We’ll get burnt putting faith in the sun

Tuesday, 29 August 2017
llustration: Sturt Krygsman

Nick Cater writes in The Australian:

If you find it frustrating to be stuck behind a Toyota Prius, you should try selling one. “We have a Prius which we purchased new and it is in excellent condition,” Matt writes on “When I looked up the resale value, I was absolutely SHOCKED!”

The Prius chat room gave a collective sigh. “Yup! And good luck getting the actual book ‘trade in’ value out of a dealership!” wrote one member.

“Well there goes everything we ‘saved’ in gas mileage!” said Matt. “Heck, we would have made out better driving a Hummer!”

The hapless Matt and his marked-down Prius are a parable for our times. The same impulse that leads the environmentally chic to pay $40,000 for a vehicle that will drop more than half of its value in five years is encouraging soft-headed state administrations to pick technological winners in an uncertain race.

Last week the Victorian government showed casual disregard for the findings of the Finkel review by committing itself to a renewable energy target of 40 per cent by 2025. It announced the construction of yet more solar farms and promised households their energy bills would be cut by 60c a week.

Victorian Energy, Environment and Climate Minister Lily D’Ambrosio, an arts graduate and former union organiser, tried her best to justify the ­ludicrous assertion. “We know for a fact that more supply, in a pure economics 101 sense, means cheaper prices and that’s what we’ll be delivering,” D’Ambrosio said.

Sadly, the rules of supply and demand have long ceased to operate in what the minister calls “a pure economics 101 sense”, and nowhere more so than in Victoria, where energy bills have more than doubled since the renewable craze began.

Solar, an intermittent form of energy, will do nothing to increase the supply of dispatchable electricity, which is the only kind that matters. The only reliable commodity likely to emerge from the new solar farm is profits. The operator’s share price will not be determined by its ability to satisfy a market — which it can’t — but by the value of the renewable ­energy certificates bestowed on it. The new economics 101 works like this: the higher the target, the higher the price of certificates, meaning the Victorian government’s virtue signalling suits speculative investors just fine.

It is somewhat less advantageous to households, however, where power bill trauma is a condition no longer confined to the poor.

Victorian Council of Social Service chief Emma King refused to believe that solar plants would “magically drive down prices”, which VCOSS estimates have risen by 119 per cent in a decade. “We shouldn’t be building a greener Victoria on the backs on people doing it tough,” she says.

The ranks of the energy poor in Victoria have swelled under the Andrews government, as VCOSS discovered recently when it commissioned a study by the RMIT Centre for Urban Research. Rachel showers at a local charity because she can’t afford a gas connection; Tess collects food vouchers to save money for her utility bills; Don goes to bed when the weather turns cold; Nola’s family never uses heating or cooling because it’s too expensive.

In different circumstances, Labor would champion these victims, pouring empathy until the vessel overflowed. These days, however, the party of Ben Chifley has hardly anything to say to actual poor people or battling families. Instead, it has discovered the ­abstract virtues of fairness and compassion which, like green jobs and sustainability, are sentiments rather than solutions.

On Sunday the West Australian government promised that 1200 green jobs would be created by exporting solar power to Indonesia. No, we’re not making this up. For a mere $20 billion they can lay the world’s longest and deepest underwater electricity cable connecting the Dampier Peninsu­la to Java. The Sunday Times’ political editor Joe Spagnola reports that WA Regional Development Minister Alannah Mac­Tier­nan “scoffed at suggestions it couldn’t be done”. MacTiernan claimed “a pre-feasibility study” found it was economically feasible.

On the other side of the Nullarbor, the news from the green economy is grim. South Australia’s only plastics recycling factory is closing because of — you guessed it — the punishing price of electricity. The bottom has fallen out of the recyclables market, particularly glass, which is heavy on freight and energy-hungry. Councils insist we separate our rubbish only to hand it to contractors who crush the glass and turn it into landfill.

The fascination for the next clean green shiny thing is undiminished by such setbacks. Throw away the keys to the Prius; by 2030 we’ll all be driving electric cars, according to a widely reported British study. Let us suspend our natural disbelief and imagine that by then all the obstacles to this electrical paradise will have been achieved, and the billions of dollars governments in the US and Europe have bet on this so-far uneconomical transport solution will look like money well spent.

They will have cracked the battery problem, and will have sourced sufficient cobalt and other minerals to manufacture them at an affordable price. They will be light enough and large enough to run for at least 600km between charges, the distance motorists reasonably expect from their cars. Drivers without off-street parking — as high as 57 per cent in Britain — presumably will be able to plug in at the kerb, regardless of the reservations expressed by Britain’s national grid operator.

Tens of thousands of charging points will have been installed between Land’s End and John o’ Groats and the charging time will have been reduced from hours to seconds. Last, but not least, the network will be humming along perfectly without coal or gas, to allow drivers to drive their sci-fi machines with a clear conscience.

In the expectation that these unlikely developments will be achieved, some governments are using government policy and taxpayers’ money to force the pace.

If there is one thing we should have learned by now it is this: technological breakthroughs do not work to government timetables, no matter how much money you throw at them.




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2019 by Menzies Research Centre