Guest essay by Eric Worrall
Aussie Prime Minister Malcolm Turnbull is celebrating passing the National Energy Guarantee, a policy which attempts to please everyone by demanding energy retailers source a portion of their supply from dispatchable sources, while at the same time attempting to encourage investment in renewables to meet Australia’s Paris Agreement commitments.
The green response;
Coalition votes to kill renewables, encourage new coal generation
Giles Parkinson 14 August 2018
Federal Coalition MPs voted on Tuesday to support the National Energy Guarantee that proposes to ensure no new investment in large-scale wind, solar or battery storage for nearly a decade, and also expressed their support for a new government initiative they hope will support new coal-fired generation.
A two-and-a-half hour meeting of Coalition MPs in Canberra produced the result that prime minister Malcolm Turnbull and energy and environment minister Josh Frydenberg had been hoping for: support for the NEG, despite opposition from former PM Tony Abbott and former deputy PM Barnaby Joyce.
That meeting and the meeting of Coalition MPs on Tuesday embraced the promise by the Energy Security Board that the NEG – at its current emission reduction target – would ensure there would be zero investment in new large-scale wind, large-scale solar or large-scale battery storage from 2022 to 2030.
That unprecedented investment drought will take Australia from one of the leading countries in the adoption of renewable energy to bottom of the pile, according to analysis from ANU researchers.
Australia’s former Primer Minister Tony Abbott pretty much sums up the climate skeptic response;
Tony Abbott defends CO2, attacks his own Paris targets
Mr Abbott reaffirmed on Monday his view Australia should walk away from the Paris commitment and continued to insist the target was an aspiration, not a commitment – a claim which is disputed by everyone else involved at the time with setting the target.
Mr Abbott said it was a “very dangerous move” to use legislation to bind the power sector to what he claimed were only “voluntary guidelines”.
“There is a world of difference between a non-binding target and a mandatory legislative commitment,” he said.
“I have enormous concerns about anything that smacks of our country being dictated to, surrendering our sovereignty really, to the green bureaucrats of Paris.”
Clearly not a lot of joy in either camp. The reason is simple – in my opinion Australia has just been served with a “dog poop yoghurt” energy policy.
The dog poop yoghurt fallacy is a demonstration of why compromise is not always a solution. In the words of James Delingpole;
It goes like this: one side of this debate thinks that the best thing to put in yoghurt is fruit; the other side is of the view that what really needs to be added to yoghurt is a nice bit of dog poo. Now suppose we were to compromise. Suppose the latter faction were to concede sufficient ground to agree that only a tiny quantity of dog poo should go into the mainly fruit-rich yoghurt, would this constitute a victory for commonsense?
Of course it wouldn’t. Even if just the smallest, smidgen of a fraction of dog poo were to go into that yoghurt it would still be irredeemably tainted.
What problem does the NEG energy supply compromise solve?
The NEG’s guaranteed presence of coal in the mix ensures CO2 emissions remain high – which is why the greens are upset.
The guaranteed presence of renewables in the mix ensures end user prices remain artificially high – which is why people who support free markets are upset.
Of course these guarantees aren’t really fixed, the actual percentages could be fiddled anytime by government fiat – so the NEG is unlikely to encourage the kind of long term energy infrastructure investment Australia desperately needs.
The only people who stand to gain from the NEG are electricity suppliers, owners of near end of life coal plants and subsidy funded renewables plants. The NEG effectively gives everyone who supplies electricity an opportunity to be a rent seeker, to demand their government mandated slice of the income of Australia’s long suffering electricity consumers.