Wicked Waste: Rocketing Prices & Blackouts Only ‘Dividend’ From $60bn in Subsidies to Wind & Solar

Setting fire to cash is one way of destroying value, throwing $billions in subsidies at intermittent wind and solar is just as effective.

Chicago gangsters displayed their notorious net worth by stoking up their stogies with hundred-dollar bills. Easy come, easy go, as they say.

So it is with the unreliables: wind and solar.

Australian power consumers will be forced to stump up more than $60 billion in subsidies to wind and large-scale solar over the life of the Federal government’s Large-Scale Renewable Energy Target (LRET).

The Federal government’s Small-scale Renewable Energy Scheme (SRES), along with State-based green schemes and Feed-in-Tariffs for domestic solar are adding more than $1.2 billion to power bills across the country.

Together the LRET, SRES and state FITs collectively deliver more than $4 billion annually in subsidies to wind and solar; all of which is added to rocketing retail power bills.

Those figures constitute the largest single industry subsidy scheme and the largest government mandated wealth transfer in the history of the Australian Commonwealth.

The usual retort from renewable energy rent seekers is that all that forced largess is paying off in spades.

Wild and wonderful claims are made about how cheap wind and solar are, compared with ‘dirty’ coal-fired power. Never mind that wind is only available at crazy, random intervals and solar is available for around 6.5 hours a day, at best, provided, of course, that there’s no pesky cloud cover. Whereas, coal-fired power is available around-the-clock, every day of the year.

Attempting to compare wind and solar – renowned for downing tools without any meaningful warning – with ever-reliable coal-fired power, is like comparing a dilapidated horse with a brand-new motorcar. The old pony might get you there, but it might not be today, or tomorrow …

Equally wild and wonderful claims are made about tens of thousands of ‘groovy’ green jobs said to be ‘created’ by those tens of $billions in subsidies. Never mind the hundreds of thousands of jobs being destroyed in mining, mineral processing and manufacturing by the rocketing power prices that inevitably follow any attempt to rely on sunshine and breezes. [Note to Ed: is this where we normally mention Germany, Denmark, South Australia, Ontario etc?]

Alan Moran drills down on some of the sillier aspects of those claims; claims being made in earnest in relation to Victoria’s effort to knock South Australia from its perch as Australia’s renewable energy capital. Note to Victorians, be careful what you wish for, because you just may get it!

Wasteful investment in wind/solar has a negative value
Catallaxy Files
Alan Moran
2 October 2018

A breathless piece by the Guardian’s Calla Wahlquist announced that Victoria’s renewable energy boom is set to create six thousand new jobs. And yet the head of the renewable energy lobby group, Tristan Edis, was downbeat because the subsidies are being phased down.

This is the group that claims subsidies are not really needed (or is it will soon not be needed?) because the wind and solar technology has made such colossal leaps that they are now (or will soon be) on parity with that archaic fossil fuel technology.

New “clean energy” investment in Australia was estimated in 2017 by the renewable punting Bloomberg New Energy Finance at over $10 billion.

But the term investment is somewhat casually used here.

Neither BNEF nor Ms Wahlquist have ever heard of “Broken windows syndrome” whereby “investment” replacing destroyed investment is not productive. The replacement-of-broken-windows-as-investment notion is fallacious enough when applied to the spurious benefits of replacing damaged assets but this is magnified when, as with renewables, the replacement has only one third of the efficiency of the plant it replaces.

We are swapping valuable assets by worthless assets and paying $10 billion a year to do so. And the 6,000 unproductive jobs in producing the high cost energy are jobs that consumers and employees elsewhere must subsidise.

Fortunately for the government, all this is hidden and will be claimed to have been due to natural forces. That claim, like the PR announcement of the policy settings, will be eagerly embraced by journalists with little ability to undertake their own critical analysis.

Victoria’s government, soon to be joined by Queensland, is doubling down on the financing of the scam by negotiating contracts for long term renewable supplies that consumers will need to finance in their energy bills in years to come.

Claimed to be negotiated at less than $60 per MWh ($40 per MWh was the Australian norm before renewable policies destroyed the industry’s efficiency), the intermittent unreliable power generated will need to be “firmed” by a side-by-side contract for reliable power. The cost of this is likely to exceed $30 per MWH. And 96 per cent of the profits, courtesy of the unwitting Victorian electricity consumer, are to be gathered by overseas suppliers.

Where will it all end? Fortunately the Trump revolution is on the way. By carving out US subsidies and pushing down prices, America is already hoovering up investment from high cost energy countries like the EU and Australia. This, and the recent measures by China to staunch its own $20 billion a year subsidies to renewables will force a reversal of policy here – a forerunner of which is already annoying the subsidy seekers.

Action cannot come soon enough and must entail the abolition of all subsidies – including the retrospective removal of those granted under the false pretences that they soon would not be needed.
Catallaxy Files