Wind Weasels Determined to Continue Scamming the Ratepayers….

The Wind Industry’s Need for Massive Subsidies: The Never Ending Story

never ending story

Wind Power Is Intermittent, But Subsidies Are Eternal
Wall Street Journal
Tim Phillips
1 December 2014

“Tax credits have been essential to the economic viability of wind farms so far, but will not be needed within a few years.” So said Christopher Flavin, now president emeritus of the Worldwatch Institute – in 1984.

Thirty years and billions of dollars later, the wind industry is still saying it needs taxpayer support. Congress is currently hearing this argument as it debates whether to extend the 22-year-old “production tax credit” in the lame-duck session.

The PTC, which gives wind producers a 2.3-cent tax credit for each kilowatt-hour of electricity produced over 10 years, expired at the end of 2013. Now wind-industry lobbyists are roaming the halls of Congress, asking legislators to renew it as part of a tax-extenders package before adjourning on Dec. 15.

The industry’s arguments are bluster. Wind-power capacity has increased by nearly 5,000% since the PTC was created and the industry now makes billions of dollars in annual revenue. Meanwhile, the credit has devolved into another example of corporate welfare.

Over the past seven years, the PTC has cost taxpayers $7.3 billion, and it is expected to pay out $2.4 billion more in 2015. Combined with other subsidies and programs, wind generators received $56.29 in government subsidies per megawatt-hour in 2010, according to a 2012 report from the Institute for Energy Research. That’s compared with 64 cents in subsidies for natural gas and $3.14 for nuclear power.

The program operates as one of America’s least-known wealth-redistribution schemes, forcing taxpayers to pick up the tab for wind farms beyond their borders. In 2012 more than 30 states paid more in subsidies than wind farms in those states received in tax credits. Citizens in five states paid more than $100 million more in federal taxes than they received from the PTC: California ($196 million), New York ($163 million), Florida ($138 million), New Jersey ($126 million) and Ohio ($104 million). Eleven states paid into the PTC even though they have no qualifying wind production. The unlucky losers included Florida, Virginia and North Carolina.

The credit also encourages abuse — both of the electricity grid and the taxpayer. Instead of paying wind producers based on how much of their electricity is used, the PTC pays them based on how much electricity they generate. Companies that invest in wind power thus receive tax credits to produce something that consumers may not actually want. In fact, producers often pay electricity-grid operators to take their product. This phenomenon is known as “negative pricing.”

Wall Street has figured out that it can use this system to its advantage. The PTC offers major corporations a chance to lower their tax rates by investing in wind energy. But investors also realize that wind farms make little financial sense if the taxpayer isn’t picking up the tab.

Wind power’s fluctuating growth patterns bear this out. In 1992 wind installations produced about 2.8 million megawatt hours of electricity; in 2013 wind installations produced 167.6 million megawatt hours. Yet when the PTC expired temporarily in 2000, wind installations plummeted 92% the next year. The same thing happened in 2002 and 2004, when new installations fell 76% after two temporary expirations.

But the past few years deserve special mention. For most of 2012, wind producers weren’t sure if the PTC would be renewed at the end of the year. As a result, producers didn’t break ground on new projects, with only 1,100 new megawatts brought online the following year – a more than 90% drop.

Yet Congress caved and gave the PTC a one-year extension in January 2013, throwing in a bonus: Wind projects under construction by the end of the year would still be eligible for the PTC, even if they wouldn’t come online until after the credit expired.

Corporations and wind producers promptly rushed to cash in the taxpayer’s generosity. The industry broke ground on 12,000 megawatts of new wind farms before the PTC finally expired on Dec. 31. Thanks to the credit’s 10-year payout guarantee, taxpayers still have another decade of subsidizing wind.

It would be a mistake for Congress to renew the PTC again, and it is time to let the wind industry compete with other energy industries in a fair market. Congress should ignore the hot air surrounding the PTC and let it flutter away forever.

Mr. Phillips is the president of Americans for Prosperity.
Wall Street Journal

More than just a few parallels to be drawn from that great little piece and the wind industry’s current efforts to keep the scam rolling here.

No matter where they ply their trade, the wind industry, its parasites and spruikers will never be accused of running a consistent theme when it comes to wind power’s (supposed) ability to compete with conventional generation sources.

Whenever the political brains trust start challenging the true and hidden costs of wind power to their constituents, these boys start babbling about the wonders of wind being “free”; their costs coming down all the time; and – in their more fantasy-filled moments – making the wildest claim of all: that wind power is already truly competitive with coal and gas fired generation (see our posts here and here).

That drivel lasts for just as long as it takes for the political conversation to turn to chopping the massive stream of subsidies directed by government mandate to wind power outfits. At which point, they sober up really fast – and start whining like spoilt brats about threats to investment and jobs (read their “own investments and their own jobs”).

In this recent post, we threw down the gauntlet – challenging the Australian wind industry’s spruikers to pin their colours to the mast.

Is wind power REALLY competitive with conventional generators?

Or is it just a perpetual infant, that would die a natural death in a heartbeat in the absence of massive subsidies filched from power consumers, under the threat of whopping fines that get levied against retailers that fail or refuse to play ball?

While that story will shift like the desert sands – and continue to be delivered with the all the persuasion of Little Britain’s vacillating Queen of Darkley Noone, Vicky Pollard, whenever she’s put on the spot – the one constant is that the “future” of the wind industry will be just as it always has been: one entirely wedded to corporate welfare on a mammoth scale.

Vicky-Pollard-2136549

Big wind Pressing Congress, For More Money! $$$$$$$$ It’s a money-pit!

Via. Greenie Watch    30 November 2014

Big Wind is pressing Congress for yet another bailout

By Mary Kay Barton

Taxpayers beware! While you were sleeping, enjoying your family and eating turkey,

Congress has been busy.

Congressional Republicans are negotiating with Senate Democrats to extend the infamous wind energy Production Tax Credit through to

2017, after which it will supposedly be phased out, just as was supposed to happen in the past. This sneaky, dark-of-night “lame duck”

session tactic should be flatly rejected.

While you’ve been busy just trying to make ends meet, wondering why the cost of everything is going up, and agonizing over how your

children and grandchildren will ever pay the mounting $18 TRILLION dollar national debt – the wind industry lobbyists’ group, the

American Wind Energy Association (AWEA), just sent Congress a letter seeking to extend the federal, taxpayer-funded wind Production Tax

Credit (PTC).

The list of signers to AWEA’s letter include rent-seeking industries and “green” groups who’ve all benefitted by tapping into

taxpayers’ wallets via the Big Wind PTC (aka: Pork-To-Cronies). It certainly isn’t hard to figure out why these corporations pay many

millions of dollars to hire lobbyists and run national TV advertising campaigns geared at convincing crony-politicians to vote to

continue these TAXES and higher energy prices on American citizens.

AWEA’a letter is typical of wind industry propaganda. It makes specious claims about creating jobs and reducing pollution, without

providing a shred of evidence to PROVE any of their claims. AWEA apparently hopes Congressional officials are “too stupid” to

understand what energy-literate citizens nationwide know: Industrial wind can NEVER provide reliable power. It raises electricity

costs, even after subsidies are factored in. It kills more jobs than it creates. It defiles wildlife habitats and kills eagles, hawks,

other birds and bats – with no penalties to Big Wind operators.

Here’s the reality: After 22+ years of picking U.S. taxpayers’ and ratepayers’ pockets, industrial wind has NOT significantly reduced

carbon dioxide emissions. It has not replaced any conventional power plants, anywhere. However, the $Trillions spent on these “green”

boondoggles to date have significantly added to the $18+ TRILLION dollar debt that our children and grandchildren will have to bear.

AWEA’s own statements from years and decades past can be used against them. To cite just one example, 31 years ago, a study coauthored

by the AWEA stated:

The private sector can be expected to develop improved solar and wind technologies which will begin to become competitive and self-

supporting on a national level by the end of the decade if assisted by tax credits and augmented by federally sponsored R&D.

[American Wind Energy Association, et al. Quoted in Renewable Energy Industry, Joint Hearing before the Subcommittees of the Committee

on Energy and Commerce et al., House of Representatives, 98th Cong., 1st sess. Washington, DC: Government Printing Office, 1983, p.

52.]

In other words, the PTC should have ended 20 years ago, because wind energy would be self-sustaining by then. It wasn’t. It still

isn’t. It never will be. We need to pull the PTC plug now!

Here are some details about the bill that is currently being negotiated during the lame duck session –before the newly elected,

Republican majority Senate takes office and can do much about it.

In 2016, wind developers would be eligible for 80% percent of the PTC’s value. They could also claim 60% of its value through the first

nine months of 2017, after which it would supposedly expire.

The proposed congressional deal also seems to continue basing PTC eligibility on when project construction project begins. That opens

huge doors for abuse.

The last time Congress extended the PTC, as part of its “fiscal cliff” deal in 2013, it said “eligibility” for taxpayer largesse

covered projects “under construction,” rather than requiring that they be “placed in service” by a certain date. In practice, this

means just a shovelful of dirt has to be moved by that date.

Remember too that the Production Tax Credit supposedly expired last year. But this clever language has allowed construction and

expansion in the meantime. Meanwhile, Lois Lerner’s Internal Revenue Service has helpfully said projects that were started or “safe-

harbored” prior to the PTC’s most recent pseudo-expiration can claim tax credits if they are in service by 2015. And then they can

claim the $23-per-MWh credit for ten more years!

What a wonderful holiday gift for Big Wind and its political sponsors – at your expense.

Our government should NOT be in the business of picking and choosing the winners and losers in the energy marketplace – while

assaulting and harming the very citizens they are forcing to pay for this “green” energy scam. It’s time for government to get out of

the way and let the markets work!

The best solutions will rise to the top of their own accord because they will provide modern power at the best prices – thereby

maintaining the reliable, affordable power that has made America great.

Citizens nation-wide have awakened to this massive “green” energy scam. Many have sent letters to Congress like the one below. You can

join the fight by contacting your representatives and urging them to do the right thing: Protect American consumers, taxpayers and

ratepayers. END Wind Welfare (#EndWindWelfare)!

Time to End the Global Warming Scam….Before it Ruins the World’s Economies!

Global warming: Can Owen Paterson save us from an unimaginable energy disaster?

There is no way of meeting the Climate Change Act’s targets, except by closing down Britain’s entire economy

Owen Paterson visits the Northmoor Pumping Station in Moorland

Owen Paterson visits the Northmoor Pumping Station in Moorland  Photo: Getty Images

Mr Paterson will, for the first time, reveal clearly just what we have now been committed to under the two Lib Dem ministers, Chris Huhne and Ed Davey, who, since 2010, have presided over our energy and climate change policy. Most of this is hidden away in policy documents so obscure that few non-insiders have any idea of where we are heading. But Paterson will explain, first, what is really now being planned, and, second, why it cannot conceivably work. He will then set out what hard-headed technical experts believe to be the only practical policy that could save us from an almost unimaginable national disaster.

1. The reality of our existing policy

Key to all our present energy policy is the fact that Britain is now, uniquely in the world, legally committed under Ed Miliband’s Climate Change Act to cutting our CO₂ emissions by more than 80 per cent by 2050. When this Act – which Mr Paterson wants repealed – passed almost unanimously through Parliament in 2008, not one politician tried to explain how in practice such a target might be achieved. But since then, the officials at the Department of Energy and Climate Change (Decc) have been trying to devise ways in which it might be possible, within 36 years, to eliminate those four-fifths of all the CO₂ emissions on which any modern economy depends.

Their declared aim, at an estimated cost of £1.1 trillion, is the almost complete “decarbonisation” of our economy. Astonishingly, this means that, before 2030, the Government plans to eliminate almost all use of the fossil fuels we currently use to generate 70 per cent of our electricity, to cook and heat our homes and workplaces, and to power virtually all our transport. They want all our existing coal- and gas-fired power stations to close.

Out will go petrol-driven vehicles, along with all gas-powered cooking and central heating. These are to be replaced by such a massive switch to electricity for heating and powering our vehicles that it will require a doubling of our electricity needs. Much of this is to come from “renewables”, such as wind turbines; most of the rest from new nuclear power stations – although, after 2030, new gas- and coal-fired power stations will again be allowed, on condition that all the CO₂ they emit is buried in holes in the ground (what is called “carbon capture and storage”, or CCS).

2. Why the policy cannot work

Mr Paterson will then show how any hope of achieving those Decc targets hidden away in a mass of opaque documents is, in practical terms, just pure make-believe. The EU would have us provide 60GW of electricity from wind turbines, which, thanks to the wind’s intermittency, would require a total capacity of 180GW. We would thus have to spend £360 billion on some 90,000 giant wind turbines, 85,000 more than we have at present, covering an area the size of Scotland.

To meet our 2050 target would require building 2,500 new windmills every year for 36 years, a rate eight times greater than we have managed in the past decade.

Because wind is so unreliable, the Government hopes instead to keep the lights on by adding 1.5GW of power every year until 2050 from huge, new “zero carbon” nuclear power stations. But we can already see what a pipe dream this is, from the only plant so far given approval, at Hinkley Point in Somerset. This is not expected to begin generating its 3.2GW until 2023, at a cost now estimated to have soared sixfold, to a staggering £24 billion.

Equally wishful thinking is Decc’s belief that by 2030 we might have “carbon capture and storage”. Even if this can ever be made to work on a commercial scale, its costs could treble the price of their electricity. As for providing electric replacements for two thirds of the 36 million vehicles on Britain’s roads, last year’s uptake was just 10,000. At this rate, we might get there in 20,000 years’ time.

In other words, there is not a chance of meeting any of Decc’s targets, except by closing down virtually our entire economy. So, as Mr Paterson will ask on Wednesday, is there any way in which such an incredible disaster can be averted?

3. Paterson’s ‘Plan B’

Having consulted a range of practical experts, Paterson will end by suggesting a revolutionary new energy policy, based only on proven technologies. This might not meet the requirements of the Climate Change Act, but at least it could achieve a dramatic cut in our CO₂ emissions (for what that is worth) – and, unlike Decc’s policy, his “Plan B” could guarantee to keep our lights on, our buildings heated, and our now almost wholly computer-dependent economy still functioning.

The first leg of his new policy would be to tackle what has long been one of the real scandals of the way we use energy, by wasting colossal amounts of heat from power generation. This could be used to warm most of the buildings in the country by what is known as “combined heat and power” (CHP). Official figures from the US government show just how dramatically gas-fired CHP compares with the inefficiencies of wind and solar power. At well over twice their efficiency, a CHP system can generate more than twice as much electricity as wind, and, furthermore, produces large quantities of heat, at significantly less cost – while actually saving 50 per cent more in CO₂ emissions. And if ever we can emulate the “shale revolution” that has recently cut US gas prices by two-thirds, the costs of CHP would be even lower.

The second proposal is that, instead of relying for nuclear power only on hugely expensive plants such as Hinkley Point, using obsolete reactor designs, we should look to hundreds of mini-reactors. These would be similar to those that have been used safely for decades to power ships (Rolls-Royce has been running one for 50 years next to Derby football ground). These could thus be installed much nearer to population centres, both to generate electricity and to power CHP district heating schemes.

The third leg, the only one Decc is currently looking at, is to use the latest computer technology to provide what is called “demand management”. This uses sophisticated techniques to reduce electricity demand so drastically that we could actually reduce our capacity by 40 per cent, without anyone noticing.

The stark alternatives, Mr Paterson will conclude, are that either we continue down the present course, which cannot begin to achieve any of its desired goals – or we can adopt an entirely new strategy, which could actually allow us to survive as an industrial nation.

In his lecture on Wednesday, he will be the first politician to kick off a properly realistic debate on Britain’s energy future. It could not be more desperately overdue.

Are the Liberals Finally Waking Up, in Britain? Green taxes are Absurd!

Green taxes DO harm the British economy and let other countries carry on polluting, Vince Cable admits

  • Business Secretary said levies on energy were undermining British exports
  • He said Lib Dems had to recognise green tax meant pollution was ‘exported’
  • Remarks will be seized on by the Tories who have warned of green tax harm

Vince Cable has launched an astonishing broadside against the party’s green agenda, saying that it imposes too high a cost on industry.

The Business Secretary said industries with high energy costs such as steel, are struggling against their international competitors because of soaring electricity costs.

Chancellor George Osborne has given £250million compensation to ‘energy intensive’ industries, but Mr Cable admitted this ‘doesn’t go the whole hog’.

It is a surprise admission from a Liberal Democrat, because the party is passionate about renewable energy which is funded by levies on households and businesses.

Vince Cable today warned Lib Dems not to overlook the fact that pollution could simply be 'exported' abroad if green taxes put British companies out of business

Vince Cable today warned Lib Dems not to overlook the fact that pollution could simply be ‘exported’ abroad if green taxes put British companies out of business

Read more: http://www.dailymail.co.uk/news/article-2781433/Green-taxes-DO-harm-British-economy-let-countries-carry-polluting-Vince-Cable-admits.html#ixzz3FNBNbfWM
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Wind Relies on Exorbitant Subsidies, Special Favours, and lack of Regulation!

Time for Wind to Stand on Its Own

Susan Combs | 09/25/2014 |
Time for Wind to Stand on Its Own

We in Texas are proud of our economic successes over the past several years. One topic that keeps popping up is our energy sector. Texas consumes a great deal of electricity because of its energy-intensive industries. And of course, we have hot summers.

Regular consumers pay the price tag for their air conditioning and these taxpayers hope that there is a rational basis for their energy costs. But when government puts its thumb on the scale and tips the balance toward one energy source over another, things can go awry. Remember Solyndra? The federal government put more than their thumb on the scales on that one – they put $536 million on the scales to support a solar panel maker and the taxpayers had to foot the bill when it went belly up.

With the population and economy growing, and the demand thereby increasing in Texas, it is critical that taxpayers and consumers not be disadvantaged by government policy. My office just issued Texas Power Challenge, a report that looks at the various energy sources used for electricity in Texas. When it comes to the rich subsidies they receive from the state and federal governments, wind generators and their turbines tower above other sources of electricity generation – this is particularly troubling considering the actual electricity they generate, especially during the times when Texans really needs the power.

Texas made a bet on wind nearly 15 years ago by mandating that power companies provide a certain amount of power from wind. The challenge for wind is that it is well, windy, only sometimes. When it is not, it needs a more reliable partner.  That is most often natural gas. Nonetheless, we doubled our bet for wind by mandating extensive and very expensive transmission lines that are primarily for wind. When the wind is not blowing, the lines are not being used to their capacity.

The lines, built to provide transmission infrastructure from the Competitive Renewable Energy Zones in West Texas, were projected to cost about $5 billion, but instead spiked to nearly $7 billion (a 40 percent increase in cost to consumers). And consumers are going to be paying these costs for 15 to 20 years. Adding insult to injury, the bulk of wind farms here are least productive at the time of highest demand, in the middle of hot summer days. The Energy Reliability Council of Texas (ERCOT), which manages system reliability for most of the state’s customers, says that summer capacity of wind is about 11,000 megawatts (MW), but it only counts on 963 MW because summer wind generation is so weak.

Subsidies and financial encouragement by states or federal agencies often look to fledgling industries that need a bit of help. With the wind capacity Texas now has, I would argue that market forces would produce a more efficient outcome and that the time for subsidies has passed. Texas has more than twice the amount of wind it originally mandated, and now has more subsidized wind power than any other state.

Because subsidies undoubtedly distort the market, caution should be used in their application. Texas has an economic development program that the wind industry has used extensively to limit property tax value on wind farms. For example, my office estimated in 2011 that wind projects qualified at that time under the property tax value limitation statute would receive nearly $850 million in total tax savings. Those wind projects were expected to create 480 jobs, which equates to about a $1.7 million tax benefit per job. That contrasts sharply with non-energy projects in the same program where the tax benefit per job was $195,565 — for 5,552 jobs. So instead of generating jobs and providing a reliable and consistent energy source, wind projects just generate higher costs. And there are increasing concerns about subsidies being used to encourage wind turbines close to homes, airports, military bases and migratory bird routes.

As the comptroller and chief financial officer of Texas, I worry about choices by policymakers that can have significant and adverse consequences. It seems to me that it is time for wind energy to stand on its own towers.

Susan Combs is the comptroller and chief financial officer of the state of Texas.

Stop the Outrageous Subsidies, and the Wind Scam Dies!

US Wind Industry Under Siege: Congress Set to Cut Subsidies as Communities Boil Over

turbine collapse 9

Wind power opponents seek repeal of tax credit
The Seattle Times
Hal Bernton and Erin Heffernan
21 September 2014

FOREST, Wisconsin — When wind-power developers prospected the rolling hills around this small dairy town, they found plenty of gusty sites for turbines. In 2011, they proposed a $250 million project with up to 44 turbines that could produce enough energy to power thousands of homes.

Since then, nothing has come easy for the developer in a state that has emerged as a stronghold of resistance to the spread of wind power.

In Forest, opponents gained enough votes to take over the town government, sued in state court to try to block the project, and added their support to a national movement that seeks to end the federal tax credit for the wind-power industry.

“We are here to protect our property values, our eagles, our health and our town,” said Brenda Salseg, spokeswoman for the Forest Voice, the local opposition group, which posted online a form letter urging the Wisconsin congressional delegation to oppose the tax credit.

The tax credit was passed by Congress in 1992 and has been periodically extended. It is currently set at 2.4 cents per kilowatt hour, and, during times of glutted electricity markets, can be worth more than the wholesale price of power.

This tax credit has helped catapult wind power to the front of the U.S. efforts to launch a renewable-energy industry.

By the end of 2012, wind power represented 43 percent of all new U.S. electric generation installed that year and was hailed by the Obama administration as a key in the global effort to combat climate change.

Wind power also has been bolstered by state mandates that require utilities to acquire a certain percentage of the power from renewable-energy sources.

The turbines operate in more than three dozen states, from Washington’s Columbia River Plateau to the Allegheny Mountains of Maryland, and in 2013 provided more than 4 percent of the nation’s power, according to a Lawrence Berkeley National Laboratory report.

In many areas, wind turbines have been welcomed as an economic boon to landowners who are paid for leasing acreage.

But as wind power has grown, so, too, has the opposition.

In some communities, such as Forest, developers have faced a backlash from residents concerned about the noise and health effects of living near wind-power projects.

The toll on birds and bats killed by turbine blades has drawn scrutiny.

Critics have attacked wind power as a fickle source of electricity that ebbs whenever the wind dies down. They fault the tax credit for encouraging new projects when many utilities have plenty of power.

Over time, the politics of wind power have become more partisan.

Most of the wind-power capacity is within Republican congressional districts, but many politicians in the party have made ending the tax credit part of their agenda. This year, efforts to extend the tax credit have made little headway in the Republican-controlled House.

Some House Republicans such as Rep. Dave Reichert, R-Wash., still back the tax credit, according to Reichert’s spokeswoman. But some former supporters have turned against it.

Rep. Kevin McCarthy, the House majority leader, once advocated the tax credit that helped spur investment in wind farms in his California district. But before his June election to his leadership position, he told the Wall Street Journal he thinks wind companies no longer need the tax credit.

“My feeling is the current situation is as bad as it has ever been,” said Robert Kahn, a Seattle consultant who represents wind-power developers. “Congress is so polarized about so many things that if some people are for it, other people are going to have to be against it.”

The fight against the tax credit also has been championed by Americans for Prosperity. One of the nation’s most prominent conservative advocacy groups, it was co-founded by billionaire David Koch, who has extensive interests in the fossil-fuels industry.

The organization last fall sent an open letter to Congress signed by more than 100 groups, including many smaller groups formed to fight wind power.

Wind-power advocates note that fossil-fuel industries have received federal subsidies for decades, such as a tax provision that allows favorable write-offs of oil-drilling costs. They say the government should put a price on carbon, or continue offering incentives for technologies that produce energy without carbon emissions. “We don’t want to lower or eliminate our tax credit when everyone else gets to keep theirs,” said Jim Reilly, a senior vice president of the American Wind Energy Association.

The wind-power tax credit extends over the first 10 years of a project’s operation. Congress has typically extended the credit a few years at a time, creating financial uncertainties for the wind-power industry.

In 2013, installations of wind farms declined by more than 90 percent from the previous year, reflecting concerns that the credit would not be extended.

Congress did extend the credit that year, eventually prompting many companies to break ground on projects.

Many are going in this year, putting the industry on a record pace for construction, according to the American Wind Energy Association.

The cost of new power has plummeted to record lows. The average price of about $25 per megawatt hour for power-purchase agreements in 2013 was nearly a third less than in 2009, according to a study by the Lawrence Berkeley lab.

What would happen if the tax credit dies?

Ryan Wiser, a co-author of the Berkeley report, said that would push the price of wind power past $40 a megawatt hour, and cool investor interest.

“The number of projects would be much less, but there is no doubt there would be some,” Wiser said.

Even without a tax credit, wind power also would receive a boost from President Barack Obama’s proposed rule to limit emissions from existing power plants. It could prompt the closing of some coal plants and open up more demand for turbine power.

But the proposed rule is opposed by many Republicans, and already is facing court challenges.

Conflict still rages Wisconsin once was swept up in the wind-power boom. But it’s now an example of how a state, even with federal incentives in place, can put the brakes on turbines. Many wind-power projects in Wisconsin are on relatively small properties, increasing the potential for conflicts with neighbors who don’t receive any lease payments but find themselves living next to turbines.

“The first day the turbines came on, I thought it was a jet plane taking off,” said Gerry Meyer, a retired mail carrier who complains of health effects from living near turbines in rural southeast Wisconsin.

Meyer has testified at state legislative hearings and also networked with Forest activists seeking to block the wind-power project proposed there by Emerging Energies.

These opponents have found some powerful allies among state Republican politicians.

“Wind turbines have proved to be an expensive, inefficient source of electricity, and thus any future construction of turbines simply is not a policy goal or object that should be pursued further,” Gov. Scott Walker wrote in a 2010 campaign memo obtained by the Milwaukee Journal Sentinel.

Walker, once in office, backed a legislative effort to increase setbacks for turbines by increasing the distance they must be located from a neighbor, and measuring that setback from the neighbor’s house rather than property line. That 2011 effort failed.

But a legislative committee voted to suspend the state’s wind-siting rule to study the health effects of wind turbines.

By the time the rule was reinstated a year later, five Wisconsin wind projects had been suspended or canceled, according to Clean Wisconsin, a wind-power advocacy group. New installations of turbines plummeted in the state.

In the months ahead, developers’ attorneys will argue in court for the right to finally move ahead on the Forest project.

Meanwhile, an emotional battle over the project continues to rage within the community. “It’s been devastating for the town,” said Carol Johnson, a Forest resident who supports the project. “Many family members will never speak again … It’s just torn the town apart.”
The Seattle Times

As it goes in Wisconsin, it goes all around the globe: spear giant fans into closely settled rural communities and the only thing guaranteed to be generated isn’t meaningful power, but a constant source of anger, hostility and community division. What makes these people so wild is that all their suffering has done nothing for the economy or the environment, leaving them feeling like dupes in the greatest fraud of all time (see our post here).

We love the line about how closing coal plants would “open up more demand for turbine power”. We think that’s a form of flattery best reserved for first dates. There is no “demand for turbine power”. In the absence of mandated targets (shortfall charges, penalties and the like) or massive subsidies there is NO demand for an unreliable and intermittent power source that can only ever be delivered at crazy, random intervals (see our post here). Wind power is not an alternative energy source (unless you’re prepared to sit in the dark for hours and days on end?) and will never be a substitute for conventional generation sources available on demand (see our post here).

We note a lot of “brave” talk about the wind industry being able to survive if the US Congress does away with the Production Tax Credit (PTC).

If the tax credit dies, the US wind industry dies – it will not be a case – as Ryan Wiser asserts – that: “The number of projects would be much less, but there is no doubt there would be some”.

What utter piffle. Cut the subsidies and there will never be another wind turbine erected anywhere, ever again.

The massive stream of subsidies – like the REC and PTC – provide the ONLY explanation for the wind industry – as recognised by the “Sage of Omaha”, billionaire Warren Buffett – whose company Berkshire Hathaway has invested $billions in wind power in order to get at federal subsidies – namely the PTC – which is worth US$23 per MW/h for the first 10 years of operation.

A subsidiary of the Buffett-owned MidAmerican Energy Holdings owns 1,267 turbines in the US with a capacity of 2,285 MW – eventually when the company’s Wind VIII expansion is finished, MidAmerican will own 1,715 turbines with a capacity of 3,335 MW. Buffett has piled into giant fans for one reason only: to lower the tax rate paid by Berkshire Hathaway.

As Buffett put it earlier this year at his annual investor jamboree in Omaha, Nebraska:

“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

There, Warren Buffett said it, not us.

At least he had the honesty and integrity to explain the only conceivable basis for the greatest rort of all time. And isn’t it so much better when those that profit from it choose not to speak with “forked tongue”. Maybe Ryan Wiser, the CEC and AWEA can take a leaf out of Warren’s book?

subsidies

European Union Finally “Gets It”….The Faux-Green Scam, is Nothing But a Money-Grab!

When can we expect the same sanity from the Liberals, in Canada, especially Ontario?  They are ruining our manufacturing sector, with their outrageous energy prices!  Families can no longer afford their electricity bills.  It has to STOP!

EU Dismantles Its Climate Commission Amid Economic Struggles

European Union leaders announced they will be consolidating energy and environmental goals under a new commissioner, effectively axing the intergovernmental groups’ climate arm as green policies are making it harder for citizens to pay their power bills.

Former Spanish agriculture and environment minister Miguel Arias Canete was tapped by the EU Commission to take over a consolidated energy and climate office. Canete will be replacing Climate Commissioner Connie Hedegaard and Energy Commissioner Guenther Oettinger in what is seen as a huge blow to Europe’s global warming efforts.

“The EU is signalling a historical shift away from its green priority towards a new focus on economic recovery, competitiveness and energy cost,” Dr. Benny Peiser, director of the Global Warming Policy Forum, told The Daily Caller News Foundation.

“This policy shift has been in the making for the last two years, but only now has Europe new leaders who are no longer obsessed with climate change,” said Peiser, who is based in the UK.

The change in EU energy and climate leadership was partly spurred by Russia’s aggression in Ukraine, which has put Europe’s natural gas supplies at risk. The Ukraine crisis also sparked calls for Europe to drill for its oil and gas using hydraulic fracturing and begin importing more energy from allies, like the U.S.

Europeans are also being burdened by rising energy bills from domestic green policies and EU rules that effectively mandate higher cost electricity generation from renewables, like wind and solar power. The UK, in particular has seen numerous power plants close down and is even considering WWII-style energy rationing to keep the lights and heat on this winter.

Canete preside over the drafting of new energy rules after the EU hashes out cap-and-trade reform and green energy targets in October. The former Spanish official will also have to balance Europe’s energy needs against pressures from interest groups and the United Nations to enter into a legally binding global climate treaty.

Environmentalists have expressed concerns that the EU Commission is abandoning too many of its environmental goals, especially by getting rid of its independent climate arm. Activists have even accused Canete of being too cozy with fossil fuels companies.

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“The choice of a Climate and Energy Commissioner with well-known links to the fossil fuel industry raises issues of conflict of interest,” reads a letter to the EU Commission from Green10 — a coalition of environmental groups.

“The fact that sustainable development, resource efficiency and the green economy are not covered at all at Vice-President level implies a Commission that will be operating on the basis of an outdated paradigm of economic growth, one that benefits the industries and jobs of the past over those of the future, and detached from real world constraints and limits,” the coalition said in its letter.

“Canete is a surprising choice, given his connections to the oil industry,” Greenpeace’s managing director in the EU, Mahi Sideridou, told Bloomberg in an emailed statement. “To prove he is the right man for the job, he’ll have to resolve conflicts of interests and improve on his environmental record as a minister.”

Canete is a lawyer by training and worked for Spanish Prime Minister Mariano Rajoy’s government from 2011 to 2014, reports Bloomberg. Canete was elected to EU Parliament in May 2014.

He has been described as “an acute politician” by analysts and could help make the EU’s fragmented energy and environmental goals more coherent and workable.

“His number one challenge will be to bring coherence into very fragmented policies, reflecting the commission’s recent proposal to put the [emissions trading system] back in the center of EU energy and climate policy,” Laurent Donceel, director at the consulting firm G+Europe, told Bloomberg.

Read more: http://dailycaller.com/2014/09/12/eu-dismantles-its-climate-commission-amid-economic-struggles/#ixzz3DPWpd0Z1

Scrap Renewable Energy Targets! It’s all a big scam!

Terry McCrann: The Mandatory RET – It’s Only a RORT When You’re Not In On It

terry_mcrann

Follow the money trail, and RET spells rort not power
Herald Sun
Terry McCrann
8 September 2014

TWO eternal pieces of advice emerged from the Watergate saga that kneecapped Richard Nixon’s presidency and then the president himself.

The first was the observation that it’s not the crime that gets you but the cover-up; the second was the instruction to follow the money.

While we’ve seen dozens if not indeed hundreds of examples of the former in the subsequent four decades, arguably it’s the latter that has proved more absolutely durable.

That’s been the case, if for no other reason than that, all too often, neither the crime nor the cover-up gets the — usually, political — “criminal”, with or without the quotation marks.

But “the money” always, always, leads somewhere. Throw in the great and piercingly accurate quote from Australia’s larrikin entrepreneur John Singleton that it’s only a rort when you are not in on it, and we arrive at the RET.

More specifically, we arrive at the long overdue and fundamentally necessary review of the RET — Renewable Energy Target — by businessman and both economic and climate realist Dick Warburton.

Somewhere along the line, as I’ve previously noted, it lost the “M” from its original acronym of M (for mandatory) RET, even though it remained just as punitively obligatory.

Well, the release of Warburton’s punishingly rational and even-handed review has unleashed a primeval scream across the renewable energy sector as if torn from Munch’s famous painting.

Follow the money, your money — and the screams. They lead directly to all those who have been sucking on the taxpayer and consumer teat: so far, as Warburton detailed, to the tune of over $9 billion (of your money) with another $22 billion (still, of your money) to come, if the scheme is left untouched.

Those figures are in NPV (net present value) terms — which mean the total of actual dollars wasted every year through until at least 2030 will be much, much bigger.

We have seen the usual campaign of misrepresentation and outright lies to scare the Federal Government out of turning off the money flows to all the renewable energy main-chancers.

This has been done in the context of a vicious campaign to demonise Warburton as a climate sceptic, by deliberately mischaracterising and indeed simply ignoring what he recommended. If anything Warburton went too lightly on the extraordinary fraud that is so-called renewable energy.

Extraordinary, but so obvious. What part of: when the wind don’t blow the power don’t flow; and when the moon comes out the glass doesn’t glow, do assorted otherwise intelligent people and useful idiots find impossible to comprehend?

That, on a more substantive level, every single MW of installed (sic) wind and solar capacity (sic) has to be backed up by real sources of power generation, otherwise known as carbon-based coal or gas?

Even in the country which is the poster boy for wind power — Denmark — which gets close to a third of its total power from wind, there are times when it gets zero, nothing, nada, from that source.

It then has to use its own coal-fired generators or tap into the power generation of its neighbours — mostly Norway, Sweden and Germany.

That means it gets access to a mix of hydro — when the water’s flowing; nuclear; and coal, with “green” Germany building more Hazlewood-style brown coal stations because, ahem, even in Germany some times the winds don’t blow.

The bottom line with wind so-called power — for all the lazy allure of solar panels on rooftops and even massive solar “farms”, almost all future RET-imposed renewable spending will be on wind — is that its actual cost of production is two-to-three times that of coal.

We have seen an innovative form of deception with the claim that massive increases in wind will work to reduce future power prices.

The claim is true, in terms of potential prices to the power buyer, because the RET would swamp energy supply with compulsory wind. Generators of real and reliable (coal-fired) power would cut prices to buy a slice of the lower non-RET available demand.

To understand why it’s a fraud, imagine if we’d done that to “save” the car industry. The government could have mandated 20 per cent of cars bought had to be locally made. It might well have sparked a cut in prices by importers fighting over the remaining 80 per cent, but it would not be sustainable.

Whether cars or power, the market would correct. In the case of power, generators of (actual) cheap power would be forced to close, leaving us with mandatory (actual) expensive wind power.

Somebody, somewhere, would have to pay the bill for producing wildly expensive wind power.

Warburton didn’t actually go near any of these core absurdities; there wasn’t an ounce of climate scepticism in his analysis, far less the recommendations.

All he did was to arrive at the inescapable conclusion that using the RET to try to reduce emissions of carbon dioxide was grossly wasteful and inefficient. He was also very mindful of the legitimate point that, whether sane or not (my comment, not), people had invested money on the basis of the RET, and to simply scrap it would be unfair.

So he offered two alternatives. The first was to continue the scheme until 2030, but freeze it at its current level of investment, including projects that had just only been committed.

As he noted: this would “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.

“Importantly, this approach avoids the costs to the community associated with subsidising additional generation capacity that is not required to meet electricity demand.”

Alternatively, to grow the RET in line with growth in electricity demand; and indeed, allocate it 50 per cent of that growth.

That is hardly the recommendation of a so-called sceptic, but of a businessman — who doesn’t think you can simply ignore both arithmetic and reality — doing the job he was asked to do.

But no, no, that was not enough for the reality-deniers sucking on the renewable target teat. They don’t want us to follow the money, just to keep it coming.
Herald Sun

dirtyrottenscoundrelsoriginal

Aussies Determined to Scrap the Renewable Energy Targets to Save the Poor!

Senator David Leyonhjelm: “Wake Up Clive!” – It’s Time to Kill the RET & Save the Poor

clive palmer sleeping

STT hears that Tony Abbott is hard at work on his mission to kill off the mandatory RET – with the aim of bringing an end to the most expensive and pointless policy of all time. One of the cross-bench Senators the PM needs to help demolish it during this parliament is David Leyonhjelm – the Liberal Democrats Senator for NSW – and he gets it.

David has come out with a cracking piece published by The Australian – which is pitched squarely at Clive Palmer and his PUPs. The Palmer United Party’s 3 Senators – Glenn Lazarus (QLD), Dio Wang (WA) and Jacqui Lambie (Tasmania) – are the only obstacle that stands in the way of scrapping the mandatory RET during the life of this parliament. Big Clive and his Senators should consider David’s article a timely “wake up” call.

Ditch RET to set economy free
The Australian
David Leyonhjelm
27 August 2014

If Labor and Clive Palmer care about the poor they will stop subsidies for windmills.

ELECTRICITY bills are a huge worry for many Australians. In coming months a lot of people will receive the biggest household utility bills they have seen.

The latest figures from the Australian Bureau of Statistics show that in the five years to June 2012, Australia’s retail electricity prices rose by 72 per cent with even higher increases in Melbourne and Sydney.

The Queensland Competition Authority’s annual report revealed recently that 344 households were disconnected every week in the Sunshine State because of non-payment of electricity bills.

Senators and MPs, however, don’t need to worry about whether staying warm in chilly Canberra may send them broke. Perhaps if they had to pay for their own heating and airconditioning in Parliament House, it would concentrate their minds on the important discussion we need to have on the future of the renewable energy target.

The repeal of the carbon tax will help, but studies show that the RET has an even greater impact on the bottom line, reducing our living standards and the competitiveness of our entire economy.

The dramatic surge in power bills has been a major factor in the decline of our manufacturing sector and the loss of thousands of jobs. In a little more than 10 years the RET has rocketed Australia from almost the cheapest to almost the most expensive electricity in the world: Australian states occupy four of the top six spots beaten only by Denmark and Germany. These countries also are sapped pointlessly with punishing renewable energy policies producing small amounts of extremely expensive, intermittent power that has to be backed up by fossil fuel power anyway.

Contrary to claims by industry lobby groups and consultants representing Big Wind producers and merchant bankers, it is no coincidence that power prices went up so steeply when mandatory renewable energy targets were introduced. A report from the accounting firm Deloitte shows the RET will stifle the economy, cost jobs and drive up prices, and is a very inefficient means of reducing greenhouse gas emissions. It concludes that abolishing the RET would increase real GDP by $29 billion in net present terms relative to the RET continuation.

The chief beneficiary of the RET is the wind industry, which receives Renewable Energy Certificates worth about $30 for every megawatt of electricity it produces, on top of the price paid to it for electricity generated by wind turbines. The certificates are funded by electricity customers as a hidden charge on their bills. The net effect of this subsidy is to hand an additional $17bn of our money to these companies over 15 years for no measurable environmental benefit.

It is undisputed that despite being a mature technology the wind generation industry is not viable anywhere in the world without government or customer subsidies. It is just government mandated corporate welfare.

Grant King, chief executive of Origin Energy, one of Australia’s largest electricity retailers with extensive interests in gas and wind energy generation, has said that the RET would be the main driver of electricity price rises by 2020 and that renewable energy costs now accounted for 14 per cent of electricity bills, up from 2 per cent five years ago; for larger users it is 30 per cent of their bills.

If Labor, the Greens and Clive Palmer really care for social justice they will not allow working families, pensioners and the disadvantaged to be ripped off by wealthy wind generators and will back the abolition of the RET.

David Leyonhjelm is the Liberal Democrats senator for NSW.
The Australian

david leyonhjelm

When David talks about handing wind power outfits “$17bn of our money … over 15 years for no measurable environmental benefit”, he bases that figure on a REC price of $30.

While RECs are currently trading at $30, from 2017 – when the annual figure for the RET starts to increase dramatically – RECs will be worth at least as much as the mandated shortfall charge of $65 per MWh.

The total renewable energy target between 2014 and 2031 is 603,100 GWh, which converts to 603.1 million MWh (1 GW = 1,000 MW). In order for the target to be met, 603.1 million RECs have be purchased and surrendered over the next 17 years: 1 REC is issued for every MWh of renewable energy dispatched to the grid. The REC is a Federal Tax on all Australian electricity consumers.

The cost of subsiding the wind industry through the REC Tax is born entirely by Australian power consumers. As Origin Energy chief executive Grant King correctly put it earlier this week:

“[T]he subsidy is the REC, and the REC certificate is acquitted at the retail level and is included in the retail price of electricity”.

It’s power consumers that get lumped with the “retail price of electricity” and, therefore, the cost of the REC subsidy to wind power outfits.

Even at the current REC price of $30, the amount to be added to power consumers’ bills will hit $18 billion (David gets pretty close with his figure of $17 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).

This massive stream of subsidies for wind power stands as the greatest wealth transfer in the history of the Commonwealth.

That transfer comes at the expense of the poorest and most vulnerable; struggling businesses; and cash-strapped families.

If Clive Palmer is serious when he says he is out to represent the poorest in society, he has a golden opportunity to put his money where his mouth is.

With thousands of Australian households living without power – having been chopped from the grid simply because they can no longer afford what used to be a basic necessity of life – and thousands more suffering “energy poverty” as they find themselves forced to choose between heating (or cooling) and eating – Australia risks the creation of an entrenched energy underclass, dividing Australian society into energy “haves” and “have-nots”.

For a taste of the scale (so far) of a – perfectly avoidable – social welfare disaster, here are articles from Queensland (click here); Victoria (click here); South Australia (click here); and New South Wales (click here).

Slapping a further $50 billion on top of already spiralling Australian power bills over the next 17 years can only add to household misery. So Clive, if you really do care about the poor? – then it’s time to muscle up and help kill the mandatory RET now.

Beyond the RET’s perverse impact on the poorest and most vulnerable is its wealth and job destroying impact on the economy as a whole.

The Australian Chamber of Commerce and Industry (ACCI) – the top body representing Australian business – came out with this press release in full support of the position taken by David Leyonhjelm – calling for the mandatory RET to be scrapped outright.

Australian Chamber of Commerce and Industry
MEDIA RELEASE
WEDNESDAY, August 27, 2014

BUSINESS WELCOMES LEADERSHIP ON RENEWABLE ENERGY TARGET

The Australian Chamber of Commerce and Industry (ACCI), Australia’s largest and most representative business organisation, welcomes the leadership of Independent Senator David Leyonhjelm in calling for the abolition of the Renewable Energy Target (RET).

The RET is a major policy failure that drives up electricity prices and is a highly inefficient means of emissions abatement. Economic modelling by Deloitte Access Economics commissioned by ACCI makes a powerful policy case for the abolition of the RET. The modelling shows that persisting with the policy in its current form will cost the economy $29bn in lost economic output and more than 5,000 jobs.

“It is a matter of deep regret that a policy with such appalling economic foundations has remained uncontested for so long”, remarked Chief Economist Burchell Wilson.

“This insidious tax needs to be taken off energy users and is important step toward restoring the competitiveness of Australian industry.”

“The business community remains hopeful that the Palmer United Party after examining the findings of the Deloitte Access Economics modelling will reconsider their support for a policy that is driving up electricity prices, sending businesses to the wall and destroying jobs”.

While options for appropriate compensation for sunk investment under the scheme will need to be considered, it is clear that abolition of the RET is the best outcome for energy users and the economy.

At the very least the target should be wound back to a level consistent with 20 per cent of demand in the wake of the collapse in actual and projected electricity consumption over the past five years.

A robust Parliamentary debate in which all the facts are on the table is the first step in achieving that objective.
Australian Chamber of Commerce and Industry
27 August 2014

kate carnell

Aussie Politicians, We Can ALL Be Proud Of!!!

Tony Abbott, Joe Hockey & Mathias Cormann: Natural Born RET Killers

abbott, hockey, cormann

Tony Abbott has made no secret of his eagerness to do away with the most colossal corporate welfare scheme in the history of the Commonwealth (see our posts here and here and here).

And his Treasurer, Joe Hockey has pinned his colours to the mast as someone who can’t stand wind farms – and whose political mission is to bring the “age of entitlement” to an end, which includes the stream of subsidies directed at wind power outfits (see our posts here and here).

The Finance Minister, Mathias Cormann made his disdain for the great wind power fraud known by joining Hockey to prevent the Clean Energy Finance Corporation signing up anymore unsecured loans to wind power outfits (see our post here).

So it comes as no surprise that Abbott, Hockey and Cormann would team up as Natural Born RET Killers. Here’s the Australian Financial Review heralding the beginning of the end for the mandatory RET and, with it, the end of the great Australian wind power fraud.

Abbott’s plan to axe RET
Australian Financial Review
Phillip Coorey
18 August 2014

The federal government is moving towards abolishing the Renewable Energy Target rather than scaling it back in a move that will cost almost $11 billion in proposed investment and which is at odds with the views of its own Environment Minister.

The Australian Financial Review understands Prime Minister Tony Abbott has asked businessman Dick Warburton, whom he handpicked after the election to review the RET, to do more work on the option of terminating the target altogether. This was after Mr Warburton’s review leant towards scaling back the RET.

Sources said Environment Minister Greg Hunt, who advocated scaling back the RET as a compromise, has been sidelined from the process and is understood to be unhappy. They said Mr Abbott, Treasurer Joe Hockey and Finance Minister Mathias Cormann are pushing the issue now.

A government source said when the government announced its decision, possibly before the end of this month, it was now “more likely” the RET will be abolished under a so-called “closed to new entrants scenario” in which existing contracts only would be honoured.

Given Clive Palmer has vowed to block any change to the RET until after the 2016 election, it remains unclear when the government could declare the RET terminated.

Independent modelling commissioned by the Climate Institute and other environmental groups, and which will be released Monday, found that under the termination scenario, coal-fired power generators would reap an extra $25 billion in profits between 2015 and 2030.

There would be no reduction to household power prices and carbon emissions would climb by 15 million tonnes a year on the back of a 9 percent increase in coal-fired power.

Diminished investments

Abolishing the RET would diminish investment in renewable energy by $10.6 billion, said the modelling, conducted by consulting firm Jacobs.

Conceived under the Howard government, the RET mandated that 20 per cent of Australia’s electricity be generated from renewable sources by 2020. The Abbott government has been lobbied heavily by the business and energy sectors to abolish or water it down as renewable energy gained a larger than expected share of the electricity market.

When the RET was first conceived, it was envisaged 20 per cent of total power production by 2020 would equate to 41,000 gigawatt/hours of renewable energy produced each year.

Under the scaleback favoured by Mr Hunt, annual production of renewable energy in 2020 would be reduced to 27,000GWh. But this would still amount to 20 per cent of total energy production because forecast total energy production for 2020 had been downgraded due to the decline in manufacturing, especially the collapse of the car industry and the closure of two aluminium smelters. This is known as the “real 20 per cent” option.

The abolition proposal would reduce renewable energy production in 2020 to 16,000GWh.

It is understood Mr Abbott’s office was briefed on the recommendations of the Warburton review in late July. The review found the RET did not add significantly to household and commercial power bills, as its critics, including Mr Abbott, had argued, and that it should be scaled back to the real 20 per cent model as advocated by Mr Hunt.

With the government favouring ­termination, Mr Warburton was asked to give the option more consideration and his report is expected this week.

Energy oversupply

The government source said the market was oversupplied with energy and there was no longer any cause for a mandated use of any specific type of power. The source said while there would be investment losses if the RET was abolished, or even scaled back, investors “would have to have been blind to know this wasn’t coming”.

Miles George, managing director of renewable company Infigen Energy, said either scaling back or terminating the RET “would be devastating”.

He said the creation of sovereign risk would be significant and the very issue had been raised by prospective foreign investors, including Canadian pension funds which Mr Abbott sought to woo when abroad in June.

“Infigen’s shareholder base of over 20,000 investors has invested in renewable energy in Australia on the basis of a fixed target of 41,000 GWh by 2020,” Mr George said. “This is no different to investors in private public partnerships acquiring a toll road concession, or a port lease.

“If the Government pulls the rug from under institutional investors in renewable energy we shouldn’t expect those investors to come back to buy other infrastructure assets here, including the electricity networks and generation assets that the governments of NSW and Queensland are proposing to sell or lease.”
Australian Financial Review

The AFR touts the wind industry line about “diminished investments”, as if wind power outfits are lining up to make an outright, “no-strings-attached” gift of $10.6 billion to Australian power consumers.

On that spin, Australia’s power punters are meant to fear the “loss” and shed a tear for cowboys like Infigen (aka Babcock & Brown) who are, apparently, just itching to give their investors’ money away.

Of course, like every investment, those stumping up the capital will only do so where a juicy return is on offer; and, under the current 41,000 GWh target set by the mandatory RET, the returns promised to be very “juicy”, indeed. Until now.

So let’s have a look at just who ends up paying for the promised (or, rather, threatened) $billions in wind power investment: we’ll call it $10 billion for ease of reference.

Before we kick off, there are a few things to note.

First, is that around 50% of the value of the threatened “investment” will go to foreign turbine manufacturers in China, India and Denmark. So that sends at least $5 billion offshore; adding to Australia’s current account deficit.

Next, is the fact that the great bulk of any wind power “investment” is underwritten by all Australian power consumers via the mandatory RET – as detailed below.

And it needs to borne in mind that any “investment” in wind power generation capacity has to be matched with an equal investment in fossil fuel generation capacity (principally fast-start-up Open Cycle Gas Turbines) to provide power to balance the grid (the need for which increases – along with the need for additional spinning reserve held by base-load thermal generators – due to the wild fluctuations in wind power output – see our post here) and to accommodate routine, but unpredictable, collapses in wind power output (our posts here and hereand here and here and here and here and here and here).

The greater the amount of installed wind power capacity, the greater the need for highly inefficient OCGTs – the installation of which needs to be financed, allowing for returns to those providing the capital: a cost that is never included in calculations accounting for the costs attached to wind power generation (see our post here).

As noted by the AFR, the Australian energy market is oversupplied, which means any further investment in an unpredictable and unreliable source like wind power will simply cause further and substantial increases in retail power prices, additional grid instability and energy market chaos – precisely the circumstances the Germans now find themselves in, after years of runaway renewable energy policy (see our post here).

An “investment” NOT a “gift”

Any investor naturally looks for a return on a capital investment. Ideally, that return exceeds bank interest and – if there is any risk involved – accounts for that risk by way of higher returns. Investors in wind farm projects aim for a gross return on the capital invested in the order of 20% per annum.

That means that the investors stumping up $10 billion to build new wind power capacity will be looking to recover $2 billion from power consumers each and every year to achieve that level of return: returns on wind power investments can only be recouped via income received from power sales – there is NO other source of revenue.

So, rather than being the objects of $10 billion in wind industry largesse, power consumers are being lined up for an enormous, additional and – because there is already ample generating capacity to meet (declining) demand well into the future – completely unnecessary $2 billion hit in the hip pocket each and every year.

A fair slice of the $2 billion annual return on investment required by investors would be recouped via power bills in the form of Renewable Energy Certificates (RECs): a Federal Tax on all Australian electricity consumers. RECs are issued to wind power generators and transferred to retailers under the Power Purchase Agreements signed between them (see our post here).

Which brings us to another furphy trotted out in the AFR piece – based on “modelling” by wind industry cheer squad, the Climate Institute – that the mandatory RET hasn’t had any significant effect on retail power prices; and that scrapping it would not result in any decrease in power bills.

As we’ve just pointed out, the $10 billion in threatened wind power investment would, alone, add $2 billion to Australian power bills each and every year: no return, no “investment” – simple as that.

The true cost of the mandatory RET

As is the style of the wind industry and its parasites, whenever they’re pitching about the “wonders” of wind it’s all done with “modelling” and never with real numbers. Smoke and mirrors stuff, using assumptions that never hold water – and always ignoring the terms of the legislation upon which the whole rort depends.

So – let’s forget about “models” – based on nonsensical and unjustified assumptions – and simply apply a little old fashioned arithmetic to the provisions that make up the mandatory RET.

Putting aside the hidden costs of providing fossil fuel back up to cover the occasions when wind power output plummets every day – and for days on end (see our post here); putting aside the need for a duplicated network to carry wind power from the back blocks to urban markets (seeour post here); putting aside the cost of running highly inefficient Open Cycle Gas Turbines to cover wind power “outages” (see our post here), for the purpose of this argument let’s just focus on the cost of Renewable Energy Certificates and their bedmate – the mandated shortfall charge.

Under the mandatory RET – retailers are fined $65 per MWh for every MW they fall below the mandated annual target: what’s called the “shortfall charge” – follow the links here and here. The shortfall charge is directed straight to the Commonwealth, ending up as general revenue.

The alternative is to buy RECs (which is done via the retailer’s PPA with the wind power generator) and surrender them as proof that the retailer has purchased a MWh of renewable energy.

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.

Since the RET began in April 2001, over 195 million RECs have been created – worth more than $8 billion – the cost of which has all been added to our power bills.

The cost of the REC is ultimately borne by retail customers and, therefore, constitutes a Federal Tax on all Australian electricity consumers (see our post here).

Time for a little arithmetic.

If no RECs were purchased, retailers would simply be hit with the $65 per MWh shortfall charge on the entire figure set by the mandatory RET legislation (see the link here).

That cost alone would add $2.665 billion to power bills annually from 2020 to 2031.

Alternatively, if sufficient RECs to satisfy the target were purchased at $100, say, the cost rises to $4.1 billion a year from 2020 through to 2031.

Year RET in MWh (millions) Shortfall Charge
(or RECs) @ $65
RECs @ $100
2014 16.1 $1,046,500,000 $1,610,000,000
2015 18 $1,117,000,000 $1,800,000,000
2016 22.6 $1,469,000,000 $2,260,000,000
2017 27.2 $1,768,000,000 $2,720,000,000
2018 31.8 $2,067,000,000 $3,180,000,000
2019 36.4 $2,366,000,000 $3,640,000,000
2020 41 $2,665,000,000 $4,100,000,000
2021 41 $2,665,000,000 $4,100,000,000
2022 41 $2,665,000,000 $4,100,000,000
2023 41 $2,665,000,000 $4,100,000,000
2024 41 $2,665,000,000 $4,100,000,000
2025 41 $2,665,000,000 $4,100,000,000
2026 41 $2,665,000,000 $4,100,000,000
2027 41 $2,665,000,000 $4,100,000,000
2028 41 $2,665,000,000 $4,100,000,000
2029 41 $2,665,000,000 $4,100,000,000
2030 41 $2,665,000,000 $4,100,000,000
  Total $36,483,500,000 $56,210,000,000

 

RECs are currently trading around $30, but, as the target starts to bite from 2017, the price is expected to reach $90 and is tipped to reach $100 beyond that.

The shortfall charge (as a fine) is a cost that the retailer can’t claim as a legitimate tax deduction, whereas the REC is – this places an added value on the REC to the extent that its face value can reduce the retailer’s taxable income. At a minimum then, RECs can be expected to trade at a figure at least equal to the shortfall charge. But with the tax benefit attached, RECs would be worth at least $94 – based on a shortfall charge of $65.

At the bottom end, this means the value of RECs surrendered (and/or the shortfall charge applied) will add over $36 billion to power bills over the next 17 years. At the top end, the figure (assuming RECs hit $100 by 2017) will exceed $50 billion.

These figures represent the greatest transfer of wealth in the history of the Commonwealth: a transfer that comes at the expense of the poorest and most vulnerable in society; struggling manufacturing businesses, real jobs and families. To call the mandatory RET obscene is pure understatement. No single policy has ever threatened to cost so much for nothing in return.

It’s these hard and fast facts that have united the PM, his Treasurer and Finance Minister with the intention of killing the mandatory RET outright; and the vast majority of the Coalition are right behind them. The sooner the Coalition axe it, the better. The mandatory RET must go now.

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