SA Premier Promises to Double Power Prices & Destroy Grid: 75% RET = 100% Lunacy

Here’s one Jay prepared earlier: Adelaide 28.9.16

Looking for an example of how to destroy an economy? Look no further than wind ‘powered’ South Australia.

Where Australia’s other capital cities are growing so fast that they look like bursting, Adelaide’s population is shrinking; the best and brightest exit as fast their Commodores can carry them, leaving an ageing population and a growing rump of the terminally unemployed.

The industries that once employed blue-collar workers have already been destroyed – car maker Holden, among them – by stifling, neo-Marxist regulation and rocketing input costs. The most critical of those input costs to the industries and businesses that produce stuff is energy.

Thanks to an obsession with sunbeams and breezes, SA’s embattled employers pay the highest power prices in the world.

As an article of faith, the wind cult keep promising that the addition of more windmills, solar panels and batteries will soon start delivering power at 1970s prices. Except …

Instead of plummeting, the average wholesale price doubled in SA, in just 12 months:

Comparing 2016 (red) and 2017 (blue) average
wholesale prices ($per MWh) of electricity by state

The Labor government is headed by the vapid Jay Weatherill. Utterly detached from reality, with an election bearing down on him, Weatherill must know his days as Premier are numbered. However, in a nod to his fellow sun and wind worshippers, Weatherill has thrown not just caution, but reason and logic, to the wind.

South Australia election: renewable energy target pledge ‘complete madness’
The Australian
Ben Packham and Luke Griffiths
22 February 2018

South Australian Premier Jay Weatherill has upped the ante in his push to establish South Australia as an international leader in clean energy, but his pledge yesterday that the state would meet a 75 per cent renewables target was greeted with derision by political opponents and only cautious support from federal colleagues.

Mr Weatherill said a re-elected Labor government would deliver the target by 2025 along with a 25 per cent renewable energy storage target, in an announcement ­labelled “complete madness” by federal Energy Minister Josh ­Frydenberg.

Mr Frydenberg warned that the plan would threaten reliability and push up prices in the nation’s most expensive electricity market.

The announcement lifts SA’s renewable target from 50 per cent, which the state has almost met. It currently sources an average 48.9 per cent from wind and solar.

Mr Weatherill said the policy would lower power prices for consumers by “sending a signal to investors to come here and build more renewable projects, which puts more competition into the grid.”

But federal Labor declared the target was too high to be implemented nationally.

Federal Labor energy spokesman Mark Butler welcomed the South Australian announcement, but said the party remained committed to a national 50 per cent renewables target by 2030.

“This is an appropriate target for the National Energy Market, which includes states like NSW which are far behind SA,” he said.

Grattan Institute energy program director Tony Wood said there was no evidence that renewable energy, combined with storage, would lower power bills.

“No one has ever built this stuff at this scale to know,” Mr Wood said. “It just seems to me that 75 per cent renewables and 25 per cent storage is more of a marketing slogan than a policy.”

He said South Australia should instead co-operate with the federal government to develop “sensible policy” through the National Energy Guarantee. “I don’t think the NEG is perfect, but this is more likely to create a national mess than working together,” Mr Wood said.

Melbourne University Energy Transition Hub adviser Simon Holmes a Court said the surge in renewable energy investment in the state was driven by the federal renewable energy target — currently 23.5 per cent by 2020 — not South Australian policy. “Developers flocked to SA to take advantage of high prices and the country’s best wind resource,” he said.

Mr Weatherill said Labor would commit $20 million over four years to leverage private sector investment in extra renewable storage.

“We’re sending a signal to the world that this is our ambition. It will be supported by policy, by subsidies, by procurement,” he said.

However, Mr Weatherill conceded the government had not done any economic modelling on the impact of increasing the renewable target.

Mr Frydenberg said the 75 per cent target was “a thought bubble’’ and Mr Weatherill was like a “problem gambler doubling down to chase his losses”.

Nick Xenophon, who could hold the balance of power after the March 17 state election, said he would not back any increase in the renewable target until economic modelling proved energy bills would come down.

“Lower power prices and ­greater reliability has to be the ­­outcome, otherwise we can’t increase it,” the SA Best leader said.

State Opposition Leader Steven Marshall, who has vowed to scrap the target if elected, said the policy would lead to higher power prices. “South Australians are sick of sky-high prices and, under Labor’s plan, prices will increase even more,” he said.

Generators have warned that greater reliance on renewables will require more fast-start gas plants to ensure reliability. Origin Energy said its proposed 180MW expansion of its Quarantine Power Station was specifically designed to support growing renewable energy generation in the state.

As Mr Weatherill announced the policy, the state was running on 57 per cent gas-fired power, 28 per cent wind, and 4 per cent solar, according to live energy market figures. The balance — about 12 per cent — was being imported from Victoria, where power is predominantly derived from brown coal.
The Australian

Dearly beloved, we’re gathered here to guarantee
rocketing prices & more mass blackouts.

For Josh Frydenberg to start throwing stones at Jay Weatherill is a little bit rich. Frydenberg’s Federal Large-Scale Renewable Energy Target provided the fuel for SA’s wind rush, in the form of Renewable Energy Certificates; it still does and will for another 13 years.

Every MWh of wind (and large-scale solar) power dispatched to the grid earns 1 REC, currently worth $85 each. That costs gets tacked onto retail power bills. So far, the REC Tax/Subsidy has cost power consumers $15 billion and, until the LRET expires in 2031, will add another $45 billion to Australian power bills: a $60 billion subsidy scheme, unparalleled in Australian history.

Not one single wind turbine would have been erected in SA without the massive subsidies guaranteed under the Federal LRET. A policy which the gormless Josh Frydenberg continues to defend. His argument seems to be that the LRET is less insane than what Jay Weatherill is threatening.

Petty political finger-pointing aside, there’s one certainty attached to what’s proposed by Weatherill & Co: more blackouts and rocketing power prices. Here’s the Editor of The Australian pointing to the bleeding obvious.

Labor risks family budgets in rash energy experiment
The Australian
Editorial
22 February 2018

Less than 18 months ago the entire state of South Australia went dark because its interconnector to Victorian power failed after a storm caused wind farms to trip and brought down a regional powerline. SA’s electricity vulnerability was made plain: its own generation, skewed to renewables, is inadequate.

The blackout cost was estimated at $367 million and it has led to a $500m state government response including diesel generators, the world’s largest battery, a “virtual” power station, paying companies to cut demand and a new publicly funded gas power plant. Yet SA still is lumbered with the nation’s — and possibly the world’s — most expensive electricity.

It remains heavily reliant on the interconnector to power the state when the wind isn’t blowing and sun isn’t shining as well as to sell its renewable energy interstate.

After this costly chaos it seems inconceivable that Labor Premier Jay Weatherill has doubled down on his renewable energy push. He has lifted the state’s renewable target from 50 per cent to 75 per cent by 2025. Less than four weeks from a state election, this target crystallises the choice for voters.

Having experienced the supply crisis and high prices of meeting Labor’s 50 per cent renewable target, do voters believe a new pledge to guarantee supplies and reduce prices by opting for even more green energy? The answer is obvious.

If SA voters have learned from recent events they will baulk at this leap into the energy unknown. Amazingly, SA-Best leader Nick Xenophon has backed the plan, saying it can work if “there is a proper transition” but if it is not well managed it will be bad for the state. Where has Mr Xenophon been? If the transition were going well the state would not have a $500m crisis plan to bolster power supplies.

Mr Xenophon’s weak response clarifies the choice for SA voters. If they want to call time on household and state budgets being used to fund the world’s largest renewable energy experiment, they will have to vote for the Liberal Party’s Steven Marshall. He has labelled Mr Weatherill an “energy fraud” whose policy madness will lead to even higher prices.

Mr Marshall has pledged to scrap the state’s renewable energy targets, which still will leave it by far the most reliant on non-baseload power. But at least this would provide a chance to pause and catch up on energy security and affordability.

This high-risk policy has dramatic federal implications as evidenced by Environment and Energy Minister Josh Frydenberg likening Mr Weatherill to a problem gambler chasing his losses and making the situation even worse after giving his state the highest prices and least stable electricity in the nation.

The paradox in this heated debate is that SA’s renewables push is funded by the federal government’s renewable energy target. It sees cross-subsidies flow to wind and solar projects, an investment guarantee that lines the pockets of energy companies but hits consumers.

The Turnbull government also backs other renewable projects in SA, including solar thermal and pumped hydro storage. But Bill Shorten and Labor are promising to more than double the national target to 50 per cent, exposing the rest of the nation to SA’s energy security problems and demanding $50 billion in extra investment.

Energy economist Alan Moran details the folly of all this in our pages today. “To get the equivalent energy from a standard 500MW coal generation unit requires 300 wind generators or 900,000 solar panels, and storage or back-up capacity is required to offset the inherent unreliability of energy sources dependent on the vagaries of the weather,” he explains.

The Coalition remains committed to the Paris climate accord emissions reduction targets, but its renewables settings and proposed national energy guarantee provide a relatively cautious policy approach. The Opposition Leader’s policies are more ambitious, costly and risky, both politically and economically. They have given Labor a bipolar approach on coal, where Mr Shorten campaigns in Melbourne’s Batman by-election by urging failure on Queensland’s Adani coalmine, then travels to central Queensland, as he did yesterday, to claim Labor is the party of coalminers and won’t block the mine if it proceeds.

What Labor leaders state and federal need to understand (and Coalition MPs too, for that matter) is that personal and political agendas on energy sources or climate gestures don’t really matter to mainstream voters. What matters in households and businesses around the nation is access to power that is reliable and affordable.

This nation was blessed with resources for cheap and secure energy but we have turned our backs on it. While much attention rightly will focus this week on the company tax differential between Australia and the US, and its effect on investment, it may be worth considering the dramatically lower energy costs in the US and how they encourage economic growth and ease cost-of-living pressures. We have deliberately increased energy costs. SA voters now have a chance to call time on this reckless self-harm.
The Australian

The Australian presents the political landscape in SA as one involving a choice.

Boiled down though, the dilemma for SA’s voters is whether it’s suicide by revolver (messy, merciful and instant) or by a thousand cuts (torture, without end).

Labor’s ‘plan’ (for want of a better term) will wipeout every last vestige of productive enterprise in the State.

Miners, mineral processors, the few remaining manufacturers, irrigators running pumps and sprinklers (including dairies, vineyards, fruit and vegetable growers), seafood processors running fridges and freezers (for oysters, abalone, finfish, lobsters, etc) all use mountains of electricity; and they’re on the brink, now.

In SA, businesses watched in horror as their power prices doubled in just 12 months. Jay Weatherill is guaranteeing more of the same.

The Liberal ‘opposition’ reckons it would scrap a 75% State RET, but has absolutely no clue about how to unwind the power pricing and supply calamity that has already beset SA.

Steven ‘Holler for a’ Marshall continues to mouth unearthly platitudes about renewables and batteries, just like his opposite number.

Nick Xenophon is no supporter of wind power, but, always keen to sit firmly in the middle, plays the ‘renewables are great’ line so as not to offend the eco-zealots who just might vote for him.

Xenophon was captured by the crowd pushing the solar/thermal plant planned for Port Augusta, years ago. And is determined to see it come to fruition.

At a cost of more than $1.2 billion for a paltry 150 MW, it will turn out to be a monstrous white elephant; will produce a fraction of the power promised; and, ultimately, leave Xenophon looking like a goose.

Precisely the same costly and unreliable set up threatened for SA was built at Crescent Dunes in Nevada. That debacle commenced operation in September 2015, and ran for a mere 12 months, before a technical glitch knocked it out of action for 8 months: South Australia: Sublime One Day, Ridiculous the Next – Premier Set to Squander $1.2bn on Solar-Thermal Boondoggle

Its promoters claim that (technical glitches aside?) it will have a capacity factor of 51.9%. Which begs the question of what Mr Xenophon thinks his state will do for electricity the other 48.1% of the time? More candles, perhaps?

In short, South Australians have no real choice, but to pack up and leave. Otherwise, it’s hang in there and ‘enjoy’ the ride.

South Australia: renewable energy train wreck.