What is the real cost of Ted Baillieu’s wind energy policy?

In late August, the Baillieu government implemented new planning rules which place large sections of Victoria off-limits to wind farm developments through the creation of No Go zones, and set in place a 2 kilometre ‘right of veto’, whereby a single household can block any turbines within 2 kilometres of their home.

Planning Minister Matthew Guy said he did not believe the two kilometre set-back policy would stop developers investing in wind energy Victoria.

Premier Ted Baillieu has also rejected suggestions the changes would harm the wind farm industry.

However, the facts of the matter suggest otherwise. Already we have seen one project abandoned and a number of others – including four potential community owned projects – put at grave risk.

The Clean Energy Council estimates that the laws will eventually drive $3.6 billion of investment away from Victoria.

Friends of the Earth has compiled a summary of the real costs of this ill considered policy that are apparent just three weeks into the new planning regime: in terms of jobs, greenhouse savings, and regional development.

SUMMARY

Since late August 2011, the Baillieu government policy has cost Victoria the following in terms of:

Lost or stalled investment	up to $955 million
Lost or stalled employment	around 580 direct jobs in construction,more than 57 on-going jobs in management of wind projects, and1,274 associated indirect jobsTOTAL = 1,911 jobs

You can find our full assessment here or download as Word document here.

There is also the ongoing costs to consumers. The energy demand and costs rise with population and business outputs. Because of this energy itself in real terms has been rising by 5% a year. When you consider the number of homes that have installed solar panels and made efficiency changes such as lighting and insulation, solar hot water and so on, that demand increase has been to date largely met and then some, (reduced infrastructure demand) costs in real terms were falling while the imputes for the construction of new plants coal power plants was being negated.

http://www.abc.net.au/news/2011-08-15/power-consumption-makes-historic-drop/2839394

Now that the renewable sector has been leashed up in Victoria – completely buried with a lid on it – the actual real costs of energy are set to skyrocket as demand once again requires tax payers front up with the bulk of the costs (in the billions) of supplying a new energy plant. The real actual costs are no different per kW, its the end owner who takes the profits. In the renewable market everyone has a chance to play. A new coal plant requires huge ‘one off’ investment where progressive, largely privately funded energy requires steady low demand investment. The cost of energy in Victoria will, under this regime, double in ten years. With renewables it would have been somewhat contained. The only real cost increase is the infrastructure which is naturally ongoing.

In the conservative Liberal led market it’s just a man or a few men who take the profits. What they fail to understand is that market, the market of big industry power use is what drives the economy and supplies the foods, provides the jobs and the wages they provide.

The conservatives are siding with one aspect (monopoly suppliers) and ignoring the rest (you and everyone else) because even big industry (should an economic case exist) can or will invest in renewables and make a profit or at least curtail costs. Nobody can do that while governments intentionally herd the market into a distinct corner for the benefit of having shares, options, friends or interests in that specific entity.

In this regard you have to consider a finite source of funds – private and public. That it should be pooled and used to supply energy makes no difference to the actual energy itself, only the people who own its supply. So the costs, in real terms are the same no matter which way you go. The key difference is long term. If the Liberal party wishes to continue with traditional energy then the bulk of that energy will require significant ‘one off’ investment in infrastructure (mines, roads, supply, water, new dams) at significant costs as social, environmental, legal, state resources financially and overheads on business. Renewables negate that hit to the general pool of funds by generating on site as required with no actual overheads on inputs, there are none. You don’t need dams to supply giga liters of water and so on even with solar concentrating salt plants that can run all day and night. Because renewables are largely disparate in nature, more widespread local jobs are supplied into the mix and the energy source itself is a difficult military or terrorist target.

Because the Liberal direction of energy is traditional coal, gas or potentially nuclear the ongoing costs add to the increase as too do the externalities, the pollution and human disease factors (which adds to health costs). Renewables cost marginally more per kW initially but long term ongoing supply / repair costs are significantly less or minimal compared to non-renewables.

Renewables more than help with the general economy of keeping the costs of business down (removing the steady 5% creep), health care factors come into it (as externalities) and general environmental costs of food supply, cleanup, contaminant mitigation, acidification of soils and other factors like crop disease, marine and aquatic contamination can also be affected by coal, gas and potentially, nuclear. And lets not forget the whole global warming thing that conservatives seem so happy to blindly ignore at the cost of everyone.

Conservatives make this mistake all the time. They typically favor one element of the economy while completely ignoring the wider economic situation. The USA crop subsidies distort the open market – cheap fatty foods cost less than fresh foods – oil based fuels cost less than actual real costs so clean, efficient public transport is unviable or not even considered. The real costs are the same and all taxpayers are paying for it regardless, the market itself is completely slanted to a handful of men.

Because of this you have high hidden costs in most things while start ups fail as the market changes rapidly with policy changes instead of being reasonably predictable. All the fuss Liberals make about “pro business” is nothing more then empty hot air. Its just a sad thing when you consider that hundreds if not thousands of people are relying on incomes from the new renewables market. These incomes will disappear or reduce considerably putting families under stress and ultimately make many businesses unviable in a short period of time. If these people have to resort to welfare, how can this be good for the economy and the taxpaying public. The same public whose costs of energy will rise regardless while the value of the taxes paid is lost to – what I consider – economic, social and environmental vandalism.

It is clear that renewables tick all the boxes of social, environmental and economic outcomes. That residential, primary producers with land and corporate players can all take a share of the energy market Australia wide. Farmers can potentially make the most out of this with wind, bio gas and solar all being an easily accessible and achievable goal for increasing revenue and supplying new income streams. Income streams that will continue regardless of the weather and food markets they choose the play in. Should every farmer in Australia provide at least wind and solar combined then there will be no need to new energy plants long into the future. It might be so that some existing ones could and probably should be closed.

Not an economists, just an Environmentalist.

Kind regards

Mitch Donovan

3 thoughts on “What is the real cost of Ted Baillieu’s wind energy policy?”

Cam Walker says:

September 25, 2011 at 9:26 pm

thanks to Anglesea News for picking up on this story.
http://www.angleseanews.com/archives/1283

We said in our release:
“Through the creation of a right to veto for householders, the Government has also established a remarkable double standard in planning: why is this clause not offered to the 2,000 people in Anglesea who may be forced to live within 2 kilometres of a major expansion of an open cut coal mine?”

The double standards issue really resonates with people. How does the government defend its decision to give right of veto to some people and not others?

Mitch says:

October 22, 2011 at 2:35 pm

There is also the ongoing costs to consumers. The energy demand and costs rise with population and business outputs. Because of this energy itself in real terms has been rising by 5% a year. When you consider the number of homes that have installed solar panels and made efficiency changes such as lighting and insulation, solar hot water and so on, that demand increase has been to date largely met and then some, (reduced infrastructure demand) costs in real terms were falling while the imputes for the construction of new plants coal power plants was being negated.

http://www.abc.net.au/news/2011-08-15/power-consumption-makes-historic-drop/2839394

Now that the renewable sector has been leashed up in Victoria – completely buried with a lid on it – the actual real costs of energy are set to skyrocket as demand once again requires tax payers front up with the bulk of the costs (in the billions) of supplying a new energy plant. The real actual costs are no different per kW, its the end owner who takes the profits. In the renewable market everyone has a chance to play. A new coal plant requires huge ‘one off’ investment where progressive, largely privately funded energy requires steady low demand investment. The cost of energy in Victoria will, under this regime, double in ten years. With renewables it would have been somewhat contained. The only real cost increase is the infrastructure which is naturally ongoing.

In the conservative Liberal led market it’s just a man or a few men who take the profits. What they fail to understand is that market, the market of big industry power use is what drives the economy and supplies the foods, provides the jobs and the wages they provide.

The conservatives are siding with one aspect (monopoly suppliers) and ignoring the rest (you and everyone else) because even big industry (should an economic case exist) can or will invest in renewables and make a profit or at least curtail costs. Nobody can do that while governments intentionally herd the market into a distinct corner for the benefit of having shares, options, friends or interests in that specific entity.

In this regard you have to consider a finite source of funds – private and public. That it should be pooled and used to supply energy makes no difference to the actual energy itself, only the people who own its supply. So the costs, in real terms are the same no matter which way you go. The key difference is long term. If the Liberal party wishes to continue with traditional energy then the bulk of that energy will require significant ‘one off’ investment in infrastructure (mines, roads, supply, water, new dams) at significant costs as social, environmental, legal, state resources financially and overheads on business. Renewables negate that hit to the general pool of funds by generating on site as required with no actual overheads on inputs, there are none. You don’t need dams to supply giga liters of water and so on even with solar concentrating salt plants that can run all day and night. Because renewables are largely disparate in nature, more widespread local jobs are supplied into the mix and the energy source itself is a difficult military or terrorist target.

Because the Liberal direction of energy is traditional coal, gas or potentially nuclear the ongoing costs add to the increase as too do the externalities, the pollution and human disease factors (which adds to health costs). Renewables cost marginally more per kW initially but long term ongoing supply / repair costs are significantly less or minimal compared to non-renewables.

Renewables more than help with the general economy of keeping the costs of business down (removing the steady 5% creep), health care factors come into it (as externalities) and general environmental costs of food supply, cleanup, contaminant mitigation, acidification of soils and other factors like crop disease, marine and aquatic contamination can also be affected by coal, gas and potentially, nuclear. And lets not forget the whole global warming thing that conservatives seem so happy to blindly ignore at the cost of everyone.

Conservatives make this mistake all the time. They typically favor one element of the economy while completely ignoring the wider economic situation. The USA crop subsidies distort the open market – cheap fatty foods cost less than fresh foods – oil based fuels cost less than actual real costs so clean, efficient public transport is unviable or not even considered. The real costs are the same and all taxpayers are paying for it regardless, the market itself is completely slanted to a handful of men.

Because of this you have high hidden costs in most things while start ups fail as the market changes rapidly with policy changes instead of being reasonably predictable. All the fuss Liberals make about “pro business” is nothing more then empty hot air. Its just a sad thing when you consider that hundreds if not thousands of people are relying on incomes from the new renewables market. These incomes will disappear or reduce considerably putting families under stress and ultimately make many businesses unviable in a short period of time. If these people have to resort to welfare, how can this be good for the economy and the taxpaying public. The same public whose costs of energy will rise regardless while the value of the taxes paid is lost to – what I consider – economic, social and environmental vandalism.

It is clear that renewables tick all the boxes of social, environmental and economic outcomes. That residential, primary producers with land and corporate players can all take a share of the energy market Australia wide. Farmers can potentially make the most out of this with wind, bio gas and solar all being an easily accessible and achievable goal for increasing revenue and supplying new income streams. Income streams that will continue regardless of the weather and food markets they choose the play in. Should every farmer in Australia provide at least wind and solar combined then there will be no need to new energy plants long into the future. It might be so that some existing ones could and probably should be closed.

Not an economists, just an Environmentalist.

Kind regards

Mitch Donovan

Leeroy says:

October 25, 2011 at 2:02 pm

“In the renewable market everyone has a chance to play.” So true.