Catallaxy Files

I have a piece in the Spectator on Victoria’s  announced  intent to go much further than the federal government in requiring the substitution of renewable energy for the much cheaper and more secure energy that is provided from its endless supplies of high-quality brown coal.  Compared with the national policy of reducing emissions by 26 to 28% by 2030, Victoria is opting for a 45 to 50% reduction. Not only does this introduce another variation on what should be a national energy policy but it consigns Victoria to further losses of industrial competitiveness and households to higher energy costs.

The ALP in Victoria has a history of sacrificing the state’s brown coal reserves and their low cost electricity. Initially, the power stations were used to as union playgrounds and by the late 1980s their padded workforce was tenfold the numbers necessary.  Though the ALP started to slim this back it took the Kennett reforms and privatisations to bring them into best practice.   Over the past 20 years the ALP has again imposed costs on coal and on electricity users, this time in pursuit of the green vote.

Whereas Victorians should, as they once were, be enjoying the lowest electricity prices in the world, prices are among the highest.

Discriminating against brown coal stations has also meant downgrading the more reliable power that coal brings.  Exchanging this for wind/solar means additional expenditures to manage these variable supplies and new spending on transmission lines to gather their more dispersed generation sources. All of these additional costs are paid by the Australian electricity consumer and the taxpayer.  The costs are also driving out major industrial users, with the pride of the state’s industry, the aluminium smelter at Portland, only being kept afloat by subsidies to counter the costs that other subsidies are bringing.

The amount of wind and solar in the system is even requiring the market managers to force roof-top facilities – all of which were built with subsidies – to be turned off at the increasingly frequent times when their supply threatens to bring down the whole electricity supply system.