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As I have repeatedly urged Good Oil readers, when it comes to the ‘Net Zero’ policies so determinedly embraced by Western governments: do the maths. A bit of basic research and some back-of-the-envelope calculations are a startling wake-up call, which our political and cultural elite steadfastly refuse to heed. As I’ve warned the cost of ‘Net Zero’ for Australia alone is already locked in to be in the trillions.
That’s without reckoning with future increases in costs, due to such things as growing competition for the materials and workers to build more and more sprawling solar farms and wind turbines. It’s also not including the environmental and social costs, as vast swathes of productive farmland and native bush are bulldozed for ‘renewables’ projects (a Victorian government report estimated that that state alone would have to sacrifice at least a quarter of its arable land).
The sheer scale of the madness is so obvious that even the legacy media are starting to twig.
The NSW and Victorian renewables plan is set to be the biggest financial disaster since Federation.
The original financial estimates on which the decision to proceed was made were total fiction and completely underestimated the complexity and cost of the project.
Back in 2020, the AEMO cost estimate for most of the transmission line projects was just $8.5bn. Renewables looked to be low-cost and very profitable.
If you were an utterly gullible loon with a complete lack of basic mathematical and logical skills. Now, I don’t claim to be a mathematical or economic genius (far from it, in fact), but even a couple of years ago, I was pointing out just how fanciful those numbers were. The maths was diabolical, then, and it’s only got worse. The capital cost of a single interstate scheme, between NSW and Victoria, already exceeds $350 billion.
But that is only the beginning. These projects are being financed with high-cost loans at rates rumoured to be near 10 per cent; even a conservative eight per cent interest over the 35-year contract life turns the $280 billion design-based total into an $840 billion outlay. Factor in realistic construction overruns and the final 35-year burden sails comfortably past $1.1 trillion. Australia’s gross debt currently stands at around $940 billion. In other words, this one renewables corridor will cost more than the nation has already borrowed for everything else.
In fact, as I’ve pointed out, the total cost, as percentage of GDP, will easily exceed Australia’s entire war budget for WWI. And a great deal of it – the solar panels, wind turbines, and batteries – will have to be rebuilt, over and over, every decade or two.
And the long-suffering Australian taxpayer, already going to the wall in a cost-of-living crisis, will have to pay for it, long after the architects of this madness have retired to their massive (taxpayer-funded) pensions, gold class travel and multi-million-dollar cliff-top mansions.
Power prices, already punishing households and manufacturers, will climb further as consumers are forced to repay this mountain of debt. Cost-of-living pain that voters are already feeling will be locked in for three decades. The government’s own ministers once promised cheaper electricity: the public was duped. Snowy 2.0, now running at 20 times its original estimate, is a grim preview of what happens when ideological targets collide with engineering reality.
The physical footprint is equally reckless. Thousands of kilometres of 500-kilovolt cables and towers the height of Sydney Harbour Bridge pylons are slated to march straight through the nation’s finest agricultural land. Farmers who have fought these intrusions deserve the nation’s gratitude. They may not have grasped the full financial horror, but they instinctively understood that surrendering productive farmland to intermittent power lines was madness. Their resistance, combined with chaotic planning, has at least kept actual spending so far to ‘just’ tens of billions. The full disaster is still avoidable.
We can avoid a nation-crushing disaster.
Earlier this week the ALP moved to remove its emissions target from its national policy — the first sign that some in the ALP have woken up to the fact that Energy Minister Chris Bowen has created a financial nightmare.
To their great credit, the Liberals, Nationals and One Nation are all now opposed to putting towers on agricultural land.
Although, who would trust the Liberals and Nationals to keep their word?
One Nation has gone further, demanding developers set aside funds to dismantle the infrastructure at end-of-life. The coalition should immediately match that sensible safeguard and, together with One Nation, demand an immediate halt to the entire scheme.
All three parties need to go further and demand that the scheme be halted immediately.
There is currently $335bn in the Future Fund, which was set up to fund public servant retirement pensions.
You can already guess what happened the instant a socialist Labor government spotted a pile of other peoples’ money, just sitting there.
Dangerously, it has been empowered to invest in the renewables money pit.
Already the Future Fund has taken equity positions in developer Transgrid, effectively helping to bail out the mess. They must stop immediately.
Otherwise, we are being hurtled into a cataclysmic economic abyss. As just one ‘renewables’ project shows.
Detailed costings from the Central West Orana Renewable Energy Zone (REZ) in western NSW provide the clearest window into the fiasco. Its design cost has ballooned from an initial $675 million to $5.5 billion – already an eight-fold increase before a shovel has properly hit the ground. The nearby Project EnergyConnect, almost complete, was approved at $2.3 billion and is now finishing at $4.1 billion: an 80 per cent overrun. Apply that same experience to the 2,000-kilometre 500kV corridor linking Sydney and Melbourne and the numbers become catastrophic.
The designers of this chaos appear to revel in the scale of their ambition while ignoring the scale of their incompetence. Yet the public was repeatedly told Net Zero would deliver cheap, reliable power. That claim only ever held if one ignored the real-world cost of transmission, storage, overbuilding and backup. It was the classic ‘It will work if it’s a spherical chicken in a vacuum’ case.
Australia, like the rest of the climate-deranged West, now faces a stark choice. Proceed and watch power prices soar, manufacturing flee and critical investments in oil refineries, defence manufacturing and energy independence become impossible. Or recognise the error, halt the juggernaut while ‘only’ billions have been flushed away and redirect policy toward genuine energy security rather than ideological fantasy.
