Alan Moran took on the role of RET “Terminator” some time back (see our post here).

For Alan the driving question is not: “are you John Connor?” – it’s more like “are you Miles George?” – or any other wind industry rent-seeker hoping to continue stealing from Australian power punters, for that matter.

But there’s nothing to fear from this particular Terminator, as Alan has had the protection of Australia’s future economic prosperity hard-wired into his program.

Here’s Alan “The Terminator” Moran setting out just why the mandatory Renewable Energy Target simply has to go now.

Subsidy scam hurt the energy sector
The Australian
Alan Moran
19 May 2014

IN addressing climate change spending and regulatory costs, the government has made some impressive first steps. Few of these are in the wrong direction.

Labor went to last year’s election with more than $5 billion a year in budget outlays for its climate change programs. This included more than $2bn a year to be spent by the Clean Energy Finance Corporation.

In addition, Labor’s carbon tax would be raising $13bn by next year (though Kevin Rudd had foreshadowed reducing this) and its renewable energy target would be raising electricity bills — by $5bn a year by 2020.

In all, Labor’s planned spending on reducing greenhouse gas emissions was ramping up to $23bn a year, similar to the entire defence budget or twice the annual spending planned by the present government on transport and communications, which house its signature infrastructure areas.

In its first move to cut back the climate change impositions, the Coalition put beyond doubt any question of keeping the carbon tax.

The budget reinforces this by curtailing many other programs, though painfully slowly in some cases.

There have been backward steps. Among these is the creation of the Green Army, a sort of “young pioneer” corps of the unemployed doing landcare repair to prepare themselves for future taxpayer-funded environmental jobs. The program’s objectives avoid mentioning climate change but, starting at $48 million this year, spending is ostensibly hurtling towards $230m annually. This is an expensive attempt to deflect green dudgeon.

We have also seen the first spending step of the Direct Action program. Limited to $75m in the current year, this is planned to increase but remains a far cry from the $1bn-a-year spending the Coalition once proposed. “One million roofs”, once flaunted as a $100m program, has been dropped.

Outweighing these new spending measures are many program cuts within the environment and industry departments.

These include savage cuts to the adaptation and international negotiation spend — no more of those 114-delegation team visits such as the one that accompanied Rudd to Copenhagen in 2009.

The budget abolishes the Australian Renewable Energy Agency (ARENA), saving $1.3bn. However, ARENA’s chairman, the World Wildlife Fund’s Greg Bourne, like his counterpart at the Clean Energy Finance Corp, said he would continue “delivering funding to worthy projects” until the agency’s bank account was closed.

Also to be terminated, with a saving of $460m, is the scandalously wasteful carbon capture and storage program, though its commitments might mean it soldiers on to 2017.

Similarly, the government has closed the $17m “clean coal” initiative and axed the $20m a year Clean Technology Innovation program. Also gone is the Green Car Innovation Fund, which became redundant as a result of labour laws and regulatory-induced increases in energy prices that made motor vehicle manufacturing unprofitable in Australia.

Ever so gingerly, Joe Hockey has begun paring back the profligate scam that is ethanol subsidies, grabbing back $120m a year.

The government’s own published estimate of aggregate climate change expenditure is that it falls from $5.75bn this year to $500m two years hence. This includes spending by the Clean Energy Finance Corp.

But it excludes some spending, such as that of the CSIRO, which, when it saw its interest was in being active on climate matters, claimed that about 50 per cent of its budget was being spent in these directions. CSIRO can count itself lucky to have escaped with a mere $33m haircut, less than 5 per cent of its direct budget.

Outside the budget is the renewable energy target, presently under review by a panel headed by Dick Warburton.

Renewable energy from wind and solar, the two major subsidised supply types, remains non-commercial. It is three times the cost of electricity sourced from coal.

Renewable energy lobbyists have done wonders in getting governments to force consumers and other producers to pay $18.5bn on worthless assets.

Even with the carbon tax repealed, according to the electricity market regulator, next year will have renewable subsidies and associated schemes bringing about a 75 per cent increase in the wholesale electricity price.

Those arguing for the retention of the subsidies on renewables nonsensically claim that they reduce overall electricity prices.

In fact, the privileged position of renewables, if left untouched, would entail bankrupting the commercial providers, leaving a legacy of much higher prices and less reliable supply.

It is also claimed that early termination of the renewables program would introduce an element of sovereign risk into Australia’s investment environment.

This is untrue. The withdrawal of a privilege does not constitute a government seizure of property which would undermine investor confidence.

Nobody suggested compensating the motor-vehicle assemblers for the billion or so dollars they have written down as a result of losing government supports.

Nor has Spain suffered from reputational loss since it wound down its previously agreed wind and solar subsidies.

Wind and other renewables should be left to stand on their own feet commercially. Their ongoing subsidisation severely weakens the national economy and should be terminated immediately.

The cuts to Australia’s energy subsidies will force the entrepreneurs who have been so successful in grabbing government favours to make their fortunes elsewhere.

This is a gain to Australia and ways should be explored to allow earlier terminations of wasteful schemes that have been put in place.

Alan Moran is director, deregulation, at the Institute of Public Affairs.
The Australian

As you’d expect from Alan, all pretty sound stuff there.

The idea that the world’s climate could (somehow?) be controlled from a building in Canberra was always hard to fathom. That we’re paying $billions of “bucks” for no proven “bang” is nothing short of an outrage.

With the Coalition government chopping into welfare entitlements (and future health and education spending) in its very first budget – resulting in hysterical, self-interested moaning from the left – it’s pretty hard to justify the $billions being wasted on thousands of Canberra-based pen pushers – who claim to be able to reverse “climate change” (formerly known as “global warming”) with the stroke of a well-aimed biro.

The Clean Energy Finance Corporation and the ARENA Fund are being used as nothing more than wind industry slush funds: propping up totally un-commercial ventures that reputable banks wouldn’t touch with a barge pole – all of which are doomed to end in corporate collapses of monumental proportions – as the RET gets wound back or scrapped.

The loans being doled out by the CEFC are not accompanied with any valuable security, as the borrowers have no valuable security to offer.

Ordinarily, a wind power company looking to finance construction of a wind farm already has a Power Purchase Agreement which it offers to its banker as security for its loan. The bank takes security in the form of a charge over the future income stream guaranteed for 15 years under the PPA, thus protecting itself in the event that the wind power company goes bust.

But none of the wind power companies taking loans from the CEFC have PPAs – if they did they would be borrowing from commercial lenders.

As a result, Australian taxpayers are underwriting $billions in highly-risky, unsecured CEFC loans to wind power companies. When these outfits inevitably go bust, Australian taxpayers will end up carrying the can for $billions. The sooner the CEFC gets the axe, the better.

STT hears that the Coalition is also looking at ways of unwinding existing CEFC lending agreements; the great majority of which fail to meet the CEFC’s own lending criteria. In that event, the Coalition will be able to set aside existing loan agreements and claw back the 100s of $millions already received by wind power companies under those agreements; and prevent them taking any further advances available under those agreements.

While a CEFC loan facility might be for $100 million, say, the wind power company will only draw-down on that facility as the need arises (for example, $3 million for costs associated with getting planning approval) – leaving the balance in the hands of the CEFC. By setting aside CEFC loan agreements now the Coalition will prevent the wind power company from being able to draw-down on the balance of the facility and can then set about recovering amounts already received by the wind power company in question.

Even harder to justify than the CEFC is a retention of the mandatory Renewable Energy Target which – if left in its current form – will lead to a doubling of retail power prices within the next 3 to 4 years – on top of the 110% increase caused by the RET over the last 5 years.

Across Australia, there are tens of thousands of homes that have been disconnected from the grid, simply because they can no longer afford to pay their crippling power bills. If the Coalition is looking to win Brownie points with the poorest in our community – and the welfare groups that purport to represent them – then scrapping the mandatory RET is a surefire winner.

Now, we can’t fault Alan’s reasoning when it comes to scrapping the mandatory RET and axeing the CEFC and ARENA Fund.

But we do take issue with his heartless attack on the creation of the “Green Army” – which Alan describes as: “a sort of “young pioneer” corps of the unemployed doing landcare repair to prepare themselves for future taxpayer-funded environmental jobs.”

You see, in a few short months, there’ll be hundreds of so-called “environmentalists” without any gainful employment. There’ll be a veritable “green” sea of economic refugees flooding out of the Climate Change Authority, the ARENA Fund and the CEFC, just to name a few.

This band of erstwhile eco-warriors will be joined by dozens from wind power outfits like Infigen, RATCH and Pac Hydro – as they inevitably collapse – who’ll obviously be looking to take up the cudgels in defence of the planet.

Remember how Nick Valentine spruiked to packed town halls all over New South Wales about how RATCH’s giant fans were going to save the planet by literally sucking CO2 out of the atmosphere? Surely, Nick and his doppelgänger, Frank Bestic, will want to continue their “wonderful” work in the future? (see our posts here and here and here).

Of course, there’ll be that loyal squad of eco-fascist bloggers who – up till now – have been receiving a fat pile wind industry cash to bleat about the “wonders” of wind power – on sites like The Climate Speculator, ruin-economy and yes2ruining-us – all looking for something to fill in their days and pay the rent. And let’s not forget the champion team of “spinners” from the Clean Energy Council – who’ll have no means of support, once their wind industry clients are all wound-up.

It must be frustrating for all these bright young things to be cooped up in five-star offices in Canberra – or driving around in brand new 4WDs lying to rural communities about your bosses’ “brilliant” giant fans – when they could actually be out doing something positive to improve the health of the environment?

So, instead of throwing this passionate young band on the economic scrapheap, why not make use of their burning desire to “save the planet” and put them to work actually doing something practical to that end?

Now, some might consider that being press-ganged into the “Green Army” is a kind of state sanctioned punishment – akin to the Gulags and “education through labour” camps run by Generalissimo Stalin and Chairman Mao (although we note that these characters are held up as “Poster-Boys” by many of these same political neophytes).

But no, these starry-eyed, underemployed (and soon to be unemployed) ideologues should consider being recruited into the new “Green Army” as a golden opportunity for them to finally put their “green” credentials to the test.

Sure, they’ll experience backaches and blisters for the very first time in their lives – but, as another first – their daily labours will actually result in CO2 abatement.

You see, if they plant just 6 trees they’ll be able to tweet their excitement to all their eco-followers about the fact that they’ve just abated the equivalent of 1 tonne of “dreadful” CO2 gas from the atmosphere.

Once upon a time to be called a “tree hugger” was seen by greenies as a badge of honour. Well, here’s a chance for young-modern environmentalists to truly earn that tag.

When their trees grow up – in a nod to their environmental warrior ancestors – they’ll be able to give them all an almighty hug – clearly a much more “natural” experience than hugging a Vestas V112, which seems to be the fashion amongst their kind today (see our post here).

But wait, there’s more – instead of farmers forming lynch mobs to greet them when they lob into town – as they do now – the locals will welcome them with open arms and set them to work planting trees – as shelter-belts to protect livestock – and to restore eroded creek-lines and gullies – REAL environmental work.

And the billions of trees they’ll get to plant as Green Army Regulars will provide shelter and habitat for millions of native birds and animals – instead of slicing and dicing them – like the giant fans that they’ve all died in a ditch to promote over the last few years.

Truly a “win, win, win” situation.

So Alan – if you want to do something for the environment – then get behind the Green Army now – it really could save the planet – one tree at a time.