By Peter McCarthy
On March 13 2017, there was an opinion piece in the Australian Financial Review entitled Wind and Solar can only win on a tilted playing field. Not surprisingly, penned by Brendan Pearson, the chief exec of the troubled Minerals Council of Australia.
Knowing the track record of trickiness from the Minerals Council, I thought it would be interesting to see what a little background check might reveal. I must admit to some trepidation because, when politics is involved, you have to be careful about the sources you use, but as it turned out, by using the same sources as Mr Pearson, International Energy Agency, the picture is far more interesting.
As it turns out the figure quoted is just about right, but what Brendan failed to mention is that subsidies for the Fossil Fuel industry are 4 times the size of those for renewables. Ouch.
Let’s look at the Global figures for 2014 so we get a fair comparison:
- Fossil Fuels $550 billion a year and climbing.
- Renewables $120 billion and climbing too, but remember Renewables is gaining market share so it is to be expected.
Currently Renewables are meeting an impressive 30% of the Energy market just with current technologies and new developments like Reposit are heading towards covering peak demand issues. It’s just a matter of time before the basket of technologies cover the market. Maybe before they finally get “Clean” coal off the ground.
To me, those figures look about even given the percentage of the Energy market both serve. That alone makes a strong case for Renewables because on current figures, the attempt to meet 2DS (limiting the temperature rise to 2 degrees scenario) is predicted to fail when we hit 3.6 degrees. A horrifying figure almost double the target. (World Energy Outlook figures). We simply can’t afford to generate any carbon without serious damage to the climate.
Not feeling nervous yet?
Here is the killer punch. The US EPA did an in depth study of the cost that fossil fuel pollution has on the health of Americans. Bear in mind that chaps like Brendan Pearson give a wide berth to any consideration of the health impacts of his product.
On US figures, the fossil fuel industry gets a free pass to the tune of 14 to 35 cents per kilowatt hour which is actually higher than the unit price in some areas. To put that in perspective that’s a full 6% of US GDP. Compare that to the official subsidy of about 0.7% of GDP and you start to see how serious that oversight is.
Interestingly, this is not an issue with Renewables with the possible exception of manufacturing plants depending on what chemicals may end up being used. It will certainly be many orders of magnitude less than the problems caused by fossil fuels where everyone cops a serve.
Even leaving aside the health impacts, the case for Renewables is a strong one and unfortunately for Mr Pearson, the Industry is well aware of the problems facing his product. He may be able to influence a few pollies with things like “clean” coal, but it’s a non-starter with Energy companies and Financiers. Unless the taxpayer foots the massive bill, the sums just don’t add up. Even if a political party starts funding it via the taxpayers, at best it will only last until the next Election and then the Voters will deal with the incumbents.
Our Pollies get a 3 year term, the Industry needs about 20 years to turn a profit. Unless you can buy both sides of the political spectrum, you have 3 years to break even. No wonder only a few short sighted pollies are up for it.
This article was originally published on 1petermcc’s Blog.
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