A new report published by free market thinktank the Institute of Public Affairs questions the investment being made by the Victorian State Government into wind power around the state, claiming there is no hope of establishing a viable alternative energy industry via protectionism and MRET (Mandatory Renewable Energy Target) subsidies.

The report's author, Dr Alan Moran, explains how he collated and crunched the data on windpower and its costs:

"It starts off by looking at how the State Government's own estimates of how much wind it will need to create by 2010, and the answer is 2500 gigawatt hours per year. We looked then at how much wind costs, and there's two elements of that. One is about 70-80 dollars per megawatt hour, which is about twice what the price of commercial energy is," he says. "In addition wind is very unreliable, it cuts in and cuts out, so you have to have backup for it, so the costs are somewhat in excess of that crude depiction of the premium price you have to pay for wind. Then you just multiply those through by the numbers, and it comes to around 100 million dollars per year, and bearing in mind the fact that windfarms do in fact need 15 years' assured committment from the Government, you can work out for Victoria to go ahead with this proposal, it would cost the Victorian taxpayer over $100 billion."

Wind is not and cannot be reliable. You can rely on it to be there when you need it only 10 per cent of the time

He is quoted as saying windfarms are 'unreliable'. Upon which basis does he make this claim?

"Oh, well they just cut in and cut out. Windfarms on average operate for 25 per cent of the time, but they only operate when the wind is blowing, so when the wind isn't blowing they're not available. I think it was well publicised in South Australia a wek or so ago when they had a heatwave of 42 or so degrees and suddenly none of the windfarms were operating, or only operating at very low level and one of them caught fire. Wind is not and cannot be reliable. You can rely on it to be there when you need it only 10 per cent of the time," he says.

Has he considered the economic stimulus that goes along with the building of wind towers and wind farms, and how much gets reinvested into regional communities via jobs?

"Yes we have - in fact that would be negative. The brutal truth we learned was that once Governments start subsidising particular industries or another, there's a cost entailled in that, and the cost more than offsets the benefits in jobs. We found that out to our great expense in Australia over the 200 years. That's why we no longer subsidise textiles, clothing and footwear and a whole host of industries which we used to, and we're much better off as an economy for doing that."

Does the hard number crunching of economic theory not take into the account the political will on behalf of State Governments to do something about carbon emissions and reducing greenhouse gases? Is that not enough of a counter-argument for Dr Moran?

"This is not a responsibility of the State Government. Nobody ever said it was, nobody ever said it should be. It wasn't the Victorian Government that signed the Kyoto agreement, it was the Federal Government. These are Federal responsibilities and issues; State Governments just don't have the expertise to involve themselves in it..."

...it will result in tens of millions of dollars going to local communities through landholder payments and the like

Dr Moran finds opposition from the likes of Andrew Richards, executive manager of corporate affairs and marketing for Pacific Hydro, the company responsible for some of the largest windfarms in Western Australia, South Australia and Victoria.

"Dr Moran was talking about the cost of backup - there is absolutely no evidence to say wind energy will increase the amount of reserve capacity that sits in the system; I think those numbers may be slightly inflated," he says. "The real issue here is that government is trying to do two things: one is trying to reduce the amount of greenhouse emissions that are going into the atmosphere, and they're trying to maintain and create additional regional jobs that come from a new and emerging industry like wind," he says.

"We're already seeing down in Portland, for example, many hundreds of new jobs created because of this industry. The policy that the government is thinking about will drive 1.6 billion dollars' of investment in regional Victoria; it will result in tens of millions of dollars going to local communities through landholder payments and the like. There is a greenhouse advantage here and a regional economic advantage of doing these things... we think it's a pretty good investment."

Does he think Victorian taxpayers will be happy having to pay subsidies worth over $1 billion over the next 15 years to support the wind power industry?

"Time and time again research demonmstrates and public opnion polls demonstrate that Victorians, and Australians in general, are looking for governments to take on climate change; they feel as though it's a problem that's too big for them to solve on their own, so they're looking for government to take action... really on your average consumer bill we're talking a couple of dollars at most, that would drive cleaner development of energy, jobs and potential export growth. The blade factory in Portland is already exporting to Europe and North America, so there is huge potential here if we take the next step."