Subsidised renewable energy: from little things bad things grow

In his outstanding address launching the compendium Making Australia Right, Tony Abbott offered a fivefold agenda. Malcolm Turnbull recognised this as, in effect, throwing down a leadership challenge.

The key feature, as when Turnbull first lost the Liberal Party leadership to Abbott, is energy policy.  Turnbull is addicted to the renewable creed and will, as he once did before, sacrifice his leadership to keep it in operation.

Turnbull’s lame response to Abbott’s challenge was to claim that his government is on track to reduce emissions in accordance with our  international obligations, emission reduction plans that are atrophying with the Trump ascendancy. He spouts the need for “a coordinated plan between all governments” otherwise, he says, we will end up like South Australia.

His prejudices against fossil fuels are reinforced by the technology fix approach of his Chief Scientist, Alan Finkel, presently studying Ireland and Denmark, the world’s two least successful energy policy jurisdictions.  Turnbull wants more storage batteries when the issue is the high costs that the energy policy is creating by substituting renewables at three fold the cost of coal and nothing like its reliability

Turnbull’s sledging of the hapless crow-eaters is a convenient way of deflecting criticism of his own (and in fact Abbott’s) policy.  But it is totally inaccurate.  South Australia, in facilitating wind, was doing precisely what the Commonwealth sought it to do under the Renewable Energy Target.  Even though the government in Adelaide evinced the cockeyed optimism of the green loons, policy was driven by Commonwealth subsidies which South Australia attracted by putting fewer impediments in the way of new wind development than other states.

Turnbull’s coordinated planning between government agencies is precisely what has got us into the present impasse.  Australian energy policy is a living proof that, as with a national plan for the supply of food, petrol or entertainment, management by high level committees of government is a prescription for inefficiency.

This is only worsened in the case of energy by having decision making dominated by a new class of renewable energy anti-carbon evangelicals. Government ministers determining how an industry should operate will inevitably mean political overrides of the nature that has transformed Australia from the world’s lowest cost to among the highest cost – and unreliable – electricity industry.

Even without meddling by ministers keen to win favors from vested interests and to please the elites, as demonstrated by the pathetic solutions of more intervention and more regulations offered by Finkel (see here for a critique) the “experts” they choose to advise them will only exacerbate the difficulties, especially in light of the highly politicised public servants ghost writing the reports. The policy departments at state and federal levels advising are utterly bereft of understanding of the energy market – the Commonwealth even sent a delegation to Adelaide to examine the feasibility of exporting black coal from New South Wales – presumably using Australian union-manned coastal shipping!

With the seemingly imminent closure of Hazelwood, politicians’ minds are being concentrated by the gallows that this disaster will bring to them personally and are jockeying to shift the impacts onto other jurisdictions.  But South Australia will be just the first man to be tossed overboard.

As Abbott has said, the solution of providing offsetting subsidies for a new coal generator to redress the damage that subsidies to wind have done to the low cost, reliable generators fed by coal is just the latest desperate effect of papering over fissures created by political decisions and one that is likely to create its own future distortions.

Abbott takes some pride in winding back the subsidised renewable distortion for 28 per cent of the market to 23 per cent and acknowledges that this is not enough.  That’s a total understatement.

The distress caused by the renewable program has led to a doubling of prices, closure of low cost power stations and dare one say, political instability.  But with the current policy we still have to increase the renewable poison by another 50 per cent.

From a small base in 2002, RET requirements in gigawatt hours have grown and are scheduled to continue growing

The only solution involves an immediate cancelling of all energy subsidies and withdrawal of government from management of the energy market.

 

 

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42 Responses to Subsidised renewable energy: from little things bad things grow

  1. Bruce of Newcastle

    The only solution involves an immediate cancelling of all energy subsidies and withdrawal of government from management of the energy market.

    And apply fines for dead birds at the same rate that other industries pay: roughly $2,000 per corpse.

  2. teddy bear

    You should probably add in their that their co-ordinated “plan” will almost certainly involve ordering large electricity consumers to shut down during peek demand, naturally with compensation.

  3. jupes

    This is only worsened in the case of energy by having decision making dominated by a new class of renewable energy anti-carbon evangelicals.

    Anyone hoping to hear some sense on this need never watch David Speers on Sky.

    Last night he had four guest for a balanced discussion on energy policy and the RET. IIRC one was a full on loon from a green NGO, one was from the Grattan Institute and the other two were in the renewable energy business.

    Needless to say, not one agreed with Abbott that the RET should be frozen let alone even discuss your sensible solution.

    Keep up the good work Alan.

  4. Motelier

    Perhaps there is a government funded study to be done into the formula:

    ^renewable energy = ^renewable Prime Ministers

  5. John H of Pelican Waters

    I sometimes wonder how much of this farce is attributable to a lack of STEM graduates in our various parliaments and the upper reaches of the Public Service. A quick look suggests that they mainly come from a “well-rounded” educational background, i.e. law, economics, political science and finger-painting. In the Federal Parliament we used to have (the now sorely missed) Denis Jenssen, and of course we have Malcolm Roberts. But how many others are there? Not many, I suspect. And I also suspect that you would find a similar phenomenon among the heads of the main Public Service departments. It is becoming increasingly apparent that, without some sort of technical background, it is hard to grasp the absurdity of our current situation.

  6. billie

    subsidised renewables are a folly

  7. Empire GTHO Phase III

    The only solution involves an immediate cancelling of all energy subsidies and withdrawal of government from management of the energy market.

    Excellent energy policy. Easy to understand, simple to implement and low cost.

    Consumers win, carpetbaggers lose.

  8. The Deplorable Barking Toad

    I couldn’t watch Speers and co for longer than a minute – could see where it was going and have high respect for my blood pressure and the TV screen

  9. the Commonwealth even sent a delegation to Adelaide to examine the feasibility of exporting black coal from New South Wales – presumably using Australian union-manned coastal shipping!

    They could have just looked up the history, but probably beyond the skillset I suspect.
    Whyalla sent Iron ore to Newcastle and Newcastle sent coal to Whyalla on ANU coasters with names like Iron Knight, Iron Monarch IIRC. Basically, sixty milers and rust buckets but fully loaded each way, a nice little earner I was told.

  10. duncanm

    Ahh.. the magic of batteries.

    Never mind the 80% round-trip efficiency minus DC/AC conversion losses.

    I sometimes wonder how much of this farce is attributable to a lack of STEM graduates in our various parliaments and the upper reaches of the Public Service.

    much of it.

    A bunch of people who have never had to trade-off engineering solutions to a problem, and implement them.

  11. Snoopy

    Imagine the outrage if someone decided to buy an off-the-shelf coal-fired power station from China.

  12. Botswana O'Hooligan

    This is a prime example of the age old observation that you only went in the water to drain the swamp and instead you found yourself up to your arse in alligators.

    Many of us just do not believe in global warming tho climate change is happening just as it has since Earth formed and will continue until earth is but a cinder.

    It is that simple, we have to have a guaranteed supply of electricity as we did twenty years ago and it has been proven time and time again that solar and wind power can’t do that, never could do that, and never will be able to do that so the answer is either nuclear power with its many drawbacks in manufacture, disposal of waste etc. or coal, and we have untold amounts of coal beneath our feet, coal we export to japan, China, and India so that our companies, one by one, are leaving to go offshore to use cheap electricity generated by our coal as do Japanese, Chinese, and Indian companies, and poor Australia is up to its arse in alligators.

  13. Rob MW

    Alan – Whilst Australia is transitioning to the utopian advantages of a third world banana republic with an energy policy that forces its inhabitants to seek the reality of a shady tree in summer and a fire place in winter, or if you are rich, the climate control advantages of a cave so it’s worthwhile noting that not one Australian leader, bureaucrat or energy expert is taking any notice of you or any form of commonsense. They have simply fallen out of their collective trees !

    One of (the many) advantages of living and working in a non-urban (that’s another word for rural) environment is that I have the capacity to enact my own energy policy. My energy policy (as enacted) involves a number of technologies including, fossil fuel, copper & aluminum, rare earth metals, a trench digger, some transfer switches, a shovel and a pair of plyers and some Chinese steel of Australian origin. Once the full advantages of the banana republic become fully entrenched I might have to convert from fossil fuel to home grown bio-diesel just in case of any shortages of the good stuff.

  14. .

    The RET should be scrapped. I can’t imagine how many blackouts it will take for the public to get clued up.

    Hopefully it will see a backlash against the Greens.

  15. Rob MW

    Never mind the 80% round-trip efficiency minus DC/AC conversion losses.

    That’s only scratches the surface; short shelf life and huge replacement costs.

  16. Mark A

    John H of Pelican Waters
    #2306835, posted on February 24, 2017 at 12:21 pm
    In the Federal Parliament we used to have (the now sorely missed) Denis Jenssen, and of course we have Malcolm Roberts. But how many others are there? Not many, I suspect.

    He is not missed at all, he may well had been a climate sceptic but he also was an arrogant individual who could not get support from his colleagues. Politics don’t work by antagonising your supporters. I don’t want to go there but this “I’m better than you” seems to be a trademark of some, mind S0me , individuals from a certain place on this planet.

    Malcolm Roberts is OK but has little support at the moment, at least he sticks to facts.
    When things go from bad to worse, as they inevitably will, so attitudes will change, takes a while but and the remedy will be painful.

  17. Perth Trader

    Politics 2050…list of questions asked during employment interview for a Govt. position.
    1 Have you ever supported a political party that believed in climate change?
    2 Do you now or have you ever belonged to a group that believes in climate change?
    3 Do you now or have you ever supported renewable electric energy sources?
    4 Do you now or have you ever owned a hybrid or electric car that plugged into the power grid?

  18. Mark M

    The feathers are collected, the tar is warm, the pitchforks are sharpened, and the torches are over there next to the fire.
    I want accountability for lack of ‘due diligence’ at the very least.

  19. Boyfromtottenham

    Thanks Alan! Trumbull clearly believes that “emission reductions” are worth pursuing, so he obviously has not bothered to read any of the mass of sceptical science that demonstrates that such a policy is based on bad science (or no science), that even if the science was partly true would result in a minuscule (and almost certainly unmeasurable) effect on global temperature (if such a measurement has any scientific meaning), that continuing with the cunningly malevolent and ever growing LRET will destroy our base load power generation infrastructure, and thereby our heavy industries. If the majority of the Coalition also subscribe to this nonsense then do not deserve to call themselves Liberals, or Conservatives and should abandon any pretence of being so. I am appalled that Australia is so poorly served by our political class, and despair for the future of my children and grandchildren. When will the scales fall from their eyes – when it is too late and enormous damage has been done to this fine country? Perhaps this site be renamed “friends of Cassandra”?

  20. teddy bear

    Mark M the only ones that will ever get burnt by lack of due diligence is the “independent” bodies they set up to “advise” on these issues, and even then when was the last time you heard one of them being taken to task for lack of due diligence.

  21. incoherent rambler

    Trumbull clearly believes that “emission reductions” are worth pursuing, so he obviously has not bothered to read any of the mass of sceptical science that demonstrates that such a policy is based on bad science (or no science)

    Forget the science. It doesn’t pass muster at an engineering level. Every engineer I know (varietal types), figuratively spits on the ground when you mention roonables or .“emission reductions” .

  22. 2dogs

    Just out of curiosity, would it be feasible to split the the existing RET certificate into a “renewable at anytime” certificate and a “demand matching certificate”. You’d get the “renewable at anytime” certificate by installing rooftop solar, but to get the “demand matching certificate” you’d need to install battery storage as well.

    Both would be needed to meet the % target.

    Obviously, this would greatly add to the cost of the system, but this doesn’t seem to be a factor for Weatherill or Turnbull.

  23. Tezza

    Abbott’s useful but limited role in slightly reducing the RET to about 23% via the 2014 Warburton Review is worth revisiting in detail.

    Warburton received very clear submissions pointing out the disaster looming for the network (including from Alan Moran) but the pre-eminent national authority, the AEMO, made a submission asserting that while there were potential challenges from high penetrations of renewables, the AEMO was on top of those problems. Given that input, which was obviously wrong even at the time by observation of UK and German experience, Warburton and Abbott were left without a feather to fly with in political negotiations with Labor and the Greens to significantly reduce the RET.

    As for the political setting into which Warburton’s Report was launched, the ABC’s 4 Corners campaigned against lowering the RET by revisiting in “Power to the People” (7 July 2014) its well-worn theme: renewable breakthroughs are happening in the US, and Australia will be left behind unless we maintain or preferably increase our RET. It belittled Warburton as a climate change denier. Notwithstanding complaints to ABC Audience and Consumer Affairs and ACMA about the errors, biases and misrepresentations in that program, it stands uncorrected to this day. Its journalist, Stephen Long, remains an active cheerleader for renewables and seeks to excuse them for our recent and worsening problems.

  24. King Koala

    (((Turbull))) is a leftist pretending to be a conservative.

  25. Dr Fred Lenin

    Were the Australian people asked if they wanted to pay heaps more for power ,and put up with brown and blackouts to pay the u.n.communists and soros and his billionaire mates who own the foul windmills . The answer is of course NO,so therefore any false obligation is not a real law ,if the lawtrade dispute this put it to a referendum and see how the globalites fare then . Repeal all u.n.communist inspired laws ,and jail the proposers and benificiaries for life “pour encourager les autres ” .

  26. .

    The person, (((Malcolm TURNBULL)))

    ????

  27. JohnA

    He spouts the need for “a coordinated plan between all governments” otherwise, he says, we will end up like South Australia.

    We have a co-ordinated plan already, dammit – the Australian Energy Market. But that isn’t helping SA, is it?

    The problem is not coordination, it’s wrong-headed policy. Can the PM really be that thick?

    Kill the RET.
    Stop the Subsidies.

  28. Dr Faustus

    The policy departments at state and federal levels advising are utterly bereft of understanding of the energy market…

    This is exactly true. The problems Australia faces are the result of multi-agency failure at the policy/political level – and the failure is due to political imperatives over-riding technical advice.

    At the operational level of generation and distribution – including within AEMO – the risk of system instability caused by the build-out of intermittent supply has been common knowledge for well over 10 years. Network engineers and power station operators recognised the issue from the outset of connected wind farms because they managed the intermittency on a daily basis. However the whole industry was put on notice of the potential consequences of having a significant proportion of renewables in the generation mix by the February 2006 Texas rolling blackouts – caused by the sudden and unscheduled failure of the wind to turn the windmills on the Panhandle.

    Despite this industry knowledge, governments and rent-seekers alike have gloried/participated in the growth of renewables without any attention to managing the risk of uncontrollable supply failure. The true stupidity was allowing wind-power to develop to a critical level while relying on the support of coal-fired spinning reserve – knowing that coal-fired generation would certainly phase out (an openly stated policy objective in itself).

    With the seemingly imminent closure of Hazelwood, politicians’ minds are being concentrated by the gallows that this disaster will bring to them personally and are jockeying to shift the impacts onto other jurisdictions.

    These ‘concentrated minds’ are still dimly unaware of the critical technical and commercial issues attached to their political solutions: gas, batteries and pumped storage – and Clean Coal/CCS (FFS).

    It’s easy enough to repeat these impressive sounding terms as spells to ward off the political consequences of 10 or 15 years of duck-shoving and ‘eyes off the ball’ – however, they are complex, slow-moving, highly technical issues, replete with unintended consequences. They will not deliver acceptable results at a rate that keeps up with the atrophy of the existing Australian power system.

    There will be soiled political underwear as these issues become clearer to the mug punters who have to pay for all this incompetence.

  29. Philby

    Never mind the 80% round-trip efficiency minus DC/AC conversion losses.

    That’s only scratches the surface; short shelf life and huge replacement costs.

    Exactly as any user of batteries for storage of power will tell you. Coal is king for base load

  30. Leo G

    Turnbull’s lame response … was to claim that his government is on track to reduce emissions in accordance with our international obligations …

    Our international obligations from the Paris Agreement involve submitting increasingly stringent pledges every five years to reduce emissions, wihout any obligation to achieve those reductions.

  31. Leo G

    The problem is not coordination, it’s wrong-headed policy. Can the PM really be that thick?

    It’s not unusual to see the wrong head at the cutting edge of policy.
    “No time to think in the thick of the action” could be the PM’s guiding principle.

  32. DrBeauGan

    Can the PM really be that thick?

    Yes.

  33. mem

    The only solution involves an immediate cancelling of all energy subsidies and withdrawal of government from management of the energy market.

    And apply fines for dead birds at the same rate that other industries pay: roughly $2,000 per corpse.

    And I take it as wrote that your solution also means the end of the RET.
    In which case I’m with Bruce. I care for Australia, I care for its peoples and I care for its environment.

  34. BorisG

    Even though the government in Adelaide evinced the cockeyed optimism of the green loons, policy was driven by Commonwealth subsidies which South Australia attracted by putting fewer impediments in the way of new wind development than other states.

    Have these subsidies been introduced under Turnbull or were they inherited from Abbott/Rudd/Gillard?

  35. cohenite

    Renewables are bizarre,: old technology polished like a turd; they do not work; that’s it. As for batteries, you can’t use power twice; either energy is used at the time or saved at rapidly declining rates due to degradation, heat loss and chemical reactions, for later on; you can’t use the electricity twice which the advocates of batteries ignore.

    But this is pixie stuff, the natural element of greens and alarmists. They won’t stop ever, not even when the lights go out.

  36. mem

    Have these subsidies been introduced under Turnbull or were they inherited from Abbott/Rudd/Gillard?

    Does it matter who introduced them? The fact is the subsidies are distorting market forces in favor of an inefficient and damaging technology that doesn’t even do what it was meant to do i.e. change the climate and provide secure reliable energy. The subsidies and the RET need to be terminated.

  37. .

    I can’t get over how backwards we are rejecting nuclear power.

    Waste issues are solved and so is proliferation and meltdown stuff.

    25 MW reactors that could fit under a large backyard shed exist. The USN used a 5 MW reactor the size of a trash can.

    Lasts for years before refuelling. Highest known energy density. When scaled up, cheap as coal.

  38. BorisG

    Does it matter who introduced them?

    If Abbott did not abolish them then they are not a fault of Turnbull.

    The subsidies and the RET need to be terminated.

    I agree. But it is not easy politically.

  39. GregJ

    Has there ever been a more hapless and hopeless LP leader than Malcolm T?

    And yes, I am including Billy Big Ears and Easter Island Mal in this question.

    Seriously, has any other single leader of the LP got it so disastrously and consistently wrong, on every question, than Malcolm T?

    God knows, I gave up on Abbott 3 years ago and quit the party, after a 40 year affiliation, so I suppose its not really any of my business; but do they seriously think they can continue with this bloke?

  40. None

    Dumb question.
    Why aren’t RETS anti competitive? Why can’t we sue govs that impose them?

  41. None

    God knows, I gave up on Abbott 3 years ago and quit the party, after a 40 year affiliation, so I suppose its not really any of my business; but do they seriously think they can continue with this bloke?

    The reason you were disappointed with Abbott and quit the Libs is because they are full of people who believe they can continue, no thrive, under Malcolm.

  42. BorisG

    but do they seriously think they can continue with this bloke?

    yes

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