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The power revolution - winners and losers

By Peter McCloy - posted Wednesday, 27 May 2015


On April 29 1998 the Howard government signed the Kyoto Protocol, and created the Australian Greenhouse Office, the world's first government agency dedicated to reducing greenhouse gas emissions.

In April 2001 they introduced the Mandatory Renewable Energy Target scheme (MRET). This mandated that by 2010 electricity retailers and other large electricity buyers source an additional 2% (above 2001 levels of about 8%) of their electricity from renewable or specified waste-product energy sources. This target has grown to 20% renewables by 2020.

The scheme envisages two areas, large and small scale, the former covering large scale generators, the latter including domestic solar panels and solar hot water systems.

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Technologies to achieve these targets were limited; hydro-electric schemes, for example, were politically unacceptable because they obviously needed new dams. Wind farms were considered to be an answer to large scale generation, solar panels to both large and small scale projects. Schemes were introduced to encourage both by offering attractive and guaranteed prices for the power produced.

I have a grazier friend who invested more than $1 million in solar panels for his properties in the earliest days of such schemes. When I spoke to him recently he seemed quite satisfied with his investment, which he calculates is returning him 17% per annum.

Another friend installed solar panels on his own home, but not on an investment property he owns. He explains that he has no motivation to spend the money when it is his tenants who play the bill.

Renewable energy targets are obviously popular with those who can take full advantage of their generosity, but many are unable to profit, for various reasons, and it's them that pay the cost. The rich get rich and the poor get poorer.

Obviously the manufacturers of solar panels and wind generators are major beneficiaries, and enthusiastic supporters of the schemes.

Wind farmers like AGL are guaranteed both a market and a generous price for their output. How many of our farmers would like a deal like that?

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Which brings me to me. In 1997 my wife and I built what we considered to be an ecologically responsible home, fully solar - in other words not connected to the grid. We could have connected to the grid for about the same price, but that would have involved cutting a wide avenue through the bushland that surrounds our house, and we didn't want to do that. Not that we considered ourselves to be Greens - in our experience the further you live from Balmain the less likely you are to vote Green - we just wanted to be responsible and responsive to our environment.

We're glad we did, most of the time, but it was not a wise decision economically. At the time we qualified for some minor subsidies - we managed to time our building between two more generous subsidy offerings. Now we pay recommended retail price for everything to do with our electricity, if we can get anyone to leave their more lucrative subsidised installations in the city and travel out into the bush where they're really needed. Of course we can't make a dollar to two by feeding back into the grid to which we aren't connected. Stand-alone solar schemes, we have discovered, are not for the cost conscious.

This may change, if we believe the ABC and the CEO of Tesla, Elon Musk. "We have this handy fusion reactor in the sky called the Sun. You don't have to do anything; it just works. Shows up every day and produces ridiculous amounts of power,"he says.

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About the Author

Peter McCloy is an author and speaker, now retired, who lives on five acres of rock in an ecologically sensible home in the bush. He is working on a 20,000-year plan to develop his property, and occasionally puts pen to paper, especially when sufficiently aroused by politicians. He is a foundation member of the Climate Sceptics. Politically, Peter is a Lennonist - like John, he believes that everything a politician touches turns to sh*t.

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