Renewable Energy: the mad saga continues

Bloomberg New Energy Finance (BNEF) lobbies hard for renewable subsidies and estimates global “clean energy” investment at $333 billion. This excludes hydro-electricity other than Politically Correct “small hydro”.  Some 85 per cent of expenditure is in wind or solar with the rest including biomass, electric vehicles and waste-to-energy.

In a press release of 16 January, BNEF includes the following graphic of Australian renewable investment trends.

To recap, in Australia electricity from subsidised renewable energy – and wind is the cheapest of those sources – costs three times as much as energy from coal.  It is viable only because the government requires increasing proportions of energy it designates as renewable to be incorporated in our supply and therefore in our bills.

This results in a subsidy, which at present is $85 per MWh for wind and large scale solar, and $40 for rooftop solar.  Those sums are on top of the market price all energy receives.  That market price used to be around $40 per MWh but, as a result of closures caused by subsidised wind forcing increased costs on coal and gas generators, it is now around $90 per MWh; research conducted by the Minerals Council puts new build for coal at under $50 per MWh, costs that are consistent with those estimated for the thousand plus coal generators being built, mainly in Asia.

The upshot is a double whammy – we replace low cost highly reliable electricity with supplies that are three times as expensive and which are highly unreliable – and we call that progress!!  The $9 billion of subsidy-induced malinvestment in renewables last year alone would have been sufficient to finance over 4,000 MW of new coal plant – more than double the capacity of the now closed Hazelwood station, even if it is in fashionable but high cost low emissions plant.  That would have returned prices to their 2015 level,  half those now prevailing, and given us the reliability that is now a wistful nostalgia.

At present one of the man energy regulators, the AEMC, estimates renewable subsidies increase electricity prices by 10 per cent directly  (p.10).  That would be increased by another 20 per cent due to the subsidies boosting the overall generation cost and perhaps more due to them requiring increased transmission investment.

The lobby industry has taken to interviewing itself to raise the ante for new subsidies.  BNEF in response to Reneweconomy  notes that the capacity of renewables driven by existing schemes, which focus on the Paris Agreement’s 26-28 per cent reduction in emissions by 2030, will soon be met. Hence they are calling for further expansion of subsidies (existing ones, unless terminated, will live on for decades).   BNEF argues “So what’s required is a more ambitious emissions reduction target under the National Energy Guarantee (NEG), or for state governments to continue to develop policy to ramp up investment.” And the hope of the industry is that Mr Turnbull will exercise his influence and “States should be throwing their weight around the COAG table and only signing up to a NEG if it ups ambition on a pathway to net zero emissions by 2050”.

The industry also claims renewable energy is already competitive, pointing to recent contracts struck by AGL  and Origin Energy  for renewable power at around $60 per MWh.  But public information of these contracts’ details is missing, including about what happens to the subsidy (which on forward markets remains above $50 per MWh).  It is difficult to square claims made by many lobbyists on the back of such contracts that renewables are now competitive with coal especially since the same lobbyists say investment will dry up without more subsidies.

Meanwhile we have politicians swallowing the propaganda of the renewable industry or too timid or committed to renewable energy to stand up and tell it as it is.

Only a couple of minor players in Europe and the great Donald are resisting the madness.  The USA is benefitting immensely from Trump’s energy policies with waves of new investment – including from Australia – announced almost weekly.

In time the success of Trump’s policies will surely remove the blinkers from the eyes of politicians but in the interim we can expect to lose considerable wealth, energy-dependent investment and face trying times in the reliability of the electricity supply system.

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60 Responses to Renewable Energy: the mad saga continues

  1. struth

    Meanwhile we have politicians swallowing the propaganda of the renewable industry or too timid or committed to renewable energy to stand up and tell it as it is.

    Good piece Alan.

    Committed might be the better word there.
    Please don’t let them off here with “timid” and gullible.
    They’re in it up to their necks and profiting from it.
    Do really believe no palms are being greased?

  2. John Constantine

    Australia’s quisling politicians, the ones with the Chinese communist party ‘pay to play’ bagmen on speed dial and no number for the President of America, vote to dynamite our power stations and import solar panels from the Chinese communist party as replacements.

    The motivation isn’t the size of the power bills landed on the proles, it is the size of the payoffs that land in the laps of our corruptocracy.

  3. RobK

    It is indeed a sorry tale. So many opportunities wasted for naught. The sensible thing to do is to remove all subsidies. Never mind about Bloomberg. Renewables make sense in some niche applications. As they improve, those applications will broaden in a free market.
    Presently, lost opportunities abound in natural resources of coal and nuclear, and the economy is severely stymied by expensive over regulated energy policy. It needn’t be this way.

  4. jupes

    Great stuff again Alan.

    You seem like a voice in the wilderness at times but one voice is better than none.

  5. Elizabeth (Lizzie) Beare

    Yes, payoffs seem likely as background to such a fundamentally stupid policy. It does beggar belief that Australia should be in this situation largely because one man politically stabbed another in the back. Abbott would have been at least somewhat more cautious about jumping deeply into this murky international pond. It will not change with Turnbull at the helm. Poor Australia, sitting on so much uranium and high quality black coal and with enormous shale oil deposits and huge gas fields: led by the political nose into a sort of economic doom via an insubstantial fable of AGW.

    Thank you Alan for at least recording the process for a posterity who will eventually shake their heads in wonder at this threadbare Emperor’s vanity.

    The replacement and maintenance costs will also be substantial for all those wacky energy schemes: water uphill, monster batteries, rusting wind farms and shattered solar panels.

  6. RobK

    If the economy is brought up to a healthy, diversified position, it will be in the best shape to takle any adversity.
    Presently there is really only atrophy ahead, the result of a poorly considered energy experiment.
    Politicians should stop playing games with our economy.

  7. RobK

    Where are the strategic considerations for a secure energy supply. The diesel for SA is an embarrassing joke, if it weren’t so serious. Its actually a disaster in the making, cobbled together by opportunists and incompetence. We should be concentrating on developing expertise in every field of energy production, let the market pick the winners.

  8. Roger

    You seem like a voice in the wilderness at times but one voice is better than none.

    Indeed.

  9. John Constantine

    We will never waver from our commitment to export Australia’s industrial capacity to the third world, as war reparations for racist colonialist oppression.

    This we are solemnly assured by their turnbullites.

    Spoken from Paris.

    Comrades.

  10. RobK

    It must be embarrassing to be a Prime Minister or State Premier presiding over such a diabolical scheme. There is no shame, it seems.

  11. There is no shame, it seems.

    Shame? These bastards are proud of what they have done. They brag about it.

  12. RobK

    All this from Maurice Strong’s anthropogenic climate conjecture inc.

  13. Great work – very readable

    But at the end of the day Oz can stick a fork in itself, it is done.

  14. Robber Baron

    Just imagine the riches Frydemburgers will receive when he quits parliament. That second passport he is entitled to might come in handy.

  15. Habib

    I’d like someone who actually knows their shit to fact-check this, it reads like barefaced lies, the most egregious propaganda this side of Goebbels. I could be wrong.

  16. v_maet

    Meanwhile renewables force the closure of coal fired power stations and we get large scale blackouts which we know in advance will occur because we don’t have reliable generation capacity:

    http://www.aemo.com.au/Market-Notices?currentFilter=&sortOrder=&catFilter=Reserve%20Notice&searchString=&tagName=

    This is after the government tells us there will be no power generation shortages and how renewables will save us.

  17. The diesel for SA is an embarrassing joke

    Now, that’s going to work well if ever the sea lanes, and therefore supply, are ever cut. The same goes for any other state that thinks it can plug the embarrassing electricity shortages with diesel generators.

    The doctrine of “renewable energy” and its enabling travelling companion “catastrophic anthropogenic global warming” (for that’s what they still claim is happening, despite all the name changes) is the most destructive to date. If there’s a faster road to ruining a previously self-sufficient, viable and productive country that was once a great place to live, I don’t know what is might be, short of an actual shooting war.

  18. classical_hero

    Just call it biodiesel and it’s environmentally friendly. That’s brilliant, as one MP says.

  19. Art Vandelay

    The diesel for SA is an embarrassing joke

    SA is at the beginning of its first real heatwave for the summer. It will be interesting to see what happens.

  20. Keep at ’em Alan.

    The medium term effects of the insanity will also be (hopefully) exposed by the Donald.
    In AU we look forward to a shrinking job market and small business stepping away from anything that uses electricity or gas.

    Look at the US and China’s energy price outlook. Then look at ours.

    Our pollies will, no doubt, excuse themselves from the disaster saying that they succumbed to the will of the electorate. Not their fault.

    Unlike Germany, we do not have nuclear and gas generating near neighbours from who we can buy power, when the crisis hits.

  21. Defender of the faith

    All this is clear enough. Moran however never included in his calculations the ridiculous economics of the power sector. It has been a honey pot for rent seekers for most of its history, notably after Phil Lynch unleashed buckets of federal debt approvals to fund subsidised power to smelters in the late 1970s. The result is that huge amounts of new generating capacity in the east states was provided at vast consumer expense to Alcoa, csr-pechiney and comalco. Billions of dollars totally pissed away. So let’s make sure that whatever we get next that the states especially have no say in large scale supply.

  22. RobK

    Defender,
    You have some good points there. The governments obviously have a function but all too often get carried away witbout constraint. Preferential deals, incentives in headworks, price controls etc are dangerous tools and must be very transparent about where the benefits are. Generally, the less meddling the better.

  23. Greg

    I personally am convinced by Tim Flannery’s advice and the personal sacrifices he makes for us all.

  24. min

    I contacted Josh recently I know he has to spout the bosses rubbish . However I know he supports coal and nuclear. I suggested thinking conservatives read you and Judith Sloan etc so know the facts and figures and are tarring
    Him with the same brush as those who do not bother reading research and just spout the propaganda.
    Alan send every article every way possible
    RobK please explain what caused medieval warming to me

  25. RobK

    Min,

    RobK please explain what caused medieval warming to me

    Others are probably better qualified but I cant see CO2 had much to do with it. Consider natural variabilty and various heavenly cycles impacting on the earth’s lithosphere, hydrosphere etc. Much like we see today.
    Why do you ask?….me in particular?

  26. classical_hero

    The sun caused the warming. Pretty obvious.

  27. RobK

    Min,
    The physicist John Reid has a blog called “blackjay”. There his has a copy of a published paper he wrote about natural variability in the climate record. I have been unable to fault his reasoning. it’s all bollocks

  28. manalive

    In time the success of Trump’s policies will surely remove the blinkers from the eyes of politicians …

    The outlook doesn’t look very promising given the current lot, although if it’s Turnbull v Shorten, Shorty gets my vote because at least he’s not plain obdurate.

  29. RobK

    Min,
    Mathmatically, the midæval warm period falls well within what is described as a bounded random walk.
    The result of various coupled chaotic systems. The IPCC acknowledges climate is the result of various coupled chaotic systems. Devilishly difficult to predict.

  30. egg_

    research conducted by the Minerals Council puts new build for coal at under $50 per MWh, costs that are consistent with those estimated for the thousand plus coal generators being built, mainly in Asia.

    So the little brown people are busy building power stations whilst the great white warriors virtue signal into obscurity.

  31. egg_

    Mathmatically, the midæval warm period falls well within what is described as a bounded random walk.
    The result of various coupled chaotic systems. The IPCC acknowledges climate is the result of various coupled chaotic systems. Devilishly difficult to predict.

    Amen.
    They’re still no better than synoptic charts of yore.

  32. Elizabeth (Lizzie) Beare

    SA is at the beginning of its first real heatwave for the summer. It will be interesting to see what happens.

    They will blame the normal heat on climate change, and double down on renewballs.

    With an unfalsifiable hypothesis they will always win.

  33. min

    RobK apologies I mis understood your first post. I asked a friend Cambridge graduate engineer and honorary degree from Swinburne what causecd Medieval warming he replied Gulf Stream . But there is no Gulf Stream below equator oh he said that warming did not happen here . So that is what we are up against I gave him the research no it did nt because we are above latitude 70 so NZ down there is evidence.

  34. v_maet

    Lizzie @ 10:25am

    They are already claiming warmest on record and heatwaves while the actual data shows that temps from the 1930’s were warmer.

    People are now so used to aircon that they claim it is too hot when it gets to 32 degrees and a heatwave when it gets over 35, which is just regular summer.

  35. Kneel

    “I’d like someone who actually knows their shit to fact-check this, it reads like barefaced lies…”

    I got to this: “In heatwaves, cooling obviously becomes difficult and many power stations fail to produce at their full capacity…” and stopped. No idea AT ALL. For water cooled power stations like NSW’s Eraring, the cooling water comes from a lake. The water going back in is not allowed – by legislation – to have it’s temperature increased by more than 2 (?) C. To meet this goal, only a fraction of the cooling water actually cools the station, the rest by-passes the heat exchangers and is mixed with the water that does the actual cooling. For cooling tower using stations (like NSW’s Mt Piper, eg), there is similarly an insignificant difference – steam at the sort of temps found at the condenser inlet is not going to notice much difference between water/air (the ultimate sink) at 20C and 30C, as long as sufficient flow is available. There is ALWAYS more than enough flow – cooling water intake temp is not even measured as far as I know, except perhaps to make sure they obey the law, and air-flow in the cooling tower is passively regulated (the hotter it gets, the more air it flows).

  36. Tator

    Just looking at the AEMO data dashboard. Out of the 4455MW of wind power, only 46% is being produced. This is the big lie that the fuckwit renewables spruikers don’t tell anyone is that they never produce enough power WHEN IT IS NEEDED. My guess is that wind power will drop even further as the day progresses until around 1900 hours when it will pick up again to close to full capacity by midnite when it isn’t really required as everyone is asleep in bed.
    MUPPETS THE LOT OF THEM. May the fleas of a million camels infest their beds tonite

  37. David Bidstrup

    With all due respect to Alan Moran he is not “a lone voice”. There are many others who watch in horror as the country goes down the tube and add their two bob’s worth to the debate.
    We need to recognise that no one “in power” is listening as they juggle political survival against other groups who would inflict the same or worse on us.
    Talking about the problem is not the same as taking action and those of us who respond to articles that we agree with need to take the next step which involves getting off bums and doing something to change the godawful mess we have in Australian politics.
    Perhaps we need to join the local party branch and then get mates to stack the numbers and get rid of some of the dross that continually get re-elected.
    It cannot be too hard. Most parties could hold their meetings in a phone box and still have room for someone to make a call.
    Maybe someone has “contacts” in the media who might be able to give some balance in the “debate”. Perhaps this is a faint hope.
    Maybe someone knows a source of some lazy money that could fund a public campaign or maybe we could all contribute something towards one.
    As sure as poo smells there will be no change unless people make it happen.

  38. David Bidstrup

    Just by the way, Total load on the grid at midday was 26,000 MW. Wind was producing 1,600 which is 6%.
    In the 2 hours since the wind contribution has dropped a further 400 MW so now it is 4.5%.

  39. RobK

    “I’d like someone who actually knows their shit to fact-check this, it reads like barefaced lies…

    Ive only just read Habib’s link.
    Typically any gas turbine or furnace will be derated a little at higher air temperatures or lower air pressure (altitude) but these things are allowed for in the design, they are definately not the cause for generators to drop off. That claim is rubbish.
    Not mentioned is that monocrystaline solar panels are rated at 20deg C and typically reduce output by about 4% for every ten degrees increase in panel temperature. On a hot day panel temp can easily reach >80deg, especially those panels fitted close coupled on domestic rooves, a 25% drop in solar is common. You can actually see it on a power trace when a sea-breeze comes in, power output increases. Greatest output for a solar panel is on a crispy, cold clear day.
    The reasons for the output failures from power stations can be varied but in many cases it is due to tripping breakers or other control gear, fluctuating loads (greatly exacerbated by intermittent renewables).
    The purported quick response from the big battery;”within milliseconds” sounds great. Its actually hundreds of millisecs which still sounds good except a big synchronous alternator is pretty much instantaneous as a magnetic flux response. There is no sampling and processing time involving a CPU.
    Habib, the article is baloney.

  40. manalive

    A Shorten/Green government would surely be worse in the short term, but in that case the crunch would arrive a lot quicker.
    A swift execution is preferable than death by a thousand cuts.

  41. egg_

    We need to recognise that no one “in power” is listening as they juggle political survival against other groups who would inflict the same or worse on us.

    The South Australian basket case needs to be held aloft and exposed as much as possible as our future destiny unless changes are made.
    Weatherdildo has done the rest of us a favour in kowtowing to the gangrenes.

  42. John Constantine

    When parliament resumes the renewables committee will hand down a report saying that the grid cannot cope with ruinables.

    Therefore massive spending on a ruinables capable grid is mandatory.

    The chair of the committee said on their ABC at midday that over five billion dollars worth of solar panels and windmills could be imported for his electorate alone, once the government builds the ruinables grid.

    What a brilliant idea, Andrew broad.

  43. egg_

    Typically any gas turbine or furnace will be derated a little at higher air temperatures or lower air pressure (altitude)

    (And RH%) ditto SA’s contingency diesel Gen-sets.

  44. egg_

    What a brilliant idea, Andrew Broad.

    Conservative cuck.

  45. Boambee John

    RobK
    #2612323, posted on January 17, 2018 at 7:32 pm
    All this from Maurice Strong’s anthropogenic climate conjecture inc.

    And his demand that Western industrial civilisation be destroyed for the good (g*d) of gaia.

  46. RobK

    Oh, oh. @1500hrs aest
    SA spot price just under $12k/MWh
    Vic. ” ” ” ” $10k

  47. Alan Moran

    System survives $10 k five minute price periods in Vic/SA. Tas bidding negative most of the day (all power is on contract so they are gaming the system to squeeze out Loy Yang) AEMO calling on special reserve power tomorrow

  48. classical_hero

    Right now SA is at $14.2mw/h, Vic is $13, QLD and NSW are $0.30 and Tas is still high but at least it’s now positive. Where is the info for WA?

  49. classical_hero

    Make that kw/h.

  50. Rohan

    WA is isolated from the eastern states classical_hero. As is NT.

    I doesn’t show in that link.

  51. Chris M

    At 7.40pm…. SA electricity price is $1013 per mWh, with diesel generators funning flat stick. Tasmania is at $67

    What a Sad Ass state….

    7.43pm…. peaking at $14,200!

  52. Chris M

    Now the AEMO pricing website is down, I wonder if Weatherill had it hacked.

  53. classical_hero

    v, more government intervention. Just what we need when they got us in the mess in the first place.

  54. v_maet

    Hero.

    Federal gov forced to intervene after the states decided the fed energy policy wasn’t moving down the road of destruction fast enough.

    They should have their GST revenue rescinded to pay for it.

  55. classical_hero

    Federal regulations are just as much to blame. Forcing energy suppliers to buy renewable energy first is a big problem.

  56. v_maet

    Hero.

    For sure the feds have a part to play and should be blamed. But the states deciding to go even further on their own is what has caused these shortages.

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