Nov 1, 2011

NSW’s great big coal subsidy scandal

If there is a single mechanism that stands in the way of clean energy development across the globe it is fossil fuel subsidies, writes Giles Parkinson, of Climate Spectator.

If there is a single mechanism that stands in the way of clean energy development across the globe it is fossil fuel subsidies, which amount to around half a trillion dollars worldwide, each year. That much has been recognised by the International Energy Agency and by the G20, who have promised to remove them.

The IEA says that by doing that, more money can be freed up to invest in the technologies of the future. Given the course of the debate in the US and Australia, don’t expect that to happen any time soon.

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20 thoughts on “NSW’s great big coal subsidy scandal

  1. go-mag

    No wonder “The rAbbot ” wants to repeal the carbon pricing. I wonder how many snouts are in the trough??

  2. Michael James

    Good one Parkinson.

    You managed to go the entire length of your article without once mentioning that the Gentrader sale was the brainchild of Kristina Kenealley’s Labour government.

    O’Farrell in opposition opposed ther deal, and keneally, on the advice of her Treasurer, Roozendaal, prorogued paliament to try and shut down the Upper House investigation into the sale process.

    If it had been a conservative government I am sure you would have heralded it as a sign of their incompetance, how about applying a little even-handedness to your coverage? Hmmm?

  3. Frank Campbell

    Yet another case of Parkinson’s Disease: a quivering jelly of false assumptions.

    “If there is a single mechanism that stands in the way of clean energy development across the globe it is fossil fuel subsidies”

    Both FF and “clean energy” technologies are subsidised- the latter proportionately far more.

    Subsidies for current renewables have led to nothing but global scams. It’s now clear to most governments that renewables are ineffectual at best and fraudulent at worst (wind). Subsidies are being rolled back world wide. The UK has just announced a 55% cut to the solar subsidy. Britain also dumped the $80 billion Severn tidal power scheme.

    The renewables scam was never going to survive GFC Mk II. Renewables are an indulgence too far in the present financial mess.

    We never hear a word in Parkinsonland about the geothermal fisaco in Australia. A billion dollars wasted in the least-prospective geothermal continent. A fiasco spruiked by the Lord Monckton of climate millenarianism, Tim Flannery.

    Renewables will remain a monument to middle-class moralism until real capital is invested in basic R and D. Something the carbon tax will never manage.

  4. Mark Duffett

    Yes, “invest heavily in solar” is a crazy idea. Never mind a few solar power stations, ‘$3-3.6 billion a year’ invested in Generation III+ nuclear generators would be sufficient to completely decarbonise NSW electricity generation within 25 years. The same cannot be said of solar.

  5. AR

    Who needs a functioning moral/ethical sense, or even the ability to do simple arithmetic, when FC & Mark the Duffer can ride their long dead hobby horses off into the rhetorical sunset?
    One of the greatest (of many) lies of the neocon era was the mantra of ‘free market’ when what was meant was massive subsidies to the status quo to maintain current troughed snouts in the style which is their Divine Rite.
    By all means let the market rule, NO SUBSIDIES for anyone. The antiquity of an abuse is no justification for its continuation.

  6. Dogs breakfast

    “In short, this inquiry tells us, the coal-fired power stations in NSW are unable to compete with other power sources unless their coal is supplied at around one quarter of the cost of export coal.”

    Game, set, match.

    In fact, subsidies to coal, diesel and petroleum products generally amount to billions per annum, but that won’t sway those bastions of the free market, such as the likes of FC and the Mr Duffett.

    As someone closely connected to the leading edge of solar research, an investment of the likes of 3 to 3.6 billion a year in solar will see us free from fossil fuels for all time within 25 years.

    All that nuclear will produce is more carbon emissions from the production of the facilities, and decades of wasted time while nobody wants to live near one, along with huge problems of decommisioning these behemoths.

    Nuclear is the answer to a question nobody is asking, and nobody wants answered.

    Solar and Wind, not a fraud. Current technology could see them having a few cleaner gas fired generators for backup only while the bulk of power is renewable.

    But we would have to wean the mining industry off the govt teat, and god forbid that.

  7. Bo Gainsbourg

    The IPAs silence on the fat subsidies to coal speaks volumes. The only subsidies the so called ‘free marketeers’ never seem to want to talk about. Take the poleaxe to them and we might believe the opposition to any support for alternative energy is something other than the ideological position that it is. Until then lets keep shoveling the money to the miners and big coal companies…they obviously need us to pay for them.

  8. michael r james

    Give it a rest Frank. Where do you get all that negativity? Where do you get the “billion dollars wasted on geothermal”? The feds have assigned up to $200 million to the main companies but so far have only allowed $11 million to be drawn! (Remember, as Giles P says, it is Martin Ferguson running this portfolio.) And you blithely ignore what could be done with the near trillion dollars of fossil fuel subsidy.

    I am not aware of the UK cancelling a (presumed new, or renewed? $80 billion? only the Brits can so inflate costs but I don’t believe you since that would be many times more than the Three Gorges Dam–the world’s largest hydroproject and largest single green power source on the planet) Severn barrage but the here is a description of the world’s first and oldest tidal generator. OK, tidal is not going to substitute that much power generation but still it adds up and–unlike your pet hate of wind–extremely reliably. It has been producing power for 46 years–longer than any coal-generator (usual lifespan is not much more than 30 years, often less).

    [The Rance Tidal Power Station is the world’s first tidal power station and also the world’s second biggest tidal power station. The facility is located on the estuary of the Rance River, in Brittany, France. Opened on the 26th November 1966, it is currently operated by Électricité de France, and is the second largest tidal power station in the world, in terms of installed capacity. With a peak rating of 240 Megawatts, generated by its 24 turbines and a capacity factor of approximately 40%, it supplies an average 96 Megawatts, giving an annual output of approximately 600 GWh.
    In spite of the high development cost of the project, the costs have now been recovered, and electricity
    production costs are lower than that of nuclear power generation (1.8c per kWh, versus 2.5c per kWh for

    And that cost of nuclear power, that too is subsidized in all kind so ways.

  9. michael r james

    Frank, the Severn Tidal Power feasibility project shortlists 5 project from $3 to $4 billion and the mega-project of $32 billion (see below). It never ceases to shock me (after 30 years) of how the UK manages to make everything and anything so humungously expensive. This is more than the 3 Gorges dam cost and it will generate 26 GW.

    Anyway its cancellation seems to be an entirely political decision leveraged off environmental uncertainties. But stay tuned because did you not notice that they also just cancelled the first CCS because it was so much more expensive than planned (in this case the cost of full scale capture from a real FF generator is horrendous). Then do we still expect them to go ahead with their huge nuclear plans? 5% of all the UK’s energy needs is pretty damned impressive. My guess they will return to this (and maybe get the Chinese or maybe the French to build it.)

    [The Severn Estuary has the potential to generate more renewable electricity than all other UK estuaries. If harnessed, it could create up to 5% of the UK’s electricity, contributing significantly to UK climate change goals as well as European Union renewable energy targets. The proposal for a hydro-electric barrier to generate 8.6 GW and meet five percent of Britain’s power needs, is being opposed by environmental groups.]

  10. michael r james

    As far as I can tell the Severn Tidal decision was October last year. I suppose the $30 billion for 8.4 GW is not so bad (you’d only get half that power from funding nuclear, not counting all the hidden subsidies of course) and especially as the installation has an estimated life 3 to 4 times that of nuclear at up to 120 years. I think we might hear from this again in the next few years (I mean, relying on CCS & nuclear……)

    [The costs and risks for the taxpayer and energy consumer would be excessive compared to other low-carbon energy options. Furthermore, regulatory barriers create uncertainties that would add to the cost and risk of construction. The Government believes that other options, such as the expansion of wind energy, carbon capture and storage and nuclear power without public subsidy, represent a better deal for taxpayers and consumers at this time.]

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