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The race to be the silliest: alternative energy and the election

By Don Aitkin - posted Friday, 10 June 2016


The other night a smiling Greens Senate candidate for the ACT, Christina Hobbs, told us in the news that she had a plan that would Renew Canberra. How would she do that, always supposing the city needs 'renewing'? Why, by boosting alternative energy, of course. Now, before I get stuck into her policy it's worth remembering that the Greens can say almost anything their supporters like, because they are not going to be in power (the probability of a Greens government after July 2nd would seem to be a good deal less than 0.5 per cent). What they do, in announcing policies, is to push the two major party groups into worrying about whether it's worth competing on their ground or not. I suppose I should add that they have hopes they will be in a balance of power position after July 2nd, but Labor may have learned from last time. We shall see.

Some of the basic policy positions have been about for six months or more. The Turnbull Government has said nothing yet about its plans, if any, for boosting the use of alternative energy after 2020, for which it has a target of 23 per cent. Labor has proclaimed a target of 50 per cent by 2030, while the Greens have set a target of 90 per cent by the same year. I'll come back to the Greens' figure in due course. But let's consider Ms Hobbs's Renew Canberra plan first, noting that, in her words, Global warming is the greatest challenge of our time.

The plan is short of argument and evidence, and starts like this.

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Our economic future is clean and green, or it is no future at all. In Canberra, it is research and innovation in renewable energy that will revitalise our local economy, stimulate new industries and create new jobs. The ACT provides a blueprint for the Greens plan around the country to create a jobs-rich, clean energy future. Our plan will build on what's already happening locally by investing in new jobs in research, where the ACT is emerging as a leader in the knowledge economy.

Did you know that the ACT was emerging as such a leader? I didn't either, and I don't know what the evidence for it is thought to be, as well. No matter. The key is the Greens' national plan, Renew Australia, for which Renew Canberra is a spin-off. What is to happen there? A new half-billion government authority, RenewAustralia, will have $5 billion to spend on new energy generation over the next four years. The plan will put nearly a billion through the Australian Research Council, Co-operative Research Centres and other bodies for new research jobs, presumably all in alternative energy. It will provide better support for roof-top solar installation, and convert fossil fuel use into 'clean electricity'. How is it to be paid for? Wait for it.

Our plan for jobs in research will be funded from announced revenue measures, including the abolition of fossil fuel subsidies. Abolishing one such subsidy alone, the fuel tax credit rebate, would save the budget at least $4.5 billion a year. Instead of propping up the industries of the past, the Greens will redirect that money to securing our future.

With great respect, I have to say that the notion that Australia has fossil fuel subsidies is impossible to sustain. A fossil fuel subsidy occurs when a government acts to provide fuels to consumers at lower-than-market prices. Indonesia does this, though not as generously as it used to, and many other countries do it too. They're usually oil producers. Australia doesn't do it, and never has done it. What about the fuel tax rebate, you ask.

First, the fuel tax credit is not a fossil fuel subsidy. To repeat, we don't have any in Australia. While the Greens and their supporters talk a lot about 'fossil fuel subsidies', they seem to mean any taxation measure from which a mining company or large corporation could benefit. This is a misuse of language.

Second, the fuel tax credit is a rebate on the fuel tax, which is the largest component of the petrol price at the bowser, and is available to businesses or the self-employed who use fuel as an input to whatever it is they do. Farmers are a good case. So are mining companies. So are builders and other tradies. It is no different in principle to other business costs. The fuel tax is there in theory to help fund roads, but a lot of oil is used in heating or to run stationary machines. In another house at another time I used diesel fuel to power the central heating system, and received a rebate for that use.To abolish fuel tax rebates will simply raise the price of everything. It won't do anything of any consequence to reduce greenhouse gas emissions, let alone to 'combat climate change'.

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Back to this grotesque plan to have Australia working on 90 per cent alternative energy by 2030. It isn't clear whether the Greens are talking about all energy or electricity generation. That makes some difference, because there are no alternatives of any consequence for petrol and other oils in areas like transportation. Yes, we have an electric car or two, and an electric bus or two, and a good deal of suburban electrified rail. They do not run on alternative energy, but on grid power.

A couple of years ago, as I wrote the other day, the components of that grid power (the eastern grid, which means Queensland, NSW and the ACT, Victoria and South Australia) went like this: coal 73 per cent, oil and gas 13 per cent, hydro 7 per cent, wind 4 per cent, rooftop solar 2 per cent, biomass 1 per cent. Those proportions are likely to be very similar in 2020. The reasons are simple: we have no safe, reliable and cheap alternatives to coal and gas in generating electricity. Nor are any likely to appear in the next 14 years.

As I have explained many times, wind and solar suffer from intermittency and weakness in power. You need square kilometres of installation to provide quite small amounts of power generated that way, even if you could store the power for use when the wind was not blowing and the sun was not shining. Yes, you can look after some houses, if their roofs are set the right way and are large enough. But you cannot power an apartment building, a hospital, a factory, or the city's transportation systems that way. To suggest that Australia could seriously aim for 90 per cent generation of electricity through wind and solar by 2030 is simply ludicrous, and akin to fraud. It's not possible.

If Ms Hobbs is not aware of these problems, I can provide her with plenty of evidence from unimpeachable sources to show her the error of her ways. If she does know about them, but thinks these difficulties are unimportant, then she is extraordinarily foolish, and ought not to be standing for Parliament. Oh, and so far I haven't seen any sign that the Greens think that the size of our national debt is an important issue - as is clear from Ms Hobbs's Renew Canberra Plan. Indeed the Greens state that now is the time to borrow more.

Alas, all the parties seem to be about spending rather than saving, an odd approach when your cupboard is bare.

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This article was first published on Don Aitkin.



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About the Author

Don Aitkin has been an academic and vice-chancellor. His latest book, Moving On, was published in 2016.

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