also want electricity at night (adequate battery storage is very expensive) which cannot come from solar farms, and only sometimes will it come from wind farms, so you need additional investment (either legacy baseload or new gas-fired installations) to back up those private investments. All that investment has to be paid for by end-users. In addition, local distribution networks have consequent less demand on them, so their owners are requiring increased per household connection charges to meet their costs.
  • You and previous governments have produced a Rube Goldberg structure of government agencies to oversee the NEM, which have destroyed affordable and reliable electricity, and whose failure is rewarded with expansion. In addition, you have duplicated at the national level government officials that once existed only at state level. Electricity consumers and taxpayers pay for this mess.
  • The financial sector has got in the act offering hedging instruments so various parties can cope with the financial uncertainty caused by this system, uncertainty we never had before the NEM and intermittent power. The financial sector employs people and capital to provide those hedging instruments. That is a real cost which again ultimately comes out of the pockets of electricity consumers.
  • Where once electricity in each state was produced by a state government responsible to its electorate, it is now produced by an unscrupulous oligopoly whose members use every tactic they can to game the fake market Australian governments have created and thereby add further costs to consumers in order to pad the profits of their largely foreign owners.

As I pointed out in an earlier letter to you, this complex mess over which you are presiding and which you refuse to correct is costing the Australian community an excess and wholly unnecessary cost of between $30Bn and $50Bn per annum. Yes, that is measured in tens of billions of dollars each year. It is increasing each year and it is destroying tens of thousands of jobs.

Despite that knowledge, while presiding over a system where real consumer electricity prices are now twice what they were before your NEM started, you insult the Australian people by claiming you’ll deliver them a reduction of less than 5% in maybe a decade’s time, when you will be long gone from office. In other words you are telling them the country will have to suffer unaffordable power prices now and for decades – because you and the Prime Minister are too gutless or incompetent to fix it.

And all of this is done supposedly to limit the beneficial trace-gas carbon dioxide, despite your Chief Scientist having testified to the Senate that totally abolishing Australia’s emissions of carbon dioxide would make virtually no difference to the world’s climate.

More of the detail behind these points is explained in my letter to you re AEMO’s recent misleading advice to you and in my open letter to Dr Finkel, of which you also have a copy.

I pointed out previously what is now being commonly recognised. There is only one way to restore affordable, secure electricity to Australia and its citizens. It has two parts:

  • Abolish now all subsidies for particular forms of electricity supply. That means the RET-based subsidies for wind and solar in particular but also the various other forms like preferential funding for intermittent power generators.
  • Offer long-term government contracts for low cost dispatchable electricity supply which is also able to provide the other characteristics needed for stable supply (e.g. frequency control) sufficient to meet Australia’s electricity requirements with the safety margin we once enjoyed.

If you do not understand that, you are too clueless to be worth feeding. If you do understand it, then the policies you are following are outright treachery against Australia and its people – and all the Liberal and National members who support this treachery are also culpable.

Sincerely,

Dr Michael Crawford,
Board member, The Waubra Foundation
Quadrant Online

About stopthesethings

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

Comments

  1. In the absence of grid scale seasonal energy storage, the claim that wind energy is clean cannot be scientifically supported. While the grid distributes energy (MWh), the grid’s stability depends on power (MW) which must always be available in excess of demand (MW). The power from wind turbines is intermittent and variable and the only way it can function on the grid is when coupled with an equal amount of power from fossil fuel. Studies show that the combination of wind power with fossil fuel firming is as dirty as power supplied by fossil fuel alone.

    Until seasonal grid storage is available, currently impossible, wind energy is as dirty as fossil fuel, and the extra cost and nuisance suffered by the public is for nothing in return!

  2. Our post today:

    Rent Seeking – that expression used so many times with regard to the wind industry in particular.
    We add another very short extract from Professor Dieter Helm’s report:
    ‘Complexity has significant additional costs for energy, because the greater the complexity, the greater the scope for capture by rent-seeking lobbyists and interest groups’
    We have remained incredulous for some few years now that, with the evidence before them from places such as the UK, Australia should have hurtled headlong down the same path, and arguably even more so, with a mish-mash of policies, an increasing complexity and an open invitation to those rent seekers, lobbyists, interest groups and Oz’s own sock puppets.
    Here, via STT, is Dr Michael Crawford who is no slouch academically and experience-wise, clearly – who is also on the Waubra Foundation Board – absolutely laying into the Energy Minister Josh Frydenberg on the recently devised National Energy Guarantee and the Emissions Obligations.
    Each paragraph flays him more mercilessly than the preceding one and we urge you to read it.
    To whet your appetite: ‘Could you please clarify whether your advisers got the script for this plan from Monty Python or from Blackadder? Attribution should go to the right source.’
    Way to go, Dr Crawford and Prof Helm – spilling out the truth about complexity.

  3. Weasels 2 Go says:

    Poor Prime Minister. He is still patting himself on the back for crafting a deal that even yesterday’s investment bankers would be embarrassed to claim as their own, and now those pesky and ignorant engineers are pointing out it is not a deal but a permanent guarantee of more trouble. Could someone tell Frydenberg its time he showed some intelligence and spine and stopped looking like a lapdog.

  4. Sonia Trist, Cape Bridgewater, Victoria. says:

    Thank you, thank you Dr Michael Crawford.
    for your illuminations.
    Ignorance is not bliss:
    ignorance is ‘lights out.’

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