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Gotta Love Those Aussies…..Bringing the Wind Scam, to it’s Knees!

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Politicians & Business Finally Waking Up to the Massive Costs of the LRET

September 9, 2014 by 1 Comment

Sleep-deprived

In this post we highlighted the political distinction between the small scale renewable energy scheme (SRES) – which doles out subsidies for rooftop solar – and the Large-Scale RET (LRET) – upon which the debacle that is the wind industry depends.

While Greg Hunt and Ian “Macca” Macfarlane have been running around talking up ways of saving the RET – and their mates in the wind industry – STT hears that Tony Abbott is as determined as ever to kill the RET outright: no “grandfathering”, no “ifs”, no “buts”.

STT hears that – while Tony Abbott wants to kill both the SRES and LRET – the PM is ready to leave the SRES in place, in order to avoid a political bun-fight with the solar industry that has little upside and plenty of downside.

But the LRET is in a different class. Tony Abbott has made no secret of his desire to can the fans (see our posts here and here and here.) And his Treasurer, Joe Hockey and Finance Minister, Mathias Cormann are singing from the same hymn sheet when it comes to axing the RET and bringing the wind industry to a well-earned demise (see our posts hereand here and here). And – to the horror of the wind industry – this hard-hitting trio have emerged as Natural Born RET Killers (see our post here).

Now, after over 13 years of operation, Coalition MPs – including lightweights like young Greg Hunt and Ian “Macca” Macfarlane – have finally dusted off their copies of the Renewable Energy (Electricity) Act 2000 to learn, apparently for the first time, that the LRET contains a mighty sting in the tail.

The “sting” is the mandated shortfall charge of $65 per MWh which – under the current 41,000 GWh target – starts to impact from 2017. There is no way that the annual target set from 2017 (that escalates to 41,000 GWh in 2020, where it stays until 2031) will be met. Wind farm construction is almost at a standstill: “investment” in the construction of wind farms went from $2.69 billion in 2013 to a piddling $40 million this year (see this article).

And, from here on, no retailer is going to sign a Power Purchase Agreement with a wind power outfit; which means hopeful wind farm developers will never get the finance needed to build any new wind farms (see our post here).

In our earlier posts (here and here) we outlined the fact that – under the LRET – retailers are fined $65 per MWh for every MW they fall below the mandated annual targets – follow the links here and here.

With less than 23,000 GWh coming from renewable sources annually at present – and no likelihood of any significant wind power capacity being added between now and 2020 – Australia will fall short of the fixed target by a figure in the order of 18,000 GWh. When the target hits 41,000 GWh in 2020 – the fine will apply to that figure until 2031.

The fines paid by retailers will be collected by the Commonwealth and be directed into general revenue.

The cost of the fine compares with the average wholesale price of between $35-40 per MWh. Therefore, at a minimum, retailers will be paying $100-105 per MWh (the average wholesale price plus the fine). Retailers have already announced that they will simply recover the cost of the fine from their retail customers (see our posts here and here).

Retailers will add a margin to that in the order of 10% (or more) which means Australian power consumers will be paying upwards of $115 per MWh: 3 times the average wholesale price.

The Australian Energy Market Commission, EnergyAustralia and AGL have all united to declare that meeting the 41,000 GWh annual target will be impossible; and that, as a consequence, power punters will simply be lumbered with an enormous new electricity tax.

Given current renewable capacity of 23,000 GWh – under the legislation – the shortfall charge (fine) starts to bite from 2017.

Year Target GWh Shortfall GWh Penalty Cost
2017 27,200 4,200 $273 million
2018 31,800 8,800 $572 million
2019 36,400 13,400 $871 million
2020 41,000 18,000 $1.17 billion
    Total $2.886 billion

The mandatory RET continues until 2031; and the $65 per MWh fine with it. That means power consumers will be paying around $1.17 billion every year from 2020 until the RET expires in 2031. In addition to the $2.886 billion in fines added to power bills (up to and including 2020) – between 2021 and 2031 – fines of almost $12 billion will be issued to retailers, recovered from power consumers and the proceeds pocketed by the Commonwealth.

Remember that the policy justification for the insane cost of the mandatory RET is that it would: “encourage the additional generation of electricity from renewable sources”; and “reduce emissions of greenhouse gases in the electricity sector”; and “ensure that renewable energy sources are ecologically sustainable”.

On the scenario outlined above, the Federal government will collect close to $15 billion from power consumers by way of the shortfall charge levied on retailers. However, there will be: NO additional renewable energy; NO “break-through” on-demand renewable energy technologies; and NO reduction in CO2 emissions. An outrageous outcome, confirmed by Australian Energy Market Commission, EnergyAustralia and AGL (seeour post here).

Here’s the Australian Financial Review reporting on how the obscene cost and pointlessness of the LRET has just dawned on some of our political betters and business leaders.

Election power price surge fear forcing new clean energy plan
Australian Financial Review
Joanna Heath
8 September 2014

The fear of spiralling electricity prices around the time of the next federal election is driving the government to consider a deal with Labor on the Renewable Energy Target to avoid deadlock in the Senate.

A potential “third way” for the RET that would lower the 41,000-gigawatt-hour target but fix prices of renewable energy certificates is being actively considered as a way to match falling electricity demand but provide certainty to the industry, and provide a palatable option for Labor.

In an opinion piece published in The Australian Financial Review today Business Council of Australia chief executive Jennifer Westacott warns of “an effective $93 tax” that would be triggered under legislation if there were a political impasse on the RET.

“Under this circumstance community sympathy for the RET is likely to quickly dissipate and the pressure will come on the government to do more than just amend the existing scheme,” Ms Westacott writes.

“If people are really concerned about renewable energy then they should be encouraging an agreement across political parties so as to guarantee a moderate amount of future investment, while reducing the cost burden on consumers.”

Without the support of Labor, the government must rely on the Palmer United Party to pass any changes to the RET through the Senate, something leader Clive Palmer has vowed it will not do.

According to Bloomberg New Energy Finance modelling, if this political impasse were not resolved by 2015, so-called “penalty” prices within the RET would be triggered which the government fears would drive up retail power prices in about eighteen months’ time.

Industry minister Ian Macfarlane is understood to be using this pre-election nightmare scenario to build support for finding a compromise position that could be taken to Labor.

One coalition party source said the penalty scenario was “a nasty train wreck waiting to happen” which will focus minds on finding a solution.

“There is potentially some room to come to an arrangement,” the source said.

Senior Labor sources said the party’s default position was not to allow any changes to the RET, but a sensible approach from the government could open doors.

“We need to see quite what their bona fides are before we were to sit down with them,” a source said.

“We’ve always taken the view that a bipartisan policy around renewables is the only way to guarantee strong levels of investment. So if there was a way to restore that . . . it’s a question of how far off the reservation they have wandered.”

New analysis published by Bloomberg on Monday estimates a continued political impasse on the RET would freeze investment until 2016, which would mean renewable energy production would start to fall short of its target around 2018.

In this scenario, renewable energy certificates would surge to a legislated “penalty” price of about $93/MWh, compared to the current price of around $20.

Market anticipation of that scenario could drive up prices far earlier, however, creating political tensions around the next election.

Bloomberg analyst Kobad Bhavnagri described this as the “worst case outcome for consumers”.

“To prevent this outcome, the political uncertainty will need to be resolved by 2015, or early 2016 at the latest,” Mr Bhavnagri writes.

No approaches have yet been made by the government to Labor over a potential compromise, with the coalition party room expected to meet first to decide on a position.

Lowering the target but fixing certificate prices is an option that it is hoped would address industry concerns by providing some investor certainty.

But accepting it would mean ignoring the two key recommendations of the Warburton review to either close the large-scale RET to new entrants or scale the target back to 50 per cent of new demand every year. It would also require several influential members of cabinet – including the Prime Minister and Treasurer – to soften their position on keeping the RET.

The search for a bipartisan deal is not likely to be helped by the renewable energy lobby, who are refusing to budge from their opposition to any change in the target.

“We don’t think there is any rationale whatsoever for changing the policy. While we’re always open to talking at the end of the day we certainly don’t have a proposal on the table worthy of any meaningful discussion,” Clean Energy Council chief executive Kane Thornton said.

Mr Thornton also cast doubt on the viability of the floated “third way” option, arguing fixing certificate prices was a highly interventionist, anti-market approach.

“There are a whole lot more questions than answers.”

The Solar Council is continuing to rev up its campaign against the Warburton review recommendation to scrap the small-scale renewable energy target.

Its “Save Solar” campaign in marginal coalition electorates is gaining some traction, according to government insiders, and political impetus to attack solar is waning.

In coming weeks the Solar Council will launch advertisements on commercial television in Victoria and Queensland with the tagline “don’t vote for anyone who will cut the renewable energy target”.

Solar Council chief executive John Grimes said his organisation was not interested in compromise.

“The government is rattled, backbenchers are nervous, they understand solar is enormously popular in the electorates. I think our pointed marginal seat campaigns have been working,” Mr Grimes said.

“[The advertisements are] a big escalation in the campaign. We are furious about the way the government has handled the entire thing.”

According to the Bloomberg modelling, however, solar would be less badly affected in the long term by an abolition of the small-scale RET than larger projects would be under changes proposed to the large-scale RET.

“Our residential and commercial market modelling suggests that the total amount of behind-the-metre solar capacity installed by 2030 will vary only slightly in response to policy decisions stemming from the current review,” the report reads.
Australian Financial Review

You’ve just got to love the Clean Energy Council and the irony dripping from Kane Thornton’s statement that: “fixing certificate prices was a highly interventionist, anti-market approach”.

It seems irony is a subtlety lost on the wind industry and its highly paid spruikers; neither of which would exist in the absence of the mandatory RET: which the more economically literate might point out is easily the most “highly interventionist, anti-market approach” developed since Jo Stalin decided to help himself to the Kulaks’ grain and “collectivize” their farms.

Apparently, setting up legislation that threatens to whack retailers with $billions in penalties for not purchasing wind power in order to make them enter PPAs with wind power outfits, so as to purchase $billions worth of RECs and avoid the penalty, is not “interventionist” or “anti-market”?

And we pause to notice the CEC’s uncompromising, all-or-nothing approach to changing the 41,000 GWh target set by the LRET. With Tony Abbott sharpening his axe, we think it a little like keeping the band playing as the Titantic started to founder: a noble gesture, despite the inevitable outcome.

The gripes from John Grimes will soon die down as Tony Abbott makes plain the Coalition’s plan to leave the SRES alone; thereby avoiding a fight over the solar panels that mums and dads are dying to own; and Grime’s clients are itching to install.

But expect the wind industry’s whining to continue unabated, as its merry band of rent seekers watch their lives flash before their eyes.

Here’s the opinion piece by Jennifer Westacott referred to above.

Take the third path on renewable energy target
Australian Financial Review
Jennifer Westacott
8 September 2014

Reaching the original RE target now presents considerable political risks. So why not cut it to a true 20 per cent?

When circumstances and the evidence changes, policies too need to change. This is the case with the Renewable Energy Target (RET) scheme.

The RET was meant to ensure 20 per cent of our energy supply comes from renewable sources, but because it was not designed to be adjusted if demand for energy falls – as it has – it now accounts for almost 30 per cent of energy supplies.

The best outcome for the community, business and the renewable energy industry would be bipartisan support for a form of a true 20 per cent RET that doesn’t risk falling short of its megawatt target at a huge cost to consumers.

The risk is that while reaching the existing megawatt target might be technically possible, it is unlikely to be commercially possible.

The commercial risks in the electricity and renewable energy certificate market are just too great to pull through large-scale renewable energy (predominately wind) investments in the coming years.

First, the price of renewable energy certificates is suppressed to a point which is too low to finance new wind projects due to an oversupply of certificates that are expected to hang in the market until 2017.

Second, because of the decline in energy demand, the wholesale price of electricity is suppressed which isn’t conducive to attracting further investment in any form of energy generation.

Third, because of the lack of bipartisan support on the design of the RET, it makes it very difficult for any investor to allay the commercial risks of regulatory change.

Even after 2017, once the oversupply of certificates is eventually soaked up by the market, it leaves only three years to build a massive amount of wind energy, some 8000 megawatts (MW) in three years.

This compares to 3800 MW of wind energy that the RET, in its various guises, has pulled through over the past 13 years.

To deliver wind on this scale and this quickly would require shorter community consultation on proposed wind farms than has historically occurred and would likely lead to added cost pressures as projects compete for limited resources.

Add all these risks together and it presents a grim investment environment – a market frozen until there is political consensus on the policy of the RET.

Certificate oversupply problem

What is becoming clear is that unless all parties to this debate are willing to compromise, investment in wind will be stymied, creating the risk of higher electricity prices for consumers. This is because, without new wind investment, the price of certificates will spike.

What is not well understood is that if the certificate price hits the level of what is called the penalty price, electricity consumers will be paying an effective $93 tax with no additional investment in renewable energy.

Under this circumstance, community sympathy for the RET is likely to quickly dissipate and the pressure will come on the government to do more than just amend the existing scheme.

What needs to be recognised is that unwavering support for the existing target will not lead to greater wind investment unless the current issue of certificate oversupply is dealt with and there is a stable and bipartisan policy and investment environment.

If people are really concerned about renewable energy then they should be encouraging an agreement across political parties so as to guarantee a moderate amount of future investment, while reducing the cost burden on consumers.

The fact remains that the RET is an expensive way of reducing Australia’s greenhouse gas emissions.

According to the government’s own modelling by ACIL Allen Consulting, the cost of reducing emissions under the RET is estimated to be between $35 and $68 per tonne – which is significantly more expensive than the uncompetitively high $23 carbon tax.

Saving the furniture on a second-best policy tool to reduce emissions, such as the existing flawed design of the RET, will not create an environment for bipartisanship on climate change policy – it will just push up prices. Instead we are better to have a well-designed market mechanism that reduces emissions on a least-cost basis that does not add to the oversupply in our electricity markets.

All sides of politics need to recognise the consequences of sticking with the existing RET, and seek out the middle ground on a form of a true 20 per cent RET that minimises the risk of higher costs being lumped on consumers.

Jennifer Westacott is chief executive of the Business Council of Australia.
Australian Financial Review

STT is very keen to see the evidence on which Jennifer bases her “wonderful” claim that wind power reduces CO2 emissions in the electricity sector. No doubt, WA Senator Chris Back would be keen to see it too (see our post here).

Jennifer gets 10/10 for identifying “that if the certificate price hits the level of what is called the penalty price, electricity consumers will be paying an effective $93 tax with no additional investment in renewable energy”. It’s a point STT has made once or twice, but has been lost on our political betters, business leaders and commentators, until now (see above and our posts here and here and here).

Jennifer’s figure of $93 for RECs is based on the shortfall charge of $65 per MWh. As the shortfall charge is not a deductible business expense (it is treated as a fine), the effective pre-tax penalty is therefore $92.86/REC ($65/(1-30%), assuming a 30% marginal tax rate.

However, Jennifer gets an “F” for her “third way” argument, which is a little like Goldilocks breaking into houses to look for porridge at just the right temperature.

Setting up a “true 20%” target begs the question: “20% of what?” With spiralling power prices driving minerals processors to the wall and manufacturers offshore, demand for power will continue to fall (see our posts here and here). The AEMO demand forecasts (on which the current target was set) have been woefully inaccurate, so far. So just when does Jennifer suggest we should lock-in this “true 20%” target? Now, say? Or in 2020, when our vision will be 20/20?

And just what does Jennifer propose as a solution to the “problem” of an oversupply of RECs? Government “intervention” in the REC market, perhaps?

To STT, Jennifer’s magical “third way” simply sounds like more of the “highly interventionist, anti-market approach” (which gave us the RET in the first place) of the kind that Jo Stalin loved and that the CEC now purports to loathe.

The LRET is simply unsustainable – even with magical “third way” approaches. Any policy that is unsustainable will fail under its own steam; or its creators will be forced to scrap it. It’s a matter of when; not if.

abbott, hockey, cormann

Investing in the Wind Turbine Scam, is a Risky Business!

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Australia’s wind turbines may stop spinning as banks foreclose

By on 1 September 2014
 

Australian analysts have warned that some of the country’s wind farms could be forced to close down under proposals made by the Abbott government’s RET Review panel.

Insiders are aghast at the assumptions made by the panel about the possibility of closing the scheme to new entrants and providing “grandfathering” arrangements for existing assets.

They say the proposals – and the assumption that LGCs, the certificates that are the currency of the scheme – will hold value are flawed, and the panel has not considered the basic refinancing risks of all projects under any scenario.

“I’m amazed at how flawed this document is,” said one close observer. “It is internally inconsistent, it is intellectually flawed … and it doesn’t even try to cover up its bias. It is 160 pages of self-serving logic.”

Another noted that almost every wind farm in the country will be up for refinancing for next 3 years. “They will be in major financial distress, and they are all at risk of falling over.”

While wind farms in Australia can have long term power purchase agreements out to 2030, the financing arrangements are much shorter, usually around 5 years.

This means that most, if not all, wind farms, will be up for refinancing in the next few years. When that happens, the major banks will review the state of the market, and are either likely to raise the price of debt, or do an “equity sweep” – calling on project owners to invest more cash.

None are likely to do so.

And in some cases – because the value of the LGCs will be effectively zero – as Bloomberg New Energy Finance has pointed out – and the price of wholesale electricity has fallen due to the removal of the carbon price and over-capacity brought about by the construction of thousands of megawatts of gas-fired generation – many wind farms will struggle to make debt obligations under current terms.

In its report, BNEF warned that a “whole host of Australian and foreign companies and lenders could be exposed to asset impairments, and almost all will suffer significant write-downs in the mark-to-market value of their investments.”

This dire situation was confirmed last week by Infigen Energy, which warned of potential bankruptcieslast week (an extraordinary enough statement for a listed company). Infigen Energy head Miles George – who doubles as the chair of the Clean Energy Council – warned that many other companies are in a similar situation.

Those wind farms on merchant contracts are most at risk, but even those with PPAs have clauses which allow bankers to review the financing arrangements.

Analysts suggest that Australian banks will be mortified when they understand the full implications of the review panel’s recommendations.

“Every time there is a refinancing, banks redo the base case model for the project. As the situation gets worse – with a lower LGC price – they will have to squeeze all of their parameters to make sure they get repaid,” one said.

“When they pull all those levers – a shorter amortisation period, a higher debt-equity ratio, then the equity holders are going to have to tip in additional capital to keep the projects going. The project owners are not in position to do that.

“And if the equity holders start falling over, banks might be left with wind farms to run and operate. But there will be no real market left, and no real market value in those projects. It may be that they have to turn them (the wind turbines) off.”

Even the other scenario recommended by the RET Review panel – that of downgrading the target from its current level of 41,000GWh to a “real” 20 per cent target of around 25,000GWh with targets set annually, would not be practical.

Analysts warn that there would unlikely be any new entrants because of the price uncertainty with rolling targets and – as a result – the higher cost of capital.  It is highly unlikely that any Australian bank would provide debt finance in these circumstances.

All of Australia’s big four banks are at risk, but particularly NAB and ANZ, who have project financed most wind farms in Australia.

bnef debt

People of Oklahoma to Fight the Wind Industry….In Courts of Law!!!

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Oklahomans Launch Pre-Emptive Legal Action to Prevent Wind Farm Construction

August 30, 2014 by

For most non-Okies, their appreciation of the glories of life on the great prairies of Oklahoma comes from Gordon Macrae (as Curly) – bathed in “a bright golden haze on the meadow” and crooning from a fine looking mount about what was clearly a very “beautiful morning”.

While Curly waxed lyrically about seeing stratospheric corn, his profound sensory enjoyment included being able to hear nature at its untrammelled best, in a place where “all the sounds of the earth are like music”.

Well, they used to be.

Oklahoma hasn’t escaped America’s great wind power fraud: turbines have sprung up like mushrooms all over the, once tranquil, State. And, like everywhere else, the locals are fighting back.

Not content to let wind power outfits turn their beautiful mornings into sonic torture events, a group of Oklahomans have just launched court action, seeking an injunction to prevent 300 giant fans from being speared into their peaceful patch of prairie paradise.

The action, filed by 6 plaintiffs, is being pursued in “nuisance”: the common law right attached to property to be able to enjoy it free from any unreasonable interference from the activities of neighbours, which includes unreasonable interference from noise – particularly where the noise in question interferes with sleep (see our post here).

The plaintiffs’ claim (available here) sets out the nature of their action as:

This action seeks to enjoin Defendants from creating a nuisance that will cause unreasonable inconvenience, interference, annoyance, adverse health effects, and loss of use and value of each Plaintiff and class member’s property.

Where the plaintiffs say they are seeking to “enjoin Defendants” they mean that they are asking the court for an injunction preventing the developers from constructing the turbines proposed.

The plaintiffs face the prospect of being left with properties that are worth a fraction of what they would be without turbines as neighbours – and ending up with homes that are uninhabitable due to incessant turbine generated low-frequency noise and infrasound (see our post here). So, their planning authorities having failed them, it’s off to court.

Here’s a run down on the plaintiffs’ action from the Oklahoma Wind Action Association.

Oklahoma citizens file class action lawsuit against wind energy companies
Oklahoma Wind Action Association
27 August 2014

Seeking reasonable placement of wind farms to protect health of nearby residents.

Citizens of Canadian and Kingfisher counties filed a class action lawsuit in United States District Court for the Western District of Oklahoma today to prohibit the placement of wind turbines that will harm residents.

After exhausting all local and state legislative and government resources, members of the lawsuit are seeking protection from adverse health effects, and loss of use and value of their property, by requiring wind turbines be placed a safe distance from their homes.

There are multiple wind farms planned for Kingfisher and Canadian counties consisting of more than 300 industrial wind turbines. From plaintiff Julie Harris’ land, there are 47 turbines targeted near her home with the closest planned less than one-half mile from her property. The turbines are almost 500 feet tall, equivalent to approximately five-eighths (5/8) the size of Devon Tower in downtown Oklahoma City, Okla.

“Despite working tirelessly with local officials and the wind company to request a reasonable setback of wind turbines from our property, our only recourse now is litigation,” said Terra Walker, a plaintiff and property owner in Okarche, Okla. “There are real health concerns when turbines are placed too close to homes. This is about requiring safe setbacks to protect the health and safety of our families.”

The plaintiffs are concerned about health impacts and interference in the use and enjoyment of their land. In the complaint, the plaintiffs note that wind turbines emit infra and low frequency sounds that are inaudible to the human ear, but have a long history of causing adverse effects to the human body and mind, including sleep loss, increased stress and cardiac issues. The plaintiffs are also concerned about how noise and shadow flicker emitted from rotating blades deteriorates the ability — in both children and adults — to properly think, remember, or concentrate.

“The wind farms located next to our house have ruined our health and property,” said Tammy and Rick Huffstutlar, living outside of Calumet, Okla. and in the middle of the Canadian Hills Wind Farm.

The Huffstutlars live adjacent to wind turbines and experience significant shadow flicker, noise and disruptions in air pressure, resulting in a worsening heart condition, severe headaches, and lack of sleep.

“Industrial wind energy in Oklahoma is unregulated, allowing companies to build wind farms wherever they can make deals with landowners without any required notice to those impacted,” said Brent Robinson, Oklahoma Wind Action Association (OWAA) president. “Research shows a negative impact to health for people within three miles of a turbine. Therefore, we believe a three-mile setback from property lines is necessary to protect our families.”

OWAA, along with other Oklahoma organizations such as Oklahoma Property Rights Association and Wind Waste, are combining forces to advocate for sensible laws to protect people and oversee future development in Oklahoma. The non-profit associations are concerned about the long-term impact this unregulated industry will have on property owners, and are fighting for oversight to ensure turbines are appropriately placed, operated safely, well-maintained and there is adequate funding to remove abandoned wind farms.

The plaintiffs in the lawsuit are Terra Walker, Cheyenne Ward, Julie Harris, Janelle Grellner, Elise Kochenower, Karri Parson, Cindy Shelley, and Oklahoma Wind Action Association. The defendants are APEX Wind Construction, LLC, APEX Clean Energy, Inc., APEX Clean Energy Holdings, LLC, Kingfisher Wind, LLC, Kingfisher Wind Land Holdings, LLC, Campbell Creek Wind, LLC, and Campbell Creek Wind Transmission, LLC.

Oklahoma Wind Action Association was founded in February 2014 to protect its members from negative affects of industrial wind turbines. The organization serves more than 150 citizens in Canadian and Kingfisher counties.
Oklahoma Wind Action Association
27 August 2014

Curly & Laurey

People of Oklahoma to Fight the Wind Industry….In Courts of Law!!!

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Oklahomans Launch Pre-Emptive Legal Action to Prevent Wind Farm Construction

August 30, 2014 by

For most non-Okies, their appreciation of the glories of life on the great prairies of Oklahoma comes from Gordon Macrae (as Curly) – bathed in “a bright golden haze on the meadow” and crooning from a fine looking mount about what was clearly a very “beautiful morning”.

While Curly waxed lyrically about seeing stratospheric corn, his profound sensory enjoyment included being able to hear nature at its untrammelled best, in a place where “all the sounds of the earth are like music”.

Well, they used to be.

Oklahoma hasn’t escaped America’s great wind power fraud: turbines have sprung up like mushrooms all over the, once tranquil, State. And, like everywhere else, the locals are fighting back.

Not content to let wind power outfits turn their beautiful mornings into sonic torture events, a group of Oklahomans have just launched court action, seeking an injunction to prevent 300 giant fans from being speared into their peaceful patch of prairie paradise.

The action, filed by 6 plaintiffs, is being pursued in “nuisance”: the common law right attached to property to be able to enjoy it free from any unreasonable interference from the activities of neighbours, which includes unreasonable interference from noise – particularly where the noise in question interferes with sleep (see our post here).

The plaintiffs’ claim (available here) sets out the nature of their action as:

This action seeks to enjoin Defendants from creating a nuisance that will cause unreasonable inconvenience, interference, annoyance, adverse health effects, and loss of use and value of each Plaintiff and class member’s property.

Where the plaintiffs say they are seeking to “enjoin Defendants” they mean that they are asking the court for an injunction preventing the developers from constructing the turbines proposed.

The plaintiffs face the prospect of being left with properties that are worth a fraction of what they would be without turbines as neighbours – and ending up with homes that are uninhabitable due to incessant turbine generated low-frequency noise and infrasound (see our post here). So, their planning authorities having failed them, it’s off to court.

Here’s a run down on the plaintiffs’ action from the Oklahoma Wind Action Association.

Oklahoma citizens file class action lawsuit against wind energy companies
Oklahoma Wind Action Association
27 August 2014

Seeking reasonable placement of wind farms to protect health of nearby residents.

Citizens of Canadian and Kingfisher counties filed a class action lawsuit in United States District Court for the Western District of Oklahoma today to prohibit the placement of wind turbines that will harm residents.

After exhausting all local and state legislative and government resources, members of the lawsuit are seeking protection from adverse health effects, and loss of use and value of their property, by requiring wind turbines be placed a safe distance from their homes.

There are multiple wind farms planned for Kingfisher and Canadian counties consisting of more than 300 industrial wind turbines. From plaintiff Julie Harris’ land, there are 47 turbines targeted near her home with the closest planned less than one-half mile from her property. The turbines are almost 500 feet tall, equivalent to approximately five-eighths (5/8) the size of Devon Tower in downtown Oklahoma City, Okla.

“Despite working tirelessly with local officials and the wind company to request a reasonable setback of wind turbines from our property, our only recourse now is litigation,” said Terra Walker, a plaintiff and property owner in Okarche, Okla. “There are real health concerns when turbines are placed too close to homes. This is about requiring safe setbacks to protect the health and safety of our families.”

The plaintiffs are concerned about health impacts and interference in the use and enjoyment of their land. In the complaint, the plaintiffs note that wind turbines emit infra and low frequency sounds that are inaudible to the human ear, but have a long history of causing adverse effects to the human body and mind, including sleep loss, increased stress and cardiac issues. The plaintiffs are also concerned about how noise and shadow flicker emitted from rotating blades deteriorates the ability — in both children and adults — to properly think, remember, or concentrate.

“The wind farms located next to our house have ruined our health and property,” said Tammy and Rick Huffstutlar, living outside of Calumet, Okla. and in the middle of the Canadian Hills Wind Farm.

The Huffstutlars live adjacent to wind turbines and experience significant shadow flicker, noise and disruptions in air pressure, resulting in a worsening heart condition, severe headaches, and lack of sleep.

“Industrial wind energy in Oklahoma is unregulated, allowing companies to build wind farms wherever they can make deals with landowners without any required notice to those impacted,” said Brent Robinson, Oklahoma Wind Action Association (OWAA) president. “Research shows a negative impact to health for people within three miles of a turbine. Therefore, we believe a three-mile setback from property lines is necessary to protect our families.”

OWAA, along with other Oklahoma organizations such as Oklahoma Property Rights Association and Wind Waste, are combining forces to advocate for sensible laws to protect people and oversee future development in Oklahoma. The non-profit associations are concerned about the long-term impact this unregulated industry will have on property owners, and are fighting for oversight to ensure turbines are appropriately placed, operated safely, well-maintained and there is adequate funding to remove abandoned wind farms.

The plaintiffs in the lawsuit are Terra Walker, Cheyenne Ward, Julie Harris, Janelle Grellner, Elise Kochenower, Karri Parson, Cindy Shelley, and Oklahoma Wind Action Association. The defendants are APEX Wind Construction, LLC, APEX Clean Energy, Inc., APEX Clean Energy Holdings, LLC, Kingfisher Wind, LLC, Kingfisher Wind Land Holdings, LLC, Campbell Creek Wind, LLC, and Campbell Creek Wind Transmission, LLC.

Oklahoma Wind Action Association was founded in February 2014 to protect its members from negative affects of industrial wind turbines. The organization serves more than 150 citizens in Canadian and Kingfisher counties.
Oklahoma Wind Action Association
27 August 2014

Curly & Laurey

SSE and Centrica have Cancelled Economically Unfeasible Big Wind Projects! Check this out!

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Funding boost will help fuel SSE joint venture

Thursday 28 August 2014
 

A JOINT venture between energy giant SSE and Intelligent Energy which is developing technology to change the way domestic energy is generated and consumed has received £800,000 in fresh funding.

 

Bellshill-based IE-CHP will use the latest funds from its backers, which also include the Scottish Investment Bank, to develop its mini power station or smart power unit prototype.

It says the fuel cell technology, which works alongside existing heating systems, has the potential to reduce the fuel bills of millions of home owners.

The technology takes mains gas and converts it into hydrogen, which is then fed into a hydrogen fuel cell stack. The cell then acts like a mini power station by converting the hydrogen into low-cost electrical power and heat, which can be used in the home.

IE-CHP technical director Mark Bugler, who hopes to start rolling out the technology in 18 months, said the latest funds will allow it “to finish some of the development work we are doing”.

He noted: “We’ve got some political lobbying to do to get a fuller understanding really of the potential for fuel cells. Certainly on the technology side, it [the funding] helps.

“This is really the start of the journey to get the whole of the UK excited about the potential for what ultimately is the best form of using a gas in a chemical process, rather than burning it.”

The funding boost, which takes the total raised by IE-CHP to £5 million, coincides with research suggesting the installation of millions of mini power stations could transform the UK power market.

A report by Ecuity, the energy analyst, claimed the roll out of five million fuel cell smart power units across the UK by 2030 would generate annual energy bill savings of £1000 for five million consumers.

It is understood smart units are significantly more efficient than power stations, where energy is lost through production and transmission. More than 80,000 smart power units have been installed in Japan, which plans to roll out 5.3 million by 2030 as it replaces nuclear power with fuel cells.

Mr Bugler said: “We see this as part of the UK energy mix for the future. At the moment you have got centralised power stations, which generate electricity at less than 50 per cent efficiency.

“By decentralising power and putting power stations at the homes, rather than centrally in the country, you avoid all the emissions plus all the losses and extra cost of upgrading and maintaining the network.”

He added: “SSE and Centrica have announced cancellation of their big wind farms because the economics don’t stack up. There will have to be some other low carbon technology which replaces that. We think fuel cells is probably that technology.”

Spain’s Failed Green Energy Experiment….Another Case Study from Institute for Energy Research

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Spain’s Green Energy Experiment

AUGUST 27, 2014

The Institute for Energy Research released today a case study on Spain’s failed green energy policies. This is the second entry in a series of case studies on Europe’s green energy disaster (click here to read IER’s case study on Germany).

For years, President Obama has pointed to Europe’s energy policies as an example that the United States should follow. However, those policies have been disastrous for countries like Spain, where electricity prices have skyrocketed, unemployment is over 25 percent, and youth unemployment is over 50 percent. 

IER’s study found:

  • In 2000, Spain began a new program to subsidize renewable energy with the passage of its “Promotion Plan for Renewable Energies.”
  • Spain’s feed-in tariffs have created a “rate deficit” amounting to $41 billion (about $850 per person).
  • In 2011, Spain’s domestic electricity prices (including taxes) amounted to 29.46 U.S. ¢/kilowatt-hour (kWh), nearly 2.5 times more than U.S. prices.
  • Spain’s electricity prices increased by 92 percent from 2005 to 2011.
  • Rising energy costs hit low-income Spaniards the hardest–driving them into energy poverty
  • Despite myriad renewable subsidies and mandates, Spain’s CO2 emissions increased by 34.5% from 1994-2011.

Click here to read the full case study.

Click here to read IER’s previous study on Spain by Dr. Gabriel Calzada Alvarez.

The Good People of Maine have made Radio Commercials to Educate the Public about Wind Turbines!

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Listen to Saving Maine’s first three radio commercials exposing wind power in Maine

Click right here and turn your speakers on. These spots are being aired as part of Saving Maine’s continuing advertising effort to counter the wind propaganda spewed by the wind industry and their sock puppets at Maine’s so called environmental groups who have sold out the people of Maine.

 
Click here and then click on each of the three :60 radio spots.
http://savingmaine.org/
 
 
1. “Goodbye Saddleback” — SAVING MAINE

1:01
2. “Poor Wind” — SAVING MAINE

1:01
3. “Power Exporter” — SAVING MAIN
 
Wind power sailed into Maine on a free pass and has survived thus far based on cheer leading from the Baldacci administration which in 2008 pushed through a law written by and for the wind industry. That law, which completely stacked the deck against ordinary Mainers, will be changed and advertising will speed up the process. For the first time, through the power of paid advertising, large numbers of Mainers are learning the other side of the wind story – paid for by their fellow Mainers.
 
These wind companies are on the ropes. It is time to put them away. So make sure we keep the pressure on by clicking the DONATE button at http://savingmaine.org/ Even a small amount will add up so go ahead and click that button and ask everyone you know to do the same. Please do this today.
 
The following is from a wind industry consultant and it speaks volumes about the importance of getting our message out:
  
 
 

During the webinar, Justin Rolfe-Redding, a doctoral student from the Center for Climate Change Communication at George Mason University, discussed ways for wind-energy proponents to get their message out to the public.Rolfe-Redding said that polling data showed that “after reading arguments for and against wind, wind lost support.” He went on to say that concerns about wind energy’s cost and its effect on property values “crowded out climate change” among those surveyed.

 

The most astounding thing to come out of Rolfe-Redding’s mouth — and yes, I heard him say it myself — was this: “The things people are educated about are a real deficit for us.” After the briefings on the pros and cons of wind, said Rolfe-Redding, “enthusiasm decreased for wind. That’s a troubling finding.” 

When Will All Governments Follow the Aussies lead? Not soon enough!

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Australian Wind Industry Doomed: Tony Abbott Signals the End of the Mandatory RET

August 27, 2014 by  

wind_turbine_fire

STT followers have been delighted with news that Tony Abbott, Joe Hockey and Mathias Cormann have teamed up to axe the mandatory RET (see our post here).

In response to the PM’s mooted plan, the wind industry and its parasites have been reduced to making idle threats of “revenge” and bleating about “sovereign risk”. Despite a rear-guard effort by Environment Minister, Greg Hunt to salvage something of the mandatory RET, his boss has confirmed that his mission is to kill it outright. And that pretty much means the end of the wind industry as we’ve known and grown to despise it. Here’s the Australian Financial Review on the beginning of the end.

Coalition fails to budge on RET pruning
Australian Financial Review
Phillip Coorey
26 August 2014

Pleas by solar and wind companies to leave the Renewable Energy Target untouched have fallen on deaf ears with the government deciding to proceed with a phasing down of the scheme.

While a final position will not be announced until next month, The Australian Financial Review understands the intent is to cut the scheme harder than a compromise scenario that was being pursued by the Environment Minister, Greg Hunt.

The end result will be closer to the abolition scenario advocated by Prime Minister Tony Abbott which would end the scheme by closing it to new entrants and grandfathering existing large scale projects.

Seeking to overcome the cabinet split, Mr Hunt, Mr Abbott and Industry Minister Ian Macfarlane met on Sunday to discuss a policy position to be put to the bureaucracy for analysis and then to the cabinet for a final decision.

The government is being guided by the findings of the review into the RET conducted by businessman Dick Warburton, a person the industry has argued is ill-suited to the task because he is a climate-change sceptic.

The guiding principles of the final decision will be to balance investor risk with the impact of the RET on household and business power bills. Mr Abbott claims the RET has had a significant impact on power prices. The government’s own modelling shows while the RET has added $40 a year to average household power bill, prices will fall over the medium term as more renewable energy is produced.

The industry is ramping up its warnings that any dilution of the current scheme will not only jeopardise more than $11 billion in the renewable energy investment pipeline, but create a broader sovereign risk perception for Australia.

Close watch on outcome

Philip Green, the London-based partner of the Children’s Investment Master Fund (TCI), which has a 33 per cent stake in renewable energy company Infigen, said the issue was being watched closely. “Sovereign risk has already increased in Australia given the media coverage of the carbon debate and now the RET. Sovereign risk will increase more if the stories about cuts to the RET are confirmed,” he said in a statement.

“This comes at a cost to the nation through higher capital costs as it seeks future investment in infrastructure. The Australian RET had strong bi-partisan political support [including from the current prime minister]. It can take a long time to restore trust and in some cases this is only achieved with a change in leadership/policy/party.”

Under the RET, a policy which hitherto had bipartisan support, 20 per cent of Australian’s energy production by 2020 would come from renewable sources. Based on earlier predictions of power production in 2020, this 20 per cent target was calculated at an annual production of 41,000 gigawatt hours.

But the 2020 production total has been downgraded following the decline of the manufacturing sector, including automotive and aluminium.

Consequently, 20 per cent of the revised production target is 27,000 GWh. This is the “real 20 per cent” scenario for which Mr Hunt is advocating.

Under the push by Mr Abbott, renewable energy output would be frozen at current levels of about 16,000 GWh.

Any proposed change faces a near impossible passage through the Parliament with Labor and the Greens opposed to any alteration, while Clive Palmer says he will not allow any change unless Mr Abbott goes to the next election in 2016 and wins a mandate.
Australian Financial Review

dick-warburton

STT thinks the constant reference to Dick Warburton as a “climate-change sceptic” is just churlish bitterness from the vanquished. From STT’s viewpoint, Dick did precisely what he was supposed to do: standing up for Australian power consumers and helping to bring an end to the most costly and pointless piece of policy ever devised.

And, yet again, the wind industry – and those with shirts to lose when it collapses – trot out the furhpy about “sovereign risk”. Not only is it utter bunkum (see our posts here and here and here and here), harping on about it won’t save the wind industry from the inevitable demolition of the mandatory RET.

The AFR talks about Australia risking “$11 billion in the renewable energy investment pipeline” as if that were some kind of loss to Australian power consumers, in an already over-supplied market. As we’ve previously pointed out, the threatened “investment” is hardly a “no-strings attached-gift”. The would be investors are after annual gross returns in the order of 20% on that figure – ie, a cool $2.2 billion, every year – which can only be recouped from power consumers through higher power bills – with a fat pile of RECs underwriting the “investment” (see our post here).

As a piece of friendly advice, we wouldn’t be betting the house on Clive Palmer blocking any changes to the RET in the Senate. Horse trading is the life-blood of politics; and a week can be a very long time for anyone engaged in the political caper. As you’d expect, STT hears that Tony Abbott is already doing business with the Senate’s cross-benchers, including the PUP in order to come up with a workable solution to the debacle that is the mandatory RET, which has utterly failed as a cost-effective CO2 abatement policy.

Clive Palmer wants an Emissions Trading Scheme (albeit with the price of credits set at zero). So the Coalition’s Direct Action policy is being reworked by top energy market economist, Danny Price in a manner that will not only resemble something like what Clive is after, but in a way that will slash the value of the subsidies to wind power outfits (as promised by the RET) by around 90%. One of the cross-benchers, Nick Xenophon – who works closely with Danny Price – is in on the mission to kill off the wind industry, by introducing some tweaks of his own to Coalition policy, aimed at achieving least-cost CO2 abatement (see our posts here andhere). Another cross-bencher, David Leyonhjelm penned a piece for The Australian today (we’ll cover it shortly) setting out his eagerness to kill the mandatory RET, which he sees as “just government mandated corporate welfare” that will cost power consumers $billions “for no measurable environmental benefit”. No, STT didn’t write David’s article.

But, in the result, whether or not changes to the mandatory RET occur during the life of this parliament is a matter of passing academic interest. The wind industry is doomed simply because – from here on – NO retailer in touch with their earthly senses will enter a long-term Power Purchase Agreement with a wind power outfit – which means that those desperados still hoping to build wind farms will never obtain the finance needed to do so. Moreover, the REC price is bound to head south over the coming weeks and months, placing outfits with current wind farm operations in mortal financial jeopardy.

One of those facing an early exit from the stage is our old favourite, Infigen. These boys have just announced an $8.9 million loss for 2013/14, which follows a $55 million loss in 2011/12 and an $80 million loss for 2012/13 (see our posts here and here). Those hefty losses were all racked up at a time when the mandatory RET was set in stone, such that the regulatory cards were all firmly stacked in Infigen’s favour.

With the mandatory RET set for the chop, Infigen is preparing to emulate its predecessor (Babcock & Brown) with another spectacular financial collapse. Here’s the Australian Financial Review setting the scene for Babcock & Brown Mk II.

Infigen at risk if RET wound up
Australian Financial Review
Angela Macdonald-Smith
26 August 2014

Wind power producer Infigen Energy has warned it could fall into breach of its debt covenants within three months should the 2020 Renewable Energy Target be wound back with no compensation for affected investors.

Managing director Miles George said either of the two outcomes apparently being favoured by the government for the overhaul of the RET would be “disastrous” for both the industry and Infigen.

He said significant write-downs would follow, with the loss of value for Infigen more than its current market cap of about $185 million.

The government is thought to be considering two potential outcomes for its RET review, one involving reining the 2020 target back to represent a “real” 20 per cent of electricity use, rather than the 26 per cent to 28 per cent it is currently expected to represent.

The other involves closing off the scheme to new entrants, while honouring existing contracts only.

“Either of these scenarios is disastrous for our industry,” Mr George said, after Infigen posted an $8.9 million full-year net loss, affected by the regulatory uncertainty. “They are both death for the renewable energy industry and, to be frank, they are death for Infigen.”

He said if no compensation was provided for investors, the resulting weakness in the price of large-scale renewable energy certificates would cut cash flow for debt servicing. As a result, Infigen would be at risk of breaching its covenants within three months.
Australian Financial Review

This couldn’t be happening to a nicer bunch of lads.

dirtyrottenscoundrelsoriginal

Renewable Energy Targets…the Smart Thing to do, is Get Rid of Them! It’s a scam!

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Mandatory RET: An Expensive (and Unsustainable) Economic Burden

August 25, 2014 by  

Donkey HeavyLoad

The RET is an expensive burden on the economy
Australian Financial Review
Alan Moran
19 August 2014

People and firms should be free to choose how they trade off their sources of energy and price preferences.

With the carbon tax repealed, the focus has shifted to the renewable requirements. A key component of these, the renewable energy target (RET), is under review by a panel headed by former Caltex chief Dick Warburton. The RET forces electricity retailers to buy certificates to ensure they incorporate at least 20 per cent of renewable energy within their total supply. Few other countries have renewable schemes as ambitious as Australia’s.

Compared with $40 per megawatt hour, the price of unsubsidised electricity, the cheapest source of additional renewable energy is from wind and is about $110 per megawatt hour. The renewable energy certificates are intended to fill the gap but they have been trading at low prices of around $35 due to the subsidy from the carbon tax, very attractive subsidies to roof-top installations and the fact that the build-up of renewable requirements is gradual. The subsidy price, in after-tax terms, is capped at $93 per certificate (or per megawatt hour).

Two external analyses have been undertaken as part of the RET review process. While both of them adopted conservative assumptions about the required renewable subsidy, they each arrived at very high aggregate costs to the economy as a result of the existing scheme.

The review itself commissioned ACIL Allen to estimate the future costs of the present scheme in 2014 prices. ACIL Allen put this cost at $37 billion or $6 billion if the scheme were to be closed to new entrants but existing installations continued to receive the subsidy.

The ACIL Allen estimate is based on the renewable subsidy at $70 per megawatt hour. This is equivalent to providing renewables a carbon tax subsidy of about $60 per tonne of carbon dioxide compared with the now defunct broader carbon tax at about $25 per tonne.

The other study undertaken by Deloitte was funded in part by the government’s Consumer Advocacy Panel and estimated the overall cost to the economy from maintaining the scheme is $29 billion. If it were to be immediately closed to new entrants that cost would remain in excess of $16 billion. These two cost estimates of the RET ($29 billion to $37 billion) approach the combined value of the Australian electricity transmission network.

Gains to coal-fired generators

An analysis for the Climate Institute estimates the abolition of the RET would bring gains to coal-fired generators of $25 billion by 2030. Although coal would regain market share from not facing subsidised renewables, electricity supply is highly competitive and increased revenues to coal-fired generators would not involve any form of super-profit.

In terms of the direct impact on electricity consumers, the burden of renewable requirements this year is estimated by the energy regulator to add 12 per cent to the average household’s electricity costs. That’s about $260 per year.

On current policies, these costs will rise considerably over the next six years. The annual renewable energy certificates requirements will increase from 17,000 this year to 41,000 by 2020. In addition, the price of these certificates will need to rise sharply to allow incentives for the construction of new windfarms.

As a result, the cost of renewable programs for typical households could rise as much as fourfold.

In research IPA commissioned last week from Galaxy, people were asked whether they favoured retaining the present level of support, increasing support in line with current policy or scrapping all assistance to renewable energy. Only 14 per cent favoured increasing support along the lines of current policy. Twenty-three per cent favoured scrapping the scheme entirely.

While 62 per cent said they would be content to see the subsidy costs kept at present levels, people are rarely as profligate as they say they would be when it comes to their actual spending decisions. This is readily seen in the small take-up of consumers’ voluntary top-up sales of green energy at premium prices, which amount to only 0.7 per cent of the annual sales of electricity.

Moreover, the direct costs of renewable energy through electricity prices is only half of the costs that consumers bear – the rest come about through consequent higher costs of goods and services. And for businesses, the renewable requirements are much greater, as a share of total energy costs, than they are for consumers.

The renewable energy subsidies fail all tests. Consumers resent paying for them and they represent a dead weight on industry competitiveness and economic growth.

Restoring consumer sovereignty and allowing people and firms to make their own choices about trading off their sources of energy and price preferences is the appropriate course.

Alan Moran is director of the Institute of Public Affairs’ deregulation unit.
Australian Financial Review

Alan Moran is alive to the scale and scope of the wind power fraud (see our posts here and here and here). But we think his calculator must have flat batteries in order to explain his observation in the piece above that:

“The annual renewable energy certificates requirements will increase from 17,000 this year to 41,000 by 2020.”

In fact, the “renewable energy certificate requirement” referred to by Alan will increase from 16.1 million RECs this year to 41 million RECs each and every year from 2020 to 2031.

The target figures in the legislation are set in GWh (1 GW = 1,000 MW): 16,100 GWh for 2014 (which converts to 16,100,000 MWh); rising to 41,000 GWh in 2020 through to 2031 (which converts to 41,000,000 MWh) (here’s the relevant section).

The “renewable energy certificate requirement” is that retailers purchase renewable energy (with which they receive RECs) and surrender RECs sufficient to satisfy the mandated target: 1 REC has to be surrendered for each MWh set by the target. If they fail to surrender enough RECs, they will be hit with the mandated shortfall charge of $65 per MWh for every MWh below the mandated target (see our post here).

Wind power generators are issued 1 REC for every MWh of power dispatched to the grid – and this deal continues until 2031: the operator of a turbine erected in 2005 will receive RECs (1 per MWh dispatched) each and every year for 26 years.  Retailers aiming to satisfy the target purchase RECs through a Power Purchase Agreement with a wind power generator. The rates set by PPAs see wind power generators receive guaranteed prices of $90-120 per MWh (versus $30-40 for conventional power). PPAs run from 15 and up to 25 years.

As part of the PPA deal, whenever a MWh of wind power is dispatched to the grid, the generator claims a supply under the PPA; and recovers the guaranteed price from the retailer. For the same supply, the wind power generator is issued RECs (1 REC per MWh) by the Clean Energy Regulator. In accordance with the PPA, the wind power generator transfers the REC to the retailer which can cash it in, thereby reducing the net cost of the power supplied under the PPA (RECs are currently trading around $30).

For example, if the price set under the PPA is $110 per MWh, the retailer sells the REC that comes with it – pocketing $30 – and reducing the net cost to $80 per MWh (which is still double the rate for conventional power). In this example, the retailer pays, and the wind power generator gets, $110 per MWh (or, in reality, whatever the PPA price is) irrespective of the REC price. In that respect, the value of the REC operates as a direct subsidy, designed to support the inflated (fixed) price received by wind power generators under their PPAs.

In practice, the full cost of wind power supplied to retailers (as set by PPAs) is recovered from retail customers (with a retail margin of 7-10% on top of that). As such, the REC is a Federal Tax on all Australian power consumers (see our post here). On the other side of the equation, the RECs issued to wind power generators operate as a direct subsidy for wind power; the value of which allows wind power generators to charge retailers prices under PPAs 3-4 times the cost of conventional power.

While the RECs transferred to retailers act as a “sweeteners”, the failure to purchase RECs leaves retailers liable for the $65 per MWh shortfall charge – and it was the threat of being whacked with a whopping fine (bear in mind the conventional power retailers purchase costs less than $40 per MWh) that provided “encouragement” to retailers to sign up to PPAs. Although, a number of the big retailers – like Origin and EnergyAustralia – have said they would rather pay the shortfall charge than purchase unreliable wind power and pass the full cost of the fine on to their customers.

Between now and 2031, the cost of the REC Tax/Subsidy will range between $40 billion to $60 billion; depending on the price for RECs.

The total renewable energy target between 2014 and 2031 is 603,100 GWh, which converts to 603.1 million MWh. In order for the target to be met, 603.1 million RECs have be purchased and surrendered over the next 17 years.

Even at the current REC price of $30, the amount to be added to power consumers’ bills will hit $18 billion. However, beyond 2017 (when the target ratchets up from 27.2 million MWh to 41 million MWh and the $65 per MWh shortfall charge starts to bite) the REC price will almost certainly reach $65 and, due to the tax benefit attached to RECs, is likely to exceed $90.

Between 2014 and 2031, with a REC price of $65, the cost of the REC Tax to power consumers (and the value of the subsidy to wind power outfits) will approach $40 billion – with RECs at $90, the cost of the REC Tax/Subsidy balloons to over $54 billion (see our post here).

As Liberal member for Hume, Angus Taylor – in his attacks on the cost of the subsidies directed to wind power outfits under the mandatory RET – puts it: “this is corporate welfare on steroids” (see our posts here andhere). STT thinks Angus is the master of understatement. In Australia’s history, there has never been an industry subsidy scheme that gets anywhere near the cost of the mandatory RET.

In the same edition, the AFR’s Editor chimed in with this eminently sensible piece of analysis.

Renewable target is not sustainable
Australian Financial Review
19 August 2014

The Abbott government’s moves to wind back or even scrap the Renewable Energy Target, as reported exclusively in this newspaper, would reduce a major distortion of the electricity market that has produced only a limited and expensive reduction in carbon emissions. How the RET affects the electricity market and prices is subject to much argument, including contradictory findings by computer modelling groups. But it clearly has forced considerable additional electricity supply – intermittently generated by windmills – into the market at a time of static electricity demand.

That extra capacity is pushing down wholesale prices at the expense of the margins of conventional electricity producers, as some modelling efforts have suggested. But force-feeding high-cost supply into a market of stagnating demand is likely to have some unintended consequences. One has been to short-circuit the hoped-for shift to less emissions-intensive gas plants. They have been squeezed out by the mandated high-cost windpower at one end and the sunk cost of the dirtier coal-fired power stations at the other. So the RET has restricted the expansion of an important transition fuel.

The RET scheme was conceived by the Howard government with a small initial target of 5 per cent of electricity consumption. But it took on a new life in 2010 when the Rudd government lifted the target to 20 per cent of estimated electricity consumption by 2020. That renewables target of 45 terawatt hours by 2020 assumed that the demand for electricity would continue to grow. Instead, demand has stalled due to soaring power prices and the decline of power-hungry manufacturing plants. So the absolute mandated target may amount to as much as 30 per cent of electricity consumption by 2020. That leaves the nation’s power grid heavily reliant on whether the wind blows.

Informed by a review by business leader Dick Warburton, the Abbott government is set to decide whether to wind the renewables mandate back to a “real 20 per cent” or even to end the scheme. In a world of a general carbon price, of course, a renewables target would become redundant. But, without a carbon price, Australia has been left in the worst of worlds. We have abandoned the lowest-cost mechanism for reducing emissions, adopted a budget-sapping “Direct Action” scheme that is surely no long-term answer and, so far, retained a high-cost renewables target. The government does need to be careful about the sovereign risk of changing its investment incentives. But mandating 30 per cent of our energy to come from high-cost renewables is not a sustainable energy policy.
Australian Financial Review

The mandatory RET is the most expensive and utterly ineffective policy ever devised.

As the AFR points out, the RET is simply not sustainable. Any policy that is unsustainable will either fail under its own steam; or its creators will eventually be forced to scrap it. European governments are responding to their unsustainable renewables policies by winding back subsidies and tearing up wind power contracts (see our posts here and here). And Australia won’t be far behind them.

STT hears that Tony Abbott is acutely aware that the mandatory RET is an entirely flawed piece of public policy; and is nothing more than an out of control industry subsidy scheme.

As such, it represents a ticking political time-bomb for a government that doesn’t need anymore grief from an angry proletariat. And boy, the proletariat are going to be angry when they find out that under the mandatory RET they’re being lined up to pay $50 billion in REC Tax – to be transferred as a direct subsidy to wind power outfits and added to their power bills – over the next 17 years.

For Tony Abbott to have any hope of a second term in government, the mandatory RET must go now.

abbottcover

Sherri Lange Appeals to the Auditor General to Audit the Disastrous GEA

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Canada’s Wind Power Disaster Laid Bare

August 22, 2014 by  

Ontario april-28-protest-rally-3

Ontario is about to boil over, as impacted and threatened communities unite in seething rage at what their political betters have done to energy policy (see our post here).

The hard-green-left Liberals have created a wind power policy so insane as to beggar belief: sending power prices through the roof (referred to as “hydro bills”, as the bulk of their energy comes from hydro power); killing hundreds of thousands of real jobs; and destroying the lives of thousands of hard-working rural people, who’ve been left to endure a swathe of giant fans speared into the heart of the most productive agricultural country in Canada, rendering hundreds of perfectly good family homes uninhabitable.

One of those taking up the fight is Sherri Lange, who heads up the NA-PAW (North American Platform Against Wind Power), is the Founding Director Toronto Wind Action, the Executive Director Canada, Great Lakes Wind Truth and is the VP Canada, Save the Eagles International.

In this brilliant letter to Ontario’s Auditor General, Sherri lays out the disaster that is wind power in Canada and details the scale and scope of the greatest economic and environmental fraud of all time.

Ms. Bonnie Lysyk
Auditor General for Ontario
20 Dundas Street West, Suite 1530
Toronto
M5G 2C2
Fax 416 327 9862
August 11, 2014

Dear Ms Lysyk,

Please consider this letter as an urgent formal request for a complete and impartial audit for all matters pertaining to the Green Energy and Green Economy Act, 2009, and its false assertions and negative results for Ontario: these misrepresentations include vigorous job creation, suggested cleaner air space, the ability to create energy facilities, wind and solar, in particular, in a cost savings manner, or competitive manner.

The Green Energy and Green Economy Act has suggested with not a little hyperbole, that it will “spark” growth in “renewables sources in Ontario, while creating savings, and producing 50,000 jobs, direct and indirect,” and “make a positive contribution towards climate change objectives,” whereas in fact the GEA threatens to eviscerate the economy of Ontario and Canada as a whole. The factual results of the GEA are of economic chaos, massive job losses, environmental degradation of the highest order, a decay of our treasured environmental protections in law, and yet uncounted human health and productivity costs.

Under the guise of positive net growth, and climate change objectives, this Act has been used to gouge and tyrannize the province, materially and economically.

We believe that the mandate of the Auditor General to provide access to “value for money” data, within an audit, will provide even more information with respect to the waste and perhaps fraud at the highest levels; consumers are indeed not being provided with fair business practices, but are continually subjected to even more egregious attacks in their daily “energy expensive” lives due to a battered and debt ridden economy.

Jobs continue to leave Ontario. Some are relocating to Buffalo, to save, in one instance, $4 million per year in energy savings, or to Saskatchewan, for example. The bleed of jobs cannot continue, and we believe that an assertive and clear look at the funding and economic threat of the Green Energy Act will bear striking similarities to the international failure of wind power and Green Energy policies. Even information provided years ago by your office and the Fraser Institute did nothing to change the course.

We contend that none of the GEA assertions and projections have proven valid, and have in fact been a major contributor, likely THE major contributor, to the near demise of manufacturing in Ontario, to energy poverty for many Ontarians whose hydro bills have risen 30-40% with promises of more hikes, to the loss of jobs to the USA and western Canada, to the ill health of hundreds of Ontarians, some of whom have been forced to abandon homes, or been bought out by developers, or who reside in parking lots at Walmart, or at cottages, or with relatives. The energy chaos of Ontario now handily competes with that of Spain, Germany, or the UK.

All of this should be and should have been preventable, since the facts are well known. Indeed, the facts of the Green Energy failures of Europe should have been a lesson learned before this Ontario failure of a massive scale. (Ontario now has the unenviable position of having the highest cost of power in North America. The significance of this is not lost on Moody’s Credit Ratings system, with the threat of downgrades to Ontario.) The lessons of Europe have been put before the Legislature, all parties, on many occasions, without benefit or improvement.

The Fraser report of 2013 has already indicated that the assertions of the GEA are egregiously false.

“Already, the GEA has caused major price increases for large energy consumers, and we’re anticipating additional hikes of 40 to 50 per cent over the next few years,” said Ross McKitrick, Fraser Institute senior fellow and author of Environmental and Economic Consequences of Ontario’s Green Energy Act.”

“The Ontario government defends the GEA by referring to a confidential 2005 cost-benefit analysis on reducing air pollution from power plants. That report did not recommend pursuing wind or solar power; instead it looked at conventional pollution control methods which would have yielded the same environmental benefits as the GEA, but at a tenth of the current cost. If the province sticks to its targets for expanding renewables, the GEA will end up being 70 times costlier than the alternative, with no greater benefits.” (News release, April 2013)

The study goes on to indicate that returns to investment in manufacturingare “likely to decline by 29 per cent, mining by 13 per cent, and forestry by less than one per cent.”

Professor McKitrick explains in his report that wind is especially wasteful, as surplus generation occurs generally when demand is low, and the resulting “dumping” also results in net losses to Ontario.

“The Auditor General of Ontario estimates that the province has already lost close to $2 billion on surplus wind exports, and figures from the electricity grid operator show the ongoing losses are $200 million annually”, says the report.

Terrance Corcoran in the Financial Post quotes from the Auditor’s report that the cost of power is estimated to rise again another 46% in the next four years. In his analysis of the Auditor General’s 2011 report on electricity, Mr. Corcoran writes of “wilful negligence” and a “high level of fiscal negligence and abuse of process and disdain for taxpayers and electricity consumers.”

The Fraser report of 2013 has already indicated that the assertions of the GEA are egregiously false.

“Already, the GEA has caused major price increases for large energy consumers, and we’re anticipating additional hikes of 40 to 50 per cent over the next few years,” said Ross McKitrick, Fraser Institute senior fellow and author of Environmental and Economic Consequences of Ontario’s Green Energy Act.”

“The Ontario government defends the GEA by referring to a confidential 2005 cost-benefit analysis on reducing air pollution from power plants. That report did not recommend pursuing wind or solar power; instead it looked at conventional pollution control methods which would have yielded the same environmental benefits as the GEA, but at a tenth of the current cost. If the province sticks to its targets for expanding renewables, the GEA will end up being 70 times costlier than the alternative, with no greater benefits.” (News release, April 2013)

The study goes on to indicate that returns to investment in manufacturing are “likely to decline by 29 per cent, mining by 13 per cent, and forestry by less than one per cent.”

Professor McKitrick explains in his report that wind is especially wasteful, as surplus generation occurs generally when demand is low, and the resulting “dumping” also results in net losses to Ontario.

“The Auditor General of Ontario estimates that the province has already lost close to $2 billion on surplus wind exports, and figures from the electricity grid operator show the ongoing losses are $200 million annually”, says the report.

Terrance Corcoran in the Financial Post quotes from the Auditor’s report that the cost of power is estimated to rise again another 46% in the next four years. In his analysis of the Auditor General’s 2011 report on electricity, Mr. Corcoran writes of “wilful negligence” and a “high level of fiscal negligence and abuse of process and disdain for taxpayers and electricity consumers.”

A prime example of the negative impact on the Ontario jobs situation is reflected in Magna’s (the largest automotive parts manufacturer in Canada) announcement that due to the high cost of electricity in Ontario, it will not make any further investments. (Specifically, for Magna between 2013 and 2014, normal business activities resulted in an increased cost of electricity of 30 million dollars.)

The expressed primary purpose of the 2011 audit was to ensure that the OEB had sufficient and adequate systems in place to protect consumers, ratepayers. As noted also in the report, consumers are protected under the Energy Consumer Protection Act, 2010, and that under this legislation consumers shall be provided with the information they require about contracts, prices, and that they will be protected by fair business practices. This fairness has not been brought to fruition.

And the serial negligence continuing until this day, despite hearty and clear directives from the Fraser Institute and your office, has resulted merely in the advance of even more industrial wind in Ontario under Premier Wynne. Consumers are indeed not being increasingly protected, and continue to be recklessly thrown under the fiscal bus.

What we find most egregious is that the people of Ontario have warned the Premier(s) McGuinty and Wynne, and made reports to the Finance Committee, as well as reporting to these offices the results of energy chaos in Germany, Spain, the UK as well as other European states previously under the spell of “renewables.” (Please note the letter to the Editor, Financial Post, March 3, 2011: “No such thing as renewable energy.”) These abject economic failures in Europe should have provided clear warning of the folly of subsidizing inefficient non base load sources of power, particularly wind turbines.

The government and lobbying association CanWEA’s (Canadian Wind Energy Association) assertion that the wind turbine industry operates safely and without damage to human health is false and must also be examined, since the reports of ill health given to the MOE (Environment) now number in the thousands. The MOE (Ministry of the Environment) has recognized the problem, and admitted in an email obtained from an FOI that they “did not know what to do.” The costs of wind power to our medical system and human productivity have not yet been accounted for.

We remind you that with about 240,000 wind turbines worldwide, we yet only receive one half of one percent, NET ZERO, of our power needs from this source. This industry is a failure, plain and simple; does the build out then have something to do with massive subsidies deep in the pockets of developers? Who is receiving these massive double or quadruple profits?

We would like to see a chart of the major beneficiaries of the FIT program in Ontario. In Spain, the profits have been so tidy, that the Government recently asked for some retroactive repayments, understandably chilling the wind developers’ aspirations. (The lineup of crimes against consumers continues in Ontario: with 86% of Ontario’s wind power being produced on days when we are already in a surplus export mode. Another net loss for consumers is obvious.)

Please also include an environmental impacts costs study in your findings. The extreme damage to water tables, prime farm land, general ecological tragedies and killing of wildlife, has an external cost factor as well, to be borne, sadly, by our future generations.

Mr. Geoffrey Cox, a UK Conservative MP, expressed his disgust for the “gigantic machines” which are terrorizing his country:

“The reality is there is a Klondike-type gold-rush going on in rural areas where developers are anxious to get their applications through to pick up the vast profits that can be made.

“This is having a disruptive, devastating and distressing effect on dozens of small rural communities that are being torn apart by these huge industrial machines that are just yards away from their home.

“The number of applications seems to be going up rather than receding. What is going on is a stealthy, silent revolution of the most beautiful landscapes in Great Britain. “If we carry on we will have ruined this most extraordinary inheritance.”

SNAPSHOT
What we know

  • Industrial wind turbines are inefficient and pitiably useless
  • Industrial wind installations, factories, create energy sprawl and high levels of environmental pollution and toxic waste
  • Industrial wind does not work when we need it to and over performs at times to the extent that developers are sometimes paid to NOT produce
  • Huge subsidies support the industry, without which, the industry does not survive
  • The GEA suppresses all democratic opposition to wind and solar power, and the cards are stacked in favor of preferred accelerated promotion of wind turbines at the expense of Municipal and community cohesion and preferences
  • Massive amounts of base load back up power are always required; there is zero reduction in GHG’s
  • The industry (lobby) gets to sit at the table with policy makers and lay the table for the feast
  • There has been no reasonable or realistic or honest explanation for the massive outlay of wind turbines in Ontario
  • Energy poverty is abundant now in Ontario, along with massive job losses and gutting of the public purse
  • Lessons from Europe are not being acknowledged
  • IS THIS CRIMINAL NEGLIGENCE?

We look forward to your prompt reply and a rapid advancement into an impartial audit of these matters in their complete impacts on Ontario, on the economy, and on fairness, or in this case, unfairness, to each consumer and job seeker. It will be extremely useful to untangle some of the Byzantine financial and undemocratic policy arrangements that have led to this “made in Ontario” crisis. We must immediately stop this re-creation of the catastrophic results of Green Energy failures in Europe.

Please conduct an impartial and in depth assessment of all financial matters pertaining to the GEA and relay these findings to the people of Ontario at your earliest convenience. We anticipate that your report might reflect also on the medical costs to Ontario families, the loss of economic vibrancy and stability of rural Ontario which continues to bear the assault fully on its shoulders, the loss of tourism, and the loss of property values, which also contribute to economic stagnancy. Please also conduct a study on a trace of the profits to developers, kWh by kWh, if possible. We have a right to know where our hydro dollars are going.

The high octane waste of the “Green Energy and Green Economy Act”, which has been repeatedly explained to legislators, must cease immediately. It must also be retroactively remediated. Your office has the ability to further outline to the Government not only how it may alter course, but how it must immediately repair.

(We will be writing under separate cover to Commissioner Hawkes, as we fully believe the waste and apparent fraud of the GEA far overpowers the ORNGE, E-Health, and Gas Plant scandals.)

Thanking you in advance,
Sherri Lange
CEO NA-PAW (North American Platform Against Wind Power)
Founding Director Toronto Wind Action
Executive Director Canada, Great Lakes Wind Truth
VP Canada, Save the Eagles International
www.na-paw.org

C.c. Vince Hawkes, Commissioner of the OPP
C.c. Honorable Joe Oliver, MP and Minister of Finance, Canada
C.c. Interested parties

sherriwithwildasterspp