It took a while, but the Murdoch media has finally deployed its media howitzers against the ACT government’s 90 per cent renewable energy plan – the one bright spot in an otherwise desolate landscape for large-scale renewables in Australia.
In a piece titled “Renewable energy proposal for Canberra offers a capital example of the green Left’s hot air”, reporter Angela Shanahan manages to combine an unexplained ideological opposition to green energy with a whole bunch of misinformation.
Dismissing the plan as a “left-green obsession of saving the planet”, and drawing an unclear analogy with the local sex industry, Shanahan then swallows a grotesque piece of misinformation fed to her by Angus Taylor, the newly elected federal Coalition MP for Hume, who has made it his mission to bring the wind energy industry in Australia to a halt.
The ACT government has said that the cost of 200MW of wind farms it wants to commission will add around $1.30 to household electricity bills a week, and the entire 90 per cent renewable energy target will add around $4 a week by 2020. That is equivalent to around 10 per cents to the average household bill, although the ACT says this will be offset by its new energy efficiency scheme that will reduce consumption.
Taylor, though, claims that electricity bills will “triple” – a claim Shanahan is happy to repeat as fact. But it’s nonsense, based on Taylor’s estimate that wind energy costs three times as much as coal power.
“Standard electricity price at the moment is $30 a megawatt-hour,” Shanahan quoted Taylor as saying, “but according to my calculations, the cost of wind on an equivalent basis is over $90, triple. So this will have a big impact on household electricity bills.”
Well, as Taylor well knows from his work at Port Jackson Partners, there is a big difference between wholesale electricity prices and retail bills.
Take this table from the Australian Energy Market Commission, and its analysis of retail price trends across Australia published last December. As it shows clearly, the wholesale price of electricity makes up a small percentage of the overall bill – even in the ACT, where the kWh prices are relatively low.
Indeed, the Australian Energy Market Commission (AEMC) says the wholesale price charged to ACT consumers is not, as Taylor suggests, $30/MWH, but $45/MWh – even without the carbon price. (In NSW the wholesale component is nearly $90/MWh, but the ACT pricing regulator takes a tougher stance on margins).
The ACT auction system means that consumers will pay the difference between the spot price on the wholesale market and the contract agreed with the wind farm developer. Given that many wind farm developers will be bidding for the contract, the price is likely to be below $90/MWh. Wholesale electricity prices, given the expected doubling of gas generation price because of the LNG boom, are likely to be pushed much higher.
(The ACT could have actually reduced the costs significantly by cashing in the renewable energy certificates generated by the wind farms, but because it wants its target to be “additional” to whatever the federal Coalition government sets as the national renewable energy target, they will “retire” the certificates instead).
This is not the first time that Taylor has “gilded the lily” on estimates of renewable costs. Last year, we wrote how he had circulated a document claiming the costs of renewable energy would be astronomical, when a similar study by the very same Port Jackson Partners had concluded a year earlier that they would be minimal. Check out the way the two graphs were portrayed in the first and the second documents.
Still, Shanahan didn’t hold back, suggesting there would be more costs for “back-up”, which is patently not true, and claiming that Germany and Denmark are going back to coal power – in fact, both countries have recently lifted their renewable targets.
Shanahan even threw in some nonsense predicting a mass migration of businesses from the ACT to NSW, and massive impacts on the remaining population. “Businesses will relocate to Queanbeyan and first-home buyers and lower-income groups will suffer, a blatant example of the Labor Party betraying its constituency to get elitist green votes.”