The dark forces lined up against renewables in Australia

Print Friendly

The Australian renewables industry is under no illusion about the extent of the forces lined up against it following the election of a highly conservative Coalition government in Canberra.

The antipathy to renewables in large sections of the Coalition is deep set, as it is among some of the highly influential and ultra-conservative think tanks such as the Institute of Public Affairs, and various industry lobby groups.

But even battle-weary supporters of solar and wind energy – and those firmly in the middle of the road –  were taken aback by an extraordinary tirade against renewable energy delivered in Sydney on Wednesday by Burchell Wilson, a senior economist at the Australian Chamber of Commerce and Industry.

ACCI is one of the most visible and influential lobby groups in Canberra, and its opposition to climate policy, carbon pricing, and renewables incentives, is well known. Still, no-one was quite ready for the “venomous rant” – as one observor described it – against the renewable energy target that Wilson delivered to the Eastern Australian Energy Outlook Conference.

Wilson’s approach was not atypical of the sort of rhetoric we have come used to hearing from conservative energy ministers – be they state of federal – and the incumbent utilities, who are threatened by the rise of renewables, and their cheerleaders in the conservative think tanks.

The trick for these people is to ignore the benefits of renewables – increased investment, more jobs, lowering emissions, delivering a  faster transition to low carbon economy, solar delivering cheaper alternative to homes and businesses – and instead paint a doomsday scenario.

There was no mention of the massive influence of network costs, or the $1 billion in annual subsidies paid to support the delivery of fossil fuel generation to customers in WA and Queensland. Instead, the focus is on inflated “abatement costs” using out of date technology prices, warnings about rising energy costs, collapsing industries and economies, and all the things that only a “green ideologue” would think were good.

Then you throw in hyperbole – the renewable energy target  was “crazy”, “an ugly baby”, and “bad policy” that could only be justified by an “ideological predeliction towards renewable energy.”

This was a view, Wilson claimed, that was “largely uncontentious”.  There were “no economists I know who is not an ideologue who disagrees with that.”

Given that more than 100 countries now have renewable energy targets of some sort, and that these are recommended as sound policy by such conservative bodies as the International Energy Association, that must mean there are a heck of a lot of ideologically-driven economists out there. Probably the same mob inventing crap about climate change, pushing for carbon pricing and a new world order.

But Wilson is simply calling the kettle black, or green as the case may be. “That was one of the most deceptive, disingenuous and manipulative presentations I have ever seen,” said Andrew Richards, the external affairs manager for renewable energy investor Pacific Hydro. “It was almost comical.”

Jonathan Upson, from Infigen Energy, described it as the “most creative presentation I have seen.”

When challenged by Upson and others on his statements, Wilson, a former regulatory economist with a Victoria-based energy distributor, declared that: “I’m an economist, so costs are my forte.”

And later, he added: “You can have your own opinions about climate change and climate policy, but you can’t have your own facts.”

But apparently you can.

When challenged by Upson about his claim that the RET had been the second biggest contributor to the doubling in retail electricity prices in the last five years, ignoring the impact of network upgrades that accounted for at least half of that, Wilson said: “I was just referring to green schemes. It’s a power point presentation … it’s shorthand.”

When it was pointed out that renewables had contributed to sizeable falls in wholesale prices – a fact recognised by participants, regulators and analysts in energy markets across the world: Wilson replied: “I was here talking about the RET, I’m not sure why you talking about wholesale prices.”

Well, the reason people talk about wholesale prices is that these falls more than offset the costs of the scheme in the first place, and deliver lower wholesale electricity costs to all. This, the so-called merit order effect, was deemed an asset until the generators discovered just how far this undermines the earnings from their incumbent investments. Which is probably why the man from Alinta (the owner of two mothballed coal fired generators) leaped to Wilson’s defence, and why generators in general are seeking to have the RET diluted or removed.

(A graph prepared by the Australian Energy Market Commission which highlights the contribution of network pricing, green schemes and the declining wholesale prices can be found here).

And when RenewEconomy challenged Wilson over his claim that the RET did not displace coal, but displaced gas instead, Wilson said:

“I don’t think I actually said that, did I.”

Er, yes, you did. Everyone heard it and I and the conference organisers have it on tape. And AEMO data states quite clearly that since the introduction of the 20 per cent RET by Labor, with the full support of the conservatives, black coal generation has fallen by 15 per cent, but gas generation has actually increased – along of course, with renewables.

If you doubt what the energy market operator has to say about this, read what Queendsland’s biggest generator Stanwell Corp has to say about the ipact of demand and wholesale prices. You can even see a pretty graph illustrating the changes in generation here.

“I’m talking about the operation of the RET over a specific juncture in time,” Wilson complained, without identifying which particular juncture. “I really don’t understand what the mentality is here with these point scoring exercises.”

Probably just to point out that you cannot bring your own facts to the table.

The tragedy of this is that Wilson’s presentation may have been plain wrong, nasty, manipulative and ideological, but he’s not alone in Canberra. Even middle-of-the-road energy folk found the presentation to be “unprofessional”, but noted that while energy market professionals may see the obvious holes in the argument, some politicians could be easily swayed, and offer up the same nonsense.

As Wilson (rightly) pointed out, there is a vast reserve of anti-renewables passion in the rump of the National Party and the Liberal party backbench open to such rhetoric– which insiders say is being whipped up by new Liberal MP Angus Taylor.

Wilson expressed his hope that these views would overwhelm those of moderates such as Environment Minister Greg Hunt,  and Energy Minister Ian Macfarlane. He hoped that the economic rationalists at the Productivity Commission would have carriage of the next RET review. He will likely be granted his wish, given that the institution that called out the fossil fuel industry on this nonsense, the Climate Change Authority, is to be dismantled and “independent” advice is to be brought “in house”.

Wilson insisted that renewables “are producing a product that no one wants to buy.” This ignores the fact that Australian households and businesses are still spending more than $1 billion a year installing their own rooftop solar systems – even with most subsidies removed. (Hint: this is very cheap abatement). It also ignores the radical change that is engulfing the electricity industry world-wide.

But the more people like Wilson stick their head in the ground, the more they risk the future of the industry they seek to defend. As US energy market analyst Perry Sioshansi told the conference yesterday, the traditional generation model is being over-run by cheaper, greener alternatives. And how bodies such as ACCI can argue that Australia has cheap electricity, when it costs nearly $280/MWh for the consumer even before green schemes are added, is beyond belief.

“I believe that the electric supply industry will soon approach a tipping point where consumers will provide electricity cheaper than industry can deliver,” Siosanshi told the conference. And the industry has been so wrapped up in its own hyperbole and ideological purity that it’s missed the chance to save itself. Siosanshi said it was probably already too late. And this is now a widely supported view in the US, and in Europe.  

RenewEconomy Free Daily Newsletter

Share this:

  • suthnsun

    I am starting to think Siosanshi’s prognosis is correct, ‘the industry has missed it’s chance to save itself’ (I don’t agree it was because of ‘ideological purity’ at all!)

    Previously I thought they still had time to grasp the new reality, take their losses and move into a new creative engagement with their customers, now everything is lining up against them, incumbency is their only advantage and they are misusing that so customers are likely to be sloughed off in droves.

    • Miles Harding

      With near complete apathy, it’s difficult to see a consumer revolt unseating these turkeys and their regressive ideas.

      • suthnsun

        It think it would be fair to say there is (near complete) apathy to acting to save the environment but acting to save a fair few dollars per annum over the long term is a different matter, especially when you mistrust your electricity supplier’s intentions and the whole political support system behind it. When we can buy solar panels delivered by parcel post for less than $1 per watt, there are going to be a lot of people wanting to take it on to some extent or other. (in addition to the large number of grid-connected panels already destabilising the business model) It would not take many wrong moves by govt. or utility to really move people to act decisively.

      • Gongite

        The new solar lobby group Solar Citizens seems to be able to mobilise large numbers of solar owners; they campaigned strongly against the proposed changes to the WA FiT. If they keep on strengthening and getting new members they will get even harder to ignore. No doubt members are partly concerned about costs, but many would also be concerned about climate change – the trick, which Solar Citizens seems to have got, is finding campaigning issues where the two interests intersect.

  • Miles Harding

    Weeeee it’s the slippery slide!

    Australia had better forget about the “clever country” slogan, it’s rapidly assuming the title of the “stupidest country on earth”, although there is stiff competition from Canada and a few others.

    • Gongite

      Or ‘no future at all, we are fine with making the planet completely uninhabitable’

  • Mike

    Where do we purchase residential solar batteries or cabinets??
    I believe that if we, to quote Mr Wilson: ‘are producing a product that no one wants to buy’ should therefore keep it and use it!!
    As the state governments privatize our utilities there are then shareholders to pay, and solar energy doesn’t do that, it pays the householder!

    • Alistair Spong

      Check out EVpower based in w.a ,ships all over Australia , in house battery management systems using safe reliable LiFePo4 batteries ….. And I hear business of late is very good !!!

      • Mike

        Cheers Alistair, but EVpower is for E cars etc but unfortunately not residential.

        • Alistair Spong

          Not true , Rod at Ev Power makes up battery packs for practically anything , from EV’s to ebikes , to off grid battery cabinets and caravan power. If you have a need he can probably design and build it for you .

          • Mike

            Alistair, I will contact him. To be truthful I only checked out the website. I am really interested in a solution to home energy that does not include the government.
            Every state government in Australia has or is considering selling off the utilities owned by the populace. Privatization means shareholders and I don’t want a big power bill designed to make a profit in order to satisfy their requirement!

  • Kevin O’Dea

    The Stern Report (remember that, folks?) emphasized that the costs of non-action on carbon-induced climate change would far exceed the costs of abatement and reduction in carbon emissions. The boofheads in charge at the moment would be well advised to dig up that study and then argue their case with the public. The Abbott regime is gambling on the notion that public apathy and indifference to the dangers is going to win the day for their side. With the Murdoch propaganda machine in full swing, I suppose it will take a few more bushfire emergencies and cyclones for people to have to experience the realities of what climate scientists have been warning us about for the past few years.

    • wideEyedPupil

      Or the CC movement gets better at our offense game. Divestment movement is starting to raise eyebrows in a few places where worldly concerns like Climate Change would not traditionally interfere with the business of making money any way we can.

  • RobS

    Let them cut the RET entirely, it only pays ~$0.60per watt for solar installations, its been cut by over $1.50 already in the last 12 months and installs have risen, you coudl cut it entirely and they would continue to rise as that $0.60 was eaten up in power price rises and solar equipment cost reductions. Cut it entirely and installation rates will fall once and for all wiping the smirks off the faces of conservatives who believe renewables cant survive without subsidies.

  • Terry J Wall

    It is amazing the speed with which avarice provides a free lobotomy.

  • Mike

    After some research I have found solar cabinets (called BESS) when fitted allow all of your solar energy harvested from your rooftop panel via the Inverter to be stored.
    Fully automated to 1: power your home 2: store excess energy 3: only pass energy to the grid when fully charged. They can store enough energy to run your home for up to 8 hrs. The downside is the cost $14,000. Panasonic are also entering this market and soon to be released this year. I reckon to form a co op of interested people in WA and get a quote for a container load to bring down the price?
    Whatever happened to human rights, that these people can choose to penalise us, a minority, for using free energy?