The Renewable Energy Target review panel, headed by businessman Dick Warburton, is in the final week of taking submissions. The carpetbaggers in the renewable space have been urging their affiliates, dependents and soul mates to get the submissions in, gambling that volumes of flatulence will be persuasive to the panel.
I have put in the IPA submission. Its summary is
Renewable energy in the form of wind and solar, the two major subsidised supply types, remains non-commercial, at threefold the cost of electricity sourced from coal.
Globally, these and other subsidised renewable sources have shown considerable growth and now account for around three per cent of electricity supply. In Australia they amount to some four per cent of supply and are scheduled to reach 17 per cent by 2020.
Australia’s coal wealth provides the nation with perhaps the world’s lowest cost electricity. Australia has, however, been relegated from being among the world’s cheapest locations for electricity supply into becoming among the dearest. The renewable program has been a major contributor to this.
Assuming the carbon tax is repealed, next year will see non-commercial renewables, together with feed-in-tariffs and “energy efficiency improvements schemes” bringing about an increase in the wholesale electricity price by 75 per cent. This is an average increase in household prices of 11 per cent.
The expense of wind’s mandatory inclusion within electricity supply results in a serious dilution of the domestic capital stock’s productivity. There is some $18.5 billion spent on renewables that require a subsidy to cover most of their costs.
Wind and other renewables should be left to stand on their own feet commercially. They have achieved their current market position only through subsidies and show no sign of reaching commercial viability without them. Their on-going subsidisation severely weakens the national economy and imposes significant penalties on consumers both directly and indirectly. This is of added importance in the context of Australia’s acute budgetary problems and stringent measures are required by the federal and state governments to redress the spending excesses of recent years.
Australia’s renewable program is ostensibly targeted at a reduction in carbon dioxide emissions. But whatever the merits of such a reduction, it is clear that the contribution Australia might make is negligible.
Those arguing for the retention of the subsidies to renewables claim that the program reduces overall electricity prices. It is however impossible for a subsidy to bring about a sustained reduction in prices without its rate continually increasing. In the process not only does this mean high costs to consumers who are required to fund uncompetitive renewable energy suppliers but it also would entail bankrupting the formerly commercial, unsubsidised providers.
It is also claimed that early termination of the renewables program would introduce an element of sovereign risk into Australia’s investment environment. This is untrue. The withdrawal of a privilege does not constitute a government “taking” of property which would undermine investor confidence.
The privileged position of beneficiaries from renewable energy subsidies is so onerous that it is having an economically debilitating impact on the economy at large. The renewable regulations perform no positive function and therefore should, accordingly, be discontinued with immediate effect.
The renewables have been a lead weight around the economy and are more prominently so once the carbon tax is removed. Their beneficiaries have done wonders in lobbying to force consumers and other producers to pay two thirds of the costs of their products so that they can turn handsome profits.
They are now trying to retain the tap to their loot by claiming that the low marginal cost of wind means it is bid in at a zero cost and this lowers the price of all electricity. That might partially offset the hidden slug for the renewables’ subsidised but can only last until the commercial producers are bankrupted.
Having tricked hapless politicians with the help of a militants to give them a massive subsidy, the rentseekers are also trying to cement things in by claiming that a withdrawal of their scam would impose “sovereign risk”. Hopefully the panel won’t buy that furphy.