Renewable Fatuity
Proof that ‘clean’ energy is expensive, destroys industries and cannot alter the weather is mounting. But don’t tell the Victorian Government, says Nick Cater.
When the Labor Party gets together you never know what it will pull out of the bag.
At the West Australian Labor conference in Perth last month, they voted to resurrect the “socialist objective”, affirming the party’s goal of “the democratic socialisation of industry, production, distribution and exchange”. It was comforting in a strange way, a reminder of the days when Labor merely wanted to take over the factories rather than close them down, as the Andrews Government is successfully doing in Victoria.
Stephen Conroy called the revival of the socialist objective “barking mad”, which seemed a little rich from the bloke who gave us the National Broadband Network, as fine an example of the socialisation of production, distribution and exchange as one could ever wish to see.
In Conroy’s home state of Victoria, the Labor Government’s renewable energy target turns the socialist objective on its head. The profits go to grasping capitalists while the proletariat pays the costs. The workers don’t lose their chains, they lose their jobs.
Daniel Andrews’s 50 per cent RET delivers the death sentence to the state’s three remaining coal-fired power stations. Their demise will leave a 4730 megawatt gap in dispatchable capacity, three times larger than the deficit caused by the closure of Hazelwood.
With summer approaching, Victorians are on tenterhooks. The national energy regulator predicts that 3 million customers face blackouts in weather far from unusual during a Victorian summer that we are nonetheless obliged to call extreme.
Victorian Energy Minister Lily D’Ambrosio was characteristically unprepared when she appeared on Neil Mitchell’s 3AW radio show. “Can you guarantee supply?” Mitchell asked.
“Well, we’re in a tricky situation here, there’s no doubt about it,” she replied. “We just can’t keep relying from summer to summer on our ageing coal generation.”
Her answer lacked the precision Mitchell was looking for. Was that a no? he persisted.
“Well, what I can guarantee is that we’ll be working closely with the market operator. If I can explain, Neil, because I think it’s fairly important …”
Mitchell tried once more. Could she guarantee power or not?
“You can’t guarantee it … the market operator is independent … they’ve got constraints of rules in terms of putting in place contingencies … this is why we’re calling on the federal government …”
“So, it’s the federal government’s fault, is it?” said Mitchell.
Blaming Canberra — the last refuge of scoundrel states since Alfred Deakin was a boy. It is a particularly pitiful excuse when it comes to energy policy.
The Andrews Government wants us to believe it has the power to alter the climate but not to keep the lights on. It wants us to believe that there is no connection between subsidising wind farms and the degradation of unsubsidised baseload coal-fired power. And this from a government that seeks virtue in legalising euthanasia but has criminalised drilling for gas.
In more sensible jurisdictions, wind power is falling out of favour as its problems become apparent. Germany’s Energiewende policy, the shift away from nuclear in favour of renewables, is an expensive failure. Germany’s Federal Court of Auditors says the €160 billion spent in the past five years “are in extreme disproportion to the results”.
In the US, Michael Moore, famous for delivering anti-capitalist “wake-up calls”, set out to make a documentary extolling the virtues of renewable energy and finished as one its biggest critics.
“It turned out the wake-up call was about our own side,” his director Jeff Gibbs said last month. “It was kind of crushing to discover that the things I believed in weren’t real, first of all, and then to discover not only are the solar panels and wind turbines not going to save us … but (also) that there is this whole dark side of the corporate money … It dawned on me that these technologies were just another profit centre.”
Even Bob Brown has turned against wind farms, condemning them as a blight on the landscape and a danger to animals.
In Victoria, however, too much bird slicing is barely enough. To entice renewable investment, the Victorian government absorbs the risk, guaranteeing fixed-price contracts for up to 20 years. The size of the liability further governments will inherit has not been calculated.
When it comes to saving the planet, the Victorian RET is about as useful as gluing your hands to the tarmac. As an incentive for rent-seekers, on the other hand, it is working a treat. The result is more windmills under construction than in the rest of the country put together. Another dozen or so projects are waiting for approval. It means that more than 1500 or so turbines could be fitfully turning in a few years, generating 6600MW on paper at least, larger than the state’s coal-generating capacity before the closure of Hazelwood.
Non-synchronous power of this kind is worse than useless in a crisis, however. It serves only to destabilise the grid. Which is why Victoria wants to pass its troubles on to the rest of the country through a network of giant extension leads drawing coal-fired power from NSW and Queensland and hydro from the Snowy Mountains and Tasmania.
It is impossible, sadly, to confine the pain caused by this folly to Victoria. The connection to the grid means that the costs are socialised. When prices spike at times of peak demand, everybody pays them.
Who will pay for a second inter-connecter across the Bass Strait, a project likely to cost up to $3 billion, and the upgrading of connections to the north, will provide endless fodder for blame games.
In a perfect National Energy Market, the Pottery Barn rule would apply: you broke it, you fix it. In a broken energy market the cost of one state’s stupidity is loaded on to everyone’s bill.