ReNu’s solar fantasy crashes and burns
Terry McCrann, Business Columnist, 7:49PM August 2, 2019

Two years ago our — and also “their”, as in “their ABC’s” — Alan Kohler exhorted us to see the future in renewable energy. The poster child of that future nominated by Kohler was, as he put it, a “little company named ReNu Energy”.

Well, since then that “little company” has been getting progressively but relentlessly, well, littler. When Kohler was enthusing, its share price was around 14c. More recently it’s been languishing around 6c. In April it tried to raise $5.5 million from shareholders. They were somewhat less enthusiastic about its future than Kohler had been: they subscribed all of $733,500.

On Friday, ReNu got a lot littler when its share price was slashed more than 40 per cent to just 3.5c.

And for why? Because ReNu Energy was getting out of that future nominated and exhorted by Kohler — putting solar photovoltaic panels on the rooftops of shopping centres. It’s sold the lot for $5.8m. It’s now going to “concentrate” on its “bioenergy projects” — a more realistic word for “projects” would be “fantasies” — and its “geothermal remediation program”.

Oh yes, let’s not forget that geothermal used to be the “great renewable future”.

All we were going to have to do was plug long extension cords into South Australia’s “hot rocks” and the power would flow free and clean forever.

Indeed, Australia’s answer to Al Gore, former palaeontologist Tim Flannery, was most enthusiastic about that great renewable future, although apparently not so much these days.

Now, the only “geothermal future” is in cleaning up the mess left by the fantasy, which ReNu in a previous incarnation and enthusiasm — and a considerably higher share price — had once embraced.

Just as — when and if some sanity returns to our world — we will at some point be cleaning up the mess of all the useless wind turbines and equally useless solar panels around the world.

Useless that is, other than of course, for chopping, crunching and frying bats and birds and especially raptors. Already there are more than 24,000 abandoned — we really should add, so-called — turbines in the US. And for why? Apart from their inherent uselessness?

The answer is the dramatic increase in the use of real carbon-based energy — fracked oil and gas.

Yes, much of that gas is in place of coal-fired generation and emits less CO2, but it is competitive with coal because it is so cheap and plentiful — thanks to fracking — and easily sent into the US’s pervasive pipeline network.

And to emphasise the important point: it is still a fossil fuel and it still emits CO2.

But the US gas reality is denied Australians by our politicians. With some grudging exceptions, they discourage even the finding of frackable gas, far less developing it — and of course Victoria’s Labor takes it to a whole new level of insanity by banning any attempt to discover gas onshore even by conventional drilling.

Indeed, it’s insanity on insanity on insanity. State Labor governments are falling over themselves to mandate more and more renewables. And if you go down that path — and demand or force reliable coal-fired power stations to close — you have to have replacement gas-fired generation.

Now, let me be very clear — a combination of wind and solar (I guess we can scrap geothermal) and gas is fundamentally irrational and uneconomic. It only slightly reduces the insanity of using any wind and solar.

But if you are going to have extensive wind and solar — that’s to say, not just as virtue-signalling “Potemkin village” style vanity exercises — you have to have gas generation, to be turned on when “the wind don’t blow and the sun don’t shine” and off when they do.

So it’s insane to stop the finding of gas.

The insanity on insanity is that you have to build $2 billion plants with the specific intention of permanently only, say, half-using them.

That is to say, then either overpricing the electricity they produce to get an adequate return on the invested capital or to permanently accept a sub-economic return, to keep the lights on.

This economy wide insanity was perfectly captured in the ReNu — for want of a better term — “business model”, as I explained back in June 2017. ReNu was putting solar panels on four (small) shopping centre roofs. It would dribble a pathetic amount of electricity into the centres to keep the common area lights on. Only during the day of course and provided it wasn’t cloudy or raining.

The real power for the shops and for the grunt work like air-conditioning and machinery would come from the grid; from the real power generation (as long as it’s still being generated). And of course, for everything when the sun wasn’t shining — on average through the year, for most of each day’s 24 hours.

So, it’s fundamentally parasitic, riding on the back of real power generation to even function.

But further, more than half the revenue expected to be generated by the panels was to come not from the price of the power sold but from the renewable energy subsidies.

As I wrote: ReNu would get a direct cash subsidy and that subsidy would be paid by the real power generation it was purportedly competing against!

Plus, its real power generation competitor had to make its power available, instantly, to ReNu when “the sun don’t shine”. The very process of all these free riders dipping in and out of the grid would not only force up the grid power price but make it unreliable and prone to blackouts.

Or as we’ve seen, so-called “demand management”.

So AGL is going to keep a real power station, Liddell, open for another six months or so beyond its previously scheduled close. So why should it be necessary if AGL’s planned replacement generation will work. Because it won’t.

I have also seen the future. It’s a very different future to Kohler’s. It’s called reality.

via Errors in IPCC climate science

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August 3, 2019 at 03:48AM