‘Greens’ Gamble on Your Future; while PM Stops CEFC from Laying Wind Power Bets
A little while back, that great philosopher, Kenny Rogers spelt out the rules for Gamblers in clear and simple terms:
You got to know when to hold ‘em, know when to fold ‘em,
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealin’s done.
That sound and sage advice is ignored in the breach by the wind industry, its parasites and spruikers.
Every time there’s a ‘little blow’ – and wind power output registers more than the usual piddling fraction of its ‘installed capacity’, there’s a flurry of Tweets and blog posts about the ‘monumental’ (but always ‘momentary’) energy effort. All laced with the kind of tear-filled joy that accompanies cheers for a disabled athlete, who’s just won Olympic Gold.
But, when it comes to cheering on the ‘disabled’ energy runner, wind power fans are always in breach of the Gambler’s 3rd rule, about counting their money while sittin’ at the table – they always count too loud and too soon.
And, just like the Gambler, the greentard is always quick and ready to tell you about their “wins”, but never about their “losses”. When he’s down on his luck, the Gambler will happily lie to himself, friends and family about his failing fortunes – the greentard Gambler is no different.
In the last two posts (here and here) we popped up the some of the “track results” for wind power and, as laid out in dozens of pictures, its shameful ‘form’ would have had it “scratched” from the book, long ago – but for the gullible and naive (not to mention corrupt) among our political betters that control the field.
We’ll start with another example of how the “Gambling Bug” has displaced common sense, with greentards cock-a-hoop about “a single windy NIGHT in Denmark” – said to herald a ‘new dawn’ in our wind powered ‘future’.
GetUp! striving for an Australia where wind power meets 3am demand
14 July 2015
The hearts of climate change lobbyists were aflutter recently with news that wind farms had generated 140 per cent of Denmark’s electricity demand, and local advocates contrasting this with the Abbott Government’s supposed ‘war on wind’.
What this story is really saying is that in a country with a population the size of Victoria (around 5.6 million) and less than half the geographical area of Tasmania (at 43,000 square kilometres), wind power is able at 3am in the morning, when very few people are using electricity, to generate electricity in excess of demand.
To get a sense of what 3am demand for electricity looks like, here it is this morning in Victoria:
Denmark is of course famous for having the most expensive electricity prices in the world and enjoys the luxury of being close enough to Germany, Sweden and Norway to buy their excess electricity (in part supplied by significant nuclear and hydroelectric facilities) when the wind isn’t blowing.
Wind farms turn the economics of energy markets upside down. Traditional power plants, like any other commodity, generate a product (power) that is sold in a market competing with other providers, and charging a price that is set balancing demand and supply.
However, wind farms, which are typically only economical in the first place due to significant government subsidies, which often include fixed tariffs (so much for the free market) actually rob the market of price signals when the wind blows. It can destroy the economics of electricity providers that need to stay in the market as backup for the 70 per cent of the time that the wind doesn’t blow.
Every country needs cheap and affordable electricity to build and sustain a modern economy and for its people to enjoy quality of life.
Australia has a population of almost 24 million people spread over 7 million square kilometres with an electricity demand more than 6 times that of Denmark, and no neighbouring country’s electricity to fall back on. Denmark offers no lessons for Australia other than “Don’t do this.”
Chris Berg in The Drum today wrote about the history of the Clean Energy Finance Corporation and its political genesis. The Abbott government was right to follow the lead of the United Kingdom and instruction to the Clean Energy Finance Corporation to no longer invest in wind or small-scale solar facilities.
Now, while the wind industry and its greentard-gamblers are ready to keep rolling the dice with our energy future, thankfully, the PM, Tony Abbott and his Vice-Squad, Treasurer “Smokin’” Joe Hockey and Mathias “The Terminator” Cormann have tipped the gaming tables and prevented the Clean Energy Finance Corporation from laying anymore high-risk bets, with taxpayers’ money. Here’s a little piece on the Vice-Squad’s raid.
There’s no ‘war on wind’, just MPs doing their job
14 July 2015
There are a lot of objectionable things in Australian politics, but Government ministers directing the Clean Energy Finance Corporation to stop funding new wind farm projects doesn’t rate, writes Chris Berg.
There was a lot of heat in the debate about the Clean Energy Finance Corporation over the weekend, but not much light.
On Sunday, Fairfax papers reported the Abbott Government had directed the CEFC to stop funding new wind farm projects.
Social media was livid. Tony Abbott was waging a “war on wind power”. How dare the Abbott Government presume to interfere with such a virtuous independent market program to tackle climate change?
That reaction was, to put it mildly, a load of nonsense. The Government’s direction to the CEFC is not unprecedented interference in an independent body. Nor is the CEFC a “market” mechanism. The CEFC is a government program whose funding policies are set by the executive.
Yes, the Coalition wants to abolish the CEFC outright. But it can’t. So the Government says it would rather the CEFC focus on funding innovation rather than established technology. There are a lot of objectionable things in Australian politics. This doesn’t rate.
The CEFC’s enabling legislation – which was written and introduced by the Gillard government and passed without Coalition support – allows the sitting government to do exactly what the Coalition is doing now. Asnoted in an explanatory memorandum authored by the Gillard government:
It is appropriate that the Government, as manager of the economy and owner of the Corporation, have a mechanism for articulating its broad expectations for how the Corporation’s funds will be invested and managed by the Board.
The memorandum specifically nominated “allocation of investments between different types of clean energy technologies” as one of the areas in which ministers might issue a direction.
What independence is provided by the CEFC Act is a requirement that ministerial directions not be contrary to the CEFC’s statutory obligations, and that ministers must not direct or prevent CEFC investments in specific companies. All fair enough.
With these provisions, the Gillard government gave itself the statutory leeway to direct the CEFC’s investment direction. If it didn’t want an Abbott Government to have the same leeway, it should have written the legislation differently. It knew the Coalition was opposed to the CEFC.
Anyway, that discretion is entirely proper. The CEFC is not an ethereal, non-political part of the Australian social fabric. It is the result of a four-year-old political compromise, designed to funnel money into one particular sector of the economy as part of the quid pro quo for theGreens’ carbon tax support.
So it’s a little bit silly to hear (as we did over the weekend) that by changing the CEFC’s mandate the Abbott Government is “picking winners”. That’s exactly what the CEFC was designed to do. The CEFC was designed to pick winners. It was designed to choose investments that it felt were not being adequately funded by open capital markets.
And the CEFC legislation already favours specific technologies. The body is not allowed to invest in carbon capture and storage or nuclear power. Nor can it invest in non-Australian projects. This last constraint seems a little peculiar if you think the CEFC’s ultimate goal is to reduce carbon emissions – a global, not a national, problem. But foreigners can’t vote.
Because it is not driven by the profit motive in a competitive market, the CEFC has to rely on non-market criteria on which to evaluate alternative investments. Right now that is done by these folk – the board of the CEFC. All the Abbott Government’s no-wind mandate does is constrain their criteria some more.
The idea that the CEFC is a “commercial” operation is nonsense. If it makes a profit consistently then it is a good candidate for privatisation. Why should the government own a profit-making financier? Why would it need to?
The CEFC got upset earlier this year when the Abbott Government asked it to lift its investment returns, asking it to “consistently outperform the market by a large margin”. But if the CEFC can’t beat the market with its government support, then the case for its continued existence is pretty weak.
Australia has a long history of government-owned banks like the CEFC – banks designed to push money into politically favoured sectors.
Who now remembers the Commonwealth Development Bank or the Australian Industry Development Corporation? Or the Commonwealth Bank’s Mortgage Bank Department and Industrial Finance Department? Or the joint public-private ventures of the Australian Resources Development Bank, the Primary Industry Bank of Australia, or the Australian Banks’ Export Refinance Corporation?
These banks were abolished or privatised because Australia came to recognise that markets allocate capital better than bureaucrats.
But it is almost inevitable that one day parliament will end the CEFC. Just as it ended all its other special development banks.