Government Surrenders: PM Hoists White Flag on Australia’s Self-inflicted Renewable Energy Crisis

I hereby surrender my country to renewable energy rent seekers.

 

With Labor threatening a 50% RET and a giant carbon tax, Australian industry is ready to pack up stumps and leave. But, instead of fighting for those industries, businesses and the jobs they create, the Liberal/National Coalition has thrown in the towel.

STT had high hopes for the Energy Minister, Angus Taylor when he was sworn in last year. Even Scott Morrison, as he took the helm as PM, sounded a whole lot more sensible on energy than the lunatic he replaced, the patrician and aloof Malcolm Turnbull. But that’s not saying much.

But, as the battle lines are drawn for a Federal election set for mid-May, the choice for voters is dismal.

The Energy Minister has gone soft and the PM seems content to let the ship of state drift on energy, and much else besides.

With no stomach for a fight with the renewable energy rent seeking crowd, the ground has been conceded to the hard-green left. The choice is really between more costly, unreliable and intermittent wind and solar and much, much more of the same.

Talk about underwriting new High Efficiency Low Emissions coal-fired plant turned out to be just that.

The Coalition fluffed out on the opportunity to bankroll and back just such a plant in Far North Queensland (which would have been a guaranteed election winner in the regions).

And then there’s the $10 billion Snowy 2.0 white elephant; a pumped hydro scheme that was abandoned in the 1970s because it was uneconomic then.

Notwithstanding that it would take a decade to come online, both Taylor and the PM keep pumping it up, as if it was some kind of magic solution. By the time the first Snowy 2.0 spark hits the grid, the only jobs left in this country will be flipping burgers and brewing up flat whites and lattes. Mining, mineral processing and manufacturing are doomed, and people like Taylor surely know it.

A despairing Alan Moran details further the Coalition’s pathetic, spineless surrender on energy.

Electricity subsidies beget further interventions bringing additional inefficiencies
Catallaxy Files
Alan Moran
31 March 2019

Unusually, Energy Minister Angus Taylor has some pre-politician expertise in the sector and is fully aware of the deficiencies of renewables (the exotic wind/ solar ones, not hydro) and the damage done to Australian prices and reliability by subsidised wind/solar.

Back in August of last year, as a newly minted minister, he basked in the PM’s invested title of Minister for electricity prices down.  Conceptionally, the task this entails is not very difficult in the context of Australia having an abundance of cheap well-situated coal that has in the past allowed us to have the cheapest electricity in the world and could again do so.  However, timing is of the essence and the program had to be achieved in the nine months gestation period ending in this year’s May election.  This was a tall order, seeing as the collapse of the low prices occurred in 2016/17 (when Hazelwood closed) some 15 years after the renewable subsidy venom started to be introduced.

By November of last year Angus Taylor was trying to jaw-bone electricity retailers to reduce their prices.  The pressure was intensified and by January this was converted into a rather more prescriptive form of price regulation followed by censorious comments about electricity company profits; these have grown tumescently not because of retail margins but as a result of the high wholesale prices caused by renewables (plus state government actions) knocking out Hazelwood and the SA Northern Power Station.

Finally the white flag has been hoisted. Unable to address the cause of high prices, the government has instead decided to subsidise consumers with Energy Assistance Payments to pensioners, veterans, single parents and the disabled.

Far from addressing root causes, Minister Taylor is not proposing removing the support for renewables. Perhaps this illustrates the impotence of any politician operating in an environment where voters are deemed to want cripplingly costly subsidies that wreck reliability and politicians are unable to persuade them of the deficiencies this policy brings.

However, the Minister himself suggests the subsidies are becoming less important.

This may be the case with the subsidies for wind farms and large scale solar.  Due to a supply glut, the subsidy for these, as reflected in the price of LGC’s, has fallen from the equivalent of $80+ per MWh to a present price of around $35 per MWh and a 2023 forward price of $10 per MWh. The pre-crisis average price of electricity in the national market was about $40 per MWh and, though costs have fallen, it is difficult to see how wind/large scale solar can be profitable at less than $80 per MWh once they have an increasingly expensive “firming contract” that retailers will need to marry with intermittently available renewable energy.  That means either the subsidies will continue or the electricity price will remain high.

Regarding the second subsidy scheme, that for roof top renewables, even the hyper-interventionist Rod Sims of the ACCC, Angus Taylor’s former colleague at Port Jackson Partners, favours removal.  The cost of this subsidy (like that for wind farms paid for by consumers rather than the Budget) is estimated at $1.5 billion this year – astonishingly, four years ago, prior to the renewable induced tripling of wholesale prices, the national market turnover cost of electricity was under $8 bihttp://catallaxyfiles.com/2019/03/31/electricity-subsidies-beget-further-interventions-bringing-additional-inefficiences/llion.

One crumb of comfort is that collateral benefit from the Berejikliean victory in NSW is that Energy Minister Don Harwin is tipped to be relieved from inflicting additional poisonous policies on the sector.  Harwin, with his personal crusade for low emissions, brought unwanted further dimensions to the already formidable task Taylor faces.

But the latest retail subsidy on top of those for renewables, the Clean Energy Finance Corporation, and a host of additional state taxes, (cross subsidies to renewables, energy saving requirements and regulatory restraints on fossil fuels) leaves the industry utterly marooned from the market forces that created its low cost competitiveness. It will not recover under the even more aggressive renewables policies an ALP government would introduce and it is difficulty to see how the Coalition, should it be returned to power, can reverse the current direction.
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. Peter Pronczak says:

    In my experience scratch a greenie and the colour found is a fascist one once called a type of socialism under a flag of far-out-right dictatorship.

    Things have become quite crazy, preschool children are brainwashed into drawing monsters and chanting for RE.

    Most politicians remind me of the cartoonists speech balloons, heads obviously full of hot air; their shoes must be very heavy to stop them from floating away with what they believe is practical logic.
    Having once thought Alice in Wonderland was a fairy tale, these days I’m not so sure.

  2. Sarcastic Cynic says:

    How do you choose at the next election? One part of me wants to vote for the conservative candidate who will oppose the renewable energy scam knowing that he/she will have a snowball’s chance. The other part of me wants to vote Labor and get this malaise to a head, so that we can transition the economic catastrophe and get out the other side ASAP. One thing for sure: any Lib/Nat politicians will be last on the list. They need time in obscurity to re-establish their priorities. Whether the parties can survive or not is up to them. Based on what I’ve seen for the past decade: good riddance.

    • Give Sco Mo a Go.

      You can always vote for the wind industry err.. Labor at the next election in 3 years time! I would never vote for electricity Bill. Labor would need a new leader before I reconsidered my vote. That is the word coming down the line to me from some Labor friends of mine. They say that they want… I’m not saying until after the election!

      • Peter Pronczak says:

        Sco Mo? Mr Hillsong who blames the victim of even pedophilia!

        Unfortunately the ordinary voters ignorance doesn’t understand the economic consensus of the ALP/NLP of the 1980s to follow British PM Margaret Thatcher’s Institute of Economic Affairs Polices of tariff reduction/removal, Union busting, deindustrialisation, population reduction in an intentional post industrial society, that doesn’t support the population, means that AU along with the rest has nothing to do with democracy. USA Assistant Secretary of State Victoria Nuland admitted Obama spent $5B to overthrow the Ukraine elected government for NATO to move toward the Russian border.
        There is always plenty of money for the military/industrial complex to create enemies rather than support the needs of ordinary people.

        Why else do you think there is the stupidity of the money milking RE policy?

        So another election? Nothing more than a baton passing process of the party political system. Don’t believe it? Look at the historical record and wake up.

      • Wake up?

        You must be joking. I live 600m from an industrial wind energy facility! I haven’t been able to wake up properly for the last 10 years, in a home that has been destroyed.

        ‘Electricity Bill’ Shorten would see this situation increase rapidly around Australia. For the sake of the country, I don’t want to see that happen. And voting is compulsory.

        A fight with the Coalition is one thing, of which we as a family have had many. As for a fight with Labor. Forget it. During the Wind Farm Inquiry in Portland, Victoria several years ago, the Labor representative wouldn’t even visit our home. Whilst SEN John Madigan and Nationals member SEN Matt Canavan did. When I asked Matt a question, he said yes sure, and sat down on the couch and listened to every word that I said. Not only did he listen to me, he later read out the information in Parliament.

        I will show you the courtesy of researching your information, even though you have shown me no courtesy whatsoever.

        Daisy Cousens. Where are you?

  3. Crispin says:

    So now we are giving subsidies to both the consumers and the ‘ruinable’ energy developers! And destroying the grid into the bargain.

    What the hell is going on here?

    I do feel that more should be made of exposing the subsidies these wind developers receive.

    Can STT please explain just how much a single 2 or 3 megawatt wind turbine receives a year in subsidies? I think the public at large would be shocked.

    And how do these subsidies breakdown? Would be much appreciated.

    • My jaw just hit the floor!

      Thanks STT.

      Quote…

      To give some idea of how ludicrously generous the REC Subsidy is, consider a single 3 MW turbine. If it operated 24 hours a day, 365 days a year – its owner would receive 26,280 RECs (24 x 365 x 3). Assuming, generously, a capacity factor of 35% (the cowboys from wind power outfits often wildly claim more than that) that single turbine will receive 9,198 RECs annually. At $93 per REC, that single turbine will, in 12 months, rake in $855,414 in REC Subsidy.
      But wait, there’s more: that subsidy doesn’t last for a single year. Oh no. A turbine operating now will continue to receive the REC subsidy for another 14 years, until 2031 – such that a single 3 MW turbine spinning today can pocket a total of $11,975,796 over the remaining life of the LRET. Not a bad little rort – considering the machine and its installation costs less than $3 million; and that being able to spear it into some dimwit’s back paddock under a landholder agreement costs a piddling $10-15,000 per year. State-sponsored theft never looked easier or more lucrative!

      …end quote.

  4. Craig Lucanus says:

    Frydenberg on Q&A said “The Transition” is inevitable. Between he and Morrison it’s hard to see what has been the electoral and policy worth of removing Turnbull. My only hope for nuclear (I’m not pro-coal, call me a warmist) is these guys can slip through for a win then change spots. IMO, they should have championed nuclear and turned CSIRO and Office of the Chief Scientist with suitable placements, going into the election with nuclear plans and ears pinned back, hell or bust.

    Australia is screwed.

  5. Crakar24 says:

    To add insult to injury they have now approved the Adani coal mine, just so the late comments can catch

    1, we are destroying our power generation network by installing renewables.
    2, we have a self inflicted perma ban on coal burning because we have to reduce co2 emission and save the planet
    3, we export our coal to Indonesia and China because they don’t have to reduce co2 emissions and save the planet

    Any questions not pointing out the obvious hypocrisy will be happily answered

  6. Marshall Rosenthal says:

    Thanks, again, CGNP! I guess I won’t have to catch that solar plane to Australia after all!

  7. Reblogged this on ajmarciniak.

  8. Californians for Green Nuclear Power, Inc. (CGNP) continues to advocate for the environmental and ratepayer benefits of nuclear power instead of relying on intermittent power sources such as wind and solar, which actually serve to “embed” large amounts of fossil-fired generation in a power grid. As a consequence of the intermittent generation by solar and wind, the fossil generation is operated in an inefficient, intermittent fashion, leading to increased costs. CGNP objected to these characteristics of solar and wind generation in their prepared remarks delivered to the California Public Utilities Commission at their headquarters on April 4, 2019. Here are links to the 110 pages of CNGP’s reply comments appendix.

    http://tinyurl.com/Reply-Comments-Appendix-1
    The 48-page Appendix Part 1 includes Exhibits A through L.
    and
    http://tinyurl.com/Reply-Comments-Appendix-2
    The 62-page Appendix Part 2 includes Exhibits M through Y.

    There is considerable material in these pages that is relevant to STT.

    CGNP’s 15-page reply comments and the one-page prepared comments are available on request to government [at] CGNP dot org. CGNP is also advocating for public safety in California by sending copies of some of its recent legal filings to the judge overseeing the criminal trial USA v. Pacific Gas & Electric. CGNP is offering to serve the public as a friend of the Court in that case.

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