EcoSouth Solar Blog
Here is news and thoughts of the EcoSouth team regarding all things solar. No information contained here should be relied upon for its accuracy without independently verifying it.
RET Review - the report is a crock of questionable assumptions
The much-awaited review of the Renewable Energy Target (RET) has been completed. As you may be aware, it was 'hand-picked' by the Prime-Minister's office, and consists of people with known antipathy to renewable power. (There is also now an ironic legislative 'problem' in that the Climate Change Authority (CCA) is mandated by law to undertake a review of the RET, but since the PM's own office has now done this, what does the CCA do?)
Unsurprisingly, the report handed down is draconian in its recommendations - either severe curtailment, or abolition. This in spite of submissions from the public and industry as follows:
- 754 detailed submissions for the RET
- 55 detailed submissions being mixed or neutral
- 56 detailed submissions calling for its abolition
- 23,272 community submissions for the RET !!
The RET report relied on two studies: one commissioned by ACIL-Allen, the other by Deloittes.
An example of points from the review, through these studies:
- "The RET will cost $22 billion in cross-subsidies if it is not changed"
Very challengeable depending on the assumptions made in the studies. The Deloittes report was criticised by the renewables industry bodies as making questionable, if not void, assumptions, such as energy demand will continue to rise, and there will be no effect from the upcoming energy storage revolution.
- "Renewable energy generation has almost doubled under the RET"
True - thats what it was designed to do - supplant generation from non-renewables. (So why were non-renewable energy providers and distributers allowed to over-invest in capacity? They were the ones who assumed rising energy demand)
- "The RET is exerting some downward pressure on wholesale electricity prices"
True - as is in line with its designed expectations. Makes sense to me that an investment is desired to result in lower running costs.
- "The RET has delivered a modest level of reductions in greenhouse emissions but is a high cost approach to delivering that aim"
All depending on assumptions, but one wonders: the ACIL-Allen report does state that abolishing the RET will result in some price-rise for consumers over the years. Perhaps they are being 'anti' (like other assumptions) and there will actually be 'great' price-rises instead of 'some'?
I think the public has to decide where they want their money to go. Do we want to continue paying for digging and transporting coal, for every kWh we use, with virtually no incentive to increase the safety and respiratory problems it causes to the local public when accidents like that at Morwell occur? And pay we do, via the 'traditional' subsidies for non-renewable energy providers: we all pay $2billion per year specifically to coal and gas miners in the Fuel Tax Credits scheme, and there is an estimated further $2billion in tax concessions to non-renewable fuel users and producers. Has this been factored into the Deloittes and ACIL-Allen reports? - I doubt it!
Straight-away the public has no choice but to "drink the kool-aid" if they do not read more widely.
Do we want to make tiny payments for the rest of the RET program, that in effect deliver greater savings to the consumer, than the actual cost?
As one commentator said:
"The report says that the solution to the oversupply of generation capacity is to stop more renewables. But the whole point of a renewable energy target is to REPLACE generation capacity by closing dirty coal generators. The fossil fuel lobby just refuses to accept that some generators have to close."
In line with this, the Governor of Virginia (USA) proposed a tax for the sales of energy efficient cars because they use less petrol, which means less money goes into the highway trust fund to repair roads. Hybrid and electric car owners were up in arms: why should those saving petrol and significantly reducing pollution be penalised? By the end of 2013, a bipartisan coalition abolished the law. Perhaps, if the revenue was recognisably impacted by more electric vehicles, then the tax should be raised *for all* users! This would hasten the retirement of petrol vehicles. (However, I suspect the answer maybe more complex).
Another commented on the health costs:
"The biggest subsidy is not fully pricing the costs of climate change." In the long term yes, but in the short term the biggest externality relates to the health impacts of air pollutants. (for example see papers by Epstein at Harvard and US Economist Nordhaus - both published in 2011). Air pollutants especially fine particulate matter and ozone (a secondary pollutant) confer the majority of health impacts that include heart disease, stroke, asthma and lung cancer. These costs are paid by communities now and cumulatively into the future.
When the costs of these illnesses and their economic impacts are included, the full price of coal more than doubles. Nordhaus found the externalized costs of coal fired generation to be 0.8 to 5.6 time value added. Meaning coal is at best worth nothing to communities. That is how much we are subsidising fossil fuels electricity generation."
It is a great opportunity to force reform or closure on aging dangerous, unhealthy coal plants, and encourage energy sources where *there is no ongoing cost of the fuel itself* !!!! Why this appears to be of lost signifigance in so many reports, I do not know. Australia should be up in arms about the hypocrisy and short-sightedness of cutting investment that would otherwise help newer technology with zero fuel costs to develop and mature.
Make no mistake - wind turbines, rooftop solar, coal and gas are ALL helped with paid subsidies - $2billion per year fuel subsidies for energy extraction industries, and a further $2billion per year for tax concessions. Wind and solar have proven success for delivering zero fuel-cost energy that reduces wholesale prices, but with no ill-health effects. Coal and gas industries are essentially unchanged - reliant on subsidies with no forseeable termination date, on-going fuel cost for every kWh produced, being a respiratory health hazard during handling and in case of accidents - and no promise of any change or improvement!
Another case of the Emperor's new clothes: "Look how wonderful the coal and gas industries are compared to wind and solar" -not.