From STOP THESE THINGS

Households and businesses faced with crippling power bills are just another bad optic for renewable energy rent seekers. The political support upon which the seemingly endless flow of massive subsidies depends, in turn, depends on the proles’ attitude to those charged with delivering reliable and affordable power.

Having just been whacked with 20-30% increases in their power bills – on top of increases of between 10-20% in retail power prices that took effect throughout the financial year – many households and businesses will see a 50% jump in their power bills in less than 12 months. Those on the receiving end of the grand wind and solar transition are understandably aggrieved. Australian power consumers have been lumped with annual, double-digit increases every year, for the best part of a decade (see above).

Alan Moran provides some helpful detail on how and why we’ve landed in a world with increasingly unaffordable power.

Unexpected Costs
Spectator Australia
Alan Moran
17 September 2023

Manipulated estimates of Levelised Cost of Energy tables showing wind and solar to be the cheapest supplies of energy are contradicted by the trends on actual electricity costs and inter-country comparisons.

The readily available data by country for the wind and solar renewables share and price of electricity show a high share of renewables is concomitant with high electricity costs. The cheapest electricity is found in the nations with the lowest renewable energy share: Saudi Arabia, Russia, India, UAE and Korea. Germany, the UK, the Netherlands, Spain and Italy have high prices and high renewables shares.

Australia’s renewables share is similar to that of Italy, but (for the time being) has lower electricity prices.

[Note to Alan: the EIA figure in their dataset of US 0.23 per kwh is well below prevailing rates in Australia – the graphic has Australian power prices even cheaper than that, which is not correct. South Australians have just been hit with power bills where their peak rates are AUD 0.495 per kwh, which at current exchange rates translates to US 0.32 per kwh, way above what is represented in the graph above.]

Even so, there is accumulated vested interests in promoting the ‘renewables are cheap(ish)’ myth.

For Australia, this comprises a vast bureaucracy of government departments, research agencies like CSIRO, government-assisted NGOs, an array of educational and financial institutions and, of course, politicians in both the ALP and the Coalition. The National Party, in seeking greater scrutiny of new renewable proposals, is edging its way to abandoning the sacred Net Zero creed. Politicians will shamelessly reverse course on a policy they have championed when it proves to be downright wrong and unpopular. They will avoid the pitchforks by blaming poor advice from the ‘experts’. These experts have also proven adept at dodging the bullets for policy failures (think the 264 UK economists who maintained Mrs Thatcher’s cost-cutting would have catastrophic consequences and the health experts who promoted Covid lockdowns). Once the climate myth and its renewable energy companion are discredited, they will dig deep to find another cause receptive to government intervention.

In spite of renewables requiring massive subsidies to be profitably installed – $10 billion a year in Australia’s case – propaganda about renewables being the cheapest form of energy is unrelenting. But subsidies aside, renewables are only remotely competitive if consumers will take their electricity whenever it is produced and will do without it whenever the vagaries of weather pare back its availability. That’s the equivalent of skiers paying for lift tickets even if there’s no snow and flocking to the slopes in even greater numbers during a blizzard!

For anything approaching the government’s goal of 100 per cent renewables, the backup required is upward of 20 days of storage based on the estimates of Francis Menton. For Australia that is 13,000,000 megawatt hours. Even with highly optimistic assumptions, Paul McArdle of Global Roam came to an estimate of 9,600,000 megawatt hours. Menton cites the US National Renewable Energy Laboratory estimates of storage costs by 2030 at $US200,000 per megawatt hour. This cost means reliability-proofing Australia’s network at an outlay many times the nation’s GNP. And this is just to firm-up the weather-dependent sources of energy, an expense that is not required for coal, gas or indeed, nuclear.

For its part, to accommodate the dispersed nature of wind and solar, the government plans to spend $100 billion for transmission, a five-fold increase on the present system’s costs. On top of this are sums, not yet estimated, for reinforcing the distribution network to allow rooftop generation to be exported.

But like the cunning plans of Blackadder’s Baldrick, these schemes are not panning out.

Farmers, fishers, and other people in remote locations are showing an unexpected truculence; for many, the transmission lines and land-extensive wind and solar operations impose inefficiencies (for example, impeding spraying) additional to the national waste they represent. Other opposition stems from people more fully recognising the visual and noise intrusion. Coordinated local opposition is being generated against individual projects, causing a slowdown in project authorisations. These are bringing unexpected costs to renewable energy proposals and retarding the already ambitious plans for Net Zero. Governments are reacting by seeking to truncate development approval procedures but this may lead to even greater opposition.

In addition, global supply costs are rising. One outcome was a poor response to the UK government’s latest applications for additional wind and solar, despite contracts being offered at prices 2-7 times their actual value. In the US, Danish international offshore leader, Orsted has faced cost escalations bringing a collapse in its share price.

Other international pressures add to the home-grown ones. India, China, and Saudi Arabia have opposed a proposal by Western countries to cut greenhouse gas emissions by 60 per cent by 2035. What was once called the Third World now accounts for the great bulk of global CO2 emissions and places a low priority on abating CO2 emissions. Those countries’ actions will kick down the door of the global warming and renewable energy farce. This cannot come too soon.
Spectator Australia

Labor in office: time to take stock
Spectator Australia
Alan Moran
28 September 2023

The Prime Minister, the Treasurer and the Energy Minister were supposedly somewhat trained as economists, but all three fail to grasp the discipline’s basic principles.

Energy Minister Bowen claims that his renewables program will create 60,000 jobs by replacing ‘legacy’ coal plants with wind and solar facilities plus the increase in power lines and batteries that replacement will entail.

While increases in jobs (and/or income levels) may result from the services stemming from government spending, Mr Bowen’s numbers refer to the gross jobs involved in the construction activities themselves. As those jobs are tax-funded, they are offset by jobs elsewhere in the economy due to lower spending from individuals whose incomes have been reduced by government taxes and regulatory measures.

Mr Bowen’s claim is especially specious since his program replaces low-cost (coal) with high-cost (wind and solar) energy services and therefore has a negative effect on productivity, incomes, and jobs. Like the Treasurer, his conviction is that forcing a ‘transition’ to high-cost low-reliability energy will bring economic benefits.

The forced transition from low-cost reliable energy is being amplified by the present government. One policy driving this is the ‘Safeguard mechanism’ that requires the top 215 CO2 emitters to reduce emissions by 30 per cent on top of that forced by general requirements.

Subsidies to renewables now amount to over $10 billion a year. That $10 billion of wasteful spending is equal to the market value of all wholesale electricity prior to the price escalation caused by renewable subsidies. The adverse effects of this are compounded forcing unsubsidised power stations to close.

Seemingly unaware of the reality of power cost increases, Mr Bowen, through a spokesman, maintains ‘delivering cleaner, cheaper energy across the country is a whole of society imperative’.

Unfortunately, taking down the economy through imposing higher renewable requirements is not the only delinquent policy Labor is pursuing.

In macro terms, the Treasurer has poured additional fuel onto the big spend Covid programs inherited from the Coalition. There is $61 billion in new spending (to its shame the Coalition has actually supported much of this) with $27 billion of new taxes. He claims a bottom-line improvement but this was due to $42 billion in windfall gains due to high commodity prices and new employment (partly through high immigration levels).

For his part, the Minister for Employment, Tony Burke, claims no training in economics. He can therefore excuse his actions in his crusade to destroy the ‘gig’ economy as due to being totally uninformed by a knowledge of the interactions of politics on costs. The ‘gig’ economy is composed of almost entirely non-unionised workers and allows working arrangements in areas ranging from pizza deliveries to mining services to respond to the needs of customers flexibly at low cost. The proposed rigid IR arrangements will impose massive costs on consumers and business, amplified by affording privileges to union recruiters and a Sword of Damocles of uncertainty over the practical implications of the proposals.

This same cavalier attitude to cost impositions is seen in the environment portfolio. The Minister, Tanya Plibersek, is pouring cold water on new projects in northern Queensland by pandering to UN pressures (and her own Green-challenged constituency) by knocking back mines like Clive Palmer’s Central Queensland Coal Project claiming it was ‘likely to have unacceptable impacts to the Great Barrier Reef Marine Park’. Data released by the Australian Institute of Marine Science confirmed the accuracy of measurements and analyses conducted by Dr Peter Ridd that the reef is in great environmental health.

Further courting the environmentalist vote, Ms Plibersek is also reducing the water available to irrigators in the nation’s most important agricultural province, the Murray Darling.

Labor is now halfway through what it hopes to be its first term of government. Aside from driving a cultural divide with its Voice campaign to segregate the nation, so far, its performance has been an unremitting assault on the settings that drive increased productivity and income levels. Sadly, according to opinion polls, the policy is enjoying success in the eyes of an electorate seduced by an avalanche of rhetoric. Hopefully, a realisation of the damage being done will result in policy reversals before the damage becomes permanent.
Spectator Australia