Answer ain’t blowing in the wind
Terry McCrann
The Australian
13 September 2014

IT’S doubtful that those who have attacked Dick Warburton’s review of the Renewable Energy Target have actually read even the executive summary, other than through a misty film of increasingly foam-flecked rage or rising horror at the prospect of the cookie jar being snatched from their grasp.

His review has been falsely and very deliberately mischaracterised as a work of climate scepticism. In short, he doesn’t believe in climate change and so he wants to ditch or fundamentally undermine the last substantive policy standing between us and climate catastrophe, to say nothing of ­impoverishing the climate main-chancers.

As the review noted, about $9.4 billion — of NPV (net present value) subsidies had already flowed to those renewable energy main-chancers — to stress: my word, not his. But more than double that, about $22bn, was up for grabs over the rest of the scheme.

Again, that was in NPV terms; the actual dollars-of-the-day out to 2030 would be much, much greater. Any wonder a primeval scream of pain burst from those renewable main-chancers.

It’s much easier to slime the ­author to avoid engaging with the substance of the review’s analysis even more particularly than its ­argument and recommendations.

Perhaps even more importantly, it was critical to head off any risk of the mainstream media engaging with the report other than to similarly, instinctively and with both ignorance and malice aforethought, slime it.

In fact, and in simple terms, the Warburton Report is a meticulous forensic assessment of the RET on its own terms. It accepts the policy desire to promote (so-called, my word again) renewable energy and merely analyses the effectiveness, cost and alternatives.

It also does so in the context of the investments that have been made or are committed. Someone driven solely by climate scepticism would not have made the recommendations that Warburton did. He very deliberately carved a path between wasting more money and the obligation to investors who acted on legislated policy of both the Howard and Rudd-Gillard governments.

This produced his two alternatives. The first was to let the RET continue to 2030, to honour all existing and, importantly, committed investment, but to close it to new entrants. This would, as he noted, “provide investors in existing renewable generation with continued access to certificates so as to avoid substantial asset value loss and retain the CO2-emissions reductions that have been achieved so far.”

The second was to move the RET in line with growth in ­demand for electricity, allocating to renewables 50 per cent of that growth.

Again, as Warburton said: “This would protect investors in existing renewable generators and would support additional ­renewable generation when ­demand is growing.”

The core problem is that the supposedly 20 per cent (of power generation) RET has grown to somewhere between a 26-30 per cent RET.

When the Rudd government set a specific number of 41,000 GWh that had to be supplied by renewable energy in 2020, it was expected to equate to 20 per cent of total electricity output (and ­demand) in that year.

In fact, it’s going to be closer to 30 per cent because power demand has been falling — essentially because of soaring power prices. The falling demand has ­included the deliberate closure of big consumers like aluminium smelters, as a consequence of a mix of factors including power price.

Now the pro-RET advocates have seen this as a wonderful win-win, ahem, windfall. We get more clean (sic) power and so less “dirty” power, and more dollars to boot. What’s to complain about?

They’ve also been able to seize on the argument that as more and more of our power comes from mandatory renewables this will arguably cut prices to consumers.

But as Warburton points out — to further enrage the believers and main-chancers — this is a shell game. It’s only because it creates excess supply and mainstream — I would use the word, real — power generators have to compete for their declining share of the market.

Those lower prices would be simply unsustainable. If you produce 30 per cent of your power from very high-cost wind, ultimately the price to the consumer would have to be higher. Along the way generators would close, investors — in coal and gas — plants would lose money (yet another “windfall” gain!) and then the survivors would raise their ­prices to necessary levels.

That points to a simple question: if reducing uneconomic wind would be unfair to investors in that sector — essentially accepted by Warburton; surely force-feeding future renewable investment and so forcing the closure of other existing power generation would be unfair to their investors?

The other element is the sheer impossibility of installing enough wind capacity to meet the 41,000GWh. In their usual dishonesty with key numbers, renewable advocates roll hydro into renewable capacity, to suggest the target isn’t that onerous.

There is about 12GW of installed “renewable” capacity in Australia. But less than one-third of that is wind, most of the rest is hydro.

As Energy Australia explained in a submission to Warburton, we would need to install 10GW of new capacity to be able to produce. 41,000GWh. A little short of doubling installed “renewable” capacity and doing so in just six years would be daunting enough.

But as most of it would have to be wind — it’s hard to know which is worse to a Green: coal or hydro power? — this means we would have to install something like 250 per cent of the existing entire wind capacity that we have today, and do so in six years!

This is simply impossible. It would also be sheer and utter madness. And if we needed any reassurance on that, in a heaven-sent coincidence, last week Robert Bryce of the Manhattan Institute graced our shores.

In a presentation to the Institute of Public Affairs in Melbourne midweek, Bryce utterly shredded wind as a realistic source of power, far more effectively than those wind turbines shred birds on the odd occasions when they turn.

Former journalist Tony Thomas provides an excellent detailed exposition of what Bryce had to say at the Quadrant website.

One reference from Bryce was especially telling: the way our nearest and most important neighbour Indonesia has increased its use of coal-fired power generation.

We all know — or should know — about China and its voracious appetite for our coal. But since 1985, according to Bryce, Indonesia has increased its coal usage by 5000 per cent. “Between 1990 and 2010, about 100 million Indonesians gained access to electricity — coal provided more than half of that growth.

As a consequence, Indonesia’s per-capita GDP rose by 442 per cent. Life expectancy increased by eight years. Infant mortality fell by 45 per cent. Child malnutrition fell by 65 per cent. Illiteracy declined by 77 per cent

“Countries with cheap, abundant, reliable supplies of electricity can grow their economies and educate their citizens. They can build their manufacturing bases and export goods.

“The countries that lack electricity can’t. Period. Full stop,” Bryce noted.

The rest of his analysis was ­majestic in its substance and powerful in its ineluctable conclusion. The energy of today is coal; but so also is the future.

Wind is both a fantasy and a wasteful indulgence. With apologies to Bob Dylan, the answer is not blowing …
The Australian

STT covered Robert Bryce’s brilliant lecture in this post. We think it should be compulsory viewing for anything that walks upright, has opposable thumbs and doesn’t swing from trees. But don’t take our word for it, why not hear it from Terry McCrann, who gave the vote of thanks to Robert for his remarkable speech:

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