National Suicide: Australia’s Self-Inflicted Energy Crisis Driven by Wind & Solar Obsession

Australia’s energy policy reads like a National suicide note: power prices went from the lowest in the world to the highest, in little over a decade.

Plotting the path to destruction is pretty easy: start by throwing $60 billion in subsidies at wind and large-scale solar, demonise cheap and reliable coal-fired power and put lunatics in charge of the whole operation.

Here’s Alan Moran, once again, detailing the source of Australia’s self-inflicted misery.

Reaping the fruits of political sabotage of the electricity industry
Catallaxy Files
Alan Moran
25 January 2019

The third world nature of Australia’s electricity industry was revealed this week with wholesale prices in Victoria and South Australia at the maximum $14,500 for lengthy periods in spite of thousands of customers being cut-off, major users agreeing to shut down demand in return for compensation paid by consumers, and even some oil plants being called in.

The causes are clear.  For twenty years, Australia has embarked upon a subsidy program for intermittent, unreliable and costly wind and solar.  This is accompanied in Victoria and South Australia (and perhaps now in Queensland) by outright hostility to coal, the form of power that had given the nation the lowest cost and most reliable electricity in the world.

As I said in a previous post, there has been no shortage of spending on electricity generation

Over the past decade, we have spent $70 billion on wind and solar. That $70 billion is enough for 12 new coal generators that would give us electricity with a wholesale cost of one third that of the current level. Instead we have been closing down the more economical coal fired power stations because renewables, two thirds of the costs of which are covered by subsidies, are making them uneconomical.

Not one cent of the $70 billion spent on wind and solar would have occurred had it not been for the subsidies. Those subsidies – renewable energy schemes, the Green Energy Bank, direct support from the Commonwealth and state support measures – are running at $5 billion a year.

The subsidies to this activity had (as intended) an adverse effect on existing unsubsidised supplies.  It meant coal generators were only marginally profitable and ultimately brought about many coal plant closures, chief among which were the 540 MW Northern plant in South Australia and the 1600 MW Hazelwood plant in 2016/2017 (an additional factor for Hazelwood was a punitive tax increase by the state government).  Would anyone seriously argue that the replacement output we got from wind/solar, which supplied only 4 per cent of electricity in SA and Vic yesterday, was adequate compensation, even without the $70 billion cost?

The subsidy-seekers blame our ageing coal plant for the lack of reliability and coal plant did feature in this week’s debacle – one of the Victoria’s remaining eleven major units developed a fault and another was undergoing scheduled maintenance.  But such claims by the renewable lobby overlook the fact that renewables are intrinsically unreliable – which is why they are referred to as ‘intermittent’ and ‘non-dispatchable’.

Long lived infrastructure is common.  Roads, rail, wharves, are in place for decades – even centuries.  But, like grandfather’s axe, they are modified and improved over time.  At one stage, in a rare Victorian ministerial visit to Hazelwood in 1995, the staff thought we had come to announce its closure (it was actually originally scheduled for replacement in 2003).  Hazelwood went on for another 20 years with relatively minor investment and would have continued operating under different circumstances.

Eventually, repair and refurbishment does become uneconomical and the older plant is retired and replaced.  But in Australia the renewable subsidy and government hostility has meant profitable coal plant cannot be built, while gas faces the problem of governmental action against fracking (and all exploration in Victoria) which has prevented new supplies being developed.

While in the past, even with excess supply created as a result of efficiency gains under the post 1995 privatisations, there were plans, some of which eventuated, to expand or renew coal and gas supply. But the last coal plant was built in 2007 (two gas plants were built 10 years ago).  It now seems that no new plant can be profitable without some form of governmental support. In a classic of policy madness, the government now needs to provide a subsidy to allow reliable plant to be profitable against subsidised and unreliable wind/solar.

While the ALP and The Greens have been the key political parties conspiring to this sabotage of the Australian electricity industry, the Coalition is not without blame – John Howard introduced the first subsidies and Tony Abbott might have done more to reverse the process.  Scott Morrison still could do so.  The destruction of competitive electricity supply has ramifications across the entire economy.  To rectify the damage, ALL subsidies to wind/solar should be terminated immediately, including those which have previously been ‘guaranteed’.
Catallaxy Files

About stopthesethings

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

Comments

  1. Reblogged this on ajmarciniak.

  2. Whats the difference between a Circus and the Federal and State government ministers for energy and their advisors controlling the energy and electricity sector. Answer : there are more Clowns in the Federal and State Government ministers for energy departments..
    The best part is you don’t have to pay a cent to watch this electricity Titanic actually change course to hit the Ice Berg then flounder and sink in a Quagmire of absolute stupidity and moronic decisions. ROFLOLOLOLOLOLOLOL.

  3. C. Paul Barreira says:

    Moran is far too kind to the Liberal Party. It has been a major support for Labor and the Greens. In South Australia I tend to think of the current Premier as Rann Mk III.

  4. Reblogged this on Tallbloke's Talkshop and commented:
    The renewables malaise is spreading round the world like a cancer. The symptoms can be painful but are easily recognised, as Australians are finding out.

  5. Son of a goat says:

    Journalism these days in the majority is an exercise in public relations rather than investigative research. To those in the media that have taken the time to look into the renewable energy/climate change debate and then report on the stupidity of the propaganda put forth by the zealots and rent seekers, I do dip my hat.

    Alan Moran and Chris Kenny on Sky television have for some time been relentlessly savaged by the the zealots for speaking up in the media against the zealots ideology.

    Kenny in particular is attacked on twitter, day in day out, by the likes of the Renewable Energy Messiah and his band of useless cohorts with an ugly mixture of vile and derision.

    Legendary 90’s band R.E.M. led by Michael Stipe had a hit sing with “What’s the frequency, Kenneth?”

    The song was about a true incident in 1986 in New York where a psycho thought the NEWS service of media company CBS was beaming signals into his head.

    When he saw the anchorman Dan Rathers walking down the street, he ran up and beat the crap out of him, repeatedly requesting the frequency of the signals, so that he could stop them, whilst addressing Rathers as “Kenneth” for no apparent reason.

    Chris Kenny in many ways may feel like poor “Kenneth.”

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