Friday, August 24, 2012

Electricity users cop the renewable energy bill

''Something is rotten in the state of Denmark'', says a Shakespearean character noting how poor government had caused the country to go to the dogs.

Nowadays Denmark is famous for its wind farms.  These comprise a world record 30 per cent share of its electricity production.  It is no coincidence that Denmark's electricity prices are twice those of Australia.

Clearly something is rotten in the state of Britain, another country with massive subsidies for renewable energy.  The chairman of Britain's Parliamentary Environment and Climate Change committee, Conservative MP Tim Yeo, has acknowledged receiving $220,000 a year from green companies.  Unsurprisingly, Mr Yeo is a tireless campaigner for wind farms and other forms of renewable energy.

In addition, a former Conservative Environment Minister Lord De ben has been nominated to chair Britain's ''independent'' Committee on Climate Change.  But he is also chairman of a major wind farm consortium and another company advising businesses on how to make money from global warming policies.

Similar conflicts of interest, though not involving politicians making personal gains, are evident in Australia where renewable energy businesses provide a very large share of the funding of the major political parties.

Ever since 2001, when John Howard introduced the initial scheme, exotic renewable energy such as wind and solar has benefited increasingly from subsidies at the expense of the electricity consumer.  Right now, renewable energy businesses are utterly dependent on government favours.  Their viability requires direct subsidies from the taxpayer and regulations that force consumers to use their high cost energy.  Because of this, they are vigorous political lobbyists and their prominence within political funding threatens to maintain and even expand the favours they receive to the expense of households and general business competitiveness.

Australia's renewable energy subsidies build on the carbon tax.  This was intended to replace the multitude of overlapping green energy schemes but has added yet another layer.  Even without the carbon tax, the renewable energy requirements, if allowed to continue, will raise electricity prices by at least a quarter by 2020.

At every juncture we have been assured that renewables are on the cusp of becoming viable and just need a little more temporary assistance.  But the cheapest form of subsidised renewable energy, wind, remains three times as expensive as electricity from fossil fuels.

The latest piece of Australian government propaganda published by Tim Flannery's ''independent'' Climate Commission maintains the tradition of providing an ever-receding forecast of when renewables will be competitive.  It suggests 2030.  Of course, at that date the commission will no longer be around to account for another missed target.

There has been a considerable increase in renewable energy across the globe, though hardly any installation has been built without government subsidies.

Finally we are seeing sense.  US presidential candidate Mitt Romney says he will never introduce a carbon tax and he will discontinue the US renewable energy subsidies.

However in Australia the power of vested interests is immense, and renewable energy businesses will use all their tricks to continue mugging electricity consumers.  If they are successful this will not only boost prices but, as the UK experiences show, could undermine the integrity of political process.


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