Hi, here’s reports from Quadrant Online,The Spectator,The Australian Financial Review & more……..
APR 21, 2017 — Please share these reports and this petition with everyone you know.
Where’s the due diligence on renewables?
The Spectator Australia
25 March 2017
You know that lovely warm glow you get on a summer’s evening when it’s still 42 degrees outside and you’re reaching into your fridge for your first restorative tinny when suddenly the lights go out and your air-con too?
Of course you do, especially if you live in South Australia, where, thanks to ambitious ‘green’ energy targets, power outages like this have become the new normal.
‘No worries!’ you say. ‘I accept that personal discomfort, inconvenience and mild danger are but a small price to pay to save the planet from global warming. Only a dinosaur would expect to go on being able to use electricity as and when he wants it. I for one welcome the bright new age of darkness, clean energy and government rationing!’
Except you don’t, do you? If you’re anything like all the commonsense Aussies I met last time I visited, you’ll be absolutely bloody livid: ‘We’re Australia, the lucky country, not some third world backwater. We invented commercial refrigeration. We’re sitting on top of a continent’s worth of cheap energy. What kind of eco-fascist madness is this?’
The madness is the result of the global warming scare which has dominated Western policymaking for the last four decades. Some countries are starting to get over it – notably Donald Trump’s United States – but in Australia it continues to exert a grip tighter than the bite of a ravenous saltie.
Climate change lunacy has affected everything from your right to clear trees off your property (often you can’t: they’ve been designated a carbon sink) to where you can’t build your waterfront home (junk science paranoia about rising sea levels) to how many millions of dollars you waste on desalination plants (for the permanent drought that never came).
Most damaging of all are Australia’s renewable energy targets. In South Australia they stand at 50 per cent (by 2025), in Queensland 50 per cent (by 2030) – rightly described as ‘bonkers mad’ by deputy PM Barnaby Joyce, in Victoria 40 per cent (by 2025). Even under the Liberal federal government, the national target is 23 per cent by 2020. All of these are doomed to fail – even the national one would require the impossible feat of a 50 per cent increase in Australia’s renewable energy (mainly solar and wind) within three years. Meanwhile, the havoc they have already wreaked is considerable.
South Australia has been the hardest hit so far by the great renewables disaster. No doubt it sounded good when premier Jay Weatherill and Energy Minister Tom Koutsantonis first began evangelising about their world-beating clean energy targets. The consequence, though, has been blackouts, job losses and economic chaos caused by rocketing power prices and intermittent supply.
But instead of apologising, the Australian Energy Market Operator (AEMO) is asking customers to take it on the chin. In a process euphemistically known as ‘load shedding’, the AEMO can order customers’ power supplies to be switched off in times of extreme stress so as to prevent wider system failure.
Why is this happening now in a developed nation in the 21st century? The simple answer is that renewables, apart from being two or three times more expensive than fossil fuels, are intermittent, unreliable and unpredictable.
If the sun isn’t shining (which it doesn’t, at night, not even in Australia) or the wind isn’t blowing, then the power needs to come from more conventional sources like coal and gas. The more renewables in the energy mix – 40 per cent of South Australia’s energy capacity is now wind – the more inherently unstable the grid becomes.
Hence the great blackout of September last year: a storm forced a shut down of wind power to prevent surges; this in turn crashed the entire local grid.
All this man-made chaos might be excusable if it served any useful purpose. It doesn’t.
Increasingly, it is becoming apparent that renewables are one of the great, truly bad ideas of the last 100 years: a boon for troughing rent-seekers, virtue-signalling pollies and posturing greenies but terrible for the rest of us poor saps who have to subsidise them; disastrous for the environment (all those birds and bats sliced and diced); utterly ineffectual in ‘combatting climate change’ (Australia produces less than two per cent of the world’s greenhouse gases).
So what’s to be done? What’s painfully clear is that – with rare exceptions like Cory Bernardi and One Nation’s Malcolm Roberts – Australia’s politicians have no appetite for reining in the problem, for fear of suffering the same fate as Tony Abbott, whose political demise was partly wrought by the Green Blob. It doesn’t help that most of the media – especially the ABC –is so heavily in thrall to eco-zealotry and refuses to question the (fake) green ‘consensus’.
That means people who believe in regaining the cheap, reliable energy Australia used to have before the green madness took hold have a fight on their hands. One way they might yet win is through the courts via judicial review. What, after all, is the most basic requirement taxpayers ought to expect from their governments? Due diligence on public expenditure.
This is going to be one of the tactics of Cool Futures Funds Management – a contrarian Aussie hedge fund of which I’m an enthusiastic supporter because it is, as far as I know, the first financial institution to try to profit by holding the Green Blob’s dodgy dealings to account.
It has approached the government with a low-cost, shovel-ready, clean-coal technology solution which could solve all Australia’s baseload energy supply problems. But because this solution involves fossil fuel, it will inevitably be resisted heavily by the greens and their useful idiots in government and business. And that’s where the courts may have to adjudicate.
Australians deserve better than to be held to ransom by the duff ideology of a few eco-zealots. If governments can’t provide their voters with something as basic as reliable energy, then they must be held to account for their negligence.
South Australia is a warning the rest of the country should heed before it’s too late. And the answer to your problems, my Aussie friends, is most definitely not blowing in the wind. It’s right there, underneath your feet.
The Spectator Australia
Governments’ renewable energy push to blame for crisis
The Australian Financial Review
7 April 2017
The energy sector is in disarray because of government failure, not market failure, former Productivity Commission chairman Gary Banks says.
He told Infrastructure Partnerships Australia the spectacle of South Australian Premier Jay Weatherill blaming the private sector for high energy prices and blackouts “took the wind out of my sails”.
He said government policies subsidising wind and solar energy at the expense of established coal and gas-fired power stations were primarily responsible for the “energy crisis” afflicting South Australia and increasingly the eastern states. “The inconvenient truth is that the increasingly high prices for increasingly unreliable electricity are a direct consequence of the increasingly high utilisation of renewable energy required by government regulation,” Mr Banks said.
“Energy markets are admittedly complicated things. However, the logic is unassailable that if a cheap and reliable product is penalised, while expensive and less reliable substitutes are subsidised, the latter will inevitably displace the former. No amount of sophistry, wishful thinking or political denial can change that.”
Other experts such as CME director Bruce Mountain say soaring gas prices are at least equally to blame for a doubling in wholesale electricity prices in the last year or two because gas peaking plants set the marginal price for electricity when the wind isn’t blowing and the sun isn’t shining.
But Professor Banks, now with the Melbourne Institute of Applied Economic and Social Research, said the costs of shifting from established, cheap and carbon-heavy coal power to low carbon energy had been compounded by governments choosing an “anti-market path, one violating basis principles of demand and supply”.
“The energy crisis is self-evidently not the result of market failure but of government failure,” he said.
Professor Banks said policy was going from bad to worse with the Turnbull government calling the competition watchdog on to the “alleged misdemeanours” of the energy retailers, the threat of regulatory intervention to withhold gas exports for domestic use, the prospect of billions of dollars of taxpayers’ money being used to fund “clean coal” power and the “nation building expansion of the Snowy Hydro scheme “that had been rejected as uneconomic in the 1980s”.
Australian Financial Review
Gary Banks: Australia’s energy crisis is down to deliberate policy choices.
Energy crisis a blunder of governments, not a market failure: Energy policy
Australian Financial Review
7 April 2017
Even by today’s standards, the misleading, disingenuous and partisan nature of the energy policy “debate” seemed to have plumbed new depths. So be it, I thought, it’s no longer my job to call out such things. But then a state premier went and made the following observation:
“We’ve got market failure. We know there is an investment strike. The private sector just isn’t building power generation.”
I must confess that this took the wind out of my sails – if you’ll pardon the analogy. The electorate was being told by a political leader that the problems they were experiencing – high prices, failing supply and costly emergency measures – had nothing to do with the government. It was the fault of the private sector and its perverse refusal to invest in power generation.
The inconvenient truth is that the increasingly high prices for increasingly unreliable electricity are a direct consequence of the increasingly high utilisation of renewable energy required by government regulation.
Energy markets are admittedly complicated things. However, the logic is unassailable that if a cheap and reliable product is penalised, while expensive and less reliable substitutes are subsidised, the latter will inevitably displace the former. No amount of sophistry, wishful thinking or political denial can change that basic economic reality.
Changing the mix of energy use away from low-cost but emissions-heavy fossil fuels has of course been the whole point. While Australia’s own actions can have no discernible impact on global carbon emissions, let alone on Australia’s climate, there is broad support for the idea that playing our part is a precondition for a joint international endeavour that could. This requires a leap of faith, but it is a legitimate policy objective, even if a particularly costly one for this country given its resource endowments.
The resulting costs and difficulties have been greatly compounded, however, by governments choosing a policy path that is essentially anti-market, one violating basic principles of demand and supply. The energy crisis is self-evidently not the result of market failure but of government failure.
The 18th century literary sage Samuel Johnson remarked that “a man is never more innocently employed than when engaged in making money”. The actions of private investors are not hard to understand. They will generally not invest in a project unless the returns are likely to be sufficient to cover the costs and provide an adequate return on their capital – given the risks involved and the alternatives on offer. Following regulatory interventions, returns from fossil fuel generators have gone down, while the risks of investing in them have gone up. I suppose the consequent reluctance to invest could be called a “strike”, if one needed an emotive term, but it is really just a rational response to the forces at work.
Unlike government enterprises, private companies cannot be relied upon to provide cover for a government’s policy mistakes. In that light, the SA Treasurer’s lament that privatising ETSA was “the worst policy blunder in the history of South Australia” may have not only been a big call, but more revealing than intended.
In blaming the private sector for Australia’s energy problems, there is a real risk that the policy mistakes that led to it will be compounded by further policy mistakes, rather than leading to corrective actions that acknowledge regulatory error. We seem destined to end up in a third or fourth-best world, as economists express it, when the first or second best were well within reach.
Thus we observe at the federal level the threat of regulatory intervention to withhold gas exports for domestic use – while at the same time state and territory governments ban or curtail exploration and production. We even see governments re-entering the energy business. South Australia is to spend a lazy half billion dollars on a new gas generation plant. The Commonwealth is contemplating investing in clean coal generation using its $5 billion northern infrastructure fund, the minister responsible declaring “the only people who can get rid of sovereign risks are the sovereigns”!
Then there was the dramatic announcement of a “nation building” expansion of the tri-governmental Snowy Scheme that had been rejected as uneconomic in the 1980s. Following the WA election, Western Power must also take its place on the privatisation “no go” list.
To add to the irony, we are seeing a new wave of interventions to help the very firms which emission reduction policies were intended to drive out of business. The Portland aluminium smelter, perhaps the most intensive user of electricity in the country – an operation requiring heavily subsidised power even when it was cheap – has received substantial additional taxpayer support to help forestall the inevitable.
The intervention spawned by the failure of energy/carbon policy accordingly looks to become a self-perpetuating process. It is disturbingly reminiscent of the conventional industry protection dynamic of times past, in which assistance to import-competing firms imposed costs on downstream users and exporters, who in turn demanded (and often received) assistance of their own.
Australian Financial Review
A Dead Man Warns of a Dying Grid
3 April 2017
Not long before his sudden and premature death, Australian Energy Market Operator chief Matt Zema spoke candidly at a private conference of power-industry executives. The enormous subsidies heaped on renewables, he said, mean one thing and only one thing: “The system must collapse”
Matt Zema, inaugural head of the Australian Energy Market Operator (AEMO), attended a meeting a year ago of the Regulation Economics Energy Forum at which a number of prominent electricity industry executives were present. Proceedings at the meeting were private, but the need for confidentiality was removed with Matt’s sad death three months later. The following were among his remarks:
“The renewable developments and increased political interference are pushing the system towards a crisis. South Australia is most vulnerable with its potential for wind to supply 60% of demand and then to cut back rapidly. Each new windfarm constrains existing ones and brings demand for more transmission. The system is only manageable with robust interconnectors, but these operate effectively only because there is abundant coal-based generation in Victoria…
… wind, being subsidised and having low marginal costs, depresses the spot price and once a major coal plant has a severe problem it will be closed…
… wind does not provide the system security. But the politicians will not allow the appropriate price changes to permit profitable supply developments from other sources. And the original intent of having the generator or other beneficiary pay for transmission and services over and above energy itself has now been lost so there are no market signals, just a series of patch-ups that obscure the instability and shift the problem to include Victoria. In the end the system must collapse…”
A month later South Australia’s coal-fuelled Northern Power Station was disconnected from the network because it was unable to operate profitably against subsidised intermittent renewable energy that has priority over other supplies.
In September, 2016, as a result of this capacity reduction, South Australia lost all its power when storms triggered outages and several wind generators were unable to “ride through”, causing the main interconnector with Victoria to shut down. A more limited loss of power took place in February, 2017, when wind supply dropped from 800MW to under 100MW in four hours.
The September, 2016, blackout is estimated to have cost the state $367 million. BHP, whose senior executives have long engaged in virtue-signalling in favour of carbon taxes and exotic “clean” renewables, reported a loss of $US105 million with their Olympic Dam project — a loss magnified by the company being forced to suspend its proposed doubling of the mine’s capacity as a result of power uncertainties.
Engie, the owners of Hazelwood announced in November, 2016, that the 1600 megawatt facility (supplying between 20% and 25% of the state’s power) will be the fourth big coal-fired power station to close. Hazelwood had been allowed to deteriorate as a result of subsidised wind making the plant unprofitable, which did not stop Engie being ordered to complete major repairs to at least five of the eight boilers in order to meet occupational health and safety regulations.
The bottom line is that the loss of the coal-powered stations has resulted in at least a doubling of the wholesale electricity price in the southern states and the concomitant loss of reliability.
Blame shifting between politicians has characterised the various events. Reliable coal plants are being forced to close due to competition from renewables which currently enjoy a subsidy of $84 per MWH, double the actual price received by coal plants. The forced closure of these plants has compounded the cost impost by forcing up pool prices. The subsidies favouring renewable energy include several put in place by state governments, but the most important regulations are at the Commonwealth level — especially those requiring increasing shares of wind and solar within the supply mix. These regulations give rise to the current subsidy for wind and solar, currently at $84 per MWh and capped at $92.5 per MWh.
The roll-out of new subsidised power is on-going. And various schemes are being floated for buffering and overcoming wind’s intrinsic lack of reliability. Among these is the mooted South Australian battery investment using the technology developed by Elon Musk and the proposal floated by the Prime Minister to augment the Snowy hydro system with “pumped storage”. These measures, should they go ahead, allow the transfer of power over time and, in doing so, reduce the gross power available.
New “solutions” using subsidised wind and solar abound.
Last week, for example, South Australian Premier Jay Weatherill announced a new solar-battery combination, Lyon Solar in the Riverland, which promises 300 Megawatts of capacity. This is the equivalent of perhaps 80 megawatts of coal fuelled electricity and comes at a cost of one billion dollars.
The now-shuttered Northern Power Station had 540 megawatts, yet Weatherill declined to take up an offer that would, for a mere $25 million, have kept it open. Instead, he plumped to spend $500 million-plus on a gas generator of half that capacity and, plus Elon Musk’s much bally-hooed batteries!
On paper, the new Lyon Solar facility is profitable only because of the penalties imposed on coal. These include the subsidy under the Renewable Energy Target of $84 per MWh. In addition, the facility benefits from the forced closure of the coal-fired stations. This has resulted in the wholesale price of electricity rising to a new norm of $130 per MWh, compared with the average price in the four years to 2015 of $50 per MWh. The bottom line is that the consumer will pay $214 per MWh for $50-per-MWh worth of electricity from the new facility.
With that sort of money being littered around the industry for gee-whizz exotic projects it is little wonder that moochers are circling the state like moths round a candle. In the end, renewables require at least three times the price of the supposed dinosaur facilities they are displacing; consumers and industry will need to pay this and, in addition, fork out for grid additions to offset some of the inevitable deterioration of reliability the brave new energy world entails. Obviously many outfits, especially those in the energy intensive mining and smelting and agricultural processing sectors will not find it profitable to remain in an Australian market where wholesale electricity prices have more than doubles and the system’s reliability has deteriorated.
We are seeing the future with these renewable energy facilities and it is not working. The contagion that is undermining the South Australian economy and impoverishing the state’s households is spreading to Victoria.
Ominously, on the very day that Hazelwood closed, Victoria evidenced what will be the new norm.
Incredibly, with no heatwave or any other factor to inspire a spike in electricity demand, it had to import electricity from New South Wales and Tasmania.
Daniel Andrews sends businesses and whole industries to an early grave…
Turnbull, Andrews achievements: 1,000 unemployed, prices up, blackouts coming
6 April 2017
Good afternoon Prime Minister and Premier,
Before we move on to your new partnership, let us think about Scott Morrison’s words:
“Governments must do no harm”.
As a political thinker he is “out there”, our Scotty isn’t he Gentlemen?
Perhaps we need him on the home team in the energy market do you think?
The solid basis on which the Turnbull/Andrews partnership needs to be formed has to originate with the achievements you have both made so far. Let’s list them:
◾Through your deliberate actions (and failure to act) of shutting Hazelwood, you have reduced mankind’s contribution of CO2 by a factor of 0.0002. That reduction, when compared with the CO2 produced by animals consuming vegetation and microbes consuming vegetation is a ratio of 0.000025. Hmmmm……..
◾You have just put at least 1,000 people out of work in the Latrobe Valley.
◾You will bankrupt many businesses in the Latrobe Valley and devastate a whole slab of the Nation’s economy.
◾You have placed the viability of every single manufacturing business in Eastern and South Australia under threat – with the certainty of unemployment for hundreds of thousands of people if the madness continues. These businesses are now less able to compete with imports and less able to compete when exporting.
◾You have caused power prices for every single Eastern and South Australian to rise by a ridiculous amount – because the forced removal of a marginal 1600Mw makes a massive difference to the price of a commodity in short supply.
◾You have introduced a new unprecedented level of risk of blackouts to 89% of the Australian population. Look at the attached AEMO record for this evidence.
◾You have caused an unprecedented rise in the price of east Australian gas by pushing 1600 Mw of generation away from coal and on to our dwindling gas supply.
◾Your initiative of closing Hazelwood has increased the probability of gas supply shortages for 89% of our population.
◾You have increased our farmers’ costs which also makes them less able to compete with imports and less able to export. After some of them have weathered a few previous frontal assaults from Coles, Woolworths, the Chinese Government and Murray Goulburn, your increased power prices to run milking machines, pumps and chilling equipment are just what a struggling dairy farmer needs.
◾You have made the large gas supply companies and power generating companies – and those with a finger in the renewables honey-pot – an absolute fortune for their shareholders. You could be forgiven for thinking that the Australian Federal Government and the Victorian Government actually exist to benefit shareholders of those companies – and not your own constituents!!
Gentlemen, even a compliant media will not save you from what is going to happen soon.
Your choices are simple:
1.Wait for a single interconnector trip or other unplanned event to black out a whole slab of Eastern Australia and then receive an absolute flogging over Hazelwood and be forced into an embarrassing re-start of the Station.
2.Have some initiative, form a strong home team together and get the Station fired up again without delay.
You have both seen that the Weatherillesque technique of blaming everyone else for his own failures – even with a fully compliant S.A. media on side – wears a bit thin when the lights go out and voters get ready to reach for baseball bats – so it is time for you to form a partnership and start doing the right thing Gentlemen.
You will both be congratulated for putting childish Politics to one side and behaving like true leaders.
Thankyou and best regards,
Ian Waters – Senior Project Engineer, Australian Manufacturer
Lessons from Trump on coal
31 March 2017
In view of Australia’s decline from being one of the world’s cheap-energy economies into one of the most expensive — where power prices have doubled in a decade — governments in this country cannot afford to overlook important lessons from Donald Trump’s swift move to end Barack Obama’s war on coal and his predecessor’s other so-called “progressive” climate change preoccupations. In the interests of promoting investment, growth and job creation, the US President has made energy security and affordability a priority. In doing so, he has unceremoniously dumped his predecessor’s signature Clean Power Plan, with its punitive environmental regulations that have harmed the US economy while doing little to reduce carbon emissions or temperatures.
Such realism is long overdue from the White House. Mr Trump’s policy is designed to give US manufacturing industries assured supplies of cheap energy, a significant advantage over competitors in other countries, including Australia, in seeking investment. The Obama plan compelled state authorities to retire coal plants early. The cost to the US economy, according to the American Action Forum, would have been $US1 trillion in industrial output, with the loss of 125,000 jobs. Householders and business were facing double-digit percentage increases in power costs and a less secure grid.
Despite such heavy economic and social costs, Mr Obama’s own former assistant secretary for fossil energy, Charles McConnell, estimated that a full year of US carbon emission reductions resulting from the former president’s anti-coal drive would be offset, in 2025, by just three weeks of Chinese emissions. Last year Mr McConnell described the Obama plan as “all pain, no gain”. Consumers in Victoria facing another 20 per cent hike in power costs as a result of yesterday’s closure of the Hazelwood power station in the Latrobe Valley will understand. So will long-suffering South Australians who have borne the fallout of the Weatherill government’s unrealistic renewable energy target.
Predictably, environmentalists in the US are claiming Mr Trump has unleashed a “climate destruction plan”. But it is hard to argue against a policy that puts an end to Mr Obama’s ideological obsession with waging war against fossil fuels and deals realistically with the need to save jobs and secure cheap, reliable energy supplies. Mr Trump is right to fulfil the pledge that did so much to win him blue-collar support in last year’s election. For now, Mr Trump has left open the question of whether he will withdraw the US from the Paris climate deal. The deal Mr Obama agreed to would force emission reductions on the US of 26 per cent by 2025 (over 2005 levels) and 32 per cent by 2030, targets Mr Trump has branded, correctly, as “a crushing attack on American investment”. He’s right. Even Mr Obama’s entire Clean Power Plan could not have achieved those targets.
Mr Trump’s realistic energy policy should encourage other nations to reassess. Worldwide, 1500 coal-fired generating plants are being built or are at the planning stage. At least the Turnbull government is on the right track in encouraging the construction of new clean-coal-fired power stations in an effort to mitigate Australia’s energy security and pricing crisis.