The national grids of developed nations were masterpieces of design and function until eco-ideologues and professional warmists opened the powerhouse door to rent-seekers and wreckers. The result: blackouts, price-gouging and a modern world no longer quite so modern.
At a February 2000 press conference, the first man to walk on the moon announced the National Academy of Engineering’s twenty most significant engineering achievements of the twentieth century. The aeroplane took third place; the automobile second; in first, the vast networks of electricity that power the developed world. None of the other nineteen would have been possible without electricity, Neil Armstrong declared. “If anything shines as an example of how engineering changed the world during the twentieth century,” he said, “it is certainly the power we use in our homes and businesses.”[1]
The twentieth century’s bequest of cheap, reliable electrical energy is now being undone. For the past decade or so, Australia and other industrialised countries have been conducting a vast experiment on their electrical grids. Tried, tested and refined technologies — predominantly based on coal-fired generation — are being replaced by weather-dependent wind and solar farms. Western societies are moving from industrial means of generating their electricity, with the precision, reliability and economies of scale that implies, to intermittent sources that, like agriculture, depend on the weather, with all that implies for cost and reliability.
The green energy revolution – counter-revolution would be more accurate – did not come about because wind and solar are superior generating technologies. If they were, they wouldn’t have needed the plethora of costly political interventions. These have turned the electricity market into an Aladdin’s cave for rent-seekers while destroying the market’s function to allocate capital sensibly and serve customers efficiently. Instead, the origins of the renewable experiment lie in a deeply ideological reaction against the Industrial Revolution, which, in one of the most important developments of our age, almost imperceptibly became the boilerplate of elite opinion.
Now the results of that experiment are in and they’re not looking good. Australians formerly enjoyed one of the world’s lowest-cost energy markets. Not anymore. In nine years, retail prices in the National Electricity Market (NEM) are up 80-90%. In just two years, business electricity costs doubled, even tripled, resulting in staff lay-offs, relocations and industry closures.[2] ‘The requirement is for efficient prices and affordability for “a healthy NEM,” the Energy Security Board states in its first annual report.[3]