Readers should know that Mr Ferrara has previously queried my claims, but has not accepted an invitation to meet with me, or call me to discuss the economics of wind farms. Instead, he writes to the paper and makes errors and many false assumptions about my position.

He is entirely incorrect to say that I advocate coal seam gas extraction in Hume.

This is just patently wrong. I am confident there will be no established coal seam gas industry in Hume. First, there will be none in Goulburn as there is no coal seam gas here.

In Wollondilly and the Southern Highlands where it exists in very small amounts and is of very poor quality, I have the same confidence. It simply does not make sense at so many levels. I have stated in press releases and said many times on radio that there is no shortage of gas away from sensitive areas like Wollondilly and the Southern Highlands, especially in far western Queensland, Northern South Australia, Bass Strait and offshore of Gippsland.

We have enough gas in these places to avoid threats to water aquifers or prime agricultural land, whilst meeting our energy needs.

Elly Spark (Subsidy Begs Clarification, July 3) suggests that the extra ‘green energy’ option that she chooses and many others pay in electricity bills (an extra 3 cents per kilowatt hour) must be what I am referring to when I talk about subsidies. The extra green tariff in your electricity bill is a choice that you make to pay over and above the price of electricity charged by your electricity retailer. That is obviously not a subsidy.

This optional extra cost is most certainly not what I am referring to when I talk about the wind turbine subsidies.

The subsidies for new wind turbines ($400 000 - $800 000 per annum per turbine depending on the size of the turbine and the price of certificates) are built into the price of electricity of every electricity consumer in the nation.

It operates through the federal renewable energy scheme which mandates the Renewable Energy Target (RET). Electricity retailers are required by federal legislation to provide a certain amount of renewable energy to the electricity grid.

If they do not make the renewable energy themselves (and most don’t) then they need to purchase it. The legislative scheme requires the electricity retailers to purchase renewable energy certificates (RECs) before they can sell any kind of electricity. The wind industry exists purely to provide the RECs to the energy retailers so they can comply with the legislation.

About half of the revenue received by a wind turbine is not from the generation of green energy sold to the grid, but from the revenue that wind companies receive because electricity retailers are required to buy RECs from them.

The figures I use are not difficult to justify.

They are based on very simple maths, and work completed by the (now) Chairman of the ACCC, Rod Simms, who was then a partner of mine in my consulting firm which does a great deal of work in the energy sector.

Incidentally, the wind industry executives and economists I have spoken to at length and in person in recent months (and there have been a few!) whilst unhappy about my public position, accept the correctness of the numbers I have published.

They also grudgingly accept it is correct for me to label these payments to wind companies for the RECs as ‘subsidies’ to the wind industry.

The exorbitant costs of the RECs flows through to the cost of electricity, making it much higher for every electricity consumer in the nation.

Of course, this operates most unfairly against the needy and the poor, for whom the price of electricity is utterly becoming prohibitive. They are paying as much as the wealthy for this massive ‘green’ component in our electricity bills. The madness of this scheme is that we could reduce our emissions just as effectively by using other, much cheaper means.

I am all for renewable energy and always have been. Climate change has been a concern of mine for twenty five years – well before it became a mainstream political issue.

The problem I have with the wind turbine subsidies is that they are crowding out other, much cheaper means of reducing carbon emissions. It is economic lunacy and bad public policy.

The sooner ordinary Australians come to realise the facts, the sooner we can have a real debate about whether it is in our nation’s interest to continue on with this scheme which does not merely prop up an industry (like the car industry) but has actually created an industry. Mr Ferrara, this is most definitely not ‘ideological cherry picking’ on my part.

This is about economics, and a massive, unintended public policy failure.

The absurdity of the economics of wind farms actually answers another of Mr Ferrara’s questions. What would I do with the subsidies in Hume?

I would purchase equivalent carbon emission reductions on the market at around $20-25/ tonne – a figure accepted by Treasury and well above the current European price.

In other words, I would achieve equivalent carbon emissions reductions by other, cheaper means.

With the leftover money I would then duplicate the Barton Highway for around $500 million, I would re-build the Goulburn Hospital, I would quickly fix the mobile phone and internet coverage across the electorate, get rid of demountables in some of our schools and fix every pothole in our roads. And that’s just in the first few years.

As I say, this reveals the utter absurdity of the subsidies to this industry.

Mr Ferrara, if you have anything else on your wish list let me know.

Angus Taylor, Coalition Candidate for Hume

(This letter was sent to the newspaper on July 8 - ed.)