Environmental acts of faith are seriously misdirecting public investment in our electricity sector

Environmentalism, complete with fear of global-warming (a modern day reincarnation of Hell?), has now established itself as a major religion in developed countries. Such beliefs are a now a huge influence on investment decisions, especially those of government.

The new religion makes many people fear the imminent destruction of our planet. Such (often holier-than-thou) scaredy-cats in turn are now rewarding politicians that indulge exaggerated climate fears. In particular, such voters help re-elect many governments with chequered (especially economic) records, that deserve to be thrown out of office. A similar trend is evident in respect of Covid 19, whereby governments that impose lockdowns and border closures at the drop of a hat, get re-elected by broadly the same electors.

The doomsday warnings of alarmists can be traced to a set of environmental acts of faith, that are falsely presented to the public, not just as science, but as undisputed and unexaggerated science, from which nobody is allowed to dissent. In reality, many environmental alarmists hide behind a veneer of facts, that conceal a chronic propensity to "cry wolf".

It is clear fact that global temperatures have risen 1 to 1.5 degrees since pre-industrial times (and that global temperatures have risen and fallen cyclically, not just for centuries, but for millennia). To date, alarmist predictions of much faster temperature (and sea-level) rises in recent times simply haven't happened.

Australia is continuing to severely damage its economy trying to achieve greenhouse targets (pushed mainly by countries that themselves often lack coal, gas or oil resources, and have a lot less to lose). This is all despite the prospect that advocated greenhouse targets will never be met on a global scale because they are extremely costly to achieve.

The predecessors of those currently predicting an imminent global warming catastrophe (e g the "Club of Rome") were in 1972 forecasting that the world would run out of resources, especially fossil fuels. A decade ago they were gleefully declaring that "peak oil" was almost upon us. Peak coal supposedly was in 2013, peak oil was to be between 2020 and 2030, while peak gas was going to be later. Any problem of excessive greenhouse gases (not so fashionable back then) therefore was to disappear naturally due to depletion of resources, and soaring oil and coal prices.

Acts of faith are not new. The Credo, for example, was historically recited by many Christians to state their core beliefs. Such statements of religious belief have now been replaced for many by a collection of less formal environmental acts of faith.

In respect of climate, the main environmental acts of faith are that:

• A global warming catastrophe is in prospect unless the world moves to 100 per cent renewable energy.
• The world needs to stop burning coal and petroleum products (though the greenhouse emissions consumed in making solar panels, wind turbines etc can be ignored).
• The intermittency of wind and solar generated power is assumed solvable by a combination of (expensive and mostly yet to be developed) batteries and pumped-storage hydroelectricity. (Diesel or natural gas backup is actually more common but environmentalists don't mention this. Environmentalists also rarely recognise that off-grid solar systems are only adequate when their usage is restricted to lighting and electronics, and augmented by gas cooking, wood heating, and a petrol or diesel backup generator.)
• Natural gas power generation is deemed acceptable only as a stopgap measure to address intermittent electricity shortages, being quicker to fire up and less carbon intensive than coal.
• It is not ok to replace existing old-technology coal fired stations with cleaner, far more efficient new generation coal-powered facilities.
• Nuclear power is an absolute taboo, even though it provides cheap reliable base-load power without direct greenhouse emissions.
• Internal combustion engines need to be banned and be replaced by electric motors (even if most electric power currently mostly comes from coal).

The common (though far from total) acceptance of these environmental acts of faith has been more costly for Australia than for other countries because Australia has abundant coal and gas resources, that have been key elements in our comparative advantage. By rejecting coal, Australia is smashing its electricity system, and much of our energy-intensive manufacturing has been made uneconomic.

What Australia continues to do to its electricity system is simply insane in terms of both economics and our national interest.

According to one leading economic commentator, Australia (having already doubled electricity prices to consumers) is also paying $13bn annually and rising in direct and hidden subsidies for wind and solar. Price signals to electricity producers and consumers therefore have now been totally distorted. (Retail electricity prices are now mostly between 25 and 40 cents per kwh with SA the dearest state and Queensland the cheapest). State governments privatised much of their coal-fired generating capacity decades ago, and subsequently had no qualms about sending the new owners down the swanny.

The subsidies for (largely imported) household solar panels and for wind turbines (and the prices paid for intermittent electricity fed into the grid) are so high that some suppliers are claiming, for example, that solar panels are almost free.

Under a scheme now closed to new participants, the ACT is paying households feed-in tariffs of up to 50.15 cents per kWh. A more recent scheme involves a $2.8 million community owned solar farm in the ACT's Majura Valley, announced in 2019, which is expected to produce up to one megawatt of electricity (enough to power up to 260 homes). The ACT Government reportedly is subsidising the farm to the tune of 19.56 cents per kilowatt hour for 20 years.

Free registration for electric cars and interest-free loans of up to $15,000 will be funded in next month's ACT Budget, with the goal of pushing the ACT towards a carbon-neutral future. A $150 million loan scheme will offer finance for electric cars, solar panels, purchasing battery storage, buying an electric vehicle or for efficiency upgrading of appliances. Other states (e.g. Victoria, SA and NSW) are headed in the same direction.

Australia and some other Western countries are destroying their electricity system in the name of preventing man-made global warming. Consequently energy intensive industry is being outsourced to other countries, especially China. Rising greenhouse emissions from these countries are more than offsetting cuts in the West, and it is mainly economic recession and the rising use of cheap gas (in countries like the US) that is restraining total emissions for the moment. Xi Jinping's announcement in September that China will be carbon-neutral by 2060 was merely appeasing rhetoric not to be taken seriously.

Australian coal resources are akin to Saudi-Arabia's oil. There is simply no prospect of Saudi-Arabia stopping its use of oil and gas, and switching entirely to renewable electricity and electric cars, because such a policy is inconsistent with its national interest. So why is Australia even considering abandonment of coal-fired power?

Australia can power its industry most economically (while making a substantial cut in emissions) by building new generation coal-powered stations at coalfield locations. (High-energy low-emissions plants operate at higher temperatures and air pressure to more rapidly convert water to steam. This significantly improves the efficiency of boilers and turbines, saves fuel, and reduces CO2 emissions by up to 50 per cent.)

Instead we are banning such plants, while countries like China, India and Japan ship our coal halfway around the world (at considerable monetary and Greenhouse expense), while our power bills soar. China has more coal-fired power under development than the entire coal power capacity of the United States, and uses coal-fired energy to make the solar panels, turbines and batteries we use. Australia also refuses to consider another source of base-load power, nuclear, which for us is the most practical alternative to coal.

Bedsides soaring costs, blackouts costing hundreds of millions of dollars annually have already happened in some Australian states, and regulators warn of growing instability in the electricity grid. Energy Security Board (ESB) chair Kerry Schott recently warned that Australia must confront the impact of renewables or face higher costs, stating that the rules for our national electricity market are "no longer fit for purpose''. The ESB has said the security of power supply to the east coast market remained its "most concerning issue".

Politicians, including leading Liberals, have caved in completely to the Green lobby, and are offering no sensible solutions.

There is a Commonwealth proposal to build a gas power station in the Hunter, which makes no economic sense given our high domestic gas prices. The Turnbull-inspired Snowy 2 pumped hydro scheme (now estimated to cost at least $5.1 billion) is going ahead despite being both uneconomic Aand threatening to cause considerable environmental damage. The main reason governments support hare-brained schemes like these is that such schemes have political appeal being neither coal, nuclear, wind nor solar, which each have detractors.

The NSW government recently unveiled a $32 billion electricity infrastructure roadmap it says will cut red tape, emissions and the state's reliance on coal, by facilitating private investment in renewable energy. The NSW government is to incentivise the replacement of all coal-fired power plants with renewable energy by 2042, in a policy that will supposedly "keep electricity prices low".

Two of the world's biggest batteries, worth a combined $1bn, will be built at the sites of NSW coal plants in a move to ease strains in the power grid when Liddell closes in 2022-23. Origin's 700MW battery at Eraring (for example) will be able to send power into the grid only for "up to four hours". The problem is that it is base-load coal power that allows our electricity system to function, and there will soon be little to fall back on when we have prolonged periods of low wind and sun, and a much larger renewables sector.

Bob Hawke famously wanted Australia to become the "clever country", while Donald Trump had a major concern with putting America First (in ways beyond mere isolationism). The irresponsible destruction of the base-load element of Australia's electricity system (i e coal-generated power) and its replacement by intermittent power, is neither clever nor putting Australia's interest first. Australia really is only seeking to appease alarmists both here and overseas.

We could all pray and seek the intercession of St Greta, but this, if anything, has potential to only make matters worse. It will take a crisis in the power grid to make governments see sense. In the meantime, those who are religiously inclined and want cheap reliable electricity, might be better-off seeking the intercession of St Jude (the patron saint of desperate cases and lost causes).