It still makes sense to walk away from Snowy 2.0

A second key question is whether Snowy 2.0 will yield anything like $50 billion worth of benefits.  There is clearly no chance of this.   Snowy Snowy 2.0is officially predicted to “reduce wholesale electricity prices by more than $7 billion to 2075”.   This alleged benefit only amounts to one seventh of the total cost of the project and about a quarter of the sum remaining to be spent.  The so-called mega-battery in any case is only capable of providing power for barely a week, and wind droughts can last much longer than that.

The Albanese and NSW governments committed $2.5bn to securing the future of Australia’s largest aluminium smelter beyond 2028.  The idea of spending huge sums on such a (now) loss-making industry (unviable because of expensive electricity) is nuts, though the pumped hydro project is still central to Tomago’s survival plan.  Taxpayers could be further on the hook now that Snowy Snowy 2.0 is officially running so late.

Australians for several generations will be paying for the wasteful spending already committed on “renewables”.  Irrespective of whether you are a supporter of Net Zero or not, Snowy 2.0 simply never made economic sense and has continued to be pursued for purely political reasons.  It was intuitively appealing because it was neither a fossil fuel project nor (in itself) wind or solar, and the project risks were deliberately played down or ignored.

Turning to the broader issue of “renewables”/net zero, the big question is how much public money has been committed to date?  An added issue is how to cope with intermittent power, especially given the taboo that zealots have placed on using gas, the obvious means of backing up unreliable power.

There is said to be massive cost concealment in the wider “renewables” scheme.  According to Gottliebsen the total renewable scheme costs, including the secret high-return guarantees from the government, look to be about $900bn (nearly half a year’s GDP), split roughly evenly between construction costs and secret financial return guarantee deals.  Most of the public liabilities for renewable energy are concealed from the public due to the costs being “off balance sheet”.  There is equal non-transparency regarding the identities of the ultimate beneficiaries profiting from all these expenditures.

Off-balance sheet funding for renewables refers to financial activities that are not shown as impacting the government's headline budget balance.  They include things like loans and investments made through government financial corporations to support projects like inland rail and “renewable” energy.  This is hidden debt accumulation, undisclosed financial risk, and reduced transparency, which would be illegal if a public company did this. 

Hundreds of billions of dollars have likely been squandered due to scaremongering and reckless spending on (often dud) “renewables” projects, which in large measure outsource emissions to other countries and maybe triple the cost of Australia’s electricity in the process.  A big part of the problem is that so many Australians have been suckers for exaggerated scare campaigns about climate.  Another problem is that price signals to consumers have effectively been destroyed through massive subsidies for solar and wind, penal regulations impacting on coal fired generators and gas explorers, and huge hikes in the price of electricity and gas.  Most household expenditures on things like solar panels and batteries would never have occurred in the absence of generous public subsidies and expensive electricity.

Donald Trump was right, when he claimed that clean energy sources, such as solar and wind, don't work and are more expensive than fossil fuel options.  He also said the UN exaggerated the consequences of climate change, and he repeatedly warned that the economics of renewable energy are harming the world economy and causing higher energy costs.   

Australia needs to follow the US in withdrawing from the Paris Agreement and deregulating its energy market.

As for Snowy 2.0, the smartest and the most economic strategy would be to just close it down straightaway before further tens of billions get wasted.  At the same time Australia should freeze any further expansion of costly subsidised wind and solar.  Instead, Australia should build modern high-output low-emissions coal-fired power stations, mostly where existing coal power stations stand or previously stood. This would ensure reliable low-cost electricity, minimise the need for new transmission lines, keep our electricity investments mainly local, and allow our heavy industries to prosper once again.   

An inevitable negative would be the need to brace for a violent reaction from the radical left, but some struggles are necessary to prevent further destruction of our standard of living.