Renewable energy evangelists preach a fact free utopia

Perhaps Greenpeace has some special insight into world energy markets that has eluded the world's greatest investor. But in June this year, the United Kingdom's sole wind provider – Renewable UK – warned that thousands of jobs would be lost as a result of the government's decision to cut subsidies. Unsurprisingly, the venture capitalists and financiers were nowhere to be found.

Even assuming that wind power does become cheaper, hidden costs abound. Because wind turbines rely on the goodwill and compliance of Mother Nature to generate electricity, supplying a greater share of a country's base load power with wind requires increasing backup capacity from reliable sources (in other words, coal). This is demonstrated by Germany, a nation often held out as a model exemplar of renewable energy. Last year it wasted 555 gigawat hours of renewable energy because the grid was overloaded, the cost of which was borne by consumers.

The second overlooked cost is that generating this excess capacity inevitably involves producing carbon emissions. Generating this backup capacity is not so burdensome where wind makes up a tokenistic share of a country's energy needs. However, the financial and environmental cost of maintaining the backup capacity needed to support the wind turbines needed to meet a 50% renewable energy target underscores the dishonesty of wind power utopianism. As reliance on wind grows, so does the emissions and cost of preventing a nationwide blackout. In truth, the prophecy of a zero carbon, wind powered economy belongs in a work of paperback fiction.

Of course, arguments pertaining to cost are sure to hold little sway with green evangelists who believe the climate apocalypse is fast approaching. Yet even in carbon abatement terms, the 50% renewable energy target is crudely inefficient. Wind subsidies are currently between 2 and 5 times more expensive as a means of abating carbon emissions than Labor's carbon price of $23 a tonne. At $78 per tonne, the cost of solar energy subsidies is equally wasteful.

Whereas the carbon tax was deeply unpopular amongst the electorate, recent polls indicate that the majority of Australians support Labor's target. One might attribute this to the fact that the carbon tax was successfully characterised as a tax on household electricity bills, while the phrase 'renewable energy' stated abstractedly sounds wholly inoffensive.

Superficialities aside, a 'price on carbon' and government funded renewable energy both have a cost that will find its way back to the hip pocket of consumers. And while the former may have failed politically, that is no reason why consumers should be forced to underwrite the blatant profligacy of the latter.

The common streak of green evangelicals preaching the renewable energy revolution has been to proselytize with words rather than numbers. But no amount of high-minded rhetoric about the dangers of climate change should see renewable energy targets – no matter how big or small - quarantined from a frank analysis of the costs and benefits. And when $100 billion is at stake, Australia can't afford to wait for a deathbed conversion back to common sense.