Power price debacle in Australia illustrates lack of understanding

Power price debacle in Australia illustrates lack of understanding, by Chris Mitchell.

Nothing better illustrates the lack of public policy expertise in the media and government than the debacle over power prices.

Moral posturing about climate change so infected thinking on issues of power generation that former prime minister Kevin Rudd in all seriousness declared that “climate change is the great moral challenge of our time”. …

Such posturing reached a high point when the former director of the left wing Australia Institute, Clive Hamilton, suggested this paper — and me personally — could face criminal charges for the “crime’’ of scepticism on climate issues. As I tried to explain to Hamilton in writing, the paper was, like rational Danish environmentalist Bjorn Lomborg, keen on economically sound solutions to issues and did not believe in suppressing dissenting views. …

It is unsurprising Turnbull, a former merchant banker, supports the RET [renewable energy target]. Most bankers do.

I have a friend, a merchant banker, who has invested a large part of his personal fortune in wind farms in Europe. They are crap policy, he admits freely, but guaranteed by government legislation to produce a high rate of return. …

Crazy, high-cost policy driven by virtue signaling, ideology, and falsehoods:

Our energy policy is mad for a country with the world’s largest supplies of high-quality steaming coal, among the best natural gas reserves on the planet and 40 per cent of the world’s uranium. Oh, and we are the world’s No 1 exporter of all three commodities. …

US power is so cheap, even though in private ownership, precisely because it harnessed its gas reserves while we failed to use ours to our own advantage.

Australia should have stuck to the original scenario envisaged by Howard at the 2007 election.

A market mechanism would have priced carbon and gradually made new gas baseload generation feasible. Gas has half the carbon intensity of coal and would have ensured we met our carbon reduction targets.

As carbon trading prices rose over decades this market would have facilitated the growth of renewables so that by the time mass battery storage was feasible we would have presided over an orderly transition.

And just as US power prices are a fraction of ours now, our own would have been a fraction of what they are today.

But don’t believe coal is dead. More than 1500 new efficient coal-fired plants are being planned or already under construction worldwide. …

While rich people fill their roofs with solar panels that just transfer costs to the poor, this does nothing for the climate because Australia represents only 1.3 per cent of global emissions. But it makes baseload power generation less feasible, less reliable and more expensive for consumers.