Friday, December 23, 2016

Forced "Greenhouse" emission reductions entrench high electricity prices in Australia

Significant economic conse­quences are foreshadowed by several ­reports into the electricity industry that were presented to this month’s meeting of ­federal, state and territory energy ministers. Two of those reports addressed issues stemming from Australia’s ratification of the Paris Agreement on climate change.

One of these, The Future ­Security of the National Electricity Market, was from a group chaired by Chief Scientist Alan Finkel. The other, The Integration of Energy and Emissions Reduction Policy, was prepared by the Australian Energy Market Commission.

The key feature of the Paris Agreement was the pledge by Australia and other developed countries to reduce their greenhouse gas emissions by 26 per cent to 28 per cent by 2030.

Developing countries, which account for a growing 65 per cent of global emissions, have no effective restraints.

Australia ratified the Paris Agreement on the day after Donald Trump’s election victory. The president-elect has pledged to walk away from the agreement, an outcome that would transform it from largely ineffective to totally ­ineffective.

Malcolm Turnbull, however, wishes to push ahead in forcing emission reductions.

But his plans hit a road bump with the release of the draft report from the Finkel committee, which recommended controls over ­future emissions by using a form of carbon tax. When, under media questioning, Energy Minister Josh Frydenberg ­acknowledged this, a backbench revolt required Turnbull to ­remove it as a ­policy option.

The same form of carbon tax was canvassed by the AEMC as a means to achieving the planned reduction in greenhouse gas emissions. The AEMC costed the measure at $55.4 billion. If, instead, the emission reductions were to be achieved by using a variation of the renewable energy target, these costs would increase to $66.6bn.

Either way, especially in view of the US position, the emission reduction policy is up there in profligacy with two other government spending follies: the National Broadband Network and the submarines.

More immediate energy-­related issues concern the ambitions of Victoria and Queensland to follow South Australia down the renewable path.

Electricity from renewable ­energy costs three times as much to produce as electricity from coal and gas. For this year, the AEMC estimates the cost of existing federal and state renewable energy programs for the average household’s electricity bills at $191 in Queensland (7 per cent of the bill), $109 in NSW, $91 in Victoria and $155 in South Australia.

But these are only the direct costs. The indirect costs, in ­addition to renewable energy’s ­innate unreliability, are greater.

In the first place, this is because electricity market rules mean wind and solar will always run when they are able to do so. This forces other suppliers into stop-start operations, which coal and gas baseload power stations cannot easily accommodate. Those stations are being forced to close and each such closure ramps up the wholesale electricity price.

The AEMC estimates that next year the closure of Hazelwood in Victoria will cause a cost increase of $200 for each household in the state, with lesser cost increases in other jurisdictions.

Second, wind generators ­require increased network spending. The electricity market operator has put a $2.2bn cost on new transmission lines to link Victoria’s proposed wind generators to the grid. This stems from the wind generators wanting to locate in areas where there is weak transmission capacity.

Originally the national electricity market rules required new generators to pay for any addi­tional transmission costs their ­location entailed.

But those sensible rules have gone by the board, hence the costs will be charged to consumers. They amount to about $50 a household a year (and much more than that for businesses).

Third, the AEMC has foreshadowed additional costs, which it is unable to quantify, because of a new back-up power fund to provide system stability to cover wind and solar power’s intrinsic ­inability to offer the same flexibility as the fossil-fuel generators they displace.

Compounding these problems are the measures introduced in NSW and Victoria (and prospectively under a future South Australian Liberal government) to ban or restrict the search for gas.

Households and industry are paying a high price for political meddling reacting to vociferous environmentalists’ pressures and the patronage of renewable ­energy businesses.

Australia has gone much further than any other country with green energy cost impositions.

At the turn of the century, competition reform and privatisations had brought us the world’s cheapest electricity. This has been undone. American and French consumers now pay little more than half our average price and even Japanese households, in a country with negligible domestic energy resources, have electricity cheaper than Australians.

Australia’s low prices were also the attraction for energy-intensive industries, and the news foreshadowing the departure of the Portland Alcoa smelter makes that facility the latest casualty of the nation’s politically induced loss of industry competitiveness.

Sadly, none of the reports before ministers offers a ­return to the low prices households once enjoyed.


Three African Apex gang members 'left female cyclist fighting for life after slashing her with a knife in violent robbery'

A woman riding her bike was ambushed and brutally slashed with a knife during an early morning robbery.

The victim, believed to be in her early 30s, was riding along a street in inner-city Melbourne when two men and a woman confronted her.

One of the men pulled out a knife and demanded her bike.

Her face, upper arms, torso and neck were slashed as she was ambushed at Harker Street in North Melbourne at 2.30am on Wednesday.

The victim rode her bike about 50 metres and walked to nearby Flemington Road to get help from a bystander who dialled police.

A spokeswoman for The Royal Melbourne Hospital told Daily Mail Australia she remained in a serious condition.

Victoria Police are searching for two males and a female of African appearance.

'Investigators are yet to speak with the woman as she is undergoing emergency surgery,' Senior Constable Alistair Parson said.

Their connection with the African Apex gang is being investigated.


Anglican Archbishop warns 'hipster elitists' are ruining Christmas by removing religion from the celebration - after school children were banned from singing carols

The Anglican Archbishop of Sydney has taken aim at 'politically-correct elitists' after traditional Christmas references were banished from the streets.

Archbishop Glenn Davies accused 'left-wing elitists' of being behind the NSW government's decision to remove banners saying 'very merry' and avoid the term 'Christmas'.

It comes amid reports of festive season signs being altered to say 'happy holidays' rather than 'merry Christmas' and carols being scrapped by schools, reports Daily Telegraph.

Dr Davies said the movement threatens to hinder freedom of speech and must be tackled before it spirals out of control. 'This kind of ideology comes from the left or should I say, the far left.'

He said the the removal of traditional Christmas references was a 'great folly'.

'The politically correct vanguard of secularists are basically trying to conform people to their particular pattern of speech and belief.'

Last week Peter Dutton called on Australians to 'rise up' and defend Christmas after a school rejected traditional carols for more secular songs.

Appearing on talkback radio, the furious Immigration Minister said his 'blood was boiling' after learning there was 'not one Christmas carol' at the celebration at Kedron State School in Queensland.

'It is political correctness gone mad and I think people have just had enough of it,' he told 2GB radio host Ray Hadley.

A member of Mr Dutton's Dickson electorate Jim told the radio show the public secondary school ceremony did not have 'one Christmas carol'.

The lyrics to We Wish You A Merry Christmas were replaced with 'we wish you a happy holiday', The Age reported.

'Many of the people, regardless of their religious belief, would be there happy to sing Christmas carols, happy to enjoy the fact that we celebrate Christmas as a Christian society,' Mr Dutton told 2GB


Some reasons for optimism about Australia's future

* While growth in Australia's biggest customer, China, has slowed, this is a needed, and desirable, step towards a more normal rate of growth. China has accumulated much debt, but it also has large foreign reserves and, unless the Chinese Communist Party is feeling particularly self-destructive, it will use them to stabilise any unwinding debt crisis.

* Australia's economic growth cycle is the longest on record, but it's not the best we've seen. Over the past 25 years, the economy has grown 123 per cent. Measured as GDP per capita, living standards have risen 61 per cent. But we've done better. In the 25 years following the end of World War II, the economy grew 230 per cent. Living standards rose 157 per cent. In an odd way, it is reassuring to know we can – and have – done better.

* We are not Americans. US citizens have seen no real increase in the median income for the past two decades. But in Australia, despite two decades of relentless economic restructuring, even the bottom fifth of households have seen a real increase of 60 per cent in their disposable income over the past. The rise in inequality in Australia has been more muted than elsewhere. A progressive tax system and targeted welfare system have shared the gains of prosperity across the income spectrum, even if the top 1 per cent has done particularly well.

* Our government debt is low. The combined net debt position of all Australian governments – state and federal – is still only about 20 per cent of GDP, compared with 80 per cent in the United States. This gives us more fiscal space to move should we encounter another global shock.


Posted by John J. Ray (M.A.; Ph.D.).    For a daily critique of Leftist activities,  see DISSECTING LEFTISM.  To keep up with attacks on free speech see Tongue Tied. Also, don't forget your daily roundup  of pro-environment but anti-Greenie  news and commentary at GREENIE WATCH .  Email me  here

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