When will Australia learn?
Economic history tells us that whenever governments have tried to pick industry winners it has ended in failure.
A decade ago, in response to concerns about global warming, Australia’s political leaders picked renewables as a ‘winner’ in the energy sector.
Now we face the likelihood of major summertime blackouts in NSW and Victoria, while South Australia has had to ship in diesel-fuelled emergency generators to avoid another round of outages.
Our competitors in Asia must be rolling with laughter at the sight of the world’s most resource-rich nation scrambling to keep the lights on, Third World-style.
With electricity supply unable to keep up with demand, prices have gone through the roof.
Liberal Democrat Senator David Leyonhjelm has produced a telltale graph charting the extra cost to consumers:
From 1981 to 2007 there was a steady but manageable increase in the electricity CPI.
The surge in prices dates from 2007, coinciding with the election of the Rudd Labor Government.
This marked the beginning of Australia’s power wars, with both the Left- and Right-wing sides of politics attacking the other’s preferred energy supply.
The Right attacked renewables through the Abbott Government’s abolition of carbon pricing.
The Left attacked coal to the point where no rational investor can build a new coal-fired power station.
It also destroyed Australia’s coal seam gas industry with hundreds of NIMBY campaigns based on fake environmental concerns.
Remarkably, the Left also remains opposed to nuclear power, even though it has the twin virtue of delivering energy security and zero carbon emissions.
The net outcome of this ideological bun-fight has been a sclerotic power industry, with sharply rising prices, intermittent supply and investor uncertainty.
It’s a classic case of too much politics, too much industry intervention wrecking an essential national service.
Australia should be a global energy superpower with flourishing fossil fuel, renewable, nuclear and gas industries.
We should have so much electricity that prices fall and business investment and jobs expand.
Instead, after a decade of massively subsidising renewables (now at $3 billion per annum), we have nothing to show for it except international embarrassment and the importation of emergency generators.
The obvious solution is for government to get out of the way, for politicians to stop picking ‘winners’.
What do our MPs, who are mostly lawyers and former political staffers, know about running the electricity industry?
How can they be more expert than the combined wisdom of the electricity market: millions of consumer and production decisions every day trying to power up the Australian economy with an essential input?
For Labor, this should be a no-brainer.
In the 1980s and 90s, State Labor Governments tried to pick industry winners but almost sent their economies broke with WA Inc and the collapse of Victoria’s Tricontinental Bank and South Australia’s State Bank.
The modern equivalent is Bill Shorten’s 50 percent Renewable Energy Target in 2030.
This is the same policy, at State level, that switched off South Australia’s lights in September last year.
Why can’t Shorten learn from this mistake?
With limited storage capacity, over-reliance on renewables jeopardises energy security.
To move anywhere beyond a 30 percent renewable power supply is a national economic suicide note.
Yet this is what Shorten has written.
Renewables have become the new religion of the Left.
Like Medieval zealots, they think that praying at the altar of windmills and solar panels can power Australia’s economic prosperity.
Day by day, the renewables cult continues to grow.
On Thursday, academics at the Australian National University released a report claiming to have identified 22,000 sites for pump-hydro production.
That is, pumping water up from base reservoirs to hilltop sites and then letting it flow down as hydro.
The ABC’s Leftie-in residence, Virginia Trioli, described it as “the Holy Grail” of energy policy.
Just one problem: the locations were taken off Google Earth without in-person inspections.
I visited the site closest to my home in South-West Sydney and it turned out to be arid bushland alongside a dry gully.
Whatever water had been around was now sitting in the orchard farmer’s dam next door.
This desolate little place has as much power potential as my daughter’s whirligig toys.
How does Australia get out of its energy policy mess?
We need to abolish the renewable targets, abolish the government subsidies, abolish the legal restrictions on power generation and abolish the 10 percent GST on electricity (as proposed by Senator Leyonhjelm).
The climate change challenge is real, but a renewables fetish can’t solve it.
This is why we need to go nuclear.
We are the world’s most geologically stable continent with abundant uranium reserves and vast open spaces for waste disposal.
More than any other country, Australia should be a dominant producer of nuclear-fuelled electricity.
Most of all, we need to end the political squabbling and meddling on this issue.
If we let the market pick its own winners, we can fulfill our potential as the greatest energy nation on Earth.
This article was originally published by The Daily Telegraph. Read the original article here.