Written by Joanne Nova on Dec 11, 2018 . Posted in Latest news

It’s Santa’s happy hour in electricity land

Finally, No really, renewables are so cheap we can switch to them and change the global climate for free.

This is a new study by the kind of “independent” group that is totally dependent on Big Gov handouts.

It compares Australian prices to other obscenely expensive countries and finds that “renewables push down prices.” Compared to what?

Not compared to nations with cheap electricity. And not compared to most of the last thirty years in Australia before we added all the unreliable gear.

The tricky graphs clearly baffled Peter Hannam. If only he were a journalist, he could have asked some hard-hitting questions and shown this study to be the concocted vaporous PR exercise that it was.

‘No trilemma’: Study finds increased renewables push down power prices Peter Hannam, Sydney Morning Herald Renewable energy drives down wholesale power prices well in excess of subsidy costs and a further expansion of wind and solar would likely push them lower still, a study of Australian and European markets shows.

If renewables actually reduced average prices, this would be a first. Around the world, the more intermittent generators you have, the more you have to pay for electricity.

Say it again: there is no country on Earth with lots of solar and wind power and cheap electricity.

We don’t need a tricky model, we just need a graph.

Compared to what?

The findings come as Neoen, owner of the world’s largest lithium battery, claimed the storage unit in South Australia had saved the wholesale market about $40 million in its first year of operation. The battery, whose capital costs have been reported as $90 million, had saved almost $40 million a year in Frequency Control Ancillary Service, benefiting SA and other regions.

Saved the market how much and compared to what? FCAS or Frequency control service charges hit a record high of $73 million last quarter (AEMO Q3 report, p 16). Has the battery saved us any money at all, or is it just that insanely expensive services could have been insane + $40m more? Wasn’t FCAS essentially free when we just ran with big coal plants?

The renewables research by the Victoria Energy Policy Centre, a hub set up by the Victorian government, examined the wholesales electricity market in South Australiafrom 2013-18 and compared it with the high-cost energy markets in Denmark, Germany, Italy and Britain.

Plum choice. None of these four nations have cheap electricity. Don’t we want to be cheap compared to… our competitors instead?

It’s a magical time of free money. Finally, you can have cake, eat cake, and stabilize the grid with cake

Bruce Mountain, director of the centre and the lead author of the report, said there was no longer an industry trade-off between power prices, reliability and greenhouse gas emissions.

This group could have called itself the “Renewable Energy Industry Lobby Group”.

The Victorian Energy Policy Centre (VEPC) was set up by an organization that says climate change is real and we should spend billions on it. That organization has pegged its bets (and staked its reputation) entirely on a forced renewables transition. It also consumes more than a quarter of the entire state GDP.

The VEPC calls itself “independent” which is the luxury of government-funded groups that are permitted to ignore the largest vested interests in their state and pretend it is not a vested interest.

This subsidy we don’t need, shouldn’t stop, and other Soviet bedtime stories

The Prof says they don’t need subsidies, but the subsidies “pay for themselves” so, therefore, the government should do it more and faster. I think we’ve heard this before somewhere…

But Professor Mountain said if the objective is to bring prices down, “you ought to be hastening the entry of cleaner sources more quickly than otherwise would happen”.

“There is no doubt that the market left to itself will bring in wind and solar but if you bring it in more quickly and it can pay for itself so handsomely why would you not seek to do it?” he said, adding that the SA experience would be mirrored in other states such as Victoria, NSW and Queensland.

Indeed, in the non-communist-world, paying for something in advance to earn a greater return is known as “investing.”

Since this is supposedly guaranteed free money, obviously Australia does not have entrepreneurs anymore.

Either that or Mountain is spinning a sales job, advertising lemons that don’t sell in the real world, because they don’t work, aren’t competitive and go out of business when the subsidies are cut off.

But who could blame him, Bruce Mountain is in a sense, a de facto employee of The Victorian Government, if he said anything less, they might have to shut down the center, or at least, cancel next years grant.

I’m sure everything he says is true (in a limited sense), and it just didn’t occur to him to compare us to countries with cheap electricity. Sure.

As for subsidies, we all know they prop up inefficient business and destroy jobs.

Firstly jobs vanish thanks to the opportunity cost as other businesses close because they can’t afford electricity, then, secondly when the subsidy bubble bursts.

The Germans have been cutting their subsidies, and it’s a bloodbath with 80,000 solar jobs gone.

In Australia, when there were threats to review the RET scheme 90% of new large-scale investments dried up.

In China when $15 billion dollars of solar subsidies were suddenly axed in June this year, solar stocks fell up to 30% the next day.

Notably, a Chinese academic explained at the time that the Chinese government was cutting the subsidies to make electricity cheaper – the exact opposite of what the Australian academic says.

Who to believe? Should the government make investments or leave it to the market? See the Soviet Union versus USA, 20th Century.

One day, Australians hope to be as advanced as the Chinese in free-market thinking for our electricity grid.

Read rest at JoNova

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