In the prologue to the UN meeting in Glasgow on climate change, Treasurer Josh Frydenberg has been paving the way for an Australian statement announcing a “zero-net” emissions target.
It does so on the basis of “if rape is inevitable, adjust and enjoy it,” arguing that banks and investors are increasingly demanding a net zero and that there is an increase in investors ’appetite for renewable energy. Australian (wind and solar) with $ 35 billion. has been investing in it since 2017.
It was not said that all these $ 35 billion in investment was possible thanks to direct and indirect subsidies to wind and solar.
This was clarified by New South Wales Energy Minister Matt Kean, who has no doubts about the forthcoming triumph of renewable energy and says he has policies to reduce state emissions by 50 per cent. in 2030.
This entails “confirmed” government purchases of wind and solar power, forcing consumers to fund new transmission lines, as well as new taxes on coal mining, reducing livestock methane and incentives for electric cars.
The Commonwealth is very upset about its spending on climate change. Although the budget documents (page 220) admit to spending $ 1.9 billion on climate change, the Treasury expresses it in a way designed to represent expenditures made only as a small fraction (0.4%) of total expenditure.
In fact, the sum itself underestimates real public spending. It excludes expenditure outside the Commonwealth budget and does not include the costs induced by regulation for consumers of the obligation to supply renewable energy.
The total government expenditure on renewable energy subsidies in 2019 ($ M) was:
- Commonwealth direct subsidies for wind / solar: $ 2418 million
- Commonwealth support through regulations: $ 3087 million
- State direct subsidies for wind / solar energy: $ 457 million
- State support through regulations: $ 951 million
TOTAL – $6,913,000,000
That $ 6.9 billion represents only a portion of national spending. In addition, there are:
- The costs of the new transmission, estimated very conservatively at $ 17.4 billion by AEMO, the market manager;
- The more than $ 10 billion to turn the Snowy into a renewable energy support facility, with more foreshadowed to have Tas Hydro in a similar role;
- Direct purchase of the state government of wind and solar energy “firmly”; i
- $ 100 million a year increases the market management costs that drive these policies.
The direct and indirect costs of climate change measures are added every year: we now have Australian carbon credit units designed to subsidize the rural sector to stop producing crops and use their land to bury CO2, and we have subsidies for green hydrogen ($ 1.25 billion and cash).
In addition, capital expenditure on wind and solar energy, cited by the Treasurer as $ 35 billion since 2017, rather than understanding “investment,” is really an induced expense for subsidies on low-yield assets.
In aiding this “investment” with soft loans and grants, the head of Clean Energy Finance Corporation presumes that the result is a “participation” in new investments, alien to the notion that investment stopped by a grant is a misallocation of capital .
The RBA puts the average private spending of the last three years on wind and solar energy at $ 5.4 billion a year. This is considerably lower than the figures (about $ 9 billion a year) released by the Clean Energy Regulator (CER).
CER estimates that between 2015 and 2020, $ 33.8 billion had been invested in wind and solar. Renew Economy cites BNEF as it is estimated that US $ 30 billion (US $ 40 billion) was spent between 2007 and 2014.
Thus, in less than 20 years, a total funding of $ 74 billion has been attracted to build capacity in assets that have no value without subsidies, and whose presence undermines the value of reliable low-power supplies. cost from coal and gas.
The most recent data is shown below:
So Australia spends far more than the $ 1.4 billion a year the Treasury estimates. The true annual amount for energy alone is at least $ 19 billion a year, which includes:
- Government subsidies for wind and solar management and AEMO: $ 7 billion
- New transmission to accommodate an increase in intermittent supplies: $ 3 billion
- New private spending on wind and solar: $ 9 billion
By 2030, at this annual rate, Australia will have wasted about $ 200 billion and may not be affected by the 50% reduction in Matt Kean emissions, which would require 50% renewables, as well as subsidies to reduce methane emissions. ‘animals and plants and subsidies to accelerate any existing trend towards the electrification of the vehicle fleet.
One true result is the increase in electricity costs that have resulted from measures that have already made our system the cheapest in the world two decades ago to one that is up there with the most expensive in the world.
Read the rest in Spectator AU
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