The dogma of sustainability and renewables is ruining the power system

‘Sustainability’ is a modern buzz-word, a fashion, a vital tool for preservation and all-to-often a cover for dangerous covert agendas, not the least being the danger of related policies returning electrical power delivery to third-world status.

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The energy hex Australia places on itself is madness

The energy hex Australia places on itself is madness Chris Kenny, The Australian, 23 June 2018

 

If our worst enemies abroad were given one evil wish to destroy our economy they probably would look to curse perhaps our greatest natural advantage: access to almost unlimited cheap energy.

Yet, as if to prove that fact is stranger than even this madcap fiction, this is a hex we are visiting upon ourselves.

If a prosperous nation decided to burden its people with expensive and unreliable power, imposing hardships including job losses, costs on struggling families, reduced profits and missed investment opportunities, to create a more benign environment for all the people of the world, it would be truly altruistic. But if it were inflicting pain on its citizens and handicapping future generations for no discernible benefit, then it would be an act of sheer madness.

Yet here we are. We are in a self-imposed energy crisis. No one disputes the urgency — Coalition and Labor politicians, state and federal, agree prices are too high; they are spending on diesel generators, large-scale batteries and stored hydro to find a way through; companies are having power cut or being paid to reduce demand; consumers and industries fear dire consequences; regulators sound alarms about lack of supply; and policymakers float a raft of possible solutions.

Yet it is all our doing. By mandating renewable energy targets, committing to global carbon dioxide emissions-reduction goals, subsidising wind and solar generation including by domestic consumers, toying with emissions trading schemes and imposing (for a time) a carbon tax, we have up-ended our electricity market, forced out some of the cheapest and most reliable generation and made our power more expensive and less reliable. The lion’s share of investment across a decade — upwards of $30 billion — has gone into the sure bet of subsidised renewable energy that has a guaranteed market but that cannot be relied on to meet peak energy output at any given time. Billions more have been spent on government payments and grants. All this money is recouped in the end from consumers, who are paying enormous sums to go backwards.

Since 1999, average spot prices per megawatt hour have leapt from $50 to $110 in South Australia and from less than $25 in NSW and Victoria to $80 and $95 respectively. Electricity costs for manufacturers have increased 79 per cent since 2010 and in that period there have been net job losses of about 140,000 in the sector. Price rises have squeezed family budgets, created hardship for pensioners and forced companies to cut jobs or shut down.

South Australia was plunged into darkness for hours and the Australian Energy Market Operator has warned that without remedial action, even in NSW where cheap and reliable coal-fired power has been abundant, there will be supply vulnerability in the coming years that could lead to 200,000 homes going without power during peak summer demand. The closure of NSW’s Liddell coal-fired power station in a few years will make the situation worse.

This month AEMO warned again that the “unprecedented transformation” of our electricity system means Australia “does not have the energy reserves it once had to lean on” when we need it. This is deplorable.

We are the world’s largest coal exporter. We will soon be the largest exporter of liquefied natural gas. We are the third largest exporter of uranium.

Australia powers the economic and manufacturing powerhouses of northeast Asia, and other parts of the world, with cost-effective and reliable energy supplies. But we decline to do the same for ­ourselves.

We may as well feed the people of the world with our wheat and sheep exports while our own people go hungry. Why are we doing this to ourselves? Politicians from both major parties and the Greens pretend — surely they are feigning because they must know the facts — that this is our contribution to global efforts to combat global warming. This is fraudulent.

We need to do what the climate activists constantly implore of us: back the science. All the facts tell us that, scientifically, Australia’s climate action is doing nothing to improve the global environment. We are putting ourselves through extended economic pain, with deep social consequences, for nothing more than climate gestures. This is the hard edge of gesture politics: national virtue-signalling, with the poorest citizens and jobless paying the highest price.

Don’t take my word for it; listen to Chief Scientist Alan Finkel, who the government tasked with revising policy. He confirmed before a Senate estimates committee hearing a year ago that Australia’s carbon emissions amounted to 1.3 per cent of the global total (that proportion is shrinking as world emissions grow). Finkel was asked what difference it would make to climate change if all of our nation’s emissions were cut — pretend 25 million of us left Australia idle — so that world emissions dropped by 1.3 per cent. “Virtually nothing,” was his reply.

But wait. Our contribution is much less significant even than “virtually nothing” because we will not eliminate all our emissions. We aim to reduce them by 26 per cent — so our best impact may be a quarter of virtually nothing. Wait again; we become even more irrelevant. Global emissions are on the rise. Led by China (growing by up to 4 per cent so far this year) world CO2 emissions are increasing at close to 2 per cent. So, more science, more facts. China’s annual emissions are about 30 times higher than ours and in any given year the increase alone in China’s emissions can be more than double what we plan to cut by 2030. While global emissions rise our piddling cuts do zip. We are emitting into the wind. Our price rises, blackouts, job losses, investment droughts, subsidies and energy system dilemmas are all for nothing.

Anyone with a pulse must understand this. Why they persist with proposing or backing costly climate policies is the question. They want to display their commitment to the cause. They want to associate themselves with protecting the planet. It is earth motherhood, dictated by political fashion and a reluctance to go against the zeitgeist. What a sad indictment on our political/media class — indulging its progressive credentials for social and diplomatic acceptance at the expense of struggling families, jobless blue-collar workers and our economic competitiveness.

The Coalition is starting to tear itself apart again; led by Tony Abbott, those who understand mainstream concerns are rising up against those stuck in commercial, media and political orthodoxy. Malcolm Turnbull and Josh Frydenberg’s national energy guarantee is a retrofit mechanism to encourage some investment in dispatchable electricity.

As they negotiate for a bipartisan position they could be left with a stark choice: satisfy Labor and its premiers or placate the Coalition partyroom. It may be impossible to do both — the partyroom may at least demand a plan to extend the life of Liddell — and another political short-circuit may be in the offing.

The national energy system is so badly distorted by a decade of renewable subsidies and the threat of future carbon prices that there is no easy solution. All sides of the debate propose expensive government interventions. Investors in anything but renewables are wary.

If we had done nothing on climate action we might have had plentiful and cheap coal and gas power on the back of private investment. But we killed that goose. There is bound to be a reckoning; eventually we will reclaim the energy advantage we export to other nations. And if we ever need a zero-emissions future, we will embrace the silver bullet of nuclear energy. The only question is whether it takes us three years or three decades to come to our senses — and how many political careers will be hoist with this petard in the interim.

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Australia’s power policies are killing its economy

Australia’s power policies are killing its economy  By Ian Plimer, The Australian 23 October, 2017

You couldn’t make it up if you tried. Australia is a huge exporter of energy as coal, LNG and uranium, yet it has unreliable and ­expensive electricity. South Australia has achieved a first for ­Australia: it has the most expensive electricity in the world. A short time ago it had cheap coal-fired power.

Australia remains the only G20 country with no nuclear power yet has 30 per cent of the planet’s in-ground uranium, mainly in South Australia. Vic­toria has banned drilling for ­onshore gas in its two gas-rich ­basins yet suffers a gas shortage.

Australia’s energy crisis is based on a flawed fundamental. Global human emissions are only 3 per cent of total annual emissions. It has never been shown that human emissions of carbon dioxide drive global warming. If it were shown, it would also have to be shown that the 97 per cent of emissions from natural processes such as ocean degassing, volcanoes, natural chemical reactions and exhalation don’t drive global warming.

In the geological past, Earth’s atmosphere had hundreds of times the CO2 content of the modern atmosphere yet there were no carbon dioxide-driven catastrophes. The past shows that climate change is normal, that warmer times and more atmospheric carbon dioxide have driven biodiversity and that cold times kill.

Ice core drilling shows that 800 years after natural warming, the atmosphere increases in carbon dioxide. The zenith of the Little Ice Age was 300 years ago and since then we have slightly warmed and cooled during a long-term warming trend. Instrumental temperature measurements over the past 150 years show no correlation between human emissions of CO2 and ­temperature. On all timescales it can be shown that there is no correlation between CO2 emissions and global warming. Without correlation, there can be no causation.

The worldwide temperature record has been changed. Cooling trends have been “homogenised” to warming trends. In the corporate world, if a loss is “homo­genised” to a profit, it is fraud. Why is climate science different?

No genuine environmentalist could honestly support subsidised wind turbines that despoil the scenery, slice and dice birds and bats, damage human health and spread toxins. This is not environmentalism. It is power over people by unelected activists, often ­funded from outside Australia.

Unless the laws of physics are changed, solar power cannot be made more efficient. Solar facilities result in the clearing and environmental degradation of huge acreages and depositing of toxins.

Construction and maintenance of wind and solar facilities ­release far more carbon dioxide than they are meant to save over their working lives and they need to be sup­ported 24/7 by coal-fired generators. The Spaniards invented a way of producing solar power at night without changing the laws of physics. Diesel generators with floodlights illuminated solar ­panels. Subsidies were so generous that profits could still be made at night. No wonder Spain went broke.

Australia’s CO2 emissions are only 1.3 per cent of global human emissions, which are 3 per cent of the total global emissions. To reduce Australian emissions will have absolutely no effect on the planet’s temperature. The only effect will be a rapid reduction in jobs as electricity prices skyrocket.

Those who signed the Paris ­Accord actually believed they can twiddle the planetary dials to minimise warming to less than 2 Celsius yet seemed blissfully ­unaware that whatever humans do, they cannot change Earth’s orbit and radiation released from the sun that drive climate. Australia’s signed a suicide note yet didn’t seem to notice that China, India, Indonesia and the US did not commit to reducing their large carbon dioxide emissions.

The grasslands, crops, forests and territorial waters of Australia absorb more carbon dioxide than Australia emits. Australia should demand the Paris Accord shell out some of the billions sloshing around in the climate business.

The subsidies for wind and solar power and the must-take mandate have attracted all sorts of dodgy enterprises, lickspittles and carpetbaggers to the renewable energy honey pot. The National Energy Market was the nail in the coffin and, after 40 years of falling electricity costs and a reliable grid, Australia now has energy poverty and destruction of businesses. Electricity is not a luxury; it is a necessity for any civilised society.

The solution requires political courage. Cancel the renewable energy target, large-scale RET, ­renewable energy certificates, clean energy target and any funding that subsidises renewable ­energy. Cancel funding for climate research institutes, climate conferences, carbon capture schemes and jaunts for signing suicide notes.

If any energy company provides electricity to the grid, decree that it must have 90 per cent availability 24/7 and get rid of the must-take mandate. Cancel the charitable status of feral activist groups like Greenpeace. Change the Corporations Law such that green activists, environmentalists, unionists and lobbyists abide by the same conditions of probity as company directors.

Because investment confidence in energy in Australia has been destroyed, governments must build modern coal-fired and nuclear power stations. Australia needs a nuclear industry that could start by using modular reactors for isolated mines and towns before growing a vertically integrated nuclear industry.

Only elections can change the madness but no major political party has nation-building leaders and a coherent policy to cut electricity costs and ­increase reliability. Politicians fiddle around the edges. As soon as the words emissions, climate change and Paris are used, you know you are being conned and that the world’s biggest scam will continue.

 Australia’s energy policy is based on the fallacious assumption that human emissions of CO2 drive global warming. This underpins the Finkel and Australian Competition and Consumer Com­­mis­sion reports, the Paris ­Accord and political quick-fix ­solutions. Renewable energy has become ruinable energy, thanks to green ideology.

 I fear there will be years of ­increasing pain before there is enough political courage to bring Australia to what it had in the past: cheap, reliable employment-generating electricity.

Emeritus Professor Ian Plimer’s Climate Delusion and The Great Electricity Rip-off (Connor Court) has just been published.

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Australia’s electricity is far too expensive and unreliable

Australia’s electricity is far too expensive and unreliable  By Nick Cater, The Australian, 6 June 2017

There’s an app for everything these days, even one that tracks in real time the startling cost of Australia’s ­ludicrous energy policy.

We are indebted to PocketNEM for informing us that the spot price of electricity on the National Energy Market shot above $150 a megawatt hour in the eastern states late on Sunday afternoon, hitting $365 in the windmill-powered dystopia known as South Australia. During a largely overcast and windless winter weekend, SA and Victoria sucked up megawatt after megawatt of coal-generated electricity from NSW and Queensland, stretching the interconnectors to their limits.

To whom will the cost of these expensive buy-ins be charged? To the customer of course — you, me and the business we rely on to provide jobs, goods and services.

When the dust settles, the 33,000 gigawatt-hour renewable energy target will prove to be the costliest legacy of the Rudd and Gillard governments. Sure, there are plenty of other multi-billion-dollar blunders to choose from — the cost blowout to the National Disability Insurance Scheme, for example — policies that, like the RET, were implemented with noble intent but vacant attention to detail.

Yet on the scale of bureaucratically orchestrated disasters they are dwarfed by the RET, a Soviet-scale exercise in market intervention that is unravelling before our eyes, presenting Malcolm Turnbull’s government with a diabolical policy challenge that cannot be deferred.

How quickly the world has changed. Barely nine months before Turnbull became Prime Minister the Australian Energy Market Commission, which is supposed to know about these things, predicted that scrapping the carbon tax, falling electricity demand and increased capacity would cause retail electricity prices to fall.

The AEMC’s latest forecast presents a very different picture. Household electricity bills will rise acutely, particularly in South Australia and Victoria. The closure of SA’s brown-coal-fired Northern power station 13 months ago, followed by the closure of Victoria’s Hazelwood power station this year, means that for the first time in at least a half-century there is a shortage of active generation ­capacity.

Last December, the AEMC calculated that the closures would increase the cost of wholesale energy by 55 per cent in Victoria and Tasmania and 41 per cent in SA by the next federal election.

The Turnbull government will get only one shot at fixing this mess before rising power prices start to bite, and it will steady its aim this Friday with the release of Alan Finkel’s review of the National Electricity Market.

It is a chance to rescue energy policy from the sectional interests that want the renewable energy gravy train to keep running, and to frame it to serve the national ­interest. The ideologues, aided and abetted by the self-interested renewable energy lobby, will try to make this a debate about “sustainability” in the hope of deflecting attention from our demonstrably unsustainable energy policy. We must ignore their soft-headed nonsense and focus on securing what we really need: a reliable supply of affordable energy within our carbon emission targets.

The review is unlikely to recommend, nor is the government willing to countenance, the abolition of the RET, attractive as that may seem to energy market ­rationalists.

It should, however, help us recognise that putting most of the burden on the electricity grid to deliver Australia’s promised carbon emissions reduction was a ghastly mistake. It has neither assisted the reduction of carbon emissions nor encouraged the development of new technology.

Even Ross Garnaut, the Rudd government’s professor of choice, called for it to be phased out. The RET “does not necessarily encourage the lowest cost means of reducing emissions”, he wrote in 2011, “nor does it encourage innovation: it favours the lowest cost established technologies that are eligible within the scheme”,

In fact, it can cost up to $100 a tonne to abate carbon emissions through large-scale wind and solar, and up to double that amount using small-scale domestic solar panels.

Meanwhile another arm of government, the Emissions Reduction Fund, can do the same job for less than $12 a tonne. Allowing thermal generators to offset emissions by purchasing credits from the ERF instead of renewable energy certificates at eight or nine times the price may give them a fighting chance.

The review also presents the opportunity to end the sacred treatment of wind and solar and to share subsidies, if subsidies there must be, with low-emission thermal energy production such as gas and clean coal. It would not fix the gas shortage but at least it would give the owners of mothballed gas plants a little more confidence of a return on investment.

If common sense is allowed to intrude, we will no longer pay subsidies of about $85 a megawatt hour for the fitful supply of unstable energy using subprime technology of windmills.

Renewable energy suppliers have little incentive to improve the reliability of their product since it is the public, not they, who are forced to pick up the bill for buying in thermal power at the spot price when the blades stop tuning.

The energy market as currently constructed is a classic example of moral hazard where one party decides how much risk to take, while another bears the cost when things go wrong. If renewable energy companies were made to shoulder all, or at least part, of the cost of their failure to provide electricity at 50 hertz for 24 hours a day, they might invest more in the development of storage.

What could go wrong? After all, Alan Kohler assured us in his column in The Weekend Australian that wind and solar are at the point of becoming cheaper than coal and gas, and batteries are just around the corner. We are about to see a flood of renewable investment that will spell the end of coal.

A clear-headed readjustment of the RET will allow us to test that somewhat brave assumption. Oh, and help us keep the lights on.

Nick Cater is executive director of Menzies Research Centre.

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About Peter Senior

I'm a very experienced and pragmatic management consultant. I've reviewed and led the restructuring of many organisations - large and small corporations and Government Departments, much of the time as President of the New Zealand Institute of Management Consultants. Before that I was General Manager of a major NZ newspaper; earlier, an analyst for IBM UK. I gained an honours degree in engineering at London University, and studied management at Cambridge University. This wide range of experience has left me frustrated: I continue to see too many examples of really bad management. Sometimes small easily fixed issues; sometimes fundamental faults; and sometimes really tricky problems. Mostly these issues can be fixed using a mixture of common sense, 'management 101' and applying lessons from years of management experience. Unfortunately, all too often, politics, bureaucracy and daft government regulations get in the way; internal factors such as poor culture and out-of-date strategies are often evident. So what's gone wrong, and why, and most importantly, how to fix 'it'? I hope there are like-minded people 'out there' who will share their thoughts enabling 'us' to improve some significant management failures that affect the general public. If you just accept bad management, you don't have the right to complain! If you'd like to share thoughts on any aspects of management, send me an email to petersenior42@gmail.com . My latest project has the interim title 'You’ve been conned. Much of what you were taught and read is largely irrelevant, misleading or plain wrong – this is the REAL story of life: past, present and our possible future.' The working paper so far comprises 105 pages, many listing references and interim conclusions. The main problem is finding sufficient credible evidence, and realising the more Iearn, the more I realise I don't know!
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