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November 11th 2010 print

John Izzard

Turning off the lights

Tasmanian electricity is generated without burning gas, oil or coal yet it has one of the highest electricity price-regimes in Australia. No fuel costs, free water from the sky running turbines, yet electricity prices are tipped to increase 26%.

Those young adults who ventured overseas for a working holiday in the 60’s and 70’s and ended up in some pokey London bed-sit will remember the cold winter nights when you had to put a coin in the gas meter to avoid freezing to death, or, if you needed a hot bath. If you wanted to read or use your secret Sunbeam frypan (cooking in rooms was prohibited) it was a coin in the light meter. The daily cost of energy, then, certainly focused the mind of the earnest young traveller.

As the cost of electricity in this country is now getting out of control, with estimates of a 50% increase in a five years, it seems incredible that Julia Gillard and the Labor Party are taking all of the flack, while the real engineers of the impending ‘electricity crisis’, the Greens, are snug-as-a-bug under a cosy blanket of self-righteousness. Everything in the Government’s attempt to accommodate or acquiesce to Green demands and theories have gone pear-shape. Roof insulation, green loans, solar energy, wind farms — and now the sustainability of our aging power-generation industry. And yet no one blames the Greens?

Be in no doubt. As your power costs soar, you will only have the Greens — or at least their mad theories, lobbying and political pressure, and their infiltration into the public service — to blame.

The aesthetically-ghastly solar roof-panels that are now disfiguring historically-protected homes in NSW are a good example. Normally you couldn’t fit a weather-vane on your roof without some officious bureaucrat serving you with a writ or some sort of removal order. Now you can plonk whatever non-Federation-era solar-panel-junk you like on your beautiful orange-clay tiles with gay abandon, knowing in your heart of heats, that you are helping to ‘save’ the planet, and your local council won’t get cross. Except some other poor devil will be subsidising you for your indulgence, and the Greens’ indulgence, and your cheaper power bills, apparently to the tune of something like 6 billon hard earned dollars will be paid for by un-panelled battlers from the boondocks . Except that now the NSW government, at least, has suddenly woken up.

A front-page report in The Australian, November 5, carried the news that both South Korea and Taiwan have cheaper electricity prices than Australia even though Australian coal is shipped 8000kms to South Korea and roughly 7000kms to Taiwan to burn in their power-station furnaces. The article said Australian households paid about 14.3 cents for every kilowatt hour while Asian households paid about 10.6 cents — based on 2008 figures.

And if you think that is a bit loopy, take the situation in Tasmania—birthplace of the Greens. Most of Tasmania’s electricity is generated by a network of hydro-power stations. Yes, Tasmanian electricity is generated without burning gas, oil or coal yet it has one of the highest electricity price-regimes in Australia. No fuel costs, free water from the sky running turbines, yet electricity prices are tipped to increase 26%. Tasmania has a wonderful accounting model whereby the old state-government-owned Hydro scheme was split into three, yes three government businesses, each legislated to return 7.5% profit each year.

Apparently it works like this: Hydro Tasmania which tokenly owns the dams and generators sells its generated electricity to the government owned Transend, the company that tokenly owns the transmission wires, polls and pylons. Transend then sells the electricity to the Tasmanian government owned Aurora Energy, which owns the meters and collects the money from the electricity it has bought from Transend and on-sold to households and businesses.

It’s a great model, something like the sub-prime lending scheme, which has brought the US economy to it’s knees. Well its similar in as much as a product is on-sold, with each company expected to return to the government 7.5%. That is, like, 22.5% in all. And instead of one set of executives and bureaucrats running one operation, as in the past, there are now three sets. Then the amazing thing about hydro-generation is that once the fuel, that is the free water, is used it is then on-sold to farmers for irrigation. In Tasmania the whole electricity fiasco is so difficult to understand that members of the Tasmanian Parliament are demanding a public enquiry into the weird set-up.

The extent of the Greenwashing of the Australian mind is yet to run it’s course, but what we know is that you cannot build wind-farms without government subsidies (you’ll pay), you cannot establish solar farms without subsidies (you’ll pay). You can’t run either wind or solar generation without support from base-load stations (you’ll pay), and you cannot run remote wind or solar without building billion dollar transmission grids for renewables (you’ll pay). And you can’t have a price on carbon, without …yep…you’ll pay. 

So the greatest ‘three-thimble-trick’ since Salim set up a table in a Persian market, the Greens have managed to pass the odium of skyrocketing electricity prices onto the Gillard government. And the Labor Party have fallen for it. When was the last time you heard a Greens politician raise concern about the price of electricity? No, it will all be the Labor government’s fault when the coin drops and the meters spin. Indeed the Greens want price-increases to stop people using electricity — and save the world. That’s their dream.

In Denmark, the wind-power capital of the world, 2003 saw 84% of its wind-power generated electricity dumped into neighbouring countries when the wind was up, but having to import high-cost base load electricity on windless days and weeks. Electricity is twice the cost in Denmark as it is in the UK. The crafty Danes had abandoned the construction of new wind-farms, and obligatory purchase schemes (solar panels), but had continued the very profitable export of wind turbines to other countries. They are now back in the business of wind, opening this month a new 90-turbine wind farm for Dong Energy. Dong!

Julia Gillard might consider the Danish experience when chairing the Bob Brown, Green inspired Labor government committee to put a price on carbon. Research done by the Institute of Economic Research in 2009 found the annual cost of saving a ton of carbon in the subsidised Danish wind industry was averaged out to something in the order $US124 per ton.

Which gets us get back to the Riddle of Carbon Economics. Australia sells and exports $55 billion of thermal coal to Japan, South Korea and Taiwan to run their electricity power stations, but we, conscience stricken, are building silly little wind farms and putting dinky little solar panels on our roofs, to reduce the world’s carbon. And to show the world that we are seriously odd —we’re about to tax ourselves senseless with a carbon tax. Solve the riddle of carbon economics and you could win a camel, or three thimbles and a pea.

It’s not easy being Green.