A breathless piece by the Guardian’s Calla Wahlquist announced that Victoria’s renewable energy boom is set to create six thousand new jobs. And yet the head of the renewable energy lobby group, Tristan Edis, was downbeat because the subsidies are being phased down. This is the group that claims subsidies are not really needed (or is it will soon not be needed?) because the wind and solar technology has made such colossal leaps that they are now (or will soon be) on parity with that archaic fossil fuel technology.
New “clean energy” investment in Australia was estimated in 2017 by the renewable punting Bloomberg New Energy Finance at over $10 billion.
But the term investment is somewhat casually used here.
Neither BNEF nor Ms Wahlquist have ever heard of “Broken windows syndrome” whereby “investment” replacing destroyed investment is not productive. The replacement-of-broken-windows-as-investment notion is fallacious enough when applied to the spurious benefits of replacing damaged assets but this is magnified when, as with renewables, the replacement has only one third of the efficiency of the plant it replaces. We are swapping valuable assets by worthless assets and paying $10 billion a year to do so. And the 6,000 unproductive jobs in producing the high cost energy are jobs that consumers and employees elsewhere must subsidise.
Fortunately for the government, all this is hidden and will be claimed to have been due to natural forces. That claim, like the PR announcement of the policy settings, will be eagerly embraced by journalists with little ability to undertake their own critical analysis.
Victoria’s government, soon to be joined by Queensland, is doubling down on the financing of the scam by negotiating contracts for long term renewable supplies that consumers will need to finance in their energy bills in years to come. Claimed to be negotiated at less than $60 per MWh ($40 per MWh was the Australian norm before renewable policies destroyed the industry’s efficiency), the intermittent unreliable power generated will need to be “firmed” by a side-by-side contract for reliable power. The cost of this is likely to exceed $30 per MWH. And 96 per cent of the profits, courtesy of the unwitting Victorian electricity consumer, are to be gathered by overseas suppliers.
Where will it all end? Fortunately the Trump revolution is on the way. By carving out US subsidies and pushing down prices, America is already hoovering up investment from high cost energy countries like the EU and Australia. This, and the recent measures by China to staunch its own $20 billion a year subsidies to renewables will force a reversal of policy here – a forerunner of which is already annoying the subsidy seekers.
Action cannot come soon enough and must entail the abolition of all subsidies – including the retrospective removal of those granted under the false pretences that they soon would not be needed.