NSW coal fired power subsidies worth $4B

01 Nov, 2011

The Climate Spectator’s Giles Parkinson and Sophie Vorrath saved me a lot of time this week by doing a fantastic piece of homework and analysis on the much awaited Tamberlin inquiry this week, reported here.

In summary the inquiry found that the sale of the “poles and wires” networks by the previous Government was “not a fire sale” and given the detail behind it, the price realised was reasonable. It didn’t go as far as recommending the remaining Gentraders were sold although it inferred it made great sense, which leaves Premier O’Farrell in a difficult position, given his pre election commitments to overturn the whole deal.  

Imagine that; a politician who had to break a promise. Incredulous.

What is even more fascinating however is Climate Spectator’s unearthing of the real cost of coal subsidies (and thus the price of electricity) in NSW. They have uncovered the fact that it is worth a staggering $4B, far more than originally estimated. And it had to originally be estimated because the Government kept trying to black out the data so know one would know the real cost – but they missed a few spots with the texta this time.

To be clear; I am a renewable energy advocate through and through. But I am also a realist; we need coal fired power while we transition to renewables.

However, the repeated bleating about how uneconomic renewables are, clearly comes from a base line that is highly distorted, as this new data demonstrates.

And the generators, coal miners and State Government are all complicit in (clumsily) attempting to hide the real facts and price from the public, whilst merrily blaming PV for pushing up the price of energy and being too heavily subsidised.

Garnaut also intimated that this scenario is far from limited to NSW and around the globe, similar subsidies run into the realm of half a Trillion dollars. 

What will be most fascinating (and my next task is to write to them) will be to see if IPART takes these subsidies into account in their calculations of what a “fair price for solar” should be in NSW.

Lets cut the crap. Subsidies flow left, right and centre across all sorts of industries and energy generation is has been and is heavily subsidised in a myriad of ways.

If we had full and open transparency about the cost, value and benefits of these subsidies, we would go a long way towards being able to fairly compare emerging technologies.

With a fair comparison, we could than ask ourself one simple question: “do we want to keep subsidising energy technology that has benefited from decades of support, but has a rapidly diminishing future and rapidly escalating cost or, do we want to switch these subsidies to emerging energy technologies which have a massive emerging future and a rapidly diminishing cost?”

One thing is for sure, its seems that the majority of State and Federal Government enquiries held in the last 5 years or so keep coming up with the same answers; reform the energy market and prepare for the future instead of continuing to support aging technologies. I wonder when the Government will actually listen to there own advice instead of playing politics.

About the author

Nigel Morris
Nigel Morris

Nigel is the Director of SolarBusinessServices. After almost 20 years working for other companies SbS Director Nigel Morris, established the company in 2009 with a view to providing other organisations with the benefits of his wide experience in the renewable energy industry.

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