NEG might be the answer but Turnbull needs to explain why

Today in The Australian

Experts agree that a steady diet of fudge, cream pies and french fries is far healthier than consuming grains and vegetables. Or at least they do in 2173, according to Woody Allen’s movie Sleeper (1973).

About Henry Ergas

Henry Ergas AO is a columnist for The Australian. From 2009 to 2015 he was Senior Economic Adviser to Deloitte Australia and from 2009 to 2017 was Professor of Infrastructure Economics at the University of Wollongong’s SMART Infrastructure Facility. He joined SMART and Deloitte after working as a consultant economist at NECG, CRA International and Concept Economics. Prior to that, he was an economist at the OECD in Paris from the late 1970s until the early 1990s. At the OECD, he headed the Secretary-General’s Task Force on Structural Adjustment (1984-1987), which concentrated on improving the efficiency of government policies in a wide range of areas, and was subsequently Counsellor for Structural Policy in the Economics Department. He has taught at a range of universities, undertaken a number of government inquiries and served as a Lay Member of the New Zealand High Court. In 2016, he was made an Officer in the Order of Australia.
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19 Responses to NEG might be the answer but Turnbull needs to explain why

  1. Clint

    Woody Allen was a child molester

  2. H B Bear

    Bwahahaaa. Good luck with that, Lord Waffleworth couldn’t sell oxygen to a drowning man.

  3. classical_hero

    If NEG is the answer then we’re asking the wrong question.

  4. Tom

    It’s astonishing that the news media has lost its snout for Nigerian-style scams like RET/NEG. Just because it’s backed by the government doesn’t mean it isn’t dodgy.

    The modelling is bullshit — sciencey junk by green ideologues to achieve a pre-determined outcome (destruction of capitalism and its replacement by a 19th century communist utopia powered by windmills).

    Henry Ergas is doing journalism’s job. Thank god someone is.

  5. RobK

    If NEG is the answer, then you haven’t concidered all the options. Why are supposed cheaper than coal alternatives still parasiting off coal? At a certain point the pollies will have to let go of the RE fantasy, for the good of the country.

  6. Rafe Champion

    The Prime Minister needs to find a reply to Ian Waters as described by Jo Nova. It has all been said before but it has to be explained to the punters.

    Ian Waters, describes below how the NEG serves the big retailers not the consumers, and it’s in their interest to run old coal plants into the dust. (Our electricity market is so screwed thanks to the RET. — Wholesale prices leapt when Hazelwood closed, and all successful bidders get paid at the same highest-winning-bid rate.) Are AGL driving the Liddell plant into the ground? Hard to tell, but easy to see why it might be appealing to turn a once valuable asset into a show-pony for End Of Coal. Remember AGL would rather trash Liddell than swap it for a billion bucks.

    See his scathing red pen. This mass email went out last night. Andrew Vesey, runs AGL.

  7. Texas Jack

    The NEG has sweet far-call to do with the energy market and everything to do with the continual need for more sandbags above the Turnbull parapet. When will the back bench act? They’re running out of sand.

  8. duncanm

    Frmo Rafe’s link.. the essential problem with government today in many areas:

    The Energy Security Board – with all due respect – are like all these Government energy organisations – and are grossly over-weight in Lawyers, Economists, Environmental activists and hangers-on and are severely under-weight in engineers, people who have actually been in business and people who understand power generation and transmission.

  9. min

    Heard from an engineer working for AGL in Latrobe Valley that maintenance on power station is not being done there. He was really p###ed off . Liddell is not the only problem.

  10. Up The Workers!

    Humpty Turncoat sat on a wall,
    Humpty Turncoat had a great fall.
    All of Bill’s Q.W.E.R.T.Y.s and all of his men
    Couldn’t put Turncoat together again!

    (People who live in Labor(sic) houses, shouldn’t throw monkey wrenches!)

  11. P

    From Rafe’s link.. the essential problem with government today in many areas:

    The Energy Security Board – with all due respect – are like all these Government energy organisations – and are grossly over-weight in Lawyers, Economists, Environmental activists and hangers-on and are severely under-weight in engineers, people who have actually been in business and people who understand power generation and transmission.

    Comment #5 from Rafe’s link:

    “If you see a lawyer coming down the street cross over and walk on the other side. Should you then see an economist approaching on the other side…better just to take your chances and walk in the traffic.”

  12. Herodotus

    Henry: “That the NEG may be the right response should not be ruled out, given the political constraints.”
    It’s the “political constraints” that have to be removed entirely if sense is to return.
    Rafe: “… it has to be explained to the punters.”

    There’s your problem, right there; with so many in the media in the tank for leftism, socialism, green idiocy, and climate scams, who is going to explain it to the punters?

  13. Entropy

    Here is a fascinating what if:
    What would happen if a Queensland government decided to withdraw from the National Electricity Market and stop selling power interstate to:
    *queensland revenue
    *queensland power prices
    *given the above, queensland economic growth, net positive or negative?
    * consequences to southern states’ power supply
    *Southern states’ power prices
    *given the above, the impact on southern states’ economies?

    Might be an interesting exercise for a postgraduate.

  14. Viva

    Deep green ideology has this country in a stranglehold. How the hell did we allow this to happen?

  15. Bruce of Newcastle

    Relevant article today at NTZ:

    Business Daily Handelsblatt: German Wind Industry In “Serious Crisis”, Could “Implode”…Consequences “Could Be Fatal”!

    About a week ago I reported here how Germany’s “Solar Valley” spectacularly crashed into the wall of reality, turning into an industrial Death Valley, as almost the entire solar components production industry collapsed and left tens of thousands without jobs.

    Now that the German solar industry has crashed and burned out, it looks as if the wind industry is right poised to be next, a leading and highly respected German business daily reports.

    The online Handelsblatt here writes that Germany’s wind energy industry now faces “a serious crisis” and “numerous jobs” are at risk.

    The German daily blames a lack of orders from the domestic market, due to “a dramatic price fall” for electricity from the wind. Clearly without the massive subsidies, wind energy shrivels almost instantaneously.

    The Handelsblatt also explains how earlier government moves to reform the wind energy feed-in rules have backfired

    So even in Germany, the pin-up model for the renewable energy industry, wind sucks. Only vast subsidies and priority feed-in keeps it alive. Not surprising then that they’ve been quietly building about a dozen new coal fired power plants in the last 5 years.

    Goes to show that wind energy in particular is essentially worthless because of the intermittency problem. And energy storage is so impractical and expensive that no serious financial analysis could justify wind-plus-storage packages.

    No wonder that our electricity prices are through the roof.

  16. Confused Old Misfit

    Would be nice if Henry could include a precis of his articles for those of us poor pensioners who can’t afford both a subscription to The Australian and electricity.

  17. An interesting article here about ‘experts’ and why they are nearly always wrong. It applies equally to climate change, economics, trade etc.

  18. Terry

    Well of course NEG is the answer.

    The question is, what could Australia do to drastically increase its already exorbitant energy prices while helping its struggling economy off a cliff and into oblivion at the UN’s behest?

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