Market policies killing solar power

Climate negotiations were high on Kevin Rudd’s agenda during his visit to the US for the G20 meeting. Rudd tried to position himself as the global face of action, preparing his own compromise proposal to try to rescue negotiations leading up to the Copenhagen summit in December.
Chairing a panel at the UN, Rudd declared there was “clear support” for a “grand bargain” between nations on climate change.
But the advanced economies of Australia, the US and Europe are insisting that China and India agree to major cuts to emissions in their rapidly growing economies before taking any action.
No government wants its economy to bear a greater cost of cutting emissions than its rivals, and each is under pressure from local business to get a better deal than overseas competitors.
It is clear there will be no meaningful deal at Copenhagen—and all the rhetoric will be directed towards entrenching failed market strategies like emissions trading.
As Rudd lectured the world, the toxic logic of his free market climate policies were on stark display back home. In September Solar Systems, who hold the contract to build Australia’s first large-scale solar power station at Mildura, sacked most of its staff and went into voluntary administration (see page 7).
A production line in the factory capable of producing hundreds of solar receivers every week, each powering 30-50 homes, is on the verge of completion.
The idle factory stands as a testament to the madness of the free market. Across the world unemployment is sky-rocketing and social needs are crying out to be met—while the factories and offices that could meet these needs shut their doors.
No other company in Australia has Solar Systems capacity and the Mildura power station now has an uncertain future.
So too does Rudd’s entire solar flagships program, launched with fanfare in the May budget. This program puts $1.6 billion towards the construction of four 250 Megawatt solar power stations.
Rudd plans for the private sector to build each station. The Government will provide less than one third of the required capital, and only after significant progress in the construction of each plant.
The Clean Energy Council argues “this level of funding will not be enough to build the targeted 1000MW of capacity”. The entire scheme will fail like Solar Systems unless there is a dramatic increase in public investment. Redirecting the $2 billion allocated in the budget for non-existent “carbon capture and storage” technology would be a good start.
But Rudd is wedded to the market. This misnamed Carbon Pollution Reduction Scheme (CPRS) is the centrepiece of Labor’s climate strategy. He claims it will create conditions in the market to favour renewable energy investment.
Rudd is opening negotiations with the Liberals in order to get the CPRS through the Senate— asking the Coalition to submit amendments for consideration. This means the scheme looks like becoming even worse. The Liberals are pushing for an increase in compensation for coal-fired power stations. Power companies are asking for an extra $6.5 billion on top of the $3.5 billion the government has already promised them.
According to Richard Dennis of The Australia Institute, increasing the level of compensation means it may actually end up being cheaper for the government to buy back power stations outright. Already Hazelwood power station is receiving $1.1 billion in compensation. It was bought by the private sector for just $2.4 billion in 1996.

Power plans expose CPRS
According to Newspoll 67 per cent of people support the introduction of the CPRS, thinking it represents a step towards reducing emissions. We need to break this myth.
One important step will be making sure opposition to the CPRS is prominent at the Walk against warming rallies in December.
The bankruptcy of the CPRS is demonstrated most clearly by moves to develop new coal-fired power.
In September the NSW Department of Planning released documents indicating plans for major new coal-fired power stations at Bayswater in the Hunter Valley and Mt Piper near the Blue Mountains. These plants will be built by the private sector.
This needs to be the key focus for the climate movement in NSW. Trade unions in the energy sector have been at war with the state government over attempts at privatisation.
The AMWU which represents power station workers has already given active support to campaigns for renewable energy jobs and are helping mobilise against the Solar Systems closure.
A demonstration is being planned at the NSW Labor conference on November 14. Fusing climate demands with workers struggle—demanding that new power stations are publicly owned as well as renewable—could provide the potent mix needed to derail Rudd’s market madness.
using climate demands with workers struggle – demanding that new power stations are publicly owned as well as renewable – could provide the potent mix needed to derail Rudd’s market madness.


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