Turnbull Trounced: RE Obsessed PM Ditched Over Ludicrous Plan to Double-Up on Subsidised Wind & Solar

Revolt by Dutton’s 40 consigns wind & solar obsessed PM to history.

 

Malcolm Turnbull’s demise resulted from his delusional claims that doubling wind and solar would slash rocketing Australian power prices.

Like the Boy Who Cried Wolf, the ex-PM’s problem didn’t result from telling a lie, he was done in by telling the same lie twice.

Turnbull and his gormless Energy Minister, Josh Frydenberg may have even believed their own hubris? However, a group of 10 Liberal and National MPs (soon known as the ‘rebels’) believed otherwise.

They were on pretty firm ground: they only needed to remind onlookers of the disaster that’s played out in wind and solar obsessed South Australia – the place World renowned for mass load shedding and statewide blackouts, as well as suffering the highest retail power prices, in the world.

What started out as an insurgency, turned into a full-scale revolt: the ‘terrible’ 10 soon became the ‘dirty’ dozen. And, in the result, the rebels grew to such an extent that those standing behind Queensland’s Peter Dutton totalled 40, as against the 45 that supported the ultimate victor, Scott Morrison, who was sworn in as Australia’s 30th PM, yesterday.

Malcolm Turnbull’s treachery and deceit cruelled Dutton’s chances. However, his 40 followers aren’t going to lay down their weapons, anytime soon. At least when it comes to restoring reliable and affordable electricity to all Australians.

It was that issue that triggered the revolution and resulted in Turnbull’s messy coup de grace.

And that issue is far from resolved.

One thing that has been resolved is that the National Energy Guarantee promoted by Josh Frydenberg is dead and buried. And Dutton’s 40 will guarantee it stays that way.

We’ll hand over to Judith Sloan for a little of the back story on the demise of what was the Renewable Energy Target on steroids.

NEG an abject lesson in how not to set energy policy
The Australian
Judith Sloan
21 August 2018

Shed no tears for this discredited policy – and let’s hope for more dispatchable power

It’s official — the national energy guarantee is dead. Without the setting of national electricity emissions targets, either by legislation or ministerial order, there is nothing left but a few technical bits and bobs.

Let me put it out there: the NEG was no way to make energy policy. A top-down, technocrat-driven jumble of technical details but with a carbon price at its heart, there was never really much enthusiasm for the policy among many Coalition parliamentarians.

The two compromises that Malcolm Turnbull and Energy and Environment Minister Josh Frydenberg could have made — to back-end the emissions reduction trajectory and to allow unlimited use of carbon offsets — had been rejected.

These two changes would have lowered the cost of imposing our commitment to the Paris Agreement on the electricity sector.

Wheeling in the various stakeholders to support the NEG was also a defective tactic on the part of Frydenberg. Most of those parties don’t have skin in the game, particularly the unrepresentative industry associations, and others do have skin in the game but would profit from the NEG. Seeking ­referred authority for a policy that basically sucks was never likely to work.

The toing and froing by the Prime Minister in recent days simply beggars belief. How could a non-disallowable ministerial order on targets be better than legislation, even if that order would be subject to some vague sign-off about price movements by the Australian Competition & Consumer Commission and the Australian Energy Regulator?

After all, the Prime Minister had stated just last week that legislation was needed to ensure the targets were set democratically. And, scarily for the government, Labor was really on board with the idea of ministerial orders, since they would make it much easier to increase the target.

If we work through the logic of the Prime Minister’s transient support for ministerial orders to impose emissions targets on the electricity sector, there would be nothing stopping a future government from setting emissions targets for other sectors such as agriculture, transport and energy-intensive, trade-exposed firms — the so-called EITEs — by ministerial order. Is that what the Prime Minister intended? Recall that electricity accounts for only one-third of emissions.

There was also the issue of whether the ACCC or the Australian Energy Regulator is really in a position to make accurate predictions of future electricity price movements. The reliability of recent electricity price modelling has been woeful.

According to the modelling undertaken for the 2014 Warburton review of the renewable energy target, for instance, today’s wholesale price should be $30 per megawatt hour; it is about $80 and has been much higher.

The modelling done for the Finkel review was similarly dodgy, with projections of between $40 and $45 per MWh in the present wholesale price.

Let’s also not forget that a large part of the presumed savings of $150 (out of $550) to annual electricity bills attributable to the NEG was because of investor certainty that, in turn, was assumed to lower the cost of capital for investors. Where’s the certainty now?

We need to acknowledge that we are starting from a very bad position of sky-high household and business electricity bills. In the decade ending 2017-18, real average retail electricity prices increased by 56 per cent.

During this same decade, renewable energy increased from less than 5 per cent of electricity generation to about 17 per cent. It will, in all likelihood, reach 23 per cent by 2020; it may climb further to more than a third of electricity generation by 2030, according to the Energy ­Security Board.

What the public is being asked to believe is that the close correlation between higher electricity prices and a higher share of renewables, which has been so apparent over the past decade, is about to be overturned.

But here’s where the government’s message was becoming very confused: an emissions reduction target of 26 per cent (and more renewables) would reduce prices, but Labor’s target of 45 per cent (and even more renewables) would increase prices. It’s hardly surprising that disbelief was a common response.

Sensing this unease about ­future electricity prices, the government headed in a direction a Coalition government might normally baulk at — heavy-handed regulation and price caps.

It would be very hard to find a sensible economist to support price caps because this type of intervention stifles both investment and innovation. But Turnbull doesn’t have time for economic theory at this time.

One of the ACCC recommendations that sounds eminently sensible is the replacement of retailers’ expensive standing offers with simple default products, with the AER setting the maximum price. This would remove the most egregious practice of the retailers — exploiting loyal customers.

But bear in mind that retail price regulation remains in place in a number of states and it is not clear that the movement in their electricity prices has been very different from the price movements in unregulated states.

The real problem is high wholesale prices and network costs, which will always be reflected in prices. Unless something can be done about these two major components, then household and business electricity prices will continue to rise even if prices are capped.

It’s hard to escape the conclusion that the NEG was never going to contribute much to the energy landscape. The Australian Energy Market Operator is responsible for reliability and will continue to be. A lot of additional wind and solar investment is locked in and Liddell will likely close in 2022. Another coal-fired plant will exit at the end of the decade.

Whether these trends make any sense at all for a country such as Australia, with its abundant supplies of coal, gas and uranium, is highly questionable. The one hope is that government will enthusiastically back some new dispatchable plants. At least this policy would offer some potential price relief as well as significant policy differentiation from Labor.
The Australian

STT hears that Dutton’s 40 are marshalling their forces to ensure that there is an immediate return to energy sanity. What’s driving them is the fact that there are a growing number of their constituents screaming about power prices. Including elderly pensioners who face the shame of being unable to pay their power bills, for the first time in their lives. Their shame and indignity has stirred the caring and compassionate into resolute action.

STT hears that the Genesis of the revolution was a very stirring speech by WA’s Andrew Hastie. Hastie, an SAS Captain who served with distinction, including several tours of Afghanistan, spoke out against the NEG, with great passion and conviction.

Hastie told the party room that he and his fellow soldiers knew what it was like to be on the wrong side of government policy – having been shot at, as well as watching his best mates get killed and wounded, he knew what it meant to stand up for his country, and now was the time to stand up for his country on energy policy. Hastie referred to Australian businesses and families struggling to pay their power bills – including cases of the widows of war veterans, financially desperate and unable to power their homes – told his colleagues that the NEG would only result in more of the same and for that reason he could never support it. Hastie reckoned that, having put his life on the line, he wasn’t about to give up our sovereignty to UN bureaucrats by enshrining the Paris emissions targets in Australian legislation, to the detriment of all Australians.

STT hears that there were plenty of lumpy throats and misty eyes during Hastie’s speech, which then became a rallying cry for a growing group of fired-up rebels. Well done Andrew. Your country thanks you.

Having destroyed the NEG, which would have resulted in much more of what fired up Andrew Hastie and Dutton’s 40, their next target is the Target: the Federal government’s Large-Scale Renewable Energy Target. The LRET is the $60 billion wind and solar subsidy monster that wrecked the power market and sent Australian power prices through the roof.

Here’s Judith Sloan having a crack at the policies that have destroyed Australia’s once reliable and affordable power supply.

Energy policy: it’s economic death by a thousand acronyms
The Australian
Judith Sloan
21 August 2018

For those of us who have closely followed the tragic path of energy policy in this country, it has become necessary to master acronyms — and lots of them.

There has been the carbon pollution reduction scheme, the emissions trading scheme, the emissions intensity scheme, the renewable energy target, the clean energy target, the national energy guarantee and a few others I have forgotten.

But what do the CPRS, ETS, EIS, RET, CET and NEG have in common? They all contain a form of carbon pricing. Their core function is to discourage the extent of carbon-intensive activities in the economy.

Of all of them, the RET is the most economically damaging, not only directing electricity generation to mandated forms of renewable energy but imposing a huge implicit carbon tax (about $85 per megawatt hour, which is the current price of large-scale certificates), thus driving up electricity prices. The small-scale RET (rooftop solar PV), in combination with ridiculously high feed-in tariffs, has also been damaging.

Now some naive commentators lament the abolition of the Gillard government’s carbon tax by the Abbott government. Apart from the fact that the tax had been set at a ridiculously high level by international standards, the sky-high RET remained firmly in place. It was a case of distortion imposed on a distortion. Good riddance, I say.

The most significant fork in the road occurred in 2015 when the Abbott government could have attempted to ditch the RET, as well as lots of other bureaucratic paraphernalia such as the Clean Energy Finance Corporation and the Australian Renewable Energy Agency — the CEFC and ARENA.

Based on dodgy advice, the RET was scaled back, rather than abolished. And its continuation to 2030 — it was originally intended to cease completely in 2020 — remained unaltered. Add in overly generous subsidies to renewable energy by some state and territory governments, particularly by way of reverse auctions, and it has been salad days for the wind and solar industry.

The National Electricity Market is rapidly becoming a larger version of South Australia — with more and more electricity generation from renewable sources (well, when conditions permit) and the exit of several low-cost, dispatchable plants, with more to come.

It’s hard to imagine a more destructive path of policymaking for a country such as Australia, which is rich in coal, gas and uranium.

But given that the NEM is owned by four states and the ACT, my advice to the Turnbull government is to hand the regulation of the market back to those states and territories and let them work it out. It’s hard to see how matters can improve in the hands of the federal government.
The Australian

Andrew Hastie: this time he’s fighting for affordable and reliable power.

 

Judith’s piece predated Turnbull’s demise, but her advice is equally pertinent to a Morrison lead Liberal/National government.

Morrison is no fool and knows that, unless he starts talking sense about energy, the 40 rebels that stand with Peter Dutton (including Andrew Hastie, Tony Abbott, Craig Kelly and Angus Taylor) will take the baseball bat to him, just as they did with Turnbull.

The Turnbull camp were all too keen to promote the interests of renewable energy rent seekers, and deaf to the needs of their constituents. Riding roughshod over the better half of his party, Turnbull sealed his fate.

Scott Morrison started off in a conciliatory manner, talking about bridging the divide within the Liberal party.

For Morrison to enjoy any longevity as PM, he needs Dutton’s 40, more than they need him: it’s a mathematical thing, really – 40:1, say and the 40 have a PM ready and waiting.

The 40 rebels who ran with Peter Dutton are not just from the right, on the case for reliable and affordable energy, they are absolutely right.

Due to a mix of hubris and overreach, Malcolm Turnbull and the so-called energy experts feeding him lines about how their NEG would slash power prices, improve grades at school and end world hunger, managed to not only destroy the NEG, they provoked half of the party that he once led and forced them to choose sides.

The ‘choice’ put forward by Turnbull’s camp was to ramp up subsidised wind and solar, and destroy the entire country, the way South Australia destroyed itself.

Dutton’s 40 decided, instead, to kill off the NEG, put an end to the madness and return Australia to its status as an affordable energy superpower.

If Scott Morrison wants to spend more than a fleeting moment as PM, he needs to do the same.

Over to you Scott.

I swear, I need Dutton’s 40 to be PM for more than 5 minutes.

About stopthesethings

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

Comments

  1. Well, hasn’t Frydenberg come out of this smelling of roses. Can’t possibly (((imagine))) why.

  2. singletonengineer says:

    Choose your enemies carefully. Liberals voters might see a difference between ScoMo and Dutton (Read above). I do not. But then again, I don’t vote for any party. They are all run by intellectual cripples. I try to vote for the most trustworthy candidate.

    When I look at energy policies, two issues stand tallest.
    1. Wind power only exists at all due to subsidies. No subsidy: no wind power. That’s absolutely plain, though the noise coming from certain directions is that wind is free, therefore wind power is free, or something like that.
    2. Cost is paramount, therefore coal (or gas, or whatever fossil fuel fits).

    The third is climate policy. Now, I accept that climate policy isn’t everybody’s cup of tea, but it is mine – I am pretty close to certain that if we don’t do something very effective about carbon emissions, then global air temps plus ocean acidification will do nasty things – are already doing nasty things to our climate and the health of our oceans.

    Now, I don’t expect everybody to agree with me on this, but perhaps there is common ground on these bases:

    Cost. Wind is nowhere near as cheap as other forms of electricity. Better than most, but not necessarily all. I’m thinking nuclear.

    Safety. Nuclear power has a history of being very safe indeed in practice, despite the 50 or so radiation deaths from Chernobyl and zero from Three Mile Island and zero from Fukushima.

    Waste. Nuclear power manages 100% of its waste, thus far 100% safely. Can’t say that for any other technology, except perhaps hydro, but there are massive costs, environmental considerations and hundreds of thousands of deaths recorded against that source – which is less than 10% of global energy.

    I could go on, regarding other costs and risks, but my point is that wind power, by comparison with several other technologies, has no leg to stand on.

    Personally (you don’t have to agree), I favour an “all of the above” approach, confident that on the basis of cost alone, even overlooking issues with reliability, firming, scaleability, transmission/connection costs, waste and safety, wind power is a waste of time and money in comparison with alternatives.

    So, I couldn’t give a hoot about other policies and parties – let’s at least understand why wind power is rarely a practical option.

    My expectation? That a mixture of large and small nuclear power generation will eventually dominate Australia’s electricity grids.

    And that Right, Left, Labor and Liberal and most of the rest will come to agree that this is the best way to go. This isn’t politics. It is just practical engineering, environmental science and economics.

    Apologies for the long post.

  3. Looking forward to Sky News on regional Freeview, 2nd September. Will be good to see both sides of the debate at long last.

  4. Melissa Ware says:

    Best wishes to the new PM. Those of us being forced out of our homes and off our properties due to unbearable wind factory noise and vibration desparately hope that meaningful action will be implemented. For the national wf Commissioner to say to those of us living within 1km of wind turbines that if we don’t like it to just leave is unacceptable. Planning Panels approving wind and solar projects are ripping communities apart, wrecking the lanscape, murdering nature with the belief they are obliged to under government policy to meet the RET. More rural people are being forced into agreements with the RE developer to accept payments of free electricity or annual payments while projects are given approval to operate under the outdated NZ noise standard using dBA. Many neighbours remain unprotected from harm, in limbo battling a system geared to turn a deliberate blind eye. Fed up and furious, hopeful for fair treatment.

  5. Scomo has to do a 180 if he is to survive. Certainly the Libs are looking down the barrel of a catastrophic election result unless he does. Either way, Billy Shortone will be the next PM.
    Him and his entourage will decimate what is left of Australia’s businesses by lifting the renewable energy target to 45%.

    Bye Bye Australia.

    This fiasco just proves how bad our politicians are.
    They lack common sense.
    They rely on ‘expert’ opinions without doing any research themselves.
    Very few have any backbone or morals.
    The majority pander to minority voices.
    They are all too aware of being PC, to the point of not being willing to speak on subjects that need to be discussed.

    All in all, what I think would be best for Australia is if we use Canberra as a toxic waste dump!

    • Labor can raise it to 100% but wind and large scale solar outfits will not invest without bipartisan support. They know that goes up under Labor, must come down under the Liberals. In the next parliament, Pauline Hanson will hold the balance of power in the senate. Labor will have a tough time increasing the target in any event.

  6. Terry Conn says:

    Spot on STT. Morrison’s choices for the ministry will tell us what we need to know about what happens next – if Abbott is not included it will be a big clue, even worse will be if the other Dutton supporters are only notionally included, in which event Morrison’s reign as prime minister will be over before it starts. This is a war that will only end when reality trumps politics and ideology and cheap, reliable dispatchable electricity rules again instead of emissions reduction fantasies fuelled by a weather dependant mandated wind and solar scam that can never work.

  7. “But bear in mind that retail price regulation remains in place in a number of states and it is not clear that the movement in their electricity prices has been very different from the price movements in unregulated states.” No states like Queensland now practice ” paten pricing or retail price maintenance ” for government generated electricity. Queensland generated power is the cheapest in the country but the government corporations have to pay the government a large percentage of their profits set by the government every year.The retail price of electricity in Queensland has no relation to it’s production price and usually is very similar to the other failed states and their price. The windfall between the wholesale and retail price in Queensland which is given to the treasury is just another state tax by stealth.

  8. Peter Pronczak says:

    Tun-o-bull & ScoMo did a tag.
    I did try to tell you he was only safe for “the moment” and if the ALP don’t pull their finger out on where they stand on electricity (nuclear power) and the RET they’ll be down the gurgler as well.
    Seeing that the Greens have joined the fight for Glass-Steagall banking separation; there is a major social shift.

    It’s well past time they all came to their senses and committed to the general welfare of the population, not the private financiers shafting the public. And they’re not happy with another leadership change

    They’ve forgotten the maxim: You can fool some of the people…etc.
    The population may be slow to gain momentum, but we know how a snowball rolls.

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