Why the Right won't eat their greens
Silex Systems CEO Michael Goldsworthy could hardly contain his frustration this week after announcing the closure of Australia’s only solar cells manufacturing facility – at a cost of 30 jobs at the company’s Homebush plant in Sydney.
The solar cells division was already struggling against the price and volume of overseas producers, and the rising Australian dollar, but Goldsworthy has no doubt that the killer blow came in the policy vacuum on the future of solar tariffs, particularly in NSW, where the industry has been brought to a standstill. It has made it impossible for his company to make forward investment decisions. All of Australia’s clean energy developers, indeed the entire energy industry, understands this problem well.
The Solar Energy Society estimates that more than 400 jobs have been lost and one quarter of the solar installations businesses in the state closed since the NSW government shut down the solar bonus scheme. Those losses are bad enough, but it seems that the 30 lost at Silex Solar (some for the second time, because they had gone elsewhere after the previous closure by BP Solar and then returned) has galvanised attention.
It may be because these particular workers have union support, in the form of the AMWU. NSW Secretary Tim Ayres says he had expected a more conservative approach from the new government, but also a more thoughtful one. “It seems like the politics have taken over… there is a relentless hostility to anything that looks like a green scheme from some of the media, and the politics just follows.”
But it’s also grabbed attention because Silex is one of the few businesses that can propose a genuine “value add” to the local industry. It is the last commercial producer of technology that was developed at the University of NSW. When the French government-controlled nuclear giant Areva was announced as the winner of the Solar Flagships program in June, using technology that had been developed at the University of Sydney, governments – both state and federal – made appropriate noises about how important it was that the new wave of local technologies – for they are emerging from our excellent research facilities at a rapid rate – not be lost overseas.
Just a year ago, Silex had big plans for the solar cells division, mulling a big upgrade in production and got involved in research with SunTech and UNSW to improve the efficiency of the technology and the facility’s output. “We have good technology, but to keep up with best technology that is coming from overseas, we have to … spend a lot to update the equipment,” Goldsworthy says. “We can’t justify that in the current market.”
It’s probably worth noting that Silex is not a fly-by night entrepreneurial group, or a small start-up. It has a market capitalisation of more than $500 million and has serious research and investments across a range of solar and uranium technologies. In that sense, it is practically unique in the country.
The current market Goldsworthy refers to is a policy vacuum. Goldsworthy and most other people in the solar industry support the NSW government’s decision to close Labor’s Solar Bonus Scheme in April, but they find it untenable that nothing has been put in its place, and likely won’t be until April next year at the earliest, when a review by the pricing regulator IPART is due to be delivered.
Goldsworthy says the industry is not asking for more handouts – just some policy clarity and a 1:1 net tariff, or a version thereof, which simply asks for a fair share of the revenue earned when the electricity returned to the grid by household installations is sold at full retail value to the neighbours by the local electricity retailer. “It’s just not good enough to take eight months to do this review while people are losing these jobs. You or I could do it in a week,” he says. He suggests a local content requirement, which exists in so many other countries, would also have been helpful.
Like Ayres, and many others, Goldsworthy says there appears to be animosity towards green technology. “We have got better sun than any other country, but there seems to be a philosophical opposition at the moment to solar power,” he told Climate Spectator. “It is just inconceivable – we have Coalition governments being elected in NSW, Victoria, and WA leading the charge to scale back any support for renewables, And we know the federal Coalition is less disposed to renewables and the whole climate change issue.”
Indeed, at state level, where coalition governments have replaced Labor governments in WA, NSW and Victoria, there seems to have been a seamless transition from incompetence to bloody-mindedness. The NSW government seems well satisfied with the position of the solar industry – the only sector that is benefiting are the electricity retailers who are pocketing huge margins on the solar power bought and sold on the grid – while Premier Barry O’Farrell has said he doesn’t want any more wind farms built. And while he has played that down as a “personal view” and not government policy (an extraordinary statement from a government leader), his track record of retrospective changes on government incentives, and then backtracking on them again, has not gone unnoticed by developers – local and international.
Clean energy developers are wondering where, exactly, would be a safe place to invest in Australia. Several have made it clear they will pack up and leave Victoria if the Coalition government there goes through with its wind farm policy proposals, and the state is yet to make clear its intention on state-based clean energy funds – nearly a year after being elected.
At the federal level, it gets no better, with the Coalition making it clear it intends to repeal the carbon price and warning liable parties, including electricity generators, not to participate in the forward market in carbon credits that will likely be created next year. The local Conservatives are marching in lock-step with the US Republicans who, having opposed a cap-and-trade scheme, then undermined a clean energy policy and are now attacking, piece by piece, state-based incentives.
In Australia, it means more delays and ultimately, greater costs. Developers and financiers will have difficulty building in a carbon price to their business models with any certainty. That, in turns, means further delays to the rollout of renewables. It also means that baseload gas generators, considered so essential for the stability of the electricity sector and for short-term emissions abatement, will also be delayed. Once again, tens of billions of dollars of investment gets pushed back, and ultimately becomes more expensive.
Comments on this article
Local Manufacturers...bless their souls!
"Goldsworthy says the industry is not asking for more handouts"....then 2 sentences on...."He suggests a local content requirement, which exists in so many other countries, would also have been helpful."
Oh, for the 1970's again!
Re: Consensus Shmensus
Like all attacks on peered review science a lot of big accusations backed up by nothing and driven by a dislike of the findings science is providing.
So Coupe DeVille answer to a better peer review process is to have people included in the review who aren't experts in their field. Brilliant idea, let start the ball rolling with an evangelical Christian on all reviews of anything that suggests god didn't create everything about 7000 years ago. That should really improve our understanding of the world we live in.
The peered review process is the best process we have and it has the runs on the board to prove it.
Science bashing
Coupe de Ville, if I go to the doctor with an illness and he/she diagnoses disease x, I will probably believe him/her. If I'm unsure, I can get a second opinion. If the diagnosis is the same, there's a pretty good chance they're right. If I'm still not convinced, I might even get a third opinion. If that coincides with the others, I'd be pretty stupid to say they're all wrong. Ask 100 practicing climate scientists about anthropogenic climate change and 97 of them will confirm it's real and it's serious. So I'm going to go with the 97.
The problem with asking the wrong question is ...
Willy Punter asked who I am:
I first came across global warming in my children’s school science textbook in the 1960s. Many years later I was the school science nerd who asked a visiting government environment Minister about what his government was doing about mankind's contribution to the greenhouse effect. Whilst at university I warned my environmentalist friends about man made global warming. They were extremely dismissive because the then global scare they were promoting was the supposed oncoming ice age.
I am now a practising lawyer with an honours science degree majoring in physics, applied maths and with a sub-major in computer science so when my daughter asked me, a few of years ago, to help her with a global warming assignment, I thought I could easily contribute. To my surprise, within a single evening, I found what I thought was quite a cool theory appeared to be deeply flawed as it related to man's production of carbon dioxide. Within a few more evenings of reviewing the science as it had subsequently developed I realised that man's production of carbon dioxide had little if any effect on global temperature.
I found the UN bureaucrats had been tasked with finding an excuse to create a self serving climate treaty which they had done very well but were reckless at best with scientific truth in order to do so. I now look on with horror as people far less qualified than I are referred to as climate science experts.
Whats wrong with taxes Beat?
I get sick of the oft repeated refrain that people don't want to pay more in taxes? As individuals most may not. But as a country you have to finance the Government services you want. I think Australian's recognise this. Americans don't, hence their current financial morass. Abbott and his coterie of populist shock jocks, billionaires and evangelicals are attempting to take Australia down this American path to financial insolvency and armageddon. They are just short the odd A$70 billion! Its like we need a revivalist cleansing. Stop paying taxes, Government services stop and the "unworthy" can fall by the wayside whilst the "worthy" will carry forward. Actually, reminds me more of the 1930's NAZI rhetoric when you think about it. Of course, only the wealthy are truely worthy!
Personally I, and many people I know, are happy taxpayers. I have paid around $1m in taxes over past 20 years and am a happy millionaire. I'm all for fair taxes and incentives etc. but lets cut the crap about the burden of taxes in Australia. If you pay the taxes then you earn the income or own the wealth, so quit whingeing.
Consensus Shmensus
Science doesn't 'do' consensus.
To imply otherwise shows an appalling lack of understanding and insight.
Moreover, the peer review system is corruption-riddled farce.
Mates reviewing mates is neither a vaild form of scientific method nor evidence of any alleged "consensus".
The 97% meme has been well and truly busted.
If the warmists are so convinced of the veracity of their apocalyptic predictions for the planet then they won't mind re-submitting for double-blind peer review (sadly absent in any of the IPCC submissions) their data, models and conclusions.
As we are being continually told of the dire urgency to effect a direct response to thwart a total collapse in the global ecosystem this would seem a reasonable request.
This second stage review - away from the corrosive and corrupted IPCC - would strive to be apolitical, bipartisan and above all more inclusive, including stress-testing those who have been pilloried professionally and personally for challenging the prevailing AGW orthodoxy.
Lay bare all comers and put the 'science' to the test.
We owe the planet at least that much.
Martin Strandgard u make common mistake
Sweden may well be buring wood waste biomass for electricity but their wood waste comes from farmed trees, essentially plantations. In Australia we should not be using our native forests for woodchips or biomass for electricity. This only degrades their carbon storage capacity whilst trashing their ecological value and water yield. As a farmer I would love to grow wood but I can't compete with socialist State Government forestry agencies that receive hundreds of millions of taxpayer dollars to subsidise the sale of Australian native forest wood at cheap prices.
Its like Victorian and NSW Governments running sheep farms or car dealerships and then selling the output at half the cost of production.
Australia should grow more trees, for many reasons, including for biomass to electricity, but NOT from native forests. Trees can be grown as a crop with the same, or probably more, legitimacy than most current agricultural crops, but don't confuse trees with native forests. This is what most foresters do in their deluded, multiple use, woodchip driven forestry practices.
Right or left has nothing to do with doing it right.
I think the big mistake politicians are making is to think that people on one side of politics care more for the environment then the other side. I am sure that most Australians support strong action to improve our environment but don’t want to pay more taxes and don’t support the loony policies of the Green Party. Australians are well educated and can differentiate between silly policies and good policies. Parties which underestimate the maturity of the Australian public will be punished at elections.
Greens oppose "green" energy source - biomass
It is a great irony that Sweden is reducing their CO2 emissions by sourcing a substantial amount of their energy needs from burning waste from their native forests and plan to use a lot more whereas in Australia the Greens at a federal level got this same source banned as a means of reducing Australia's CO2 emissions!
Economic literacy and the Greens/left
There are definitely some legitimate concerns over aspects of Green's economic literacy, and I say that as a long term member of the Greens. However in comparison to the conservative side of politics, ie. both LNP & ALP, many of the Green's policies are in fact far more economically rational and fiscally prudent. This is particularly the case with eliminating Government tax welfare for millionaires and properly pricing public assets and resources.Green's policies generally put the public interest foremost, not vested interests.
It does anger me though that many Greens and the solar industry so rorted the rooftop PV system with outrageously generous feed in tariffs when it was clearly not needed nor sustainable. The tariff system should always have been net and far less generous. Even now, the call for a 1:1 tariff sucks. Any exported power should account for network costs, around 50% of tariff. Thus a 1:0.5 tariff would seem fine to me for rooftop PV.
To those contributers out there who say "do nothing" and its all a "scam". Well, you are just part of a populist, anti science, anti expert minority which used to be the hallmark of the "economically iliterate left". Ironic isn't it?
end the subsidies to the polluters
forgive me but it really p#$$#$ me off when people start complaining about the subsidies that have been going towards renewable energy projects in australia. these individuals seem blissfully ignorant of the billions, yes billions!, that have been going towards the polluting carbon-intensive enrgy sector for decades. For example, it has breen estimated that the Australian public subsidises the Coal sector in this country to the tune of $6 billion per annum. there is no level playing field for renewables in this country. the fact is that emerging industries need support (policy and financial) to get to economies of scale and build an industry that can compete globally - that is what the chinese govt has been doing these past 10 years.
major players in the global renewable energy sector have been watching australia closely these past couple of years to assess potential to invest in this country given that we have such huge potential renewable energy resources. clearly the ground is shifting away from support for renewables in this country to preserve established (anti-renewable) vested interests. i suspect we will have turned most of them away by now.
where are the leaders we need with the vision and sense to guide us out of this mess?
Right is wrong
John Warner, I was hopeful of a higher standard of reader commentary in response to articles on this site. If you ignore the vast majority of the peer reviewed science, well then you are already well served by the Murdoch media, commercial TV & radio.
I am amazed that so many are prepared to dismiss the scientific consensus and risk the only habitable planet we know of because they think they know better than those who spend their life researching the subject.
ever heard of energy efficiency?
To Rod Hall.... THIS household runs on $20K a year. We've put not one but two PV systems here over the last six years, and we don't have a dishwasher let alone anything that can be programmed to run off peak. We make money from the system by being hyper efficient and not energy greedy. Please don't make such generalisations in future...
What there is consensus and increasing evidence on
As subsidies for renewables hit the German economy and Green driven feed in tariffs become unaffordable it is very clear that the only winner is China. No Chinese carbon tax, subsidies for renewables that work becuase it supports local production (fir local use and export) and industries that are increasingly taking over world wide manufacture of just about everything.
What is increasingly clear is that this isn't a debate about climate but the negative economic impact of global left/green coalitions who are economically iliterate. One unit of energy that requires two or three units of subsidy means that we all go broke.
Re: Right won't eat the world's biggest ever ponzi scheme
Who is John Warner to declare that there isn't scientific consensus on climate change? Before posting such unfounded claims try understand what a peer review process means and hopefully you will realise that a scientist who publishes an opposing opinion that is not peered review doesn’t meant the science is in dispute. Hot tip for you if you are reading a climate change article in a newspaper or business journal it probably isn't peered reviewed by the relevant scientists so it is just the author’s opinion.
They are not Conservatives
I contend that calling them Conservatives is inaccurate. This is unfair to the great tradition of true Conservatism. They are not in the same category as Edmund Burke, Benjamin Disraeli, Abraham Lincoln and Winston Churchill. Even Margaret Thatcher was proactive in terms of climate change.
I would place them closer to Joe McCarthy, Charles Lindbergh, Richard Nixon, Dick Cheney and George W. Bush... Right wing, yes, but not at all to be confused with Conservative.
Blame the Conservatives, what again?
Maybe its not just only the reduction in "subsidies" for solar energy as a reason to shut down Australian Solar Panel plants.
In today's "Australian" the following is extracted from an article by Graham Lloyd entitled Germany's green power push cools in the face of cutbacks, competition.
But as demand increases, production of solar technology is increasingly moving to China which will soon account for 85 per cent of all solar-cell production.
Germany is still the world's largest solar market, with about 54 per cent of all systems installed, but almost half of all new systems installed in Germany come from Asia.
German manufacturers cannot compete with China on price, but price is not the only problem they face.
The German government can no longer afford to continue its generous rooftop subsidy scheme in the face of falling prices.
So do we have subsidise alternative energy manufacture and production for it to be viable in Australia? I recall that great Prime Minister Bob Hawke and his Treasurer Paul Keating saying that their greatest achievement was breaking down tarriff barriers, freeing up world trade, stopping subsidies to inefficient manufacturing, the "Dohar Rounds": etc.
Are you suggesting then that we scrap these economic advances for the sake of what, a .0005˚c reduction in world's temperature. Is this what the left calls "progressive policy'?
Seems regressive to me.
Subsidies
Sure let's make renewables stand on their own and while we are at it let's remove all the subsidies directed towards coal production and power generation. $1billion alone in NSW every year. As a tax payer I want subsidies going to clean energy not to dig another hole and continue our reliance on such a finite resource.
Right won't eat the world's biggest ever ponzi scheme
The great global warming swindle is starting to unravel and sadly a lot of well meaning people will get hurt - hopefully some of those responsible will be held to account. Stupidity is not a crime so many will say it is not their fault or they were misled or they are were true believers in the so called scientific concensus (which never really existed). Think of say, Enron but on a world scale.
Blame The Right Instead Of Thinking
Just how many changes have Federal labour made to policy/support/subsidies for distributed rooftop solar panels? Is it three or four over the first four years of their government? The latest happened in the context of a left/green coalition. Quite clear that the current left/green coalition has no interest in household based PV.
The big question is why should they care?
Anyone who looks at the economics of home rooftop PV realises that this is all about affluent households who do it to feel good about the environment. If you have the cash, with high subsidies, a huge feed in tarrif and imported household appliances like dishwashers and washing machines that can be run at off peak periods, you almost get a bank interest rate of return on the rooftop PV investment.
The rooftop PV market, like the wind market and large scale solar electric markets only have a future if the Government gives them billions and billions of dollars. They don't survive with a carbon tax of $23 a tonne with a merry-go-round of compensation. In fact with a carbon tax at such a low rate all they do is suffer from the inevitable increased costs of manufacture and distribution within the Australian market.
This whole industry will require massive subsidies .. just like offshore wind did in Norway. Why should they get it? What is the environmental and economic justification for them getting even a dollar?