Connection Made: Consumers Suffer Hidden Transmission Costs For Wind & Solar

Connection Made: Consumers Suffer Hidden Transmission Costs For Wind & Solar

April 23, 2022 by stopthesethings Leave a Comment

The wind and solar industries spear turbines and plaster panels way beyond the back of beyond. Increasingly remote locations for wind and solar generators require serious upgrades to transmission infrastructure, adding hundreds of $millions to transmission costs, that would have otherwise been avoided, had Australia simply stuck with conventional generators and not squandered $60,000,000,000 in subsidies to intermittent wind and solar.

As any first-year physics student will tell you, transmitting electricity over distances results in a mathematically predictable loss of the power transmitted, over any given distance. The greater the distance, the greater the absolute loss.

Just like the value of prime real estate, the most beneficial situation for generating capacity is all about location, location, location.

In the main, conventional generators are sited close enough to the majority of the load (i.e. power consumers) – such that the transmission losses involved amount to relative trickles. Back in March 2019, the grid manager determined to hit remote wind and solar operators with penalties for their substantial transmission losses over distance. Predictably, wind and solar operators howled ‘blue murder’.

Now, with an election campaign in train, the loopy-left that occupy Australia’s Labor Party are threatening even more costly and chaotically intermittent wind and solar to a grid already on the brink of collapse.

What Labor’s apparatchiks conveniently overlook, is the astronomical cost of trying to connect even more subsidised panels and turbines, situated in increasingly remote locations.

No prizes for guessing who pays?

Power grid upgrades for renewables must be ‘paid for by someone’
Sky News
Peta Credlin and Andrew Stone
19 April 2022

Economist Andrew Stone says power companies “are not charities” and costs have to be passed on and “paid by someone”.

Labor has released a plan called ‘Rewiring the Nation’ which involves upgrading the electricity grid to incorporate renewable energy sources and driving down power prices.

“If you’re asking power companies to spend around $60 billion on changes to the grid, upgrades to the grid to be able to handle all of this renewable energy … that has to be passed on,” Mr Stone told Sky News host Peta Credlin.

“That was a large part, along with the carbon tax, of why electricity prices doubled under the last Labor government, so I’m surprised they are wading into this area again in such a fashion.”


Peta Credlin: Well, one of the big moves on the campaign trail today was the eruption of power bills and energy as an issue. Prominent energy experts have poured cold water on the Labor Party’s energy policy, warning that their promised $78 billion transformation of the electricity grid will in fact force up power prices. Labor have been accused of botching their policy and leaving consumers worse off.

In a scathing assessment, the managing director of Frontier Economics, energy economist Danny Price warned, “Logistically, it doesn’t make any sense. The reality is that prices are going to go up.” Let’s get into this now with my Tuesday night panel from Adelaide, Dr. Jennifer Oriel, and from Sydney taking the place of John Anderson who’s overseas at the moment, economist and senior fellow at the IPA, Dr. Andrew Stone.

Andrew, I’ll come to you if I can. They’re saying, economists today, $560 per annum to the average Australian power bill after Labor’s put out this policy. They say, “It’s not true,” says Labor. Experts disagree. I know you’re a bit of an expert in this area yourself. What’s your view?

Andrew Stone: Hi. Good evening, Peta. I can’t speak to the specific $560 figure, because I believe in fact the government hasn’t exactly explained where that claim comes from, but I think it’s… There are perhaps three points that can be made here.

First of all, I think Danny Price is quite right. If you’re asking power companies to spend around $60 billion on changes to the grid and upgrades to the grid to be able to handle all this renewable energy, then they’re not charities. That has to be passed on and paid by someone. And indeed, that’s the basis… There are formulas built into the arrangements whereby that gets passed onto consumers. And indeed, that was a large part, along with the carbon tax, of why electricity prices doubled under the last Labor government. So, I’m surprised they’re wading into this area again in such a fashion.

Second point to make is, even if you’ve defrayed those costs a bit by having the… As the Labor Party says, having the taxpayer come to the party by chipping in $20 billion of low interest loans and so forth; that doesn’t mean that becomes free. All it means is you’ve transferred the cost from consumers to taxpayers. So you and I, and everybody else, will still be paying. We’ll just be paying in our capacity as taxpayers, rather than as electricity consumers.

But finally, the third point to make about this, I suppose, is that this would be a very powerful attack from the Coalition, or a much more powerful attack from the Coalition if they hadn’t themselves committed to a net zero policy by 2050. Because in a sense, having made that, I think, deeply unwise nonsensical commitment; it can be argued this is just a question about timing. The Labor Party is saying they’ll make these investments much more rapidly because they’re going earlier, but it rather blunts the Coalition attack if they’re saying they going to have to spend the same amount at some point, just over a longer period.
Sky News

Share this:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s