When it comes to renewables it’s facts versus Ferguson’s fiction

It was uttered on the ABC, by the ABC. Is this why we pump more than $1bn into the national broadcaster every year, so it can corrupt public debate with politically charged falsehoods?

This statement is patently untrue. Even renewables-zealot-in-chief Chris Bowen would never go this far, preferring to play word games about renewables providing the cheapest new generation, talking up other price factors and promising future price drops, but not being silly enough to claim the renewables transition has not increased prices.

Only ideological barrackers would make this mistake. If you take as gospel the political rhetoric of Labor, Greens and teal politicians, and refer to statements by agencies charged with implementing the government’s net-zero agenda, you might draw this fallacious conclusion about prices.

The person who said renewables are not the cause of price increases was one of the ABC’s most experienced and prominent journalists, 7.30 host Sarah Ferguson. Risibly, it was the key finding of what she promoted as a “fact check”.

Rather than fact-check assertions from Bowen or his Prime Minister, the ABC was trying to catch out Sussan Ley. Ferguson’s “fact check” sought to refute the Opposition Leader’s comment on 7.30. “The blowing out of costs for the poles and wires, for the transmission infrastructure, for turning the beautiful wind and sun into dispatchable power at the source where you need it is incredibly expensive,” said Ley. “That’s why costs have gone up 40 per cent.”

Anyone following this issue closely across the past decade would have just nodded at this unremarkable observation, but Ferguson took exception and pledged to fact-check Ley.

Notwithstanding the irresistible point that we do not see interrupting, contradiction and fact checks when Ferguson and her ABC comrades interview government ministers, or even when they hear wildly absurd climate and energy hysteria from Greens and teal politicians, and notwithstanding Ferguson and the ABC have not held Labor to account for broken electricity price promises or shambolic grid management, it is still an admirable journalistic practice to express scepticism about a claim and vow to check the details.

Sadly, Ferguson did not respond with facts; she regurgitated spin and shared a false conclusion on price rises: “the rollout of renewables are not the cause”.

Power bills are not just high but at record levels, doing so much damage to the economy that taxpayers are funding rebates for all consumers and directly to many large users such as smelters. Annual household bills have risen by more than $1000 a year since Anthony Albanese won office promising to reduce them by $275.

In her fact check Ferguson correctly outlined the two major inputs of retail electricity bills: the wholesale cost of producing power and the network costs of distributing it, each making up about 40 per cent of charges.

Ferguson blamed increased wholesale costs on the Ukraine war (seriously) and its effect on coal and gas prices, claiming gas prices had tripled across the past decade. Coal and gas prices certainly spiked sharply at the start of the war but they soon returned to levels not far above where they were a decade ago, so this argument is a gross exaggeration.

Ferguson showed a graph from the Australian Energy Regulator detailing the spike in wholesale prices in 2021-22 but she left it on screen for such a short period it is tempting to think she did not want eyes to linger lest they see how the graph settled back to its normal trajectory within months. (We republish the same graph today so you can study it at your leisure.)

Ferguson also referenced how “coal-fired power stations have become more and more unreliable” but failed to consider the reason no new coal-fired plants have been built or existing generators have not been refurbished. This is because the policies, subsidies, mandates and market rules of the renewables push are specifically designed to force coal out – the price volatility of coal is not an alternative reason for price hikes, it is another pricing consequence of the renewable energy push.

But it got worse. On the network side Ferguson focused mainly on transmission costs, which make up about 6 per cent of retail electricity bills, and rising.

Ferguson dismissed this – “only a tiny proportion of the network costs now go to pay for the transmission costs of renewables” – although she did admit these costs would rise as the transmission build-out continued. Still, even though Ley had specifically mentioned “poles and wires” too, Ferguson glossed over the rest of the network costs that also are escalating, largely because of the increase in rooftop solar and how it forces higher network costs on to non-solar customers.

Research by the Centre for Independent Studies has found solar customers are being overcompensated by as much as $1000 a year for the energy they save or put back into the grid. This means the network distributors recoup more money from non-solar consumers because the grid infrastructure must be built and maintained to the same or higher level and, as regulated assets, they take their guaranteed returns, cross-subsidy or not.

Matt Rennie, a Brisbane-based independent energy consultant (who, by the way, is all-in on the renewables transition) told me on Sky News that the renewables push “mathematically is the cause for higher prices”.

Rennie focuses on the huge impact of rooftop solar creating a “solar spill” into the grid in the middle of the day that keeps coal and gas out of the market until sunset approaches and they are needed, when they charge higher prices, especially if the wind is not blowing.

“Renewables of all kinds are more expensive than coal with the exception of baseload solar, which is essentially free,” Rennie told me, adding, “there’s no doubt” the renewables push has forced prices up. “We’ve had the advantage of decades of very low-priced coal-fired power … the lowest and most reliable form of generation going around, with the technical life and economic life of coal-fired power there will be a changeover to a new system, most likely renewables and storage with a little bit of gas and hydro, but there’s no point saying it’s going to be cheaper because it’s not.”

This is precisely the opposite conclusion to what Ferguson proffered in her “fact check”. Expert energy consultant Rennie said prices would continue to rise for another five to 10 years before plateauing: “It’s a cleaner system, but it’s a more expensive system compared to what we’ve had.”

This is not a theoretical argument. Australia is conducting a world-first experiment in turning a reliable and affordable fossil-fuel based energy grid in a developed country into a predominantly renewables-plus storage model, without nuclear energy. No other country is trying this. But given this transition has been under way for two decades we have real data and real costs to inform us.

With up to $200bn spent on renewables investments, subsidies and grants, our electricity reliability has plummeted, leading to repeated warnings about blackouts, and our electricity prices have escalated to unprecedented levels. State and federal governments now subsidise every input and output of the grid.

If we produced electricity as readily as the government provides subsidies our problems would be solved. Jokes aside, this is the actual problem – we do not have an electricity grid and market where the most efficient and affordable providers succeed; rather, we have government interventions corrupting a market so the energy sector can be used to meet UN emissions reduction goals.

The project is a farcical exercise in national self-harm, especially given global emissions continue to rise, so that even if we eliminated all our emissions it would make not a skerrick of difference to the climate. While our nation undermines itself, our policies provide significant benefits to China, where they burn our coal to turn our iron ore and bauxite into steel and aluminium as they build renewable energy kit to sell back to us.

Chinese state-owned enterprises even invest in our renewable projects underwritten by our government through the Capacity Investment Scheme. Yes, it is that absurd, our taxes subsidise investments by communist China in schemes that make our power more expensive.

And we have a $1bn a year public broadcasting behemoth polluting national debate, which is the opposite role for which it was created. If ever there were a debate where we needed facts instead of spin, then securing our energy future would be it, yet our national broadcaster misleads. We are funding green-left propaganda.

Ferguson’s fallacious fact check examined the Opposition Leader’s claims on the most telling political and economic issue of the moment and accused Ley of being wrong when, in fact, Ley was right. Ferguson and the ABC were wrong. ABC viewers were misled. And we all pay for it.