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Sceptical review: clean energy finding no friends in high places

The renewable energy sector has talked tough on the government’s review of the Renewable Energy Target, but in reality the industry is in very deep trouble. Dick Warburton seems certain to scale it back.

Australian clean energy groups put on plenty of bravado when the federal government unveiled the members and the terms of reference of its long-threatened review of the Renewable Energy Target on Monday. “Bring it on,” challenged the Clean Energy Council. Other groups like Vestas, the world’s biggest wind turbine maker, and Pacific Hydro, Australia’s biggest specialist investor in renewables, suggested the facts would speak for themselves.

If the clean energy industry thinks facts will win this argument, it is kidding itself. It has taken the government several months to work out how it will get around its statutory obligation for the Climate Change Authority to conduct the next review. In choosing climate change science denier Dick Warburton to head its inquiry, the Abbott government has chosen someone who has not let facts get in the way of his ideology and policy positions.

Warburton says he is not a climate change denier but a “sceptic” about the role of humans in climate change. He doesn’t accept the science. Given the consensus of thousands of scientists, all major scientific bodies and all but a couple of rogue governments, denial and what he calls “scepticism” amount to the same thing.

Warburton has also surrounded himself with people who, like himself, have spent much of their careers fighting environmental initiatives (carbon pricing, renewables) in an effort to protect the interests of the companies they managed or represented. Warburton did this as head of Manufacturing Australia, Shirley In’t Veld as head of Verve Energy, and Brian Fisher, the former head of ABARE and more recently a fossil fuel lobbyist, had a long history of creating modelling that argued against environmental mechanisms.

The purpose of the RET review is supposed to be about the cost of the RET on consumers, but these are as well documented and verifiable as the scores from the last cricket Test in South Africa. Each year, the costs are documented by state-run pricing bodies, and they have been assessed by the Climate Change Authority, the Australian Energy Market Commission and countless others. And they all come to the same conclusion: the cost is sweet bugger-all, at best 3% of electricity bills even after retailers have been allowed to profit from the inflated prices they charge back to consumers.

What this is really about is protecting the interests of the incumbent retailers, generators and network providers, many of which are government owned. They are losing money, and their assets are being forced out of the market. This is very much about self-preservation for these businesses. But it’s a hard argument to reconcile if the head of the review does not even accept the science that fossil fuels have contributed to climate change and should be curtailed.

To an extent, the public relations battle has already been lost by the clean energy industry. It was interesting to note how ABC’s Q&A discussion centred almost entirely on the perceived high cost of renewables and the fact that there would be “too much” of it. The Labor representative, Tony Burke, was hopeless in its defence and simply wasn’t on top of the brief, despite being a former environment minister.

On the ABC TV’s flagship 7.30, the person chosen to give an independent perspective was Burchell Wilson, the chief economist from the Australian Chamber of Commerce and Industry, a right-wing ideologue and a fierce anti-renewable campaigner. Last week, Renew Economy pointed out that he was using costings invented by the Institute of Public Affairs that are pure fiction. He was at it again on Monday on the ABC, unchallenged by the interviewer, quoting the same nonsense.

Wilson claimed Fisher would approach the issue like an “economist” and not have “any predetermined views on the matter”. Then, in virtually the same breath, Wilson said of Fisher: “What he will tell you is the Renewable Energy Target is high-cost, it’s inefficient as a means of abating carbon, and if that’s your primary objective with respect to the RET, then we should scrap it altogether.” It’s all decided, then. And Wilson accused the renewable energy industry of being “disingenuous”.

In the written media, the position of the clean energy companies — which is now largely based around the attraction of renewables in the face of soaring gas prices — was hardly heard. The Australian had several opinion pieces, including one from its ill-informed chief political correspondent Dennis Shanahan, who suggested that in dumping the RET, Australia would merely be following in the footsteps of Germany.

Not so. Germany continues to reduce its feed-in tariffs, as Australia has done, but is committed to rolling out renewables. It has a 35% target for 2020, and the new “grand coalition” of centre-right and centre-left parties has reaffirmed a commitment to 60% renewable energy by 2035. German Chancellor Angela Merkel said last month:

The world looks with a mixture of a lack of understanding and curiosity on whether and how the Energiewende [Germany’s move from nuclear to renewable energy] will succeed … If we succeed, then she [the Energiewende] — and I’m convinced of it — will become another German export hit. And I’m also convinced that if any country can succeed with this Energiewende, then it’s Germany.”

As this table shows, Australia’s renewable energy target is relatively small, and it is the only government in the world that has discussed reducing its target — just as it is the only government in the world looking to dissolve carbon pricing. Interestingly, World Wildlife Fund was the only group we could find that said Australia should lift its target — it talked of 50% by 2030.

The spin from government insiders about the review was “not to panic”. Warburton and his team would be reporting to a secretariat in Abbott’s office, but that secretariat would be led by the renewables boss from the environment ministry. And did you hear Tony Abbott speaking to Allan Jones on Monday morning? He was defending renewables, I was told.

Oh really? This is what the government operatives think is being supportive of renewables:

ALAN  JONES: Yes, and don’t we say to foreign companies, if you want to involve yourself in solar power or wind power and set up a business don’t expect money from the government. They are currently getting billions of dollars.

PRIME MINISTER: Well, renewable energy makes a lot of sense.

ALAN JONES: It’s not affordable.

PRIME MINISTER: If it goes too far it becomes very, very costly. It is one thing to have solar hot water systems and what have you but it’s another thing to expect that we can deliver base load power with renewables. That is why all of these renewable systems need conventional backup.

One platitude, followed by a rapid backpedal. Hardly a ringing endorsement, or even an informed comment.

It was remarkable watching the Tweedledum and Tweedledee performance at the joint press conference hosted by Environment Minister Greg Hunt and Industry Minister Ian Macfarlane, whose portfolio includes energy. Neither have been trusted with managing the RET review, which will remain within ideological reach of Abbott and his inner cohort, including Maurice Newman.

But such is the crazy Tea Party-like politics of this conservative  government, Hunt and Macfarlane are considered moderates on the matter of renewables. Hunt, of course, has managed to dismiss everything he learned about environmental markets in prosecuting the case for Direct Action, an absurd policy if a government is serious about climate change.

How Macfarlane earned his reputation as a renewable moderate is hard to understand. Remember, when he was energy minister in the Howard government, he commissioned the Tambling review into the then-MRET (Mandatory Renewable Energy Target). Tambling didn’t follow the script and recommended the target be expanded, but Macfarlane decided otherwise and closed it down. It was too successful, he argued, buggering up the finances of the incumbents.

Those are the very same arguments that are being prosecuted today. But the clean energy industry has probably only got itself to blame. It has been unable to prosecute the case for renewables, and its policy of “managed retreat” and negotiated compromise — and it’s refusal to insist that the former Labor government adopt the CCA recommendation to delay the next review to 2016 — has blown up in its face.

Nearly three years ago, in an interview, Origin Energy chief executive Grant King first canvassed the issue of delaying the target to 2025. At the time it was considered to be the worst-case scenario, and somewhat fanciful. Now, a version of that would seem to be the best the industry can hope for. More than likely, it will end up with the same result as Macfarlane delivered a decade ago.

*This article was originally published at RenewEconomy

22
  • 1
    Jimmy
    Posted Tuesday, 18 February 2014 at 1:25 pm | Permalink

    This govt is fast showing a great aptitude for annoucning reviews stacked with reviewers guaranteed to find the result the govt has already decided on - I have said it before but I’ll sday it again, history wil judge the decision at the last election very harshly.

  • 2
    klewso
    Posted Tuesday, 18 February 2014 at 2:34 pm | Permalink

    We’re producing too much electricity” from renewables - we’ll have to cut that to make it more profitable for “industry”?
    Sound like that Howard-Wooldridge-Nelson “review” that led to cutting back doctor numbers - assuring incomes? Then we had Patel, making up for their engineered shortfall?

  • 3
    Tamas Calderwood
    Posted Tuesday, 18 February 2014 at 2:40 pm | Permalink

    He doesn’t accept the science. Given the consensus of thousands of scientists, all major scientific bodies and all but a couple of rogue governments, denial and what he calls “scepticism” amount to the same thing.”

    Hmm…  well, there is the matter of the 16 year temperature “pause”…  I don’t remember thousands of scientists and all major scientific bodies predicting no warming for this long.

  • 4
    Jimmy
    Posted Tuesday, 18 February 2014 at 2:42 pm | Permalink

    Klewso - I heard the AMA come out the other day saying that the increased number of uni places in medicine will lead to a strain on the medical systme becuase doctors will over refer and do un-needed treatments to keep their income up.
    The alternative I suppose would be to just get by on $180k a year.

  • 5
    Jimmy
    Posted Tuesday, 18 February 2014 at 2:59 pm | Permalink

    Tamas - You have been warned before about cheery picking time frames to make a faulty case, try to learn from your mistakes.

  • 6
    DiddyWrote
    Posted Tuesday, 18 February 2014 at 3:18 pm | Permalink

    Abbott and his government are practising Anthropogenic Climate Change Denial by deed if not by word, which is actually worse.

  • 7
    Electric Lardyland
    Posted Tuesday, 18 February 2014 at 3:19 pm | Permalink

    Now kids, which one of Tony Abbott’s positions on climate change, do you think is the genuine one?
    A: “Climate change is absolute crap”.
    or
    B: “I believe in the science of climate change”.

    Gee, it’s a tough one?

  • 8
    Electric Lardyland
    Posted Tuesday, 18 February 2014 at 3:25 pm | Permalink

    Yes, DW, I’m still wondering if anyone in the Australian media, will get around to asking Abbott about his previous few years of lying about climate change policy? I mean, after his time in opposition and his unhinged, ‘She lied, she lied to all of us’ routine; you’d think that there might be somebody interested in pointing out his relentless dishonesty and hypocrisy.

  • 9
    Jimmy
    Posted Tuesday, 18 February 2014 at 3:32 pm | Permalink

    EL - You’ll be waiting a long time before the media call Tony on a l i e. After all one of his own MP’s called him on re the SPC wages, TOyota called him & Hockey on it regarding the Toyota Wages and now Alcoa have called them both on it again regrarding the Carbon Taxes role in thier shut down - yet the media stay mute.

  • 10
    Dogs breakfast
    Posted Tuesday, 18 February 2014 at 3:37 pm | Permalink

    .. and Jesus wept!!!!!!!!!!!!!!!!!

    ot a climate change denier but a “sceptic” about the role of humans in climate change. He doesn’t accept the science.

    It’s not that I believe that Dick Warburton is a sorry excuse for a cross between Elmur Fudd and Satan, it’s just that I’m extremely sceptical about any point of view that suggests otherwise.

    I know that science thinks that Elmer Fudd is a cartoon character, and that Satan doesn’t exist, but I just don’t believe the science.

    Sigh :-(

  • 11
    klewso
    Posted Tuesday, 18 February 2014 at 4:33 pm | Permalink

    How far down this dry gully do we have to be led before we want to turn around?

  • 12
    Electric Lardyland
    Posted Tuesday, 18 February 2014 at 5:25 pm | Permalink

    Yes, Jimmy, there does seem to be just a little bit of difference, between how motivated some sections of the media were, in say, throwing themselves into the largely baseless, twenty year old conspiracy theories regarding Julia’s alleged involvement in the AWU scandal, and how motivated they are now, to point out to some of the slower members of the public, that many of Tony’s multiple and contradictory positions on most issues, may actually be lies.

  • 13
    fractious
    Posted Tuesday, 18 February 2014 at 6:29 pm | Permalink

    Electric Lardyland, the answer is C) neither/ both of the above, because he didn’t write either of them down.

    But what’s a Tory guvmint to do when it must conduct a review of something that’s succeeded beyond expectations yet ensure the results deliver the ummm… right answer? I don’t normally bother with Q&A cos I know its political panels are largely biased in favour of the tories, and any optimism I might mistakenly have had about it evaporated in the first 5 minutes of last night’s episode, what with Erica’s blustering bombast and that Ridout woman’s mendacious spiel and the perfectly hopeless Burke in the red corner.

  • 14
    Liamj
    Posted Tuesday, 18 February 2014 at 7:24 pm | Permalink

    Next up, cardinal Pell to review funding of school science; jesus wept.

  • 15
    Electric Lardyland
    Posted Tuesday, 18 February 2014 at 8:19 pm | Permalink

    …Andrew Bolt to review the effectiveness of Indigenous social justice programs.
    …Ralph Blewitt to head a task force into the alleged AWU scandal.
    …Bernie Madoff to formulate new strategies for the supervision of the ASX.
    …Janet Albrechtsen to be chief commissioner in the Royal Commission formed to investigate serious allegations of bias by Australian cartoonists.

  • 16
    AR
    Posted Tuesday, 18 February 2014 at 8:36 pm | Permalink

    If ever there were a country ideal for autonomous power generation, it is sun drenched OZ with vast distances traversed by energy consuming HT transmission lines.
    Reminds me of the Fraser years when he set up NERD to examine the economics of alcohol using cellulose from forest waste (woodchips soon dealt with that), sugar & chaff as feedstocks. One of the terms of reference was to compare it with parity pricing of our indigenous oil.Many red faces when it was found that sugar resulted a lower price (including lower BTUs) than oil, cellulose comparable and chaffabout 10% more expensive. The real surprise was that there was no worthwhile economy of scale beyond 500K gallons pa - the perfect size for most inland towns with a lot of chaff at the end of each growing season.
    No surprise that the report never made it to Cabinet.

  • 17
    Patriot
    Posted Tuesday, 18 February 2014 at 9:35 pm | Permalink

    Wash the sand out of your clams, greentards. They’re not going to ban renewable energy, just stop subsidising it. You’re perfectly free to blow your own dough on windmills and what have you.

  • 18
    Draco Houston
    Posted Wednesday, 19 February 2014 at 12:48 am | Permalink

    Patriot, I guess you’ll be fine removing subsidies for fossil fuel then,

  • 19
    MJPC
    Posted Wednesday, 19 February 2014 at 7:55 am | Permalink

    Patriot, the winds of change are blowing from both Peking and Washington now as a result of the recent visits by Kerry. Didn’t your esteemed PM comment (in opposition) on the pointlessness of Australia doing anything when both of those countries did nothing.
    Guess what, times have changed.
    Alas, the climate change deniers of this government once again have not read the mood for change in this world and building coal loaders in world heritage area will turn out to be expensive folly when the reality hits that coal and petroleum are yesterdays technology.
    As for windmills and PV, it’s also led street lighting, solar HWS and a myriad other green innovations that are the nightmares of the conventional electricity providors

  • 20
    Sophie Benjamin
    Posted Wednesday, 19 February 2014 at 8:11 am | Permalink

    Sophie Benjamin here, Crikey website producer.

    There is some robust debate in this thread but can I please ask people to move the tone of the discussion to something less personal. At Crikey we endorse the technique “play the ball and not the person.” In other words, please don’t attack each other. Keep this in mind and consult our code of conduct for more info. Users who repeatedly fail to follow the guidelines will have their comments moderated.

  • 21
    Hamis Hill
    Posted Wednesday, 19 February 2014 at 2:07 pm | Permalink

    Charles’ “Headless Chicken Brigade” in action?
    Wasn’t a headless chicken kept alive for several months by some intrepid researchers?
    Wasted research, given the continued existence of the political headless chickens?
    A technique perfected by their owners long, long ago?

  • 22
    AR
    Posted Wednesday, 19 February 2014 at 4:20 pm | Permalink

    PatrIdiot has been missing for so long that I’d forgotten what a throwback he is. Shame that he wasn’t thrown back into whatever morass he was found in. Perhaps he was Sectioned and released due to overcrowding?

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