Wake Up Australia: Time to Kill Renewable Subsidies and Avoid California’s Wind & Solar Disaster
Those who ignore history are doomed to suffer it all over again, even if it’s the recent history of California’s mass blackouts.
Of course, Australians need only look to South Australia (its wind and solar capital) for an understanding of how an obsession with subsidised renewables is guaranteed to send power prices into orbit and leave power consumers scrambling for power whenever the sun sets and/or calm weather sets in. SA is, of course, world-renowned as Australia’s mass blackout capital.
After equally wind and solar obsessed California’s run of mass blackouts, now is as good as time as any to have a good hard think about where Australia’s energy policy is headed. Alan Moran does just that, in a couple of pointed pieces below.
California dreamin’, our cheap and reliable electricity nightmare
20 August 2020
Matthew Warren in the AFR three days ago was highly critical of the electricity market manager’s proposed spending on new transmission lines. The proposals involve a centrally planned network with over $17 billion of new transmission lines plus a further $10 billion for the Snowy pumped storage scheme. This spending is designed to shore–up the inherently inefficient and high cost wind and solar generators that regulatory subsidies have made possible.
There is an irony in Warren’s attack since, in a previous life as head lobbyist for the renewable energy industry, he was instrumental in having the Rudd/Gillard government accept the slogan “20 per cent renewables by 2020” with the fourfold expansion in subsidised renewables this entailed. It is that policy which has undermined the low cost, reliable market-driven electricity supply industry we once had. And it is that policy which has created the case for the vast expansion in transmission expenditure that the market manager is signalling.
Warren’s conversion to a market-driven approach is clearly not shared by the market manager, Audrey Zibelman, who writes in the AFR of 19 August that her agency’s report is just fine and dandy. Zibelman does not even address Warren’s chief concern about the deficiencies inherent in a centrally planned network, funded by government regulatory requirements. She misquotes Abraham Lincoln, “The best way to predict the future is to create it,” thereby confirming a personal preference for central planning. Zibelman sees the future as renewables, hence more spending on networks because of the dispersed nature of their supply, and other expenditures to allow their variable output better to match demand.
The AFR is a leading sponsor of subsidised renewable energy (nowadays subsidies are euphemistically called “putting a price on carbon”). Unsurprisingly, therefore, not only did it publish Zibelman’s response to Warren’s article but it also featured Ross Garnaut, another architect of the energy policy debacle caused by renewable regulations. After preambling about how to recover from COVID-19 lockdowns, Garnaut gets down to the nitty-gritty claiming the way forward is to invest now in the net zero carbon emission world he says will be required by 2030. With a subtle call for subsidies, he says, “Investments over the next few years will have to make economic sense in the low-carbon global economy of the future”. For Garnaut, the way out of the wealth destruction caused by the lockdowns is to invest in high cost energy.
Meanwhile, across the Pacific, California is reaping its own harvest from requiring a wind/solar-rich electricity supply. The State Government requires a 60 per cent renewable supply by 2030, and the state is presently at 33 per cent. To meet demand of 42-44 GWh, California has a capacity of 76 GW, a bit more than Australia. But 27 GW of California’s plant is solar (useless for evening peaks) and 7 GW is wind (useless in hot windless days).
Last weekend California’s air conditioners were going full pelt due to a heat wave in the south of the state (predictably blamed on “global warming”). The market manager had to instigate rolling blackouts. In a pattern seen in Australia, many Californian nuclear and fossil fuel generators have been forced to close because they have been made unprofitable by generous subsidies that consumers are required to pay to renewables.
California’s Brave New World of wind and solar has not only brought shortages of power but the state’s consumers incur electricity prices that are 60 per cent above the US average. As in Australia, an unholy alliance of naïve environmentalists and renewable energy subsidy seekers has driven energy policy.
Australians pay billions of dollars a year as a result of renewable energy policies. This spending includes direct payments and regulatory requirements that subsidise renewables and penalise coal, a consequent doubling of the wholesale electricity price, and financing of new transmission links. And all we get is a less reliable supply.
California here we come!
Californian electricity collapse shows where Australia is heading
20 August 2020
I have an article on The Spectator flat white that addresses the calamitous energy situation we have created in Australia. The piece was triggered by an article in the AFR by Audrey Zibelman, the Australian Energy Market Operator (AEMO), defending a recent report compiled by her agency that showed the massive transmission spending which would be necessary to accommodate the expansion of renewable energy that she says is inevitable.
ZIbelman’s article was in response to one in the AFR by Matthew Warren, who as the former head of the green energy lobby group was the architect of the massive infusion of subsidised renewable energy that has created the high costs and unreliability that we face. Warren now advocates a return to market driven electricity supply system. Zibelman, as a socialist warhorse, has never supported such an approach and manages to misquote Abraham Lincoln in an attempt to justify her preferred central planning approach.
A backdrop to this is the disaster unfolding in California, which is about five years ahead of us in the Lemming-like march to net zero carbon emissions. California, in the midst of a heat wave is facing rolling blackouts as a result of the green policies its government has pursued.
As Frank Wolak points out, 33 per cent of the state’s electricity supplies are required by law to come from renewables. By relying increasingly on variable supplies, California has put itself “in a position where regular intentional blackouts are inevitable”. Christopher Horner notes that increasing blackouts were predicted by the main supplier, PG&E, following those in October 2019. And prices in California thanks to renewables are 60 per cent above the US average.
Virginia too is plumping for zero net emissions in a policy that will cost households over $500 a year in higher energy bills as well as reducing reliability.
As in Australia, an unholy alliance of naïve environmentalists and renewable energy subsidy seekers has driven energy policy in several US states and forced the replacement of low cost dispatchable nuclear and fossil generation plant by solar and wind, the variable supply of which is dependent on weather.
We are hurtling towards a policy-induced disaster and there are only a handful of politicians, led by Craig Kelly and Matt Canavan (and maybe now joined by the ALP’s Joel Fitzgibbon). Many of the rest – especially NSW Liberals like state energy minister Matt Keen – are renewable energy financed green advocates in the camp of Michael Photios and his lobbyist wife.
To restore its low cost, reliable electricity supply system, Australia must cease regulatory favours to renewable energy supplies and budgetary support for all forms of energy. Such reforms include no longer subsidising transmission links and other grid measures that compensate for the inherent deficiencies of weather-dependent renewables. But there is no sign of this yet.