Prime Minister Scott Morrison is stretching the truth when he calls Snowy 2.0 fair dinkum power according to The Australian's columnist Judith Sloan.
The Conservative Party says the government should stop subsidising renewable energy - and stop spending taxpayers' money on generating energy when the private sector can do it.
Judith Sloan writes:
Surely pumping water up hill to then be released to generate electricity, with a net loss of energy of at least 20 per cent, is more fairy story than fair dinkum?
But evidently it’s OK because taxpayers, whether willing or not, will have to invest only $1.4 billion into the project with the rest “self-funded’’ by the Snowy corporation itself. Let’s be clear about this: we either pay for this through taxes or through electricity prices.
And bear in mind the final cost of the project remains extremely uncertain. It was going to cost $2bn and then it was $4bn. Or was that $4.5bn?
We are not sure whether this includes the cost of the additional transmission infrastructure required. We could easily add another $2bn.
Don’t forget the federal government had to buy out NSW and Victoria because there could be no guarantee those state governments would be as keen on this fairy story (sorry, fair dinkum project) as the Coalition.
Let’s be clear about the economics of this project: it rests on very high and variable wholesale electricity prices. Water can be pumped up the hill when prices are low and released when prices are high. That might be a good deal for the corporation, but it’s not a good deal for consumers or taxpayers.
Evidently, the Coalition has given up on the ambition of returning real wholesale prices to levels we enjoyed at the turn of the century, levels which made heavy industry in this country competitive and profitable.
The fact the Coalition government refuses to unpick the distortions in the market, rather than adding to them by promoting Snowy 2.0, is a sad indictment of where energy policy has landed.
And, by the way, for the sort of investment being devoted to Snowy 2.0, you could get several high efficiency, low emissions coal-fired plants.
Australian energy consumers can't afford to have the equivalent of a Tesla in the garage for Sunday drives so energy executives can drive around getting kudos for saving the planet.
Conservative Party leader Cory Bernardi has been proven right again having called out Snowy 2.0 as nonsense last year in a chat with Chris Kenny on Sydney radio station 2GB.
To read Judith Sloan's full article, click here.
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