Yesterday at the rally outside Parlaiment House superbly hosted by Alan Jones some 150 or so attendees listened for three hours (a sign of the times is that GetUp managed to recruit 700 Canberra
sheep mainly public servants to rally in favour of wind farms).
Here is an abridged version of the address I gave
One of the great growth industries in Australia over recent years has been from the reallocation of funds from consumers and taxpayers to reducing emissions of carbon dioxide and other greenhouse gases.
It has been growth with a negative worth.
Both sides of politics have indulged this negative value–adding activity, though it was the Rudd/Gillard government that took it to its present levels.
Current government CO2 emission suppression policies employ four kinds of measures.
- First there is the carbon tax costing consumers $9 billion this year at the tax rate at $23 per tonne. While that rate will fall in 2015 the government plans to have it increase further in future.
- Secondly, the government is spending about $5 billion a year on subsidies to green schemes, half through wasteful green subsidies channeled through the “Clean Energy Finance Corporation”.
- Thirdly, there are measures like efficiency standards on housing, fridges and other items. These impose increased up-front costs on purchasers, estimated at $750 million a year for new home owners alone.
- Then there is the renewable Energy Target, which subsidizes windmills and rooftop solar through customers’ electricity bills. The target increases year by year and its annual costs will be $5 billion a year by 2020.
The current government’s policies aimed at reducing carbon emissions will cost between $20 and $30 billion a year, more than the entire Defence budget. And its policies can have no effect on global emission levels given that Australian emissions are a mere 1.4% of the global total, and that most measures will simply mean replacing Australian emissions with those of another country as industries move away to avoid our punitive taxes.
The insanity of the massive spending on these measures has started to strike home with the Coalition. They would replace $9 billion a year carbon tax with a less wasteful $500 million a year “Direct Action” in an attempt to buy out carbon emissions. And the Coalition would discontinue the disgracefully wasteful green subsidies handed out to eager corporate rorters through the $2 billion a year Clean Energy Fund.
This is a good start.
As far as subsidized renewable energy is concerned, this largely comprises windfarms which cost 3-4 times as much as conventional unsubsidized coal, gas and hydroelectricity, and solar panels which are even more costly. The costs of these exotic renewables is amplified by a need to have them backed up by fast-start conventional plant.
At present the cost boost to consumers is about 7% from the green schemes dominated by renewable requirements and 8% from the carbon tax. For businesses, where the share of generated energy within total delivered costs is higher, these impositions are higher and costs are passed onto consumers.
And the cost of the green schemes will continue to increase because we are only half way to the 45,000 GWh target. Moreover, because they are intrinsically low quality and must run whenever they are available – about 25 % of the time – they automatically freeze out reliable power generation.
The Coalition proclaims faith in the renewables program. That’s a great pity. The program’s effects were bad enough when consumers were hit with regulations forcing them to use this intrinsically high cost, unreliable power for 20 per cent of their supply. But because of higher prices from the carbon tax and the renewable impost, electricity demand is declining. On current estimates, subsidised renewables will comprise 27 per cent of supply by 2020.
Some encouragement can be taken from the Opposition’s movement to make the approval of new wind farms more expensive through insisting on expensive noise monitoring controls. The Opposition’s policy has, commendably, opposed wasted expenditure on windfarms by the Government’s Clean Energy Finance Corporation but unfortunately has adopted this position because such subsidies disadvantage projects developed on what it calls a commercial basis. There is, of course, no commercial projects developed under the RET where the cheapest supply is wind at a cost of $100 plus per MWh, 2-3 fold the cost of coal.
Though Greens quite predictably are happy to see a deindustrialization and impoverishment of Australia the ALP also by its actions is adopting the same agenda.
Mr Combet has gloatingly said that the carbon tax has reduced domestic coal usage for energy by 7 per cent. Well the renewable energy program would have had a greater effect than this. But guess what? Last year the export tonnage of coal rose by 13 per cent. Coal burned overseas has no different effect from coal burned in Australia but the elected government spokespeople here just don’t understand this. The Chinese and Indians, unlike us, are not silly enough to destroy their economy by substituting this high cost power for fossil fuel generated electricity. And coal explorers, those putting their own money on the line, recognize that the trend of increased demand for Australian coal will continue. Over the past five years coal exploration spending in Australia has trebled.
It used to be said that in promoting wind energy we’d be getting on the ground floor in a new global industry. Gullible politicians like Victoria’s’ John Brumby and Steve Bracks with all the gusto of people spending somebody else’s money gave subsidies to blade manufacturing in plants, hailing the dawning of a sunrise industry. Within months the subsidies had disappeared down the silt hole hiding all such government spending the world over. We hear less about the creation of such infant industries now.
We also here less about the future of low cost solar, wind and other renewable sources yet to be invented. Wind costs are obstinately stuck at $100 per MWh and have been for many years. The technology is nearing its optimum and it remains three times the cost of coal in Australia. All the projected new technology developments that Treasury, Garnaut, Stern and other economic frauds have forecast remain in the labs or in people’s imagination. There are no breakthroughs on the horizon and wind would not be among them anyway since it is a mature technology that has run its course in terms of cost reductions.
The effect of all these carbon cost impositions on businesses is particularly potent in undermining living standards. Business energy consumption is falling because our most productive industries – including smelting and steel – are relocating overseas. Other firms, even including cafes, are finding energy costs forces them to reduce their activities.
Australia has the cheapest energy in the world – others use our coal with added costs of transport while we can locate our power stations on the coal fields themselves. We are denying ourselves this birthright and plumping for wind and other solar sources, which cost us at least three times as much.
Those imposing these policies upon us are sacrificing national productivity for no purpose.