Renewable Energy Industry fights to retain its economy-sapping subsidies

In a less than enthusiastic endorsement, Lenore Taylor in the green left Guardian addresses the Renewable Energy Target, quoting at length from my IPA submission.  She says

But the Institute of Public Affairs (IPA) thinktank – which has long lobbied against the RET – has used a submission to the Warburton review to argue for its abolition, dismissing concerns that abolishing the RET would constitute “sovereign risk”. Like Warburton, the IPA suggests businesses should not have based investments on government “favours”.

“Sovereign risk involves a ‘taking’ of property and should be avoided because, ethical issues aside, it creates great uncertainties for investment, especially investment with long payback times. But sovereign risk from the government withdrawing a favour is different from when it takes a property. No investor can reasonably expect a subsidy to prevail for 15 years as is notionally the case with windfarms and other exotic renewable facilities. And there would be few precedents for a government committing its successors to what would become 24 years of worthless expenditure,” the IPA says in its submission.

“If removal of such favourable and lengthy regulatory provisions was considered to constitute reimbursable sovereign risk, the motor vehicle manufacturers now abandoning production in Australia would have a case for compensation … The termination of the renewable energy requirements should be done immediately.”

According to the IPA, there are three options for modifying the RET scheme:

• Reduce it to a “real” 20% of the current electricity market. It says this would reduce the amount of renewables from 41,000 gigawatt hours (20% of what was the estimated size of the market in 2020) to a maximum of 33,000 GWh.

• Allow only the existing and committed projects to proceed as subsidised. This would mean about 15,000 GWh.

• Totally abandon the RET and force “renewables to immediately compete without subsidy, as their adherents always claimed they would eventually be able to do”.

She adds

The climate commission, which became a crowd-funded independent body after it was abolished by the Abbott government, will release a report on Tuesday arguing that “the least-expensive zero-emission option available at scale for deployment today in Australia is wind, closely followed by field-scale solar PV”.

“These costs are falling fast as take-up globally accelerates. Wind should be 20% to 30% cheaper by 2020, solar PV is expected to halve in cost,” the report says.

Assuming Australia does need to reduce emissions from its power sector, the report says moving to renewables would be cheaper than trying to “clean up” coal-fired plants.

I have heard the forecast that within a few years renewables will be competitive continually for over 20 years.  The corollary, that we should therefore cease subsidising them, is never welcome.  Now the income wasters are simply saying it will be 20 per cent cheaper – and still nigh-on three times the cost of coal, even wind, the cheapest of the exotic renewables.

Taylor lays into those like the RET review’s Chairman, Dick Warburton, for allegedly stating the bleedin’ obvious that a business model built on mooching from the consumer and backed by compulsion, offering a product that is not remotely competitive is a poor basis for building a viable future.  She is voicing the fall-back view of the industry that should have been strangled at birth – namely that we should honour the subsidies that have been given for those who are already receiving them.  That would have been a nice solution to the motor vehicle assemblers’ distress at writing off billions as a result of the recognition that they were not and could not be competitive!

More importantly, it is cheap energy that has built the modern high living standards that we enjoy.  Forcing its abandonment will lower those standards except of course for the administrators and the beneficiaries of the subsidies.

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48 Responses to Renewable Energy Industry fights to retain its economy-sapping subsidies

  1. Brett_McS

    “cheap energy that has built the modern high living standards that we enjoy. Forcing its abandonment will lower those standards” … for the oiks, not for the elite.

  2. Andrew

    Have we ever seen “sovereign risk” used by the übergrubs to argue against removing existing alleged “subsidies” for coal, or the diesel fuel rebate?

  3. At least those running the renewables are not total hypocrites....

  4. Tel

    If government refuses to honour existing contracts it will be difficult to get private investors to engage with government in future. That said, there’s investment and there’s setting yourself up as a protected species.

    Suppose a government sold “investment bonds” which paid excellent return every year for 20 years, but only offered these bonds to their supporters. Would that be acceptable to the next flavour of government in the door?

  5. nerblnob

    You’re a couple of months behind there Mr. 173etc.
    Tillerson withdrew his complaint in April and the tower is just a water tower, which could potentially have sold water to shale gas companies in the area, just like any water tank in the area could have, just like a wind turbine could potentially have sold electricity to shale gas companies … the possibilities are endless if you live in the right area.

    I have heard the forecast that within a few years renewables will be competitive continually over the past 20 years

    It’s been a lot longer than 20 years we’ve been hearing this guff. I learnt the hard way , having got involved in working for some of these firms when we all thought it must be the Coming Thing, and saw how far the various touted renewable technologies really are from ever making a net contribution. It was interesting but demoralising when you realise the most valued skill is making grant applications.

    I still keep in touch, because the technology is interesting, but it is over-hyped beyond belief by the generally ignorant media which accounts for the widespread belief that a “renewable energy future” is just around the corner.

    It’s the future all right – and it always will be, the way things are.

  6. Rabz

    “Renewables” do not work. They are incapable of providing the baseload energy requirements of a modern society and government subsidisation of them is an inexcusable misallocation of taxpayers’ money.

    Why is this so difficult for various misanthropic cockheads to understand?

  7. Bruce of Newcastle

    Nuclear energy has the least emissions of all the technologies, even over solar and wind, which have high life cycle carbon emissions as they are dilute energy sources extracted using sophisticated high tech equipment. How can she not mention it at all in a long article?

  8. Driftforge

    Nuclear is also cheaper that wind or solar, as is hydro; the idea that wind is the lowest cost renewable is baseless.

  9. Dr.Sir Fred Lenin

    The “” soveriegn risk” factor amuses me ,it is of course allowable to destroy the names of tobacco brands ,which have cost millions to establish,and which pay billions into Tax coffers.hiwever it is wrong to deny con men “power” companies which need Tax dollars to survive? Also companies will not invest in government sponsored companies! Is that such a bad thing? That might control fools like brown,krud,giliard &co from robbing the People so much.

  10. nerblnob

    European Greens are drifting back toward nuclear.

    The Aussie Greens, so-o-o concerned about what the ROTW thinks, are going to be left stranded, still fighting the last war.

  11. incoherent rambler

    European Greens are drifting back toward nuclear.

    True. Don’t you just love it.
    If Lenore is actually having to argue a case, then the Wind/Solar scamsters are getting worried.

  12. Mr Excitement

    Germany has invested spent wasted billions on wind but, when they want usable electricity, is building coal fired stations fed with cheap imported coal.
    They also closed their nuclear plants, due to concerns about tsunamis, and buy power from former soviet bloc reactors. Much safer.
    #greensarepoison

  13. nerblnob

    The Bosche are also drilling loads of wells, gas, geothermal, whatever little skerrick they can winkle out of the good earth. Good times for drillers!

    I have a feeling they’ll re-think their nuclear move soon.

    Meanwhile, Vlad’s got his hand on it again …

  14. cohenite

    Well, well, numbers finally has a point:

    At least those running the renewables are not total hypocrites….

    The dynamic between coal companies and fracking in Australia is explained here.

    From the article:

    Some underground mines, which all have varying degrees of “gassiness”, obtain permission to build small onsite power stations using the CH4 extracted from the coal seam.

    None however have permission to sell in commercial quantities the huge amounts of CH4 they extract. Nor do they want to. Gas is an energy competitor and how the coal mines dispose of their excess gas enables them to reduce their CO2 tax burden.

    What the mines do is place a pipe into the gas deposit which is usually above the coal seam and then the lower specific gravity of the gas carries it up the pipe. No fracking required!

    What happens next is a national scandal. That gas coming up the venting pipe is burnt. The pipes are called flares or “candles”. At one mine in the Hunter valley there are 3 of these candles each 20 meters wide. They have an ignition switch above ground and they burn 60000 litres of CH4 per second!

    Another less gassy mine is gearing up to burn 10,000 litres per second.

    That’s fucked. But let’s get the allocation of blame right. The coal bastards are burning off their competition and getting a tax dividend. That tax dividend is entirely due to Green filth policies. So every day sufficient gas to power Sydney goes up in smoke.

  15. incoherent rambler

    +1 cohenite

  16. MT Isa Miner

    Rabz

    #1349822, posted on June 17, 2014 at 8:06 am

    “Renewables” do not work. They are incapable of providing the baseload energy requirements of a modern society and government subsidisation of them is an inexcusable misallocation of taxpayers’ money.

    Why is this so difficult for various misanthropic cockheads to understand?

    Because nobody tells it like that, Rabz, No-body.

    As for nuclear, Bruce and Drifty, don’t get me started, I was part of the pull out of Mary K in 1982/3.

    The Resource Capital Research report to the September quarter said international demand remained high, despite a price plunge following March’s Japan earthquake and Fukushima disaster. More than 84 new nuclear power plants are expected to be commissioned around the world by 2017.


    “We’ve got the new deposit near Mount Isa but the lunatic government won’t let us mine it,” he said.

    “The community is very pro. We’d like to see it go ahead — it’s just another mineral.”

    A coalition of councils and business groups from Mount Isa to Townsville will meet Wayne Swan next week, and are expected to voice their support for uranium mining.

    Queensland Premier Anna Bligh is standing firm on the state’s anti-mining policy, while the LNP’s Campbell Newman said the party had “no plans” and “no desire” for mining.

  17. Baldrick

    The guvmint should provide the same level of support for the renewable energy sector as it did for the motor vehicle sector … NONE!

  18. MT Isa Miner

    Cohenite, that is unbelievable.

  19. MT Isa Miner

    I mean I believe you but FM

  20. cohenite

    The burning off the gas is common practice. The flow details were obtained from engineers at the sites. It’s just staggering.

  21. entropy

    CSG extraction for commercial purposes is a relatively new technology. Underground coal mines have always had to extract the out gases to try to prevent explosions or at the very least protect their workers and their canaries from methane poisoning. The extracted gas has always been burnt off. And in an underground mine I doubt the quantities of gas involved would justify the infrastructure needed to commercialize, but could be used for local power if used to run a small generator.

    No conspiracy here.
    Oh and in Australia most CSG is not fracked.

  22. entropy

    The station I used to work at in NWqld had a lot of old Mary Kay buildings as accommodation and outbuildings, MIM.

  23. cohenite

    No doubt Entropy the quantities do vary but I must disagree with your comment about the commercialism of the gas; the quantities seem to be very commercial.

  24. entropy

    My understanding is it is only commercial as it gathers up CSG from a large number of dispersed wells. One or two wells for the purpose of degassing a mine would not gave the scale to justify pipelines etc. but might have local application.

    But you are also referring to regulatory issues. In Qld I think coal is under the mining act while gas is under the petroleum and gas act. Both have separate tenure arrangements so that might also be a problem as you indicated.

    Both of course produce meaningful amounts of energy compared with renewables however.

  25. jupes

    It is demoralising that so much thought and energy is still being expended trying to lower the amount of CO2 in the atmosphere. Why FFS?

    During the last 17 years and 9 months the amount of CO2 in the atmosphere has increased by 10% while the global thermometer has moved not one jot. The national interest is best served by placing no restriction whatsoever on the cheapest form of generating electricity.

    We live in a truly moronic age.

  26. entropy

    On the uranium issue, wasn’t there some activity around Georgetown regarding mining recently?

  27. Rob MW

    Following Lenore Taylor on the strident economic theory of environmental crony-capitalism is a bit like following Chevy on the classical roundabout.

  28. The Germans are eminently pragmatic people.

    Racist.

  29. Leo G

    Many households were never given a viable opportunity to benefit from generous feed-tariffs. Rentals, high rise multiunits, homes with Mansard or Gambrel roofing or those shadowed by trees and adjacent structures are obvious examples.
    Why should those energy users subsidise the more fortunate?
    Perhaps those households should get a subsidy equal to what they might have received had they been able to benefit from the best return RET Scheme. All paid for, of course, by the users who could have benefited but decided against- the ethical losers. The scheme would then necessarily collapse. Australia could quickly become as ethically green as North Korea.
    I’ll reject that idea- I don’t think that much green is becoming.
    But as for honouring “the subsidies that have been given for those who are already receiving them”, it would have been better that those who are “voicing the fall-back view of the industry” should also have been strangled at birth with the industry.

  30. Leo G

    The Germans are eminently pragmatic people.

    The German people are an eminent example of the imminently pragmatic. Consequences hitting home simplifies pragmatism considerably.

  31. brc

    Google has built a self – driving car with zero government money – in the same time period not one windmill site has figured out how to turn a profit. There is a big difference between the future and the never-never.

    Just remember jimmy carter installed solar panels on those White House in the 1970s. That’s how long this argument has been going on.

    Meanwhile we are keeping fossil fuel in the ground while the fruitcakes in the ME use the oil dollars to build their armies and state their desire to wipe out all infidels.

    The sensible option is to withdraw all market distortions and state that the aim is for cheapest energy supply possible. That’s what abbot told the texans, that’s what needs to be done. If wind becomes cost effective in 20 years, then, great, let’s use that. Until then, wasting capital and time on bad technology helps nobody – including the wind manufacturers, because they spend all their time optimising for government moneys instead of designing new tech.

    Maybe Morrison needs this portfolio as well.

  32. MT Isa Miner

    entropy

    #1349900, posted on June 17, 2014 at 10:39 am

    The station I used to work at in NWqld had a lot of old Mary Kay buildings as accommodation and outbuildings, MIM.

    Rio stripped every scrap and flogged it off. The buried copper pipes were dug up and wires pulled down. Yeah, Entropy, a few of us bought houses and relocated them to the Isa. I hear it’s a perfect mine remediation so should be no problem starting U mines up again, hey?

  33. Myrddin Seren

    That’s what abbot told the texans

    I wish he could drive that message home to the NSW Coalition government – who preside over Australia’s 3rd biggest mining state and which makes a vast contribution to the government’s coffers.

    And which the Coalition wants to disappear as fast as possible because ‘boo-hiss-nimbyism’.

    Once mining is killed off, I expect the politicians of both persuasions in NSW to go after the Blue Scope steel mill and any remaining aluminium smelters – because ‘boo-hiss-nasty productive jobs when what we really want in NSW is app writers and artists and barristas’.

  34. Dr.Sir Fred Lenin

    Could it be that a lot of the investors in the “green energy” scam are retired alp and union officials,alp and green members and union super funds? This could be why they all scream when common sense prevails and moves are made to remove subsidies.Complete removal of all subsidiescould do serious harm to these people. Bring it on Tony! Destroy the socialists ill gotten wealth! Do Aystralia a real favour,without money they are nothing.

  35. James D

    I reckon Greg Hunt’s going to fight as hard as he can to keep this, though. That statist maggot is a green in disguise.

  36. MT Isa Miner

    James D

    #1350067, posted on June 17, 2014 at 1:30 pm

    I reckon Greg Hunt’s going to fight as hard as he can to keep this, though. That statist maggot is a green in disguise.

    The Liberals have a lot of greens. Australia has a lot of greens- the cultural Marxists are everywhere. Someone has to take the lead and root em out, strip the money and chase them into sobbing into their lattes for their sins.

  37. gabrianga

    Lenore Taylor ? She who was converted to the Green Sect on the road to Copenhagen with Rudd and crew?

    The good old days flood back with memories of the bar in old Parliament House with Taylor, McCallum, Kelly,Seccombe ,Oakes , Ramsay, Tingle et .al snivelling around the might of Labor searching for “leaks”.

    Not much has changed.

  38. entropy

    Frigging Hunt has delayed approval of that galilee basin coal mine, even though Qld has ticked off on it with 190 conditions. The approval power he pretends he would like to get rid of. He needs to be keelhauled as a lesson to the others.

    NADT.

  39. nerblnob

    they spend all their time optimising for government moneys instead of designing new tech

    That is the worst aspect of government subsidy. People who could develop good stuff frittering their careers and public away trying to turn base metal into gold.

    Leo G, I enjoyed your pun about imminently pragmatic Germans. Numbers link is from a propaganda website, which among other things states that Munich council is going for 100% renewable. My arse it is, doing drilling jobs for them right now. The only thing that keeps the geothermal rigs going is subsidies from the federal government to the likes of Stadwerk Muenchen, (board of works) , and a 20-year guarantee on feed-in tariffs.

    And the real story in Hamburg is that

    RWE-DEA is being bought by the Russians

    so the group wasting citizens’ money on buying the grid will be getting the energy supply from oligarchs even if they use the locally produced gas from Mittelplatte. And probably will have to pay a competent operator to run the grid anyway.

  40. brc said “Maybe Morrison needs this portfolio as well.”
    exactly – as soon as borders can be handed on to some other competent administrator – Minister Morrison could make history in Environment.

  41. Elizabeth (Lizzie) B.

    The climate commission, which became a crowd-funded independent body after it was abolished

    hahahaha – ‘crowd-funded’ means a group of lunatics got themselves a website and kept on banging their green political drum, amply aided by the usual suspects in the MSM.

  42. nerblnob

    “Crowd-funding” is fine, if it’s private citizens putting their own personal money where their mouths are.

    Not so good if it’s councils or charities or “community leaders” volunteering ratepayers’ and donors’ and members’ money, but hey.

  43. AP

    cohenite – it has absolutely nothing to do with competition. Believe me the mining companies would love to utilise the gas. This is all a result of who owns the rights to the resource. The government in these cases has granted overlapping PELs to other companies. Therefore the miners (who have the right to de-gas mines since it is a sfaety hazard) have absolutely no way to commercially use the gas as the rights are owned by another company. Burning it is really the only option, since the “carbon” tax on methane is 23 times the tax on actual CO2.

  44. AP

    Incredible that they can keep on telling the lie that wind power is zero emission.

  45. AP

    The mines that do utilise the gas build banks of 1MW gensets – essentially large Caterpillar gas engines. So it is very scaleable. If you own the gas or can come to a commercial arrangement with the company that does. And several mines have.

    http://www.bulgacoal.com.au/EN/greenhousegasabatement/Pages/GreenhouseGasAbatement.aspx
    http://www.energydevelopments.com.au/01_cms/details.asp?ID=97

  46. incoherent rambler

    I reckon Greg Hunt’s going to fight as hard as he can to keep this, though.

    since the “carbon” tax on methane is 23 times the tax on actual CO2.

    Having met the man, he worst type of green moron.

    Let’s get back to the man issue. Now that it has been clearly shown that CO2 has zip effect on the Earths temperature, can we drop the “renewables” BS and get back to advancing the well-being of the human race?

  47. gabrianga

    Waiting for Greg Hunt to announce Australia is quitting the ranks of the World Heritage Committee and removing U.N. control over tracts of resource rich Australia so they can be developed offering Australians increased opportunities of employment, massive construction jobs and increased exports.

    OK It’s “white man dreaming” time again.

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