Wind farms: my place in their downfall

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.

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17 Responses to Wind farms: my place in their downfall

  1. Karl Kessel

    Great job.

    Let’s hope the coalition ends this pointless spending.

  2. south

    Yet whenever I point out the obvious inefficiencies and shortcomings of ‘clean’ energy, my greenie friends start shrieking “If governments would only subsidise research more, it would develop! Blah blah, some hearsay nonsense about Germany and Japan blah blah.”

  3. brc

    It’s all accurate and true but reason and analysis have long been out to the sword by special pleading and emotional manipulation.

    The coalition are nearly as bad on this as Labor. The current carbon tax could not exist without all the work done by the last years of the Howard government. The mere fact that the ‘direct action’ policy even exists is a sad indictment over the wet liberals who subscribe to the angry sky fairy.

    If all the money that had been tipped into religious statues and temples, people would be rightfully furious. But windmills and solar panels are as useful as a religious icon – nice to look at for believers, and gives them a warm, feeling inside, but has not actual purpose beyond spiritual renewal.

    I just get depressed hearing about this stuff. And still the media is shrieking that the world is going to end soon. When we sanity and reason return?

  4. cohenite

    Good work Alan.

    Wind and solar and renewables generally are a national scandal.

    Getup, sheep, you are too kind; parasites is closer to the mark.

  5. handjive

    Thank you Mr Moran, though, if “This is a good start” is the best we can hope for from the greenLNP, then we are lost.
    .
    Do we need another political party that promises one environmental policy only to completely backflip the policy once in power?
    .
    And, could you trust them to do a proper backflip when ALL their rhetoric/policy thus far is inline with the government funded UN-IPCC junk science propaganda?
    .
    I want a choice this election. Politicians who speak honestly. I have no choice.
    A vote for greenLNP or greenLaboUr is a vote for UN-IPCC junk science.
    If Abbott want’s to restore “trust” in politicians, this is not a good start.
    .
    Watching the LNP get slapped around the parliament by Gillard saying the LNP carbon tax scare didn’t work, and seeing the LNP can’t respond, pointing out the junk UN-IPCC science rising sea level scare and pause in global temps despite co2 levels, because they have a partisan support of the UN-IPCC science, is so frustrating.
    .
    I keep thinking “Stupid Abbott,” for foregoing the upper-hand in the debate, only to help further implement the UN climate Agenda 21.

  6. James of the Glens

    Well said, Alan.

    As Cohenite writes, “Wind and solar and renewables generally are a national scandal”. National scam and worse come to mind, too.

    The involvement of unions (eg King Island) should sound alarm bells, as with the rest of the cronyism.
    Mandated subsidies and forced purchase of the triple-expensive power create a parasitic architecture remarkably similar to pyramid selling, if not the veritable money tree. To the detriment of our economy and all consumers.

    Time to examine the “investors”, here and from overseas.
    Maybe start with Infigen Energy. Or AGL. Or..

  7. Faye Busch

    I’m standing here at the computer having just read your piece. I have six layers of clothing on including my husband’s plastic raincoat. Around my neck I hang a bag with a hot water bottle in it and when I sit to do my paperwork, I put the hot water bottle on the floor to rest my feet on. I am 71 years young and can remember when electricity was incidental to living. We are being ruled over by criminals. CO2 isn’t a pollutant, it is a gift to the planet. May I live long enough to see the end of this climate change fraud and to read history books condemning the biggest con known to mankind and the players who made it happen.

  8. Ubique

    It’s a shame numbers weren’t greater at the rally, but people who oppose wind farms, the carbon dioxide tax and all of the other demented schemes of the green-left alliance mostly have to work for a living. Unlike their opponents.

  9. DaveR

    Alan,

    great work, but for the illiterati like myself, could you give some hard and fast numbers we can reliably quote in the upcoming election thrash??? Its no use quoting “$xxb over the next 8 years”: or “rising to $xxb by 2020”, as this is the get-out for zealots to dismiss your claim.

    Answers to questions such as:

    1. what will the Carbon Tax cost to Australian companies and separately for Australian householders in 2013/2014?

    2. what is the Government spending on green subsidies in 2013/14??

    3. what is the Government spending on grants/hand outs/other to activist Green group in 2013/14??

    4. what is the actual production cost of energy (electricity/gas) in Australia, before green taxes and government takes are applied??

  10. egg_

    The involvement of unions (eg King Island) should sound alarm bells, as with the rest of the cronyism.

    Meanwhile, the hypocritical Euros sell diesel Gen-sets hand-over-fist to African Nations, which vastly improves their standard of living.

  11. Jarrah

    “Wind costs are obstinately stuck at $100 per MWh and have been for many years…it is a mature technology that has run its course in terms of cost reductions.”

    Not according to Bloomberg, who found a 10% drop in the last two years.

  12. Scott

    150 sensible people in Canberra? I’m surprised.

  13. Bill

    They were bussed in Scot.

  14. Steve

    I saw a report on TV about a month or so ago about the wind farm industry in Victoria and how the state government’s ban on new developments had affected it. Everyone interviewed thought that wind farms were great because they were all making out like bandits building them. There was the owner of an engineering firm that had been making a fortune fabricating the towers as well as some flog that had been puling down 3-4k per week driving a pilot car for the deliveries. Everyone agreed that wind farms are great and we should build lots more of them.
    I don’t Beverie that electricity was even mentioned.

  15. Eyrie

    Whoopee Jarrah, so it is only more than twice as expensive as coal and over 3 times as expensive as a well run legacy nuke.
    If you knew anything about aerodynamics (or physics) you would realise it is a mature industry. Any gains are going to be at the margin, a few percent at best.

  16. old bloke

    At present the cost boost to consumers is about 7% from the green schemes dominated by renewable requirements and 8% from the carbon tax.

    Alan, would you consider these cost estimates to be on the conservative side? I have heard that the Co2 tax adds around 10% to the household electricity bill, and the Renewable Energy Targets adds another, larger. 20% to the bill. Also, does your estimate include the additional GST component?

  17. Alan Moran

    old bloke
    Carbon tax would add 10% to some bills – it adds 50% to cost of generation. The 7% and 8% come from the latest estimate (actually based on Qld) and includes GST

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