More subsidies to green energy bringing more economic distress

I have a piece in the Spectator addressing the Clean Energy Finance Corporation (CEFC), just one government institution in the energy space that is poisoning the market with selective support to otherwise non-viable investments.

The CEFC last week loaned $160 million to finance the Neoen 300 MW Victorian Big Battery under the new System Integrity Protection Scheme.

The Victorian Government required the battery to relieve the adverse impact on reliability imposed by its growing requirements for high-cost renewable energy. The costs of the Big Battery – like those for renewables themselves – are folded into electricity bills so that the government can avoid the obloquy for the high bills its policies create. Not only that but CEFC, on behalf of the Commonwealth taxpayer, provides funding with via subsidised loans.

“So, politicians, seeking to placate green activists inside and outside their own parties, foist onto the electricity consumer costly and unreliable wind and solar. By forcing out of the market low cost and reliable coal generation, this raises electricity costs. The supply of wind and solar also causes the system to become unstable since, unlike coal, gas and hydro, its supply is variable and uncontrollable. This requires further costly measures like Snowy 2, new transmission systems, reserve power schemes administered by the market manager and now the Big Battery. All of these magnify the original damage.”

The governments concerned hope that the blackouts caused by renewable requirements in South Australia, California, and now Texas, will be avoided.  And the subsidy seekers have a chorus of media affiliates ready to tell us with each such blackout that the cause is legacy coal plants, unusual winds gas freezes and so on.  The lie of this, regarding Texas, is readily seen from the data, which shows the drop off of wind just prior to the blackout and the expansion in gas supply notwithstanding some gas plant failures.

And just to keep up the momentum of value-destroying spending, today, Minister Taylor announced yet another $50 million funding transfusion to carbon capture and storage. A continuation of the nation’s prosperity being looted by politicians seeking to placate the green blob!

This entry was posted in Uncategorized. Bookmark the permalink.

13 Responses to More subsidies to green energy bringing more economic distress

  1. Professor Fred Lenin says:

    What about subsidies to build cean Japanese style coal fired power stations that will operate 24/7 on every day of the year . We could cancel Adana exports and build a couple of power stations connected to the grid with no need f9r expensive dagerous polluting batteries . Or did Musk make some big donations to the pollieuppets ?

  2. Mark M says:

    Q. How much global warming has been prevented so far from all the renewables installed globally?

    A. None, zilch, zero, nada. (see ‘hottest year ever”)

  3. Professor Fred Lenin says:

    This summer was the hottestsummer ever recorded in Victoria,we had two 40 degree days and a couple of hot nights and I had to use the heater in the bathroon a couple of mornings in Jamuary .

  4. Roger says:

    We are governed by idiots.

  5. 2dogs says:

    The costs of the Big Battery – like those for renewables themselves – are folded into electricity bills so that the government can avoid the obloquy for the high bills its policies create.

    Given the extent of daily variation if the spot price for electricity, shouldn’t a battery pay for itself? At least in terms of the ongoing costs?

  6. jupes says:

    Anyone scared of CO2 after over 40 years of failed doomsday predictions is either a drooling moron or a scam artist.

    This government is appalling.

  7. Justinian the Great says:

    Alan,

    It would be great for you to comment on the Liberal WA plan for renewables given they are facing electoral annihilation. According to the Liberal spokesperson (I forget his name) on The Outsiders program last week, renewable energy with their peak / capacity gas back up is the low cost future. He made no mention of the subsidies for renewables but he did make a big point that WA coal plants were uneconomic because they were reduced to about 50% (give or take) utility which he assumed as the new normal. What he didn’t say was to what extant they were reduced to 50% from government initiated market interventions incentivising renewables, much less about the total grid cost (transmission, backup etc). He also made a big point about WA having a capacity model versus the NEM? Would be great to hear your views on this. The Lib’s of WA are saying renewables are the low cost future and they have the model to prove it. Love to hear your thoughts in a separate post.

  8. jupes says:

    Justinian,

    The WA Liberals are to the left of The Greens on ‘climate change’ policy.

    WA Libs – zero emissions 2030.

    WA Greens – zero emissions 2035.

    Liberals will be going last on my ballot.

  9. Karabar says:

    Justinian the Great says:
    March 1, 2021 at 9:42 pm
    The nutjob’s name is David Honey.

  10. Herodotus says:

    Climate and energy policies are the biggest betrayal of Australians in living memory.

  11. Bruce of Newcastle says:

    This is exactly the issue which caused the Texas blackouts in February. Federal subsidies caused a building boom for wind energy, who could sell electricity at less than zero cents/kWh because the US Government was paying them to produce.

    That undercut the steady generators: coal and nuclear. So no investment in them and old plants shut. But when the wind doesn’t blow there’s not enough electricity. No amount of beating a wind turbine with a stick will make it produce electricity when there’s no wind.

    Cutely after the Federal Government did this they then blamed the Texas State Government for the blackouts.

    The market approach which would fix this problem is to structure the contracts in a reverse take-or-pay model. If the contract was produce-or-pay then the wind farms would have an incentive to generate electricity on calm days, or buy electricity on the market to then deliver to the customer. A few $9,000/kWh days without wind would rapidly convince wind farm operators to invest in back up generator capacity. And the true cost of their product would then be captured in the contractual terms.

    But so far no government has required a produce-or-pay model. They should.

  12. Alan Moran says:

    Justinian
    Judith Sloan had an excellent piece on WA in the Spectator. She concluded

    Zak’s plan is unachievable. ‘Should the policies that they announced be implemented, all it would mean is many, many billions of extra debt, huge increases in family power bills, rolling blackouts across the state and huge job losses.’ And those are the better points.

    He sums up the plan by saying, ‘Everyone should be very fearful about what they have just put forward. We don’t need reckless, inexperienced and dangerous people in charge.’

    Hopefully when Zak has crashed and burnt after the election, he will be able to reflect on his folly. Mind you the WA Liberals have unwisely declared that they will persist with this policy madness even after the election.

    I have a helpful suggestion for Zak: migrate to New Zealand where he can find a real home wrapped in climate madness. You may have read that the large aluminium smelter in Invercargill at the southern tip of the South Island will close in a few years

    As for capacity markets: they add needless cost and are a form of central planning that does not give any greater security.

  13. RobK says:

    I am in awe of Zac. It isn’t possible to set Mark up better as a winner-takes-all in energy policy. Mark owes him, though he’d have won without Zacks bungling. What an embarrassment.

Comments are closed.