Hostages to a renewable ruse
Illustration: Sturt Krygsman.
Source: Supplied
IF there is a sound more pitiable than the whine of a pious environmental activist, it is the wail of a financier about to do his dough.
The mournful chorus now wafting from Greg Hunt’s waiting room is the sound of the two in unison, pleading with the Environment Minister to save the life of their misshapen bastard child, the renewable energy target.
You have to hand it to Hunt, who either has nerves of steel or is stone deaf, for he has retained both his cool and his fortitude.
The RET review by Dick Warburton on the government’s behalf has brought the rent-seekers out in force, for billions of dollars of corporate welfare is resting on its outcome.
As it stands, the RET will produce a bounteous return for a small group of investors shrewd enough to get into the windmill game while the rest of us are slapped with four-figure power bills.
Wind farms may be ugly but they are certainly not cheap, nor is the electricity that trickles from them. No one in their right minds would buy one if they had to sell power for $30 to $40 a megawatt hour, the going rate for conventional producers.
But since the retailers are forced to buy a proportion of renewable power, the windmill mafia can charge two to three times that price, a practice that in any other market would be known as price gouging.
As if a $60 premium were not reward enough, the transaction is further sweetened with a renewable energy certificate that they can sell to energy producers who insist on generating power in a more disreputable manner.
The going rate of $40 a megawatt hour means the total income per megawatt for wind farms is three to five times that of conventional power, and unless the government changes the scheme that return is only going to get better.
In an act of rent-seeking genius, the renewable lobby managed to persuade the Rudd government to set the 2020 target as a quantity — 41 terawatt hours — rather than 20 per cent of overall power as originally proposed.
Since the target was set, the energy generation forecast for 2020 has fallen substantially, meaning the locked-in renewable target is now more like 28 per cent.
http://www.theaustralian.com.au/opi...a-renewable-ruse/story-fnhulhjj-1227004820114
