I have a piece in the Herald Sun this morning on the appalling Finkel report. Below is an extract and here is an anaylsis of Finkel that I prepared for On Nation’s Malcolm Roberts.
Regulations currently force consumers to accept an ever growing share of subsidised renewable energy – largely wind farms and rooftop solar – within their electricity supply. Subsidised renewables comprise 9 per cent of supply; this is to grow to 16 per cent plus 4 per cent rooftop solar by 2020.
The damage caused by these regulations is now clear.
Renewable energy subsidies force existing coal fired generators to operate unprofitably so they progressively close.
This reduces reliability as seen in South Australia’s blackout last year following the closure of its last coal power station.
It also raises prices – Hazelwood’s recent closure has seen electricity prices, which had previously been under $40 per MWh, jump to a new level of $100 per MWh.
The Finkel review learned nothing from these disastrous outcomes, which have transformed Australia’s electricity from the cheapest in the world to among the dearest. Instead of seeking to reduce the nation’s vulnerability to high cost, low reliability wind and solar, the report calls for a fourfold increase in subsidised renewables by 2030.
Many reports over the past 30 years have proclaimed we are on the cusp of an era when renewables’ costs will fall below those of coal. This allows supporters of renewable energy to fantasise that the substitution of wind for coal based electricity will see prices gradually fall.
Finkel is hooked onto this illusion and says his proposals will mean wholesale electricity prices falling to one third of their present levels of $100 per MWh.
But the report’s confidence in this is insufficient for it to recommend the removal of the supposedly unnecessary renewable energy subsidies! And Energy Minister, Josh Frydenberg, has shown that, even with token reliability back-up, renewables require an electricity price of $108 per MWh.
The Finkel high cost, low reliability regime would see the economy deindustrialised as energy intensive businesses close.
What we need is cheap baseload electricity and our fabulous coal reserves are the route to this. According to the Finkel report, new replacement coal generators would require prices at $80 per MWH.
The real figure is little more than half this. But such has been the experience of government arbitrary taxes and regulations on coal fuelled electricity generation, that investors in new Australian power stations would require government assurances against expropriation, like those provided for major road developments.
The alternative is higher prices and much lower living standards.