I have an article and in this morning’s Australian which addresses the destruction of the once low-cost reliable electricity supply industry, a distruction that has been caused by subsidies to wind and solar.
The article draws from the “Climate and Energy Summit” last week, at which there was a cacophony from industry leaders, senior bureaucrats and ministers all declaring for ‘net zero emissions’ and that renewables are, in any case, the lowest cost sources of supply. All sought prove this is the case by calling for the continuation and expansion of the subsidies to renewables – not one speaker pointed out the inconsistency of this.
Subsidies through schemes that force electricity consumers and taxpayers to unwittingly pay half the cost of wind and solar remain in place. These are being supplemented by new subsidies whereby state governments contract with renewable firms for future supplies and engage in measures that subsidise the delivery of those supplies from remote locations to the customers.
The present leaders of this madness are the Victorian Minister Lily D’Ambrosia and NSW Minister Matt Kean. The latter claims his recently enacted regulatory policies will attract $32 billion in new private investment for wind, solar and associated transmission lines. Though the Commonwealth recognises some dangers from such policies, they too favour subsidies and ‘winner picking’ support for new technologies involving hydrogen as well as the $12 billion conversion of Snowy into a system that supports the irregularity of renewables.
In the past, subsidies to renewables forced costs on coal generators and brought closures followed by escalating prices and precarious reliability.
Now the Commonwealth has legislated a requirement for three years notice of closure. But firms cannot trade while insolvent. And investors bankrupted by government policies that discriminate in favour of competitors may sue. Businesses, like AGL, have responded to Minister Kean’s legislation by shelving new investments that are adversely affected by the new round of subsidies.
These developments led Kean to fulminate against Big Business that refuses to cop losses by doing the government’s bidding.
The only way to restore this former level of efficiency is through a market unpolluted by government subsidies, regulations and directions. Sadly, there are few advocating this and the hostility to coal, together with the established capacity of renewables means that it is difficult to bring about.
Those politicians recognising the poisonous effects of the assault of coal generation are, like the renewables lobby, forced to accept that any new facility would also need government support. Meanwhile lobbies advocating for closure of fossil fuel generation – in some cases out of environmental zealotry and in other cases to benefit from subsidies – remain dominant.